Opinion: Uzbekistan’s Growth Story Has a Skills Problem

Uzbekistan has become one of Central Asia's strongest growth stories. GDP expanded by 6.5% in 2024, and the Asian Development Bank projects growth of 6.7% in 2026 and 6.8% in 2027. Industry, services, and foreign investment are all expanding. The World Bank says real GDP growth averaged around 6% a year between 2017 and 2025. Beneath that momentum, however, a quieter problem is taking shape. Uzbekistan may not yet be training enough workers for the economy it is trying to build. The issue is not a shortage of capital; it is a shortage of market-ready skills. The country has moved from an isolated, heavily state-controlled economy toward a more open and reform-driven model in less than a decade. But if education, vocational training, and private-sector demand do not align faster, Uzbekistan risks turning one of the region's strongest demographic advantages into a labor-market strain. A Dividend That Could Become a Deficit Uzbekistan is a young country in every sense. About 700,000 young people enter the job market each year, while the working-age population is expected to keep expanding for decades. In development economics, this kind of demographic concentration is often described as a dividend: a period when a large share of the population is of working age, productive, and capable of driving growth. The risk is that the dividend does not materialize automatically. It depends on whether young people can move into productive, formal, and better-paid work. If the workforce entering the economy is not equipped with the skills employers need, the same demographic pressure can feed into informality, underemployment, migration, and social strain. The official unemployment rate fell to 4.9% in the third quarter of 2025. That is a meaningful improvement. But around 760,000 people remained registered as job seekers, and the International Labour Organization has estimated informal employment at about 40% of the workforce. Remittances also remain a structural pillar of household income: according to Central Bank data cited by local media, inflows reached $18.9 billion in 2025, up from $14.8 billion in 2024. This is not the picture of a country that has already solved its human-capital challenge. It is the picture of a country racing against time. The Mismatch at the Heart of the Problem The core challenge is not a shortage of graduates. Higher education has expanded dramatically. According to Uzbekistan's National Statistics Committee, coverage among 18- to 23-year-olds reached 47.7% at the start of the 2024/2025 academic year, up from 8.3% in 2017. The number of higher education institutions has also grown rapidly. By conventional access metrics, this is an extraordinary achievement. But enrollment alone is not the measure that matters. Employers need workers who can solve practical problems, operate modern equipment, manage digital systems, and adapt quickly to changing production and service needs. Too many students are still moving through programs shaped by an older economic model: credential-heavy, theoretically oriented, and weakly connected to the needs of a modern labor market in IT, manufacturing, logistics, energy, tourism, and services. The student-financing system has...

Kazakhstan’s Young Workforce Grows, But Sectoral Gaps Persist

The youth labor market in Kazakhstan remains a vital topic amid the country’s ongoing economic transformation. According to analysts from Finprom.kz, approximately 1.8 million young people aged 15 to 28 were employed across the country in 2024, an increase of 0.6% compared to the previous year. Regional Distribution of Youth Employment The highest concentration of young workers is in Almaty, where 243,200 young people are employed, up 5% from 2023. Almaty is followed by the Turkestan region. In contrast, the Ulytau, North Kazakhstan, and Zhetysu regions recorded the lowest figures for youth employment. Of the total number of employed youth, 1.4 million (77.7%) work as salaried employees. Additionally, the country is home to 331,900 young individual entrepreneurs, 58,300 self-employed workers, 2,700 founders or participants in economic partnerships, joint-stock companies, or cooperatives, and 2,400 engaged in private practice. Sectoral Breakdown Among all employed young people, the largest group, 424,400 individuals, are professionals, although this marks a 1.3% decrease from the previous year. They are followed by service and sales workers (291,700), unskilled laborers (281,700), technical and support staff (195,100), and industrial, construction, and transport workers (142,600). In terms of industry sectors, youth are primarily employed in wholesale and retail trade, automotive repair, education, and agriculture, including forestry and fishing. The lowest youth employment is seen in utilities (water and electricity supply) and real estate. Youth Unemployment: A Gradual Decline Youth unemployment is on the decline. In 2024, the number of unemployed individuals aged 15 to 28 dropped to 62,000, a 6.7% decrease from 2023. The unemployment rate stood at 3.7% among 16 to 24-year-olds and 3% among those aged 25 to 28. For comparison, the overall unemployment rate for the working-age population in Kazakhstan reached 4.7%. Almaty recorded the highest number of unemployed youth (11,100), followed by Astana (7,800) and the Almaty region (7,700). Ulytau, Pavlodar, and North Kazakhstan regions reported the lowest youth unemployment figures. As for the length of time spent job hunting in 2024, 18,200 young people searched for one to three months, 16,200 for three to six months, and 16,000 for less than a month. A smaller share, 7,500, searched for more than six months, and 4,000 had been looking for work for over a year. Broader Context and Causes of Unemployment Nationwide, 448,200 Kazakhstani citizens were unemployed in the fourth quarter of 2024. The unemployment rate was 4.2% among men (211,100) and 5.1% among women (237,100). The most affected age groups were 35 to 54 (256,900 people) and 55 to 64 (69,700). The most frequently cited reasons for unemployment included family responsibilities (61,400), layoffs or company closures (50,300), and difficulty finding suitable jobs (112,500). Other contributing factors were domestic duties (44,200), health issues (17,500), and challenges securing employment post-graduation (16,600). Policy Implications Experts highlight the importance of developing flexible employment policies tailored to the evolving labor market. Enhancing conditions for self-employment and youth entrepreneurship is seen as a potential key strategy for reducing youth unemployment in the long term.