Earlier, 37 “difficult” districts and 903 “difficult” mahallas with high poverty levels were identified. Target indicators for 2026 were also approved. The poverty rate is planned to be reduced to 2.8%, while unemployment is expected to fall to 4.5%. Permanent jobs are to be provided for 1 million people, and the income of 4 million people is expected to increase. The number of mahallas free from poverty and unemployment is to reach 3,500. The measures also provide for the legalization of 1 million informal jobs and the training of 120,000 specialists in high-demand professions.
In the first quarter of 2026, 3.6 trillion soums were allocated from the republican budget for the accelerated development of 37 “difficult” districts and 903 “difficult” mahallas. During the same period, 167,000 people were provided with permanent jobs. Another 737,000 citizens received services aimed at creating additional sources of income. A total of 241,000 informally employed citizens were moved into the legal sector. Under business support programs, 8 trillion soums in credit resources were directed to entrepreneurs.
The new Presidential Decree clarifies the existing procedure. The document strengthens the financial, contractual and organizational mechanisms for working with “difficult” mahallas. The main purpose of the changes is to link poverty reduction measures with reform programs, funding sources, public oversight and support for bringing entrepreneurial projects to the market.
The list of “difficult” mahallas will increase by 12 and reach 915. Special support measures will apply to these territories. They include financing reform programs, preferential lending for family entrepreneurship and support for the implementation of entrepreneurial projects.
For the financing of each “difficult” mahalla’s reform program, every 1 billion soums allocated from the relevant local budget will be matched with 2 billion soums from the republican budget. As a result, a local contribution of 1 billion soums will form a total financial package of 3 billion soums, excluding additional sources.
The role of the local level in project preparation will increase. A district or region will participate with its own funds, while the republican budget will scale up projects confirmed by local financial participation.
Along with local budget funds, the use of resources from entrepreneurship infrastructure development funds under the Council of Ministers of the Republic of Karakalpakstan and regional hokimiyats will be allowed.
This will reduce the dependence of development programs on local budget capacity. Social and entrepreneurship infrastructure projects will be financed from several sources. This provision is especially important for territories with limited budget revenues.
As part of the implementation of the reform program, a social contract aimed at reducing poverty will be concluded between the district or city hokimiyat, the citizens’ assembly of the mahalla and the employment and poverty reduction department.
The social contract shifts support into a format of mutual obligations. The hokimiyat will be responsible for organization and coordination. The mahalla will participate in identifying local needs. The employment and poverty reduction department will support measures related to employment, income growth and assistance to families.
District and city Kengashes of people’s deputies will exercise public oversight over the implementation of social contracts. Program implementation will be assessed not only by the use of funds, but also by the fulfillment of obligations set out in the social contract.
An additional task will be assigned to the adviser to the district or city hokim on the development of digital technologies and artificial intelligence technologies. The adviser will assist in the sale of products, services and works produced under entrepreneurial projects implemented in mahallas by placing information about them on electronic trading platforms.
Placing products and services on electronic trading platforms is expected to expand sales channels and increase the sustainability of family and small business initiatives.
In “difficult” mahallas, loans under family entrepreneurship development programs will be issued at an annual rate of 12%.
For “difficult” districts, this rate has been applied since March 1, 2026. For “difficult” mahallas, the mechanism will take effect from July 1, 2026.
The preferential rate will reduce the cost of borrowed funds for households. This will improve opportunities to start or expand a family business, services, crafts, trade, household farming or another small project.
The Decree provides for the implementation of social and entrepreneurship infrastructure projects included in the comprehensive development programs of “difficult” districts and the reform programs of “difficult” mahallas.
This provision allows infrastructure constraints to be addressed through program-based solutions. Roads, engineering networks, social facilities and conditions for entrepreneurship will become part of an approved program. Funding sources and control mechanisms will also be defined.
The new procedure forms a single chain of work with “difficult” mahallas. It includes a reform program, local contribution, additional funds from the republican budget, resources of regional funds, a social contract, public oversight and support for entrepreneurs in entering the market.
Izoh qoldirish