In the modern world, a state's power is measured not only by natural resources or military potential. A country's competitiveness is closely linked to the quality of its human capital, which includes a fair judicial system, quality education, effective healthcare, a developed business environment, and strong state institutions. These factors not only ensure internal development but also determine the country's place and influence on the international stage.
Success in foreign policy also depends on the state's internal potential. A country with the rule of law, a stable economy, an educated population, and developed entrepreneurship is perceived in international relations as a reliable partner. Thus, human capital and foreign policy are complementary areas.
In recent years, the modernization of the judicial system has become one of the priority areas of state policy. Procedures for forming the corps of judges have been revised, the Supreme Council of Judges has been established, and a system of indefinite powers for judges has been introduced. Furthermore, the legal foundations for ensuring the independence of the judiciary have been strengthened by abolishing the practice of coordinating judge candidates with local executive bodies.
Structural changes have contributed to increasing the efficiency of the judicial system. A specialized system consisting of criminal, civil, economic, and administrative courts has been formed. In particular, the activity of the administrative court has provided citizens with an effective legal tool to protect against decisions of state bodies, which contributes to strengthening the rule of law in relations between the state and society.
The mechanism for reliable protection of human rights has also been strengthened. The institute of the investigating judge has been created, and the use of evidence obtained by illegal methods has been restricted. These changes have significantly enhanced guarantees for the protection of individual rights in criminal proceedings.
The digitalization of judicial processes is another important part of the reforms. Electronic proceedings, automated case distribution, audio and video recording of court sessions, public disclosure of decisions, and the possibility of remote participation have increased the transparency and openness of the judicial system. This has helped reduce risks associated with the human factor and expanded opportunities for fair judicial proceedings.
Of course, the task of further improving the judicial system remains relevant. Priority tasks include strengthening the independence of courts in practice, improving the quality of decisions made, expanding public access to justice, ensuring the execution of judicial acts, and reducing the tendency towards accusation in criminal proceedings.
These reforms confirm the fact that a fair judicial system is not only an institution of the legal sphere but also a crucial element determining a state's economic development, investment climate, and international authority.
When developing human capital, the institutions of family and youth policy hold a special place. Since the majority of the population consists of young people, their education, employment, occupation, and active participation in social life directly affect the country's long-term development. Therefore, support for the family and youth has been established as a strategic direction of state policy.
Institutional foundations have been strengthened in this process. The support system for settlements and families has been improved, as has the activities of the Agency for Youth Affairs. New versions of the Law 'On State Youth Policy' and the Family Code have been adopted. Additionally, through the 'Youth Passport' and 'Women's Passport', a mechanism for targeted work with groups of people in need of assistance has been introduced.
Programs for preferential lending, professional training, subsidies, and employment are being implemented to increase the economic activity of young people. Programs supporting youth centers, technology parks, sports facilities, and startup projects also serve to improve the quality of human capital. Such initiatives aim to transform youth from job seekers into job creators.
An important area is the empowerment of women. Laws concerning gender equality, protection from pressure and violence, and the introduction of restraining orders and rehabilitation centers have been adopted. Opportunities for girls to enter higher educational institutions have been expanded, and special financial programs have been launched to support female entrepreneurship.
Human capital is formed not only through social protection. Another important pillar is private initiative and entrepreneurship. In recent years, the procedure for conducting business has been significantly simplified. An electronic enterprise registration system has been introduced, the number of activities requiring licenses and permits has been reduced, and a moratorium on inspections of business entities has been introduced. The activities of the business ombudsman have also been launched.
Reforms in the tax sphere also contribute to improving the business environment. The number of taxes has been reduced, administrative procedures have been simplified, a modern VAT calculation mechanism has been introduced, and the burden on the payroll fund has been reduced. This has led to an expansion of formal employment and a reduction in business operating costs.
Small and private businesses are becoming the main driving force of the economy. Thanks to the development of entrepreneurship support funds, guarantee mechanisms, preferential lending programs, and electronic trading platforms, new business entities are emerging. In particular, the expansion of digital services has given entrepreneurs the opportunity to reduce time and costs.
Nevertheless, there are tasks that need to be addressed in the future. For example, expanding small businesses' access to financial resources, creating equal conditions for competition, further strengthening the inviolability of private property, supporting entry into external markets, and developing entrepreneurial potential remain primary issues.
The volume of non-performing loans (NPL) in the banking system of Uzbekistan continues to grow. According to data from the Central Bank, by the end of the first half of 2026, the volume of such loans reached 22.9 trillion sums. This figure is significantly higher than 18.1 trillion sums at the beginning of the year, an increase of 27 percent.
Although the growth of the credit portfolio is considered a natural process, the faster rate of increase in non-performing loans raises concerns within the banking system. Over six months, the total credit portfolio grew from 604 trillion sums to 643 trillion sums, representing an increase of 6.4 percent. Meanwhile, non-performing loans grew almost four times faster—by 27 percent.
The share of non-performing loans in the total credit portfolio has also increased. If this indicator was 2.99 percent at the beginning of the year, it reached 3.57 percent by the end of the half-year period. Analysts note that the majority of non-performing loans are concentrated in state-participating commercial banks. The volume of NPL in these banks increased from 12.8 trillion sums to 16.4 trillion sums over six months. This means that almost 72 percent of all non-performing loans in the country's banking system are concentrated specifically in state banks.
As a result, the share of non-performing loans in state banks rose from 3.17 percent to 3.89 percent. At the same time, the situation in banks with private and foreign capital remained relatively stable, with the NPL share increasing from 2.62 percent to 2.95 percent.
In terms of relative growth, the largest increase was recorded at TBC Bank, where the share of non-performing loans increased from 5.71 percent to 12.12 percent, becoming the highest in the system. Microcreditbank also demonstrated an increase in the NPL share from 4.41 percent to 7.86 percent, surpassing others in absolute volume of non-performing loans, which increased by almost 900 billion sums over six months.
Despite the overall trend of growth, some banks managed to improve the quality of their credit portfolio. The most significant positive changes were observed at Poytaht Bank, where the share of non-performing loans decreased from 24.40 percent to 7.32 percent. Kapitalbank reduced the volume of non-performing loans by almost 200 billion sums, bringing the NPL share down from 2.81 percent to 2.14 percent. Ipoteka Bank achieved a reduction in the volume of non-performing loans by 163 billion sums. Indicators also decreased at Hayot Bank (from 3.96 percent to 2.68 percent) and Ziraat Bank Uzbekistan (from 3.86 percent to 2.96 percent).
Furthermore, the share of non-performing loans remained at 0 percent in KDB Bank Uzbekistan and Octobank. Uzumbank, ApexBank, and Open Bank were among the banks with the lowest NPL rates, at 0.01 percent, 0.04 percent, and 0.35 percent, respectively.
In summary, the half-year results show that alongside the increase in lending volume, strengthening control over debt quality is required. Especially in state-participating banks, the high rate of growth of non-performing loans requires improving risk management mechanisms, credit assessment, and borrower engagement. Nevertheless, the successful experience of some banks in revitalizing their credit portfolios demonstrates the existence of effective approaches in this area.
The joint-stock company 'Uzkimyosanat' successfully implemented the tasks set out in the Investment Plan during the first half of 2026.
Significant results were achieved during the reporting period in the areas of enterprise modernization, development of high-tech production, and job creation. Over six months, $283.2 million in foreign investments were attracted, resulting in the Investment Plan being fulfilled at 105%.
The attracted funds consisted of $278.2 million in direct foreign investment and loans, as well as $5 million in foreign loans under state guarantees.
Furthermore, three investment projects with a total value of $14.9 million were commissioned during the six-month period. These projects enabled the creation of production capacity worth 177 billion UZS annually and provided for the creation of 147 new jobs.
It is noted that these projects make a significant contribution to increasing production potential, expanding the output of import-substituting and export-oriented products, and ensuring employment of the population.
