Tasks set to advance reforms in the mahalla system to a new level

In recent years, Uzbekistan has carried out large-scale reforms aimed at transforming the mahalla institution into an efficient, people-oriented mechanism. The introduction of the “Mahalla of Seven” system and the transfer of more than 100 types of services, including access to loans, subsidies, compensations, and financial assistance, to the mahalla level have yielded tangible results. As a result, 7.5 million citizens have been lifted out of poverty, the unemployment rate has halved, and over 3,500 mahallas have been modernized.

The term of office for mahalla chairpersons has been extended from three to five years. Under their leadership, a vertical management structure has been established, supported by sufficient authority, resources, and favorable conditions. To promote local development projects and create new jobs, banking and tax specialists have been assigned to each mahalla, and dedicated funds are being allocated for infrastructure development.

The Head of State noted that while many mahallas are already showing tangible results, in some areas coordinated teamwork has yet to be established.

“My visit to the Shurariq mahalla of Norin district should open the eyes of hokims, as well as officials at the republican, regional, and district levels, and members of the so-called ‘Sevens’. It should help them develop their competencies and approaches, and serve as an incentive for more efficient and professional work”, the President emphasized.

According to a resolution adopted last week, 33 districts and 330 socially disadvantaged mahallas have been identified.

Each of these districts will receive 100 billion UZS, while each mahalla will be allocated 5 billion UZS. Additionally, $100 million in funding from the World Bank and the Islamic Development Bank will be directed toward these efforts. A further 2 trillion UZS will be allocated to improve infrastructure for key “driver” projects.

In total, more than 7 trillion UZS will be allocated to finance the program.

Regional governors were instructed to select two underdeveloped mahallas in their respective regions, while district hokims are to identify one each, allocating 5 billion UZS for their development. It was emphasized that improvements should be achieved in at least 236 additional mahallas across the country.

A resolution adopted a month ago stipulates that, under the Participatory Budgeting program, projects initiated by residents will also receive government funding. If citizens themselves start repairing roads, water supply systems, schools, or kindergartens, the state will cover half of the expenses. Next year, 500 billion UZS will be allocated to implement another thousand such projects.

The President also announced a new initiative: beginning this year, the Tax Committee will compile a “Best Tax-Paying Mahalla” ranking based on the level of land and property tax payments.

Mahallas ranked in the top 100 will receive additional benefits: the state will cover 75 percent of their infrastructure costs under the Participatory Budgeting, and each will be allocated 2 billion UZS in extra funding.

Each member of the Legislative Chamber will be allocated 3 billion UZS to support the development of mahalla infrastructure within their respective constituencies.

In addition, mahalla budgets will now retain 10 percent of all fines collected for sanitation, environmental, and illegal construction violations. Starting in 2026, no less than 200 billion UZS will be allocated annually to mahalla budgets.

Overall, throughout the year, 2,000 mahallas are expected to receive an additional approximately 8.5 trillion UZS from all designated funding sources.

District hokims have been instructed to use these resources effectively and to enhance coordination with the “Mahalla of Seven” teams based on new management approaches.

For example, the Shurariq mahalla is being transformed into a service hub for six neighboring mahallas. Inspired by this initiative, local entrepreneurs have begun launching dozens of new projects. The involvement of architects and urban planners has made it possible to develop a comprehensive plan for the renewal of seven mahallas.

Regional and district leaders, in collaboration with the Reform Headquarters, have been tasked with replicating this model across 33 districts and 330 mahallas.

The entrepreneurship development issues were also discussed at the meeting.

Each mahalla will be assigned a specialization based on its potential and the needs of residents. On this basis, microprojects will be developed, expected to create employment for at least 200,000 people.

Mahallas have been granted the right to auction off unused state-owned properties with an area of up to 2,000 square meters. Furthermore, mahalla chairpersons and district hokim assistants will now be authorized to sell assets of up to 5,000 square meters at auction. Importantly, 70 percent of the proceeds will remain at the mahalla’s disposal and be directed toward infrastructure improvements.

Entrepreneurs interested in transforming mahalla buildings into modern service centers will be offered additional incentives.

Specifically, business owners who construct buildings housing the “Mahalla of Seven” offices on the ground floor will be exempt from land and property taxes for three years in urban areas and seven years in rural areas. In addition, during this period, the profit tax and turnover tax rates will be reduced by 50 percent.

Several issues that require systemic solutions to strengthen the social environment in mahallas and improve educational and moral guidance for youth were also identified at the meeting.

It was noted that the rising number of divorces, as well as cases of alimony evasion, family abandonment, children left with credit debts, and the consequences of consanguineous and early marriages, should be a matter of serious concern for hokims, mahalla representatives, the older generation, and society as a whole.

It was emphasized that young people must be made aware that starting a family is not only a conscious choice but also a great responsibility toward one’s spouse and children. The conclusion of a marriage contract, it was stressed, helps protect the rights of both parties and prevent financial hardship in the event of divorce.

At the meeting, attention was also drawn to the fact that in some mahallas, issues of cleanliness and public order are not being properly addressed: sanitary violations are observed around residential buildings, construction sites, irrigation canals, and parks. In this regard, it was decided to declare a month-long nationwide campaign for cleanliness and order. Hokims of cities and districts, as well as their deputies responsible for public improvement, were given corresponding instructions to ensure implementation.

From now on, if the “Mahalla of Seven” and residents take the initiative to create a green zone, the district hokim will be obliged to allocate up to 10 acres of land for this purpose. Strict public oversight will be established to ensure the targeted use of these plots, and any attempt to repurpose them for other needs will be prevented in accordance with the law.

The President instructed the introduction of a comprehensive performance evaluation system for the “Mahalla of Seven”.

District hokims have been directed to reward the ten most effective teams at the end of each year and to grant them additional bonuses. It was also emphasized that, from now on, it is prohibited to hold fragmented meetings with members of the “Mahalla of Seven”, focusing on separate areas of work.

“Bringing the spirit of New Uzbekistan into every mahalla means ensuring that the ‘Mahalla of Seven’ functions as a single, cohesive team”, the President noted.

The meeting concluded with reports from responsible officials and regional leaders, followed by an open dialogue with mahalla chairpersons.