Doha, Qatar: Uzbekistan - the land that’s positioned in the geographic heart with the largest population center of Central Asia is a setting example of embracing investment opportunities across industries including tourism, banking, manufacturing, and industrial development.
The country borders Kazakhstan to the north and northeast, Kyrgyzstan and Tajikistan to the southeast, Turkmenistan to the West, and Afghanistan to the south. The total length of the country’s borders is 7090km. It is also located at the center of the Great Silk Road and has been known since ancient times as an intersection for caravan routes crossing Asia, Europe, and Africa.
With a history of statehood spanning more than 3000 years, Uzbekistan has long been one of the world’s most developed centers of commerce, science, culture, and art. The Republic of Uzbekistan declared independence in 1991.
The country has a diverse economy with an estimated $69.2bn GDP nominal value as of 2021 and a GDP growth of 7.4 percent. The GDP per capita growth stands at $1,983 as of 2021 and the main industries include textiles, food processing, machine building, construction materials, metallurgy, mining, hydrocarbon extraction, and chemicals. The key agricultural products in the country are milk, wheat, and vegetables among others.
The country’s exports in the year 2021 reach $16.6bn with 10 percent annual growth. Some of the key exports in the government’s data include copper, steel, gold, natural gas, agriculture products, cotton fibers, textiles, and building materials.
The country’s imports as of the same year stand at $25.5bn with a growth rate of 20 percent. Some of the major imports in the country are vehicles and machinery, chemicals, refined petroleum, aircraft, and food.
The leading trade partners for Uzbekistan include Russia at 17.9 percent, China at 17.7 percent, Kazakhstan at 9.3 percent, Turkey at 8.1 percent, Korea at 4.5 percent, and Germany at 2.6 percent.
Trade volume
In 2021, the total volume of disbursed foreign investment in Uzbekistan amounted to $ 9bn, including foreign direct investment (FDI) at $3.2bn and loans for state security at $1.6bn, according to the Ministry of Foreign and foreign investment trade.
The country’s manufacturing sector and the nurturing of a nascent digital economy. Strategic and financial investors will recognize in Uzbekistan many of the qualities that have distinguished the best-performing frontier and emerging markets over the last two decades.
The Development Strategy for the New Uzbekistan, which covers the period from 2022-2026, includes the following priorities:
Banking sector
Future economic growth in Uzbekistan will depend on continued development in the banking sector. Today, the banking system of Uzbekistan includes 33 banks. Among these 12 banks are state-owned, 15 are privately held, and 5 are subsidiaries of foreign banks. As of November 2021, total banking assets amounted to $39bn with deposits accounting for 40 percent of the total.
The total capital of Uzbek banks is $6.2bn, of which 81 percent belongs to the state-owned banks, which remain the larger players in the banking system.
Uzbekistan’s banking sector showed true resilience in response to the economic shock of the COVID-19 pandemic.
The Central Bank of Uzbekistan ensured macro-economic stability and the smooth functioning of the entire banking system, utilising short-term and long-term monetary policy instruments to provide banks the necessary liquidity to maintain lending.
Tourism
Uzbekistan has emerged as an exciting destination for tourists and business travelers alike. On February 1, 2019, the government introduced a visa-free regime for citizens of 45 economies, including many European and Western countries. That year the number of visitors to Uzbekistan peaked at just under 2.2 million.
For individuals and families considering relocation to Uzbekistan, a network of international schools and the availability of quality healthcare make the decision easier. A construction boom has brought a wide range of high-quality housing options.
Foreign investments
The next phase of Uzbekistan’s ambitious reform agenda cannot succeed without increased foreign investment. The country’s targets are ambitious — Uzbekistan is seeking to secure $9.5bn in investment commitments. The Uzbek government has sought to recognise a role for foreign investors not only as partners in specific financial ventures but also in the country’s broader development agenda.
Today, foreign investors in Uzbekistan enjoy a stronger legal framework, a more favorable tax regime, easier business set up procedures, and new mechanisms and arrangements such as free economic zones and public-private partnerships.
Special economic zones have been established across the country for in-incentivize different types of economic activity. These zones include free economic zones, special scientific and technological zones, tourism and recreational zones, free trade zones, and special industrial zones.
In a globalised world in which foreign investment has become commonplace, there remain few truly untapped frontier markets.
The opportunity presented in Uzbekistan is unique in both its economic dimensions and historical context—this is an investment opportunity of the kind that underpinned the economic miracles of countries like Poland and South Korea.
Having reached the end of that initial five-year period, Uzbekistan is in many respects a country transformed — optimistic and energetic, it has gained the attention of multinational corporations, global banks, and institutional investors.
