Uzbekistan was among the top 10 global improvers in the World Bank's Ease of Doing Business report that assesses the environment for doing business across 190 economies worldwide. Climbing 13 positions to rank 74th, Uzbekistan also performed better than the other Central Asian countries, the report released on October 30 showed.
The report noted a total of five business reforms implemented in Uzbekistan, most on the back of efforts by reformist President Shavkat Mirziyoyev to open up the country for investors. Mirziyoyev came to power in September, following the death of autocrat Islam Karimov, who prioritised trade protectionism over foreign investments. Mirziyoyev’s most promising reforms in 2017 include the removal of strict currency controls, which long fed a black market for the Uzbek som and double digit inflation.
Uzbekistan’s reforms include the streamlining of the process for obtaining an electricity connection “by introducing a 'turnkey' service at the utility that fulfills all connection-related services, including the design and construction completion of the external connection”.
The country also streamlined the process for obtaining approvals of land plot allocations from various agencies. In addition, it passed legislation that increased corporate transparency requirements, giving more agenda-setting power to shareholders and disclosing “board member activities in other companies, executive compensation and audit reports”.
Uzbekistan was also among the countries that introduced or enhanced systems for filing and paying taxes online. Moreover, it rolled out a new platform for business registration.
Uzbekistan’s ranking in this year’s report surpassed those of its neighbours, with the exception of Kazakhstan, which ranked 36th in the report, falling one position below last year’s 35th rank. Among the other ranked Central Asian countries, Mongolia came 62nd, improving slightly by two places from last year; Kyrgyzstan slightly worsened to 77th against last year’s 75th; while Tajikistan ranked 123rd, improving from 128th.
One of the world’s most isolated countries, Turkmenistan, was not included in the report.
Mongolia’s improvement was due to the introduction of the Law on Movable and Intangible Property Pledges, which “regulates the assignment of receivables, financial leases and retention-of-title sales, requiring their registration with the collateral registry”.
Tajikistan’s five-rank rise was driven by it “raising the revenue threshold for mandatory value-added tax registration”, which made starting a business easier in the country. The small Central Asian nation also made property registration easier and less costly by eliminating the need to register sale-purchase agreements at municipal offices.
Uzbekistan’s currency liberalisation brought in by Mirziyoyev should draw in more foreign investors as it makes it possible to repatriate profits in hard currency. Overall, the reform drive pursued by the president—which has also included the release of dissidents and human rights activists—is starting to clock up a good number of successes. For instance, the World Bank has entered discussions with Tashkent on possible backing it may be able to give to opening up the country economically—possibly including a $1bn loan according to some reports—while the European Bank for Reconstruction and Development (EBRD) has for the first time since 2007 approved financing for projects in Uzbekistan. Also, following what was the first official trip to Ankara by an Uzbek president since 1999, Mirziyoyev is hopeful that many Turkish businesses forced out of Uzbekistan by his predecessor will make a return.
Uzbek GDP grew by 5.3% in the first nine months of 2017, down from the 7.8% reported for the same period of 2016, marking the first time Uzbek authorities have reported a growth figure below 7% within the last decade, having generally reported growth within the range of 7%-9%. The latest GDP data can be seen as a positive step towards transparency of macroeconomic reporting by Uzbek authorities.