The Uzbek government is going to continue to focus on economic stability, bringing inflation down, making the country more attractive to international investors and boosting trade with World Trade Organisation (WTO) membership.
“Uzbekistan’s economy has been growing by 6% a year, the macroeconomic situation is stable and we have sizable buffers. The focus for going forward is to bring inflation down, support growth at 5-6% and carry through on the strategic vision for development set by the president,” Shukhrat Vafaev, the Uzbek director oft the General Agency for Strategic Reforms, told the delegates at the EBRD annual meeting in Samarkand on May 17 during the plenary session.
Uzbek President Shavkat Mirziyoyev has launched a raft of liberal economic reforms since taking office in 2016 that have started to bear fruit in the last year years. The emphasis has been on a shift to private enterprise to drive growth, with the emphasis on adding value in each industry.
“The transformation of the economy is accelerating and being pushed by private business. Industry production is up 1.4-fold in the last year and in the next five years we plan to attract $120bn of foreign direct investment (FDI) as well as increase exports by $30bn per year through to 2026."
Uzbekistan’s government is becoming increasingly ambitious as it notches up a slowly growing number of tangible successes. Mirziyoyev's decision to privatise the entire cotton sector and ban raw cotton exports was a very bold move, but textile exports now generate four times more than what raw cotton exports brought in, after investment into new textile facilities poured in.
“There are several things attracting attention in Uzbekistan,” said Deputy Prime Minister Jamshid Khodjeav on the same panel. “First, investors can see that Uzbekistan is at the centre of a big market of around 100mn people. Investors look at not just Uzbekistan but at the regional market.
“Moreover, Uzbekistan has good relations and infrastructure links to the Commonwealth of Independent States (CIS) as well as the rest of Central Asia, including free trade agreements [FTAs] with all these markets. And more recently the EU market has been opened as well to us.”
As part of the strategy to keep improving Uzbekistan’s connection with the global market the government is in the middle negotiating its accession to the WTO.
“The government is working on the WTO agreement and all the technical stages have been completed (explaining the current legislation to the WTO members),” says Khodjeav. “This year’s roadmap is to complete the negotiations on terms with the WTO members this year before we can accede.”
In parallel to the WTO talks Uzbekistan is also working with its neighbours on improving transport links and enhancing trade ties, such as a plan for a new railway line “from Krygyzstan to China,” Khodjeav says.
“This month we signed an agreement with these three countries to start this project,” Khodjeav added. “We are working very hard to create a good environment to promote imports and exports, first via WTO membership and more generally to develop the corridors starting with the Middle Corridor.”
Khodjeav went on to emphasise that the so-called Middle Corridor that links Asia to Europe, but bypasses Russia via Central Asia, has gained a new significance thanks to the geopolitical tensions created by Russia’s war in Ukraine.