PROFILE: President of Uzbekistan Shavkat Mirziyoyev is seeking to renew his reform mandate in snap elections

PROFILE: President of Uzbekistan Shavkat Mirziyoyev is seeking to renew his reform mandate in snap elections
President of Uzbekistan Shavkat Mirziyoyev is seeking to renew his mandate with the people by calling snap elections two years before his current term in office expires. / bne IntelliNews
By Ben Aris in Tashkent July 8, 2023

Uzbekistan, the largest country in Central Asia, with a population of more than 35mn, will hold presidential elections on July 9. The country has undergone many reforms since its independence in 1991, but it has been experiencing a full-scale transformation since 2016, when the current president, Shavkat Mirziyoyev, took office. He still enjoys popular support and has promised to continue delivering on his reforms should he be re-elected.

In April Mirziyoyev called a referendum to approve the first changes to the 1992 constitution and update the basic law to reflect the changes the country was going through. Two thirds of what the government is now calling a “social constitution” was amended to better improve citizens’ rights, reinforce the rule of law and also promote social aspects such as gender equality.

One of the changes was to extend the presidential term of office from two terms of five years to seven years each and as the new constitution in effect is the term count clock, Mirziyoyev can now remain in office for another 14 years. In order to reaffirm his mandate from the people, Mirziyoyev also called snap elections in May, two years before his current second term in office expires. He is widely expected to win by a landslide.

During the last elections in September 2021, interviews of voters in Tashkent by bne IntelliNews found universal support for Mirziyoyev simply because he had already delivered on his promise to improve people’s lives. In less than five years, Mirziyoyev has managed to liberalise the economy and modernise the political system in Uzbekistan, in contrast to his predecessor, Islam Karimov, who presided over a repressive state. Uzbekistan has now become a substantially more convenient destination for foreign business and investment, as well as a more appealing tourism destination thanks to its well-preserved cultural heritage.

Economy flourishing

Part of Mirziyoyev’s continuing reforms aimed at improving economic efficiency is the privatisation of state-controlled assets. Dozens of Uzbekistan’s largest companies are slated to be privatised in the coming years, including several banks, Uzbekistan Airways, the copper producer Almalyk MMC, the oil producer Uzbekneftegaz, the natural-gas pipeline operator Uztransgaz, the steelmaker Uzmetkombinat and Navoi MMC, which operates the giant gold deposit Muruntau, among other companies.

Selling stakes in these companies should both attract foreign investors and prompt the development of the local equities market, which remains small (with a total capitalisation of $5bn). It will also boost economic growth and provide budget funds for increased social spending.

As a result of large-scale reforms under Mirziyoyev, Uzbekistan’s GDP has been growing at an annual pace of more than 5% and exceeded $80bn last year, while the country’s exports topped a record high of $19bn in 2022. Due to the easing of restrictions, Uzbekistan also attracted about $8bn in foreign direct investment (FDI) in 2022.

Mirziyoyev has also turned the Uzbek soum into a fully convertible currency. This long-hoped-for development brought about the end of the black market, where currencies used to be traded at rates double the official rate. That was a major headache for both citizens and foreign businesses as well as investors, who couldn’t repatriate their profits.

Most notably, Mirziyoyev has eased bureaucratic barriers for entrepreneurs, reduced the tax burden, and liberalised foreign trade. Combined, these measures have enabled Uzbekistan to advance to 69th place in the World Bank’s latest Doing Business ranking, up from 146th place in 2013. Mirziyoyev’s focus on opening up the country to international financial markets enabled Uzbekistan to sell its first dollar-denominated bonds in 2019, paving the way for the country’s companies to sell foreign debt.

Political system

Mirziyoyev has a long experience in government, having served as Prime Minister from 2003 to 2016 under the former president, Islam Karimov. The latter is very popular with the people, despite his international reputation as an authoritarian, as he also delivered on growth and rising standards of living. As a result Mirziyoyev has emphasised continuity and is simply accelerating many of the reforms he oversaw as Prime Minister, as well as introducing a raft of new policies and undoing the worst of Karimov’s repressions.

Shortly after his first election as president in 2016, Mirziyoyev surprised the international community by releasing political prisoners, a rare move for many countries of the former Soviet Union. He then went on to restore bilateral relations with two neighbouring countries in Central Asia – Kyrgyzstan and Tajikistan – that had been tense during Karimov’s rule.

In addition, Mirziyoyev is fostering ties with the United States and Europe. At the same time, Uzbekistan maintains good relations with China and Russia. Last year, Mirziyoyev hosted the Shanghai Cooperation Organization (SCO) summit in the city of Samarkand, which displayed Uzbekistan’s growing soft power in the Eurasian region.

To simplify the administrative system, Mirziyoyev reduced the number of federal ministries and agencies to 28 from 61, thereby removing redundant functions. The headcount of government employees is being gradually reduced by a third, making room for budget funds to be directed towards social projects.

The new constitution will lead to higher government spending to ensure high-quality education and medical services, and state support for low-income individuals and seniors, women and children with the aim of reducing the poverty level, which has already fallen dramatically.

Environment and society

In the past, Uzbekistan had a negative human rights record, with its recruitment of millions of citizens, including children, to harvest cotton every year, which was heavily criticised by human rights groups. One of Mirziyoyev’s most notable reforms is outlawing this forced labour and allowing farmers, who were previously obliged to sell cotton to the government at a fixed price, to sell it to textile producers and create joint value-added chains.

Since then the entire cotton sector has been privatised and the once heavily state-controlled sector put on a market footing. At the same time, the president banned the export or raw cotton and forced producers to go up the value chain to produce value-added products such as thread and textiles, increasing the value of exports in the process, as bne IntelliNews described in the report Uzbekistan Rising .

Mirziyoyev also plans to implement social projects aimed at increasing sustainability, improving the efficiency of the irrigation system, and managing environmental phenomena such as river inflows, which have been aggravated by climate change and can damage both agriculture and hydropower plants (HPPs). Additionally, Uzbekistan is currently collaborating with Saudi Arabia, France, the United Arab Emirates, China and other countries to install solar and wind energy capacity, and aims to ensure that renewable energy accounts for up 30% of the country’s electricity capacity by 2030 as part of the president’s New Uzbekistan  programme.

According to its development strategy, Uzbekistan has set a target of nearly doubling its per capita GDP by 2030, to the equivalent of $4,000, and to create the preconditions for becoming an upper-middle-income country later in order to raise the standard of living in society. If Mirziyoyev is re-elected, his new term will end in 2030. The implementation of Mirziyoyev’s ambitious second stage of reforms and the creation of a new Uzbekistan depend on this upcoming election.