Uzbekistan is seeking to transform its network of special economic zones (SEZs) from tax-friendly investment destinations into platforms for industrialisation, as policymakers and investors increasingly focus on how Central Asia can convert abundant natural resources into higher-value economic activity.

A panel discussion took place at the fifth Tashkent International Investment Forum (TIIF 2026) this week on the future of SEZs. International financial institutions, consultants and policymakers argued that the era of competing solely through tax incentives is coming to an end.

Instead, successful zones are increasingly defined by infrastructure, governance, connectivity and access to skilled labour. "We need to move from tax-driven zones to ecosystem-driven zones," said Rami Rafih, managing director and senior partner at Boston Consulting Group.

The discussion comes as Uzbekistan accelerates efforts to attract foreign investment and deepen industrial development. According to Ilzad Kasimov, deputy minister of investment, industry and trade, the country now operates 47 free economic zones (FEZs) across almost all regions, hosting approximately 1,400 investment projects.

Investors from China, Russia, Turkey, the UAE, Saudi Arabia, South Korea and India are active in the FEZs. Chinese companies alone are implementing around 200 projects worth approximately $4bn.

"The development of free economic zones allows Uzbekistan to strengthen its position as one of the most attractive investment centres in the Central Asian region," said Ilzat Ablakhatovich Kasimov, Deputy Minister of Investment, Industry and Trade of Uzbekistan 

While much of the discussion focused on the broader question of how Central Asia can avoid becoming merely a supplier of raw materials, the fact that the region sits at the crossroads of some of the world's largest economic markets was also a significant topic of interest.

"We're talking about four billion consumers and about $6 trillion of economic activity. Geography has already given Central Asia a seat in the middle of the dinner table. The challenge is to get a bigger share of it," said Rami Rafih, managing director and senior partner at Boston Consulting Group.

The region's resource base is formidable. Central Asia possesses significant hydrocarbon reserves, major uranium deposits and some of the world's best renewable energy potential. However, Rahfi argued that the key challenge is no longer producing more energy but generating more value from it. "Central Asia's energy challenge is to create more value from the energy that you have," Rafih said.

The discussion highlighted what participants described as a development ladder where at its lowest level, countries simply extract and export energy commodities. The next stage involves investment in transmission networks and infrastructure that make energy more useful and reliable while the highest stage is industrialisation, where energy is converted into manufactured goods and higher-value economic output.

"The energy remains the same, but the value can increase by 10, 15 or even 100 times," Rafih said, arguing that the process depends heavily on infrastructure. "The critical thing is the middle layer of infrastructure and grid. The key is network infrastructure." The most successful economic zones, he contended, are increasingly those integrated into wider networks, including transport corridors, electricity grids, digital systems and logistics infrastructure. 

The argument reflects a growing consensus among development institutions that economic competitiveness more and more depends on connectivity rather than natural resource endowments alone.

Enrico Pinali, regional manager for Central and West Asia at the Asian Development Bank (ADB), noted that special economic zones now compete directly with one another for international capital.

For investors, the deciding factors are increasingly infrastructure quality, regional market access and regulatory predictability. "What benefits the economy is lasting access to infrastructure and a strong investment climate," said Lisa Kaestner, country manager for Uzbekistan, Kazakhstan and Türkiye at the International Finance Corporation (IFC).

Vitaly Yakovlev, managing partner at KPMG, argued that governance reforms are equally important. Zone administrations need sufficient authority to make decisions quickly and provide efficient services to investors. Investment support mechanisms should become "the window at which decisions are made", he said.

Participants repeatedly returned to the issue of human capital. While infrastructure remains essential, Soichi Kobayashi, chairman of the Japan Development Institute, stressed that long-term economic success ultimately depends on people rather than physical assets. "Economic miracles are ultimately built by young people," he remarked.

That theme resonated with a broader message emerging from this year's TIIF: Central Asia's future prosperity will depend less on its natural resources than on its ability to integrate markets, attract investment and develop the skilled workforce needed for advanced manufacturing.

As the discussion concluded, participants agreed that successful SEZ’s increasingly require a combination of effective governance, world-class infrastructure, predictable regulation, skilled labour and integration into global value chains.

Looking ahead, Kobayashi, pointed to the next stage of industrial development. "The Silk of the 21st century is electronics," he said.

For Uzbekistan, the challenge is ensuring that its SEZs become not merely enclaves for investment, but the foundations of a broader industrial transformation capable of converting the region's geographical advantages and energy wealth into long-term prosperity.