Uzbekistan’s plans to expand agricultural production, industrial output and exports are running into an increasingly uncomfortable reality: the country is running out of water.

Officials, international organisations and industry executives gathered at the fifth annual Tashkent International Investment Forum (TIIF 2026) this week to discuss climate resilience and agricultural investment, but the discussion repeatedly returned to a more fundamental question. How can Central Asia’s most populous country continue growing at the desired pace when demand for water is rising sharply while supplies are projected to fall?

According to Igor Alekseev, managing director and partner at Boston Consulting Group, Uzbekistan’s total water demand is expected to increase by 23% over the next two decades as population growth, industrialisation and urbanisation accelerate. By 2040, industrial demand alone is projected to rise by 150%, utility demand by 60% and agricultural demand by 15%.

As water demand rises, water availability falls. The uncomfortable reality is that it is moving in the opposite direction.

Climate change, melting glaciers and declining transboundary river flows are expected to reduce available water resources by 17% by 2040, with the most severe impact falling on the Amu Darya basin. Under the worst-case scenario, Uzbekistan could face a water deficit of 22bn cubic metres (bcm) by 2040.

“If we put all this together, we clearly see that the country will face a huge overall deficit of water resource availability,” Alekseev said at a panel session at TIIF. “Addressing this gap, it’s not just important, it’s imperative to Uzbekistan national security and economic stability.”

The figures highlight a growing contradiction at the heart of Uzbekistan’s economic strategy. The government wants to increase agricultural production from $40bn to $60bn, expand exports and continue industrialising its economy. Yet agriculture already consumes 90% of the country’s water resources, while 80% of those resources originate beyond Uzbekistan’s borders.

“Agriculture is the backbone of economy. It’s not only the economy, it’s the livelihood of millions of people,” said Nuriddin Kushnazarov, adviser to the Ministry of Agriculture. The sector accounts for 19% of GDP and employs 27% of the labour force, making it both an economic and political priority.

It was in 2025 that agricultural output reached $40bn. The government aims to raise that figure to $60bn to meet rising domestic demand and expand exports. “We have a strategic objective to increase agriculture production to $60bn,” Kushnazarov said. “We as well have a target to export more, we have a target to feed the population.”

Yet officials increasingly acknowledge that future growth cannot simply be achieved by using more water. “This should not be at the expense of natural resources,” Kushnazarov said. “We need to increase the productivity. We need to increase the water efficiency.”

The challenge is becoming more urgent as climate change reshapes the region. Ahmed Raza, senior policy officer at the UN Food and Agriculture Organization's (FAO's) Office for Central Asia, warned that glaciers in Kyrgyzstan and Tajikistan, which supply much of the region’s river system, are disappearing rapidly. “In the last 50 years, we have seen 30 percent of the glacier areas declining,” Raza said. “That of course has implications for transboundary water but also for people who rely on waters downstream for agriculture.”

The retreat of glaciers is being accompanied by rising temperatures, more frequent extreme weather events and growing pressure on agricultural land. According to Raza, the region is facing multiple environmental stresses simultaneously. “It’s not just a water scarcity problem which we’re facing,” he said. “It’s coupled with floods, wildfires, and they’re all happening at the same time.”

The FAO official argued that many of Uzbekistan’s current problems also stem from decades of policy choices. Soviet-era irrigation systems and extensive cotton monoculture prioritised production over sustainability, contributing to widespread environmental degradation. “What that has meant is that we have prioritised short-term economic gains vis-a-vis long-term environmental sustainability,” Raza said.

The consequences are already visible. Land degradation now affects almost 80% of Uzbekistan’s territory and it is estimated that it will impose economic losses equivalent to around 5% of GDP.

The government has responded with an aggressive programme to improve water efficiency. Since 2019 it has promoted drip irrigation, sprinkler irrigation and laser land levelling, extending water-saving technologies to roughly 2.5mn hectares of the country’s 4.3mn hectares of irrigated land. Officials aim to extend coverage across all irrigated land by 2030. “We understand that without increasing the water efficiency, we cannot reach the target,” Kushnazarov said. “Because the land will not expand. The land will still be the same size by 2030, by 2050.”

But changing farming practices has proven difficult. The government has relied heavily on subsidies to encourage adoption of new technologies and recently consolidated a fragmented system involving 10 ministries into a single agricultural payments agency. “It’s very difficult to change the mind of the farmer,” Kushnazarov admitted. “With the subsidies, we push the farmers to introduce water-saving technologies.”

The discussion exposed a deeper debate about how water should be managed. Alekseev argued that subsidies alone may not be enough and suggested that higher water tariffs could create stronger incentives for conservation. “It’s always useful not only to provide subsidies, but to also increase the tariffs for water,” he said. “As soon as you introduce higher tariffs and make water a real economic resource, not just a free resource, it always works better.”

Kushnazarov pushed back, warning that many farmers are already struggling with rising costs. “If we put higher tariffs on water, how will the farmers survive?” he asked. “We need to think about the farmers’ sustainability.” He noted that energy can account for as much as 40% of production costs in some agricultural activities and argued that additional costs could undermine rural incomes. “The farmers are already under pressure — under the pressure of the climate, under pressure of costs, prices, energy prices,” he said.

The exchange captured the dilemma facing policymakers across Central Asia. Water must become more productive, but making it more expensive risks undermining the very agricultural sector governments are trying to expand.

The scale of the challenge is daunting. According to BCG estimates, utilities will need to reduce daily water consumption by 15-20%, industry will need to reduce water intensity by 30-35%, and agriculture will need to reduce water use per tonne of crop produced by 40-45% by 2040 if severe water shortages are to be avoided.

Officials are increasingly candid about the risks. “The forecast is bad,” Kushnazarov said. “It's a scary forecast.”

He pointed to projections suggesting that water inflows into the Amu Darya could decline by as much as 30%, while agricultural output in some areas could fall by 20% by 2050 if current trends continue. That helps explain why much of the discussion at the forum focused on mobilising investment. Participants argued that climate-smart agriculture, water infrastructure, digital monitoring systems and new food technologies could help narrow the gap between economic growth and resource consumption.

Shihab Elborai of Strategy& estimated that modernising water and agricultural infrastructure across Central Asia would require around $40bn in investment.

Yet even if the financing can be secured, the challenge facing Uzbekistan is ultimately larger than technology or capital. The country is attempting to expand agricultural production, industrial output and exports at precisely the moment when climate change is reducing the availability of its most important natural resource.

The figures presented in Tashkent suggest that future prosperity will depend not simply on growing the economy, but on learning how to grow it with substantially less water.