Over the past five years— Uzbekistan has embarked on major economic reforms and investment to transition from a state-led to market-based economy. Key aspects driving increased private sector participation and foreign investment include:
Privatization of state-owned enterprises is a centerpiece of reforms, especially in strategic sectors like energy, telecommunications, and banking which aim to improve efficiency. Around 1500 smaller companies across various industries have been privatized so far. However—the large scale privatization program involving major enterprises is still in early stages. Successful privatizations can introduce modern governance and skills that will yield productivity gains.
Currency convertibility has been introduced for domestic businesses to facilitate trade and investment flows. Restrictions on access to foreign currency have been substantially eased over the past three years. The liberalization aims to develop local financial markets and improves transparency.
Uzbekistan has been attracting growing foreign investment— especially from China, Russia and Turkey. Priority areas for investors include- mining, petrochemicals, automotive and machinery. Uzbekistan’s large domestic market of 33 million people also offers consumer industry opportunities.
Tax and customs reforms are ongoing with the aim to streamline administrative processes, improve transparency, tackle corruption and reduce room for arbitrary decisions. The government plans further reforms to simplify tax payment procedures and compliance requirements.
Special economic zones with targeted tax incentives have been launched to attract export-oriented manufacturing projects. These zones aim to leverage Uzbekistan’s plentiful and low-cost labor resources and strategic geographic location. Priority sectors include machinery, automotive components, agro-processing and textiles.
As market-oriented reforms progress—Uzbekistan has been attracting growing foreign direct investment, especially from China, Russia and Turkey. In addition to the priority sectors above, investors are targeting Uzbekistan’s mining sector which has substantial untapped mineral reserves. Uzbekistan’s large consumer market of 33 million people also offers opportunities in consumer goods and services industries.
