Customers in front of a market hall in Uzbekistan

Economic situation On the road to more openness

According to official figures, Uzbekistan's economy has grown steadily by at least five per cent per annum in recent years. This was the level of growth achieved in 2018; for 2019 and 2020 the World Bank forecasts growth rates of 5.1 and 6 per cent respectively. The Uzbek economy is strongly dependent on world market prices for its main exports (gas, metals, cotton) and the economic health of its major trading partners, China and Russia.

The Uzbek government has recently implemented a large package of measures aimed at improving the investment climate. These include liberalising its system of foreign exchange control and privatising state-owned enterprises, for example in finance, the chemical industry and the energy sector. Uzbekistan's Development Strategy for 2017 to 2021 has identified a number of priority areas for development. Alongside reforms of the governance and public management system and of the law and the judicial system, important areas identified are economic development and liberalisation and improvements in social infrastructure and social services.

Yet the general environment for private sector activity remains difficult. Potential investors are deterred by the strict state controls on the banking system, limited access to credit, lengthy approval procedures, lack of legal certainty and an inadequate infrastructure.

Widespread corruption is another major problem. In the 2020 Corruption Perceptions Index (External link) drawn up by the non-governmental organisation Transparency International, Uzbekistan ranked 146th out of the 180 countries assessed.

Development potential

Thanks to its central geographical position and its mineral deposits (including gold, copper, uranium, coal and natural gas), Uzbekistan has good potential for development. Already, companies from Russia, China, Korea and Malaysia are investing in the development of the natural gas and oil deposits that can be found there.

The fuel industry, mechanical engineering, metal processing, transport manufacturing and electrical engineering are key pillars of the Uzbek economy. The textile industry, electricity sector, and the mobile telecommunications industry also offer potential for development.

The country's young population can be regarded as another asset. Almost 60 per cent of the population is under the age of 30. If educational opportunities are improved, the Uzbek economy would be able to draw on a plentiful supply of relatively well-trained labour.