The commentary analyses the current state and dynamics of foreign direct investment (FDI) attraction in Uzbekistan’s economy, viewing FDI as a key element for sustainable economic growth, technological development and job creation. Since 2017, the country has implemented many reforms aimed at attracting investors and improving the investment climate, including the introduction of laws on special economic zones and currency operations, which has led to the creation of numerous economic and industrial zones.
The paper notes that one of the strategic goals laid out in the Strategy “Uzbekistan – 2030” is to attract $110bn FDI, support public-private partnerships and increase investment in fixed capital. However, successful achievement of these goals requires improvement of the institutional environment, including the rule of law and protection of property rights, which play an important role for foreign investors.
Analyses of FDI between 2016 and 2022 show significant growth in industry, especially in textiles and chemicals, and in the energy sector. However, investment in high-tech and export-oriented sectors such as engineering and pharmaceuticals remains low, highlighting the need to create a more attractive environment in these sectors.
In addition, there have been changes in the geographical composition of FDI in recent years: the share of investment from China continues to increase, but there has also been an increase in investment from Turkey and Saudi Arabia. Regionally, FDI growth has been strongest in the Syr Darya, Samarkand and Navoi regions, where free economic zones have helped to attract FDI and spread investment more evenly across the country.
Commentary was written by Sardor Murtozaev, Research Fellow at the Centre for Sustainable Development
* The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.
Download and read the commentary (in Uzbek) here
