Uzbekistan recently awoke from 20 years of deep sleep and already implemented some major economic reforms; the local currency is now tradable and currency control was largely liberalized. The Ministry of Finance is currently working on a completely renewed tax legislation. The country is rich in cotton, and is now developing itself from being a mere exporter of raw material to building up a textile manufacturing industry – it has already made good progress with this. Pharma, agriculture and automotive are other growing industry sectors.

Not to forget, Uzbekistan has 30 million consumers.

 Opportunities of Uzbekistan

• A large labor market ensured by young and growing population
• Uzbekistan is a major market with 32mn inhabitants, of which 51% live in cities and towns and 49% live in rural areas.
• 19,4mn people are working-age.
• 72 universities which currently welcome 300 thou. Students annually.
• 4th largest economy among the CIS countries (85th in the world) in 2017 measured by GDP in real terms: USD 47,88bn.
• GDP per capita in 2017 at current prices: USD 1 490 (and USD 6 930 based on PPP).
• Considerable annual progress in World Bank’s Ease of Doing Business ranking: 74th place in 2017 (2016: 87th).
• A comprehensive governmental modernization program currently introduces major’s legal, economic, and social improvements and makes Uzbekistan a prime destination for foreign direct investment.

Key Industries in Uzbekistan

Agriculture

• Uzbekistan is one of the largest producers of fresh fruit and vegetables in the world, due to very favorable climate and soil conditions.
• The government has been promoting an active state agriculture policy, aimed at efficiency and sustainability.
• The factors of competitiveness are the low cost of agricultural production, qualified and skilled labor resources and vast land resources.
• The size of the sector is estimated to exceed USD 5 bn
• Stable growth of 6-7% annually
• The Uzbekistan Development Strategy until 2021 is aimed at a more efficient use of land and water resources, increase the volume of exports of fruit and vegetable products, and create favorable conditions for exporters

Textile Industry

• Cotton yarn, garment & hosiery and fabrics are the major production segments in the sector, respectively accounting for 54%, 28%, 18% of the exports in this industry
• Exports have increased continuously in the last 10 years. In 2017, they accounted for USD 1,3 bn.
• The factors of competitiveness in these sectors are based on skilled labor force originated by the local traditional production, the vast availability of raw materials along with low-cost energy resources, the access to local and international market thanks to general and special incentives:

e.g. Access to EU market – through

1. Cooperation and Partnership Agreement (CPA):
2. It provides reduction of import duties and customs payments of domestic enterprises from 12% to 6%
3. It increases production and export supplies to the EU countries
4. Next goal: reduction of the rates of customs payments to 0%.

Automotive Industry

• Uzbekistan’s automotive industry is the largest (after Russia) in the CIS market, producing the highest output in the market.
• Production of passenger cars in Uzbekistan has been increasing continuously, reaching 140 000 units in 2017 (in 2016, 88 000).
• Specific incentives have been introduced by the government to promote investments in this sector: reduction of taxable profits, privileges on payment of VAT and payment of customs duties, as well as benefits to pay tax on property of legal entities.
• Major production areas of the industry are located around Tashkent, Samarkand and Khorezm, as well as in Fergana Valley.