As you know, a favorable investment climate is a prerequisite for ensuring a stable high development of the economy, attracting investments in regions and industries, and enhancing entrepreneurial activity. It contributes to the influx of foreign direct investment in important industrial and social projects, expands the possibilities for innovation, and improves the quality of socio-economic development.
Over the years of independence, Uzbekistan has gone through a difficult stage of restructuring the entire economy, accompanied by certain difficulties in terms of developing a suitable concept and mechanisms for its implementation.
In particular, it must be admitted that for a long time certain issues remained unresolved in the field of doing business (including currency conversion, free repatriation of profits, attracting international financial institutions, etc.), and this, in turn, seriously affected the investment attractiveness of the country .
However, in recent years the situation in this regard has begun to change drastically, and reforms aimed at improving the investment climate have gained a dynamic character.
Already now, in Uzbekistan, one of the drivers of economic growth is the attraction of foreign capital to the national economy.
In the first half of 2019, the volume of utilized foreign investments grew by 4.3 times compared to the same period in 2018 and amounted to $ 5.6 billion.
By the end of 2019, the development of foreign direct investment in the amount of at least $ 7 billion is expected. For comparison, this figure in 2018 amounted to $ 2.8 billion.
In addition, over two years, the number of enterprises with foreign investment doubled - the figure is more than 10 thousand. The share of investments in the GDP of Uzbekistan for the first time amounted to 38%.
According to the results of January-March 2019, Uzbekistan conducted trade relations with more than 150 countries of the world. Over the past year, total turnover increased by 37%. The main trading partners of the Republic are countries such as China, Russia, Kazakhstan, Korea and Turkey.
The achievement of positive results is facilitated by the implementation of structural reforms aimed at improving the business environment, including:
- reducing the time, number of documents and costs associated with registering a business (registration takes 30 minutes);
- liberalization of the foreign exchange market, which allowed to remove restrictions on the repatriation of profits;
- simplification of tax and customs administration - introduction of a risk analysis system, reduction of documents and time required for customs clearance;
- strengthening measures for the execution of contracts (introduction of the institution of mediation), protection of minority shareholders, as well as others.
As a result, Uzbekistan was ranked 69th among 190 countries in the Doing Business 2020 ranking and entered the top 20 reformer countries in terms of creating the most favorable conditions for doing business. For comparison, we note that in 2012, the country in this rating occupied only 166 place. Also, during the second half of 2018 and the past period of 2019, Uzbekistan managed to get the first ratings from agencies such as Fitch and Standard & Poor’s. At the same time, such factors as a strong sovereign balance, low level of state debt, as well as a decrease in state participation in the country's economy positively influenced the rating of Uzbekistan. The republic granted visa-free entry to citizens of 86 countries, which in turn contributed to obtaining the status of the second country in terms of openness for tourists among the CIS countries.
Uzbekistan has also resumed active negotiations on accession to the World Trade Organization (WTO). Joining the WTO will provide an opportunity, for Uzbek entrepreneurs, to raise the prospects for increasing scientific and technological progress in the sectors through the acquisition and purchase of efficient and reliable imported equipment. In addition, upon entry into the WTO, domestic exporters will gain easier access to foreign markets.
Uzbekistan’s potential is based on solid macroeconomic fundamentals - it is a country with a strong domestic market, relatively young and cheap labor, rich natural resources, a relatively diversified economy and a rapidly developing infrastructure.
In general, Uzbekistan has the advantage of macroeconomic stability, which, combined with ongoing reforms, opens up opportunities in various sectors of the economy, be it financial services, construction or tourism[1].
The work on furtherintegration into the international stock market was intensified. Thus, in February 2019, Uzbekistan placed the first 5-year and 10-year Eurobonds totaling $ 1 billion with a four-fold oversubscription, eventually orders were distributed among more than 150 investors from England, Europe, America and Asia.
It is also noteworthy that in November 2019, for the first time in the history of Uzbekistan, corporate Eurobonds were issued. In particular, JSCB «Uzpromstroybank»issued five-year international bonds worth $ 300 million on the London Stock Exchange. Orders reached $ 1.2 billion with 4x coverage.
Successful placement of bonds also evidences to the positive assessment of international investors of reforms carried out in Uzbekistan.
