To the 29th Anniversary of Independence of the Republic of Uzbekistan
Dynamics of economic diplomacy
Posted in 2018 on the French website Radio France Internationale, the message "Visit to France of the President-reformer of Uzbekistan" says that President Shavkat Mirziyoyev, who has been leading the country with the largest population in Central Asia for two years, is developing the economy of Uzbekistan at a qualitatively new stage. One of the most important directions of the new foreign policy of Shavkat Mirziyoyev was the development of economic diplomacy. In the context that the most favored nation regime has been established between Uzbekistan and France in mutual trade, the Convention on the avoidance of double taxation of income and the prevention of tax evasion on income and capital is in force, the Uzbek-French relations demonstrate an even more complex, substantive and systemic nature.
First, after Shavkat Mirziyoyev's visit to France, the dialogue intensified in terms of the implementation of the agreements reached between the leaders of the two countries. For example, in 2019, the French Foreign Ministry’s Secretary of State, Zh.-B.Lemoyne, and in 2019 and 2020, the French Foreign Ministry’s Special Representative for Economic Diplomacy in Central Asia, P.Loro visited the republic. In September 2019, the Minister of Foreign Affairs of Uzbekistan Abdulaziz Kamilov held talks with J.-B. Lemoyne in Paris, and in November of the same year, at the initiative of the Embassy of Uzbekistan in France, a dinner was organized, which was attended by J.-B. Lemoyne and the ambassadors of countries of Central Asia. The Cooperation Program of the Ministry of Foreign Affairs of Uzbekistan and France for 2019-2020 was signed.
In May 2020, online negotiations were organized between the Deputy Prime Minister of Uzbekistan Sardor Umurzakov and the Minister of Economy and Finance of France B. Le Maire. Along with the discussion of the existing agreements, the French side also expressed its readiness to provide comprehensive support to Uzbekistan in joining the World Trade Organization, obtaining Uzbekistan the status of a beneficiary country of the European Union system of preferences "GSP+" and signing the Agreement on Enhanced Partnership and Cooperation with the EU. In June 2020, for the first time, a videoconference of parliamentarians of the two countries took place, at which the current state of inter-parliamentary cooperation and action plans for the second half of 2020 were discussed, an agreement was reached on the development and signing of a memorandum of understanding, which includes a roadmap.
Second, there is a positive trend in trade and economic cooperation. Uzbekistan is one of the leading trade partners of France in the Central Asian region. At the end of 2019, the trade turnover between the countries amounted to 345.7 million US dollars, which is 1.3 times more than in 2016. At the same time, the negative balance of Uzbekistan in trade with France was a characteristic trend in trade and economic cooperation. However, in recent years it has changed from negative to positive balance. Thus, in 2019, Uzbekistan's exports increased by 1.7 times compared to 2016, amounting to 5.7 million. Traditionally, the main export items of Uzbekistan are natural resources, in recent years the importance of export of services has been growing with the share of about 14%. The import structure includes chemical, perfumery and cosmetic and pharmaceutical products and equipment.
An important event was the opening in 2019 in Paris of the Uzbek-French trading house UzFrance Trade, designed to expand the presence and popularity of a wide range of Uzbek products in the French market. In particular, the first joint Uzbek-French enterprise in France, specializing in packaging dried fruits and vegetables from Uzbekistan, has been developed with the assistance of a commercial house. The export of dried fruits and vegetables is seen as a new and promising area of trade between the two countries.
Third, the interest of the French business community in the growing market of Uzbekistan has increased. In 2019, an Uzbek-French business forum was held in Tashkent. At the forum, a solid French delegation consisting of representatives of the leading 30 concerns and financial institutions presented more than 20 business projects and discussed the possibilities of investing in the real sector of the economy of Uzbekistan. In particular, in such industries as energy and nuclear energy, engineering services and civil engineering, construction materials, logistics, electrical engineering, cosmetics and other areas.
The interest of the French business community is also confirmed by statistics. So, in 2020, in Uzbekistan, the number of enterprises with participation of French capital increased by more than 1.5 times compared to the previous year, and amounted to 36 enterprises, including 16 enterprises with 100% French capital. According to Pascal Loro, this is due to the fact that Uzbekistan began to open up to foreign investors, and Shavkat Mirziyoyev's visit to France gave a new impetus and dynamics to the development of trade and economic cooperation. As a result, “many French firms are now coming to Uzbekistan, occupying strong positions, because this is the second economy in the region and the first country in terms of population,” added P. Loro. Chairman of the French-Uzbek Business Council MEDEF International K. Fontaine, supporting the opinion of his colleague, noted: “Uzbekistan stands out as one of the most dynamic and attractive economic regions for business in Central Asia, especially over the past three years, which, in the general opinion of the French companies marked a "new era" thanks to the deep reforms undertaken by the President of Uzbekistan, Mr. Mirziyoyev, to improve the business environment."
At the initiative of the business community of the two countries, an Uzbek-French business club has started its activity in Paris in 2019 with the status of a non-governmental non-profit organization and the opening of the residence is also expected in Tashkent. The goal of the club is to promote business activity and the development of trade and economic cooperation between France and Uzbekistan, as well as the formation of an Uzbek-French business platform for negotiations and exchange of information. Club representatives also became members of the Foreign Investors Council under the President of Uzbekistan. “The club plans to create an expert center in Tashkent to conduct research in various fields,” said club president Gulnara Kholmatova.
Fourth, financial and technical cooperation is being strengthened through the French Development Agency, whose activities are aimed at promoting economic growth and sustainable development of emerging countries. The Central Asian office of the agency was accredited in Tashkent in 2018. The choice of Tashkent is a political step that once again underlines the importance of Uzbekistan in the region for France. In the same year, the agency held its first bilateral consultations with the government of Uzbekistan. The consultations have acquired the status of annual event and have opened up new sources of financing for the economy of the republic. Deputy Director of the Agency J.-C. Pires noted: "The consultations were very productive and it is a great honor for me to celebrate this very important moment in order to establish long-term cooperation between the FDA and Uzbekistan."
The French Development Agency signed a Cooperation Program with Uzbekistan for 2018-2021 for the implementation of infrastructure projects for a total amount of about 600 million Euros. Priorities were given to projects in the areas of agriculture, water supply and sanitation, hydropower, tourism, district heating and waste management. With participation of the agency, projects such as "Modernization of solid waste management in Samarkand", "Improving the safe functioning of Charvak hydroelectric power station" are being implemented, and today the implementation of 13 new projects in priority areas is being worked out.
Fifth, large investment projects with French partners were launched. These include projects for exploration and development of uranium deposits in Navoi region with the Orano company, for the production of water and dairy products in Namangan region with the Lactalis company, the design of all types of electrical networks and energy facilities with “Assystem Engineering and Operation Services SAS ”, the production of architectural and automotive glass in Jizzakh region with the FIVES company, the construction of photovoltaic power plants in Samarkand region with the Total Eren company and others. Fabienne Demol, Senior Vice-President of Total Eren, said: “We are very proud that our project will become the first large-scale project in the field of renewable energy sources in Uzbekistan and one of the first international projects in the country in solar energy, which will provide electricity to more than 150 thousand people”.
Recently, Tashkent khokimiyat, the Ministry of Housing and Utilities and SUEZ signed a contract for 142 million Euros to modernize and improve the city's water supply system. Erik Gibali, International Development Director of SUEZ, stressed: “I certainly believe that Uzbekistan is turning into a Central Asian regional hub. We intend to make Uzbekistan – in particular, the dynamically developing capital of the country – Tashkent and legendary Samarkand a starting point for development of our business in Central Asian region. The seven-year contract includes the implementation of intelligent water management solutions as well as staff training. I am confident that this pilot project to modernize the water sector of Uzbekistan will become the pearl of Central Asia in the future."
Another major project is the creation in Tashkent region of an international all-season resort "Beldersay-Chimgan-Nanay", the implementation of which is planned with a consortium of French companies. According to Pascal Loro "... soon it will be the largest ski resort in the Central Asian region." As you can see, the interest of French investors is quite diversified in the Uzbek market.
Sixth, there is a new development trend in terms of cooperation between the regions of Uzbekistan and France. In particular, the Uzbek diplomatic mission in Paris pays considerable attention to the interaction of French business circles with the khokimiyats of Jizzakh and Namangan regions. The visits of French partners to these areas are systematically organized to discuss business projects, as well as to participate in business forums.
Along with this, in 2018, a Joint Communiqué on cooperation was adopted between the khokimiyat of Tashkent and the mayor's office of Strasbourg and an agreement on partnership in the industrial sphere for 2018-2021 was signed. And in 2019, the khokim of Tashkent received the mayor of the 7th arrondissement of the city of Paris and Member of the European Parliament Rashida Dati. During the meeting, the sides discussed the possibilities of expanding trade and economic cooperation between the cities, as well as the opening of a branch of the Strasbourg University in Tashkent.
Seventh, the tourism sector is becoming an important area of bilateral cooperation. In 2016, 4.7 thousand and in 2020 about 20.4 thousand tourists from France visited Uzbekistan. During the period under review, the number of tourists increased more than 4.3 times.
This growth was facilitated by: a visa-free entry regime for French citizens for a period of 30 days starting from October 2018, participation in international tourism exhibitions in France with a national stand – "Tourissima Lille", "Mahana", "Mondial du Tourisme", "Top Resa", popularization of the Uzbek travel brand in the leading French media – Le Point, Radio France International, Diplomatic World, Gala Magazine and others. In particular, the magazine “Gala Magazine” with the headlines “Uzbekistan is a country of great opportunities”, “Uzbekistan is an open-air museum” devoted 45 pages of its publication to the cultural and historical heritage of the republic. And another famous French publication "GEO" included Uzbekistan in the list of "Most Amazing Places 2020".
In the post-pandemic period, further growth of this segment is expected. This will be facilitated by the above measures, the implementation of the Framework Agreement on cooperation in tourism, signed between the governments of Uzbekistan and France, as well as the first Honorary Consulate of France in Samarkand that opened in Central Asia in 2019.
Professor, Emmanuel Dupuy,
President, Institute of Prospects and Security in Europe
Professor, DSc Sayfiddin Jurayev,
Tashkent State University of Oriental Studies
Ass. Prof., PhD Elyor Makhmudov,
Tashkent State University of Oriental Studies
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