European Commission: Uzbekistan to become one of most attractive investment destinations in Central Asia (Exclusive)

Uzbekistan will become one of the most attractive investment destinations in Central Asia provided that current economic and administrative reforms (including the reform of judiciary) are successfully carried out, European Commission representative told Trend in an interview.

"Its location within the region, relatively well-educated workforce, mineral wealth, favorable conditions for agricultural production, adequate transport infrastructure, potential for the development of renewable energy sources and improving trade environment within the region already makes it a desirable place for investments,” the official added.

The representative expects that the investment climate will further improve over next years with a growing number of European companies getting a foothold in Uzbekistan. The Government of Uzbekistan has the ambitious goal of reaching the top 20 in the World Bank’s Ease of Doing Businesses Index by 2022, after having climbed from 166th place in 2012 to 76th in 2018.

"EU investment flows to Uzbekistan are still limited but show a growing trend,” the official noted.

According to Eurostat, Uzbekistan is the EU’s 83rd largest trade partner, with trade relations most developed with the UK, Germany, Spain, Italy and France. EU imports from Uzbekistan include industrial products, textiles, chemicals, plastics and manufactured goods, making the EU the fourth largest trading partner for Uzbekistan.

The fuel industry, mining, manufacturing (automotive industry, transport, construction equipment etc.), metallurgy, mechanical engineering, and electrical engineering are key traditional pillars of the Uzbek economy, with further potential to be untapped including by EU investors.

The European Commission representative stressed that the textile industry, electricity sector, telecommunication industry, renewable energy, agriculture and food processing, the banking sector as well as culture, the creative industry and tourism also have good development potential.

Uzbekistan’s Development Strategy for 2017-2021 points to the need of improving the investment climate, active attraction to the economy and provinces of foreign investment, especially foreign direct investment, he reminded.

"To achieve this, major economic reform goals for the Government of Uzbekistan until the end of 2021 include, inter alia, WTO accession and the removal of trade and export distortions to hasten the process of transition to a market economy and its integration into the global trading system; and the unbundling and liberalization of aviation, rail, telecommunications and roads sectors,” the official underlined.

He also noted that the government of Uzbekistan established the State Committee for Investments in March 2017, which is responsible for coordinating the formulation and implementation of a unified state investment policy and attracting foreign investments

He added that ongoing negotiations between the EU and Uzbekistan for an Enhanced Partnership and Cooperation Agreement (EPCA) could pave the way for more trade and investment, as does the start of European Investment Bank (EIB) operations in the country in 2017 aiming to support public and private sector projects in the areas of infrastructure, energy and energy efficiency, and assist small and medium-sized enterprises in the country.