Uzbekistan - Between Covid and Economic Growth

by Farian Sabahi, September 21, 2020.

'The pandemic did not stop Uzbekistan: we were able to quickly resume production and exports with proper security measures. The Ministry of Finance created the Anti-Crisis Fund amounted to about EURO 950 million to combat the virus, support the population and business.
At the same time, we took measures to support the businesses totaling EURO 4 billion'. Deputy Prime Minister, Minister of Investment and Foreign Trade, Sardor Umurzakov, explains how Uzbekistan is coping with the pandemic.

What measures did you take to stop the virus?

We commissioned new hospitals and constructed special quarantine zones. The treatment of patients is based on international best practice, including through the participation of foreign specialists. Uzbekistan provided assistance to other countries, including Tajikistan, Kyrgyzstan, China, Russia and Hungary. Compared to 2019, trade cooperation with neighboring countries did not decrease in the first quarter of 2020. There is a feel of good neighborliness in Central Asia, which is extremely important to overcome the pandemic.

How does today's Uzbekistan differ from the past one?

It is a growing country, and the ongoing reforms are irreversible. In 2019, the foreign direct investment amounted to USD 4.2 billion and, thus, increased by 3.7 times compared to 2018. The share of investments in GDP reached 37%. The economic growth amounted to 5.6%: industrial production grew by 6.6%, exports - by 28%, gold and foreign exchange reserves increased by USD 2.2 billion to USD 28.6 billion.

What are the goals of your Ministry?

We attract foreign investments, advanced technologies, and know-how, establish business ties, and expand cooperation with international financial institutions and foreign state financial organizations. Our priorities also are to create a favorable investment climate and join the World Trade Organization.

How many Italian companies are there in Uzbekistan?

Currently, Uzbekistan 53 companies operate in Uzbekistan, 13 of them were established in 2019. They work in manufacturing and services area. We hope that the initiated cooperation with Confindustria and the creation of a new Confindustria Uzbekistan will help to increase interest in our country. We maintain a meaningful dialogue with Minister of Foreign Affairs, Di Maio, and President of Lombardy, Fontana, who visited Uzbekistan in 2019.

Tekint and Danieli greatly contributed to the development of automotive glass production and metallurgy. An electronic gas meter plant involving 'Pietro Fiorentini' was commissioned in Tashkent. There are companies interested in cooperation in photovoltaic installations. The transfer of experience in the rural tourism is of potential interest. We purchase machines and plants for the oil, steel, textile and fruit and vegetable industries in Italy. We increase the supply of Uzbek fabrics, leather, fruits and vegetables to Italy. We expect positive dynamics in further commercial exchange, and we have the potential to establish industrial cooperation relations.

What initiatives did you take to attract foreign companies?

We created 21 free economic zones for industrial, pharmaceutical, agricultural and tourism activities, where we provide infrastructure and residents are exempt from taxes and duties for 3-10 years. Favorable location of Uzbekistan and free trade agreements with the CIS countries guarantee duty-free exports to a market with a population of about 300 million people, as well as to Afghanistan.

When speaking in the Parliament, President Shavkat Mirziyoyev stressed the lag in the banking system: how do you plan to overcome it?

We have to make our banks serve to clients, privatize the traditionally public sector, and attract foreign experts. We are open for the cooperation with Italian banks and investment funds. The contributions of the EBRD, IFC and other international financial institutions are important.

What is a 'Silk Visa'?

Currently, citizens of 86 countries can enter Uzbekistan with no visa. The cancellation of the entry visa doubled the flow of Italian tourists. 'Silk Visa' would enable better organization of trips to the Central Asia, a region with similar cultures, customs and languages, where there were no borders until the early 20th century. Its operation requires certain agreements on a number of organizational and technical issues.