A new IFC and World Bank study shows that Uzbekistan can create private-sector-led, export-oriented economic growth by reforming and modernizing promising sectors such as air-transportation connectivity, information and communication technology (ICT), chemicals, and horticulture sectors.
The two institutions’ first joint Country Private Sector Diagnostic for Uzbekistan identified a strategy for creating markets in these sectors, which currently face significant modernization and investment needs. Prepared in close consultation with the government and private sector stakeholders, the report, Creating Markets in Uzbekistan, highlights that attracting investment to these sectors—currently dominated by state-owned enterprises—will require regulatory reforms, increased competition and efficiency, and greater government capacity.
Resource-rich but landlocked, Uzbekistan has long been a centrally planned economy. But it has changed fundamentally since 2016. The country is moving towards a more open, integrated and export-driven economy with reforms aimed at supporting the private sector.
“With systematic reforms, better infrastructure, and a greater role for the private sector, Uzbekistan can make use of its unique mix of abundant natural resources, favorable climate conditions, and strategic location at the crossroads of Europe and Asia to emerge as a regional hub for trade and investment,” said Georgina Baker, IFC Vice President for Latin America and the Caribbean, Europe, and Central Asia.
The study recommends that sector-specific measures in these sectors be complemented by economy-wide reforms that will help Uzbekistan overcome development challenges associated with employment, private enterprises, exports, and energy efficiency.
In the past five months, since the draft report was initially shared with the government of Uzbekistan, the authorities have already taken several policy reforms that are at different stages of implementation. They include abolishment of export controls, a new tax system, currency liberalization, no visa requirements for 45 countries, creation of new PPP agency, among many other. With these and the upcoming reforms, Uzbekistan will be able to develop to its full potential for an inclusive and sustainable economic growth.
“The World Bank Group stands ready to help the Government of Uzbekistan address and tackle the constraints that are preventing different sectors of the economy from achieving their fullest potential,” said, Lilia Burunciuc, World Bank Regional Director for Central Asia. “This support, both financial and advisory, will be targeted at deepening reforms to drive investment and modernization in these sectors of the domestic economy.”
The study also identified other sectors that have the potential to generate more sustainable and higher-paying employment and drive development in Uzbekistan—including transport infrastructure, finance, tourism, retail chains, and food production.
Country Private Sector Diagnostics provide in-depth analysis and offer recommendations for leveraging private sector solutions to achieve development objectives. Jointly produced by the World Bank and IFC, diagnostics are underway in Angola, Burkina Faso, Cameroon, Ecuador, Ethiopia, Guinea, Indonesia, Jordan, Kenya, Kyrgyz Republic, Lebanon, Morocco, Mozambique, Myanmar, Philippines, Rwanda, Senegal, South Africa, and Tunisia.
