• GDP: US$13.6 billion (2005).
• Main exports: Cotton, gold, natural gas, mineral fertilisers, ferrous metals, textiles and motor vehicles.
• Main imports: Machinery and equipment, food, chemicals and metals.
• Main trade partners: Russian Federation, Germany, Switzerland, UK, Kazakhstan, Tajikistan, Korea (Rep) and Japan.

Agriculture is the main component of Uzbekistan’s economy. Livestock is reared in the steppes while a variety of crops, including grains, fruit and vegetables, are grown in the more fertile valleys. In addition, vast quantities of cotton are produced in formerly arid areas fed by artificial irrigation schemes.

Uzbekistan continues to consume over three-quarters of the water available to the ex-Soviet Central Asian Republics. The result of this ill-conceived plan has been one of the world’s greatest ecological catastrophes in the Aral Sea, once among the world’s largest inland seas, which has been deprived of the bulk of its river sources and has consequently contracted to one-third of its original size.

The country has substantial natural resources, especially natural gas, which is an important export earner, and oil. Uzbekistan also boasts the world’s largest opencast gold mine and has deposits of silver, uranium, copper, lead, zinc and tungsten. Machinery and vehicles account for the bulk of manufacturing output.

Self-sufficiency in food and energy products meant that Uzbekistan did not suffer as badly as other republics from the collapse of the Soviet Union and its economic system. In principle, this made reform a somewhat easier prospect than for many of Uzbekistan’s neighbours.

In 1992, Uzbekistan joined the IMF, the World Bank, and the European Bank for Reconstruction and Development (as a ‘Country of Operation’). A new currency, the Sum, was introduced in 1996. Economic reform began in earnest in 1994 but the government has since blown hot and cold over putting it into effect.

Much of the economy has now been transferred into private ownership, but key sectors remain under state control and the financial crises of 1997/98 in Asia and the Russian Federation persuaded the government to put many reform plans on hold. Currency and export controls were introduced in an attempt to insulate the economy, as far as possible, from external influence (although the government now plans to make the Sum fully convertible in the near future). The lack of reform has also deterred many potential foreign investors.

Uzbekistan’s recent economic performance has been patchy. Annual GDP growth was reported by the Uzbek government to be 7.2% in 2006, but there are doubts over the accuracy of this figure. There are no reliable inflation figures available.

Uzbekistan has joined the Economic Co-operation Organisation of ex-Soviet republics and former socialist countries. In April 2004, the European Bank of Reconstruction and Development curbed its investment programme due to the lack of progress by Uzbekistan on political and economical benchmarks set by the bank. Until there is more clarity on the legal issues and efficiency in the banking sector, foreign investors will face a difficult environment.

Uzbekistan’s government is actively encouraging foreign investment, particularly in the processing industries for its raw material output. The January 1994 decree put into law a number of tax incentives for foreign investors, formally laid out guarantees for property protection, and promised a faster and less bureaucratic method of registration for foreign concerns.

Other areas in which the Uzbeks would like to encourage foreign investment include the financial sector, energy production, extraction and processing of mineral raw materials, textiles, telecommunications, tourism and ecology. All foreign companies currently have to be registered with the Ministry of Foreign Economic Relations.

Office hours: Mon-Fri 0900-1800.

Agency for Foreign Economic Relations
Ulitsa T Shevchenko 1, 700029 Tashkent, Uzbekistan
Tel: (71) 138 5000 or 5123/5.
Website: www.mfer.uz

Uzbekistan Exhibition Centre
107 Amir Temur Street, 700084 Tashkent, Uzbekistan
Tel: (71) 134 4545 or 135 0973.
Website: www.uzexpocentre.uz.

Business Information Service for the Newly Independent States
US Department of Commerce, USA Trade Center, Stop R*BISNIS, 1401 Constitution Avenue, NW, Washington, DC 20230, USA
Tel: (202) 482 4655.
Website: www.bisnis.doc.gov