In a context where global foreign investment increased by 10.9% in 2013, in particular in Europe (+25.2%) and in Latin America (+17.5%), FDI flows to developing economies reached a new high of US$759 billion. However macroeconomic fragility and policy uncertainties are driving investors to caution.
After the sharp decrease of the FDI in 2011 (-35%), Tachkent decided to review its very restrictive commercial policy (temporary closure of the border, increase of customs tariffs, heavy importation bureaucracy), implementing new rules (fiscal exemptions, administration reforms). More than 58 mixed companies work in the capital Tashkent. In 2013 FDI reached USD 1 billion.
Cooperation with China has acquired a new momentum in 2011 with the launch of the construction project to build a pipeline extension linking the country to the Central Asia-China gas pipeline. The new extension will have a capacity of 25 billion cubic meters annually. China also pledged to invest USD 5 billion in infrastructure and the mining sector. South Korea has also been a strong presence since 2011, particularly in the construction of a chemical plant mobilizing an investment of over 2.6 billion USD.
Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).
|Uzbekistan||Eastern Europe & Central Asia||United States||Germany|
|Index of Transaction Transparency*||4.0||7.0||7.0||5.0|
|Index of Manager’s Responsibility**||1.0||5.0||9.0||5.0|
|Index of Shareholders’ Power***||6.0||9.0||5.0|
|Index of Investor Protection****||4.0||5.9||8.3||5.0|
Source: Doing Business - Last Available Data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
|Foreign Direct Investment||2011||2012||2013|
|FDI Inward Flow (million USD)||1,651||674||1,077|
|FDI Stock (million USD)||7,009||7,435||8,512|
|Performance Index*, Ranking on 181 Economies||78||-||-|
|Potential Index**, Ranking on 177 Economies||67||-||-|
|Number of Greenfield Investments***||16||13||10|
|FDI Inwards (in % of GFCF****)||11.7||4.2||6.2|
|FDI Stock (in % of GDP)||15.4||14.5||15.1|
Source: UNCTAD - Last Available Data.
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
This country is a regional power in progress, even if the government is long in creating favorable conditions to attract foreign investments. A foreign-investor favorable taxation policy is to be noted and a will to modernize the main sectors of the economy. Also, the Uzbek State had been careful to strengthen the commercial banks, especially eight of the most important ones, before the financial crisis.
The compulsory systematic registration of all import contracts with the Ministry of Foreign Relations, Investments and Trade has been abolished. Only certain import contracts are subjected to it especially if it involves financing from the State budget. However, other import contracts still need to be registered with authorized banks or with the customs authorities.
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Last Updates: January 2015