Uzbekistan has witnessed a notable influx of foreign direct investment (FDI), totalling $7.5 billion in the first nine months of 2023, as reported by the Institute of Macroeconomic and Regional Studies (IMRS). This substantial FDI inflow coincides with a broader increase in investment in fixed assets, reaching $18.4 billion during the same period, reflecting an 11.8% growth compared to the corresponding period in the previous year.
The Investment Performance Index (IPI) was employed by experts from the IMRS to assess the capital injections into various regions and their contributions to the overall development of the country. In this evaluation, Syrdarya emerged as the leader, both in terms of the IPI and FDI in Uzbekistan. Notably, the capital city, Tashkent, secured the fourth position in this ranking.
The proactive approach to attract foreign investment is evident in Uzbekistan’s collaboration with the International Finance Corporation (IFC) in September. The IFC, an entity providing investment, advisory, and asset management services to less developed countries, joined forces with the Uzbek government to enhance FDI. The primary objective is to align Uzbekistan’s investment law with global best practices, fostering a conducive environment for foreign investors. The IFC, in partnership with the government of Japan, is actively involved in formulating a new investment law that outlines market entry rules, ensures equal treatment for foreign investors, provides access to international dispute settlements, and focuses on FDI and private investments.
Despite the positive momentum in FDI levels, Uzbekistan’s economy faces challenges in catching up with some of its Central Asian counterparts. The UN Conference on Trade and Development (UNCTAD) data reveals a gradual increase in FDI levels from $1.73 billion in 2017 to $2.53 billion in 2022. However, the GDP per capita in 2022 was approximately $2,510, positioning Uzbekistan behind countries like Kazakhstan and Turkmenistan. This economic landscape indicates ongoing efforts to attract foreign investment and drive sustainable economic growth.