Uzbekistan at the brink of a new chapter in its history

Uzbekistan at the brink of a new chapter in its history

With a population of 36 million, the majority of which are under the age of 30, Uzbekistan has surpassed Ukraine and currently ranks 3rd among the CIS countries in terms of population. Not only is Uzbekistan the most populous state in Central Asia, but it also boasts the fastest-growing economy in the region. According to the World Bank, the country's GDP is projected to grow up to 5.4% in 2024, while the EBRD forecasts growth of up to 6.5%, proving that Uzbekistan's economy will remain resilient and one of the most attractive globally in the coming years.

But there is more than that. This week, Tashkent is at the heart of Central Asia, not only geographically but also geopolitically, given the snap presidential elections scheduled for July 9. The elections which will determine the trajectory of the new chapter in the country's history started in 2016. Since 2017, under the leadership of Shavkat Mirziyoyev, Uzbekistan has transformed from a double-landlocked to a double-linked country, becoming not only “the island of tranquility” but also the driving force for regional cooperation, transforming Central Asia into a more resilient, prosperous and interconnected economic and political space.

Back in 2021, the Carnegie Europe article provided a rather pessimistic assessment of Mirziyoyev's economic reforms, suggesting that anyone would appear liberal in comparison to the previous Uzbek President, Islam Karimov, who had imposed extensive bans and isolated the country. Today it appears that Carnegie Europe was wrong. The current president has not stopped at ending the import restrictions but went much further, pushing for large-scale structural reforms in the country.

Now Uzbekistan offers a 12% VAT rate, the lowest in Central Asia, providing international companies with the best conditions available, including necessary infrastructure, legal framework and taxation incentives, human capital, and support from the government. Having privatized 1,200 state-owned entities, Uzbekistan intends to sell over 1,000 more companies and banks, including 10 strategically important.

Observing the EU-Uzbekistan relations since 2016, no one could have predicted the level of current intensified and in some areas, even unprecedented dialogue on the political, economic and cultural levels. Uzbekistan's accession to the EU's Generalised Scheme of Preferences Plus (GSP+) in 2021, and Enhanced Partnership and Cooperation Agreement (EPCA) conclusion in July 2022, made the EU single market door wide open, providing Uzbek businesses with highly favourable trade opportunities.

The highly successful official visits by the President to France, Germany, Italy, and Hungary in 2023, were reciprocated by numerous visits from high-level EU officials such as Charles Michel, Joseph Borrell, Valdis Dombrovskis, and David O’Sullivan. These visits demonstrated the commitment of both sides to further deepening cooperation.

When it comes to regional cooperation, impressive results have been achieved with every Central Asian state. In January 2023, Uzbekistan and Kyrgyzstan signed a declaration on strategic partnership and completed the 1,400 km border delimitation process—a historic achievement that was highly praised by Anthony Blinken, crediting the power of Uzbek diplomacy. The first conference on 'Clean Energy Future for Central Asia,' which took place in Brussels on July 4, only reaffirmed Uzbekistan's leadership. In their speeches, representatives from each country — Kazakhstan, Turkmenistan, Kyrgyzstan, and Tajikistan — mentioned at least one joint energy or economic project that they are implementing with Uzbekistan.

Uzbekistan is showing improvement across various rankings too, regardless of which one you consider: the country is steadily climbing up. Particularly impressive results can be seen in the rule of law ranking. By ranking 78th, Uzbekistan has surpassed Russia, Belarus, and Kyrgyzstan, not only leading in the Central Asia region but also within the Commonwealth of Independent States (CIS). In April 2023, Uzbekistan became the fifth country in Eastern Europe and Central Asia to criminalise domestic violence as a separate criminal offence under the law, after Georgia, Kyrgyzstan, Moldova and Ukraine. Additionally, significant steps have been taken in the areas of freedom of speech and expression, including the unblocking of Twitter, Vkontakte, and the WeChat messenger, in 2022.

Despite revolutionary progress and achievements, there is still considerable work ahead to be accomplished. According to the recent OECD report on Business Climate in Uzbekistan (May 2023), Uzbekistan urgently needs to focus on simplifying cross-border trade, addressing regulatory environment improvements, and investing in connectivity infrastructure and skills development for digitalization opportunities in the country to keep on the development track.

After travelling around the country and interacting with different stakeholders, I came to understand that the majority of Uzbeks support the incumbent and are committed to continuing his foreign and domestic policies. Furthermore, I witnessed wholehearted support — something that we Europeans cannot fully comprehend, but which is self-evident to Uzbeks. So let them vote for the leader they trust.

On July 9, four candidates will stand in Uzbekistan’s presidential elections: Ulugbek Inoyatov, People's Democratic Party, Shavkat Mirziyoyev, Liberal Democratic Party, Robahon Mahmudova, Justice Social Democratic Party and Abdushukur Hamzaev, Ecological Party. The highlights of the incumbent’s program include increasing the current GDP per capita from USD 2,200 to USD 4,000, positioning Uzbekistan as an upper-middle-income country, introducing new national and regional tax incentives, a significant expansion of access to education and improvements in its quality, the modernization of water systems, etc.

Vita Kobiela,
independent research and policy analyst,
specializing on EU-Central Asia relations


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