Russia conquered the territory of present-day Uzbekistan in the late 19th century. Stiff resistance to the Red Army after the Bolshevik Revolution was eventually suppressed and a socialist republic established in 1924. During the Soviet era, intensive production of "white gold" (cotton) and grain led to overuse of agrochemicals and the depletion of water supplies, which have left the land degraded and the Aral Sea and certain rivers half dry. Independent since 1991 upon the dissolution of the USSR, the country is striving to reduce its dependence on the cotton monoculture by diversifying agricultural production while developing its mineral and petroleum export capacity and increasing its manufacturing base. Uzbekistan’s first president, Islom KARIMOV, led Uzbekistan for 25 years until his death in September 2016. The political transition to his successor, then-Prime Minister Shavkat MIRZIYOYEV was peaceful, but sidelined the constitutional process where the chairman of the Senate would have served as the acting president. MIRZIYOYEV, who won the presidential election in December 2016, has sought to improve relations with Uzbekistan’s neighbors and proposed wide-ranging economic and judicial reforms.
Central Asia, north of Turkmenistan, south of Kazakhstan
natural gas, petroleum, coal, gold, uranium, silver, copper, lead and zinc, tungsten, molybdenum
Population - distribution
most of the population is concentrated in the fertile Fergana Valley in the easternmost arm of the country; the south has significant clusters of people, while the central and western deserts are sparsely populated
Uzbek (official) 74.3%, Russian 14.2%, Tajik 4.4%, other 7.1%
TASHKENT (capital) 2.251 million (2015)
- Conventional long form
- Republic of Uzbekistan
- Conventional short form
- Local long form
- O'zbekiston Respublikasi
- Local short form
presidential republic; highly authoritarian
- Geographic coordinates
- 41 19 N, 69 15 E
- Time difference
- UTC+5 (10 hours ahead of Washington, DC, during Standard Time)
has not submitted an ICJ jurisdiction declaration; non-party state to the ICCt
Uzbekistan is a doubly landlocked country in which 51% of the population lives in urban settlements; the agriculture-rich Fergana Valley, in which Uzbekistan’s eastern borders are situated, has been counted among the most densely populated parts of Central Asia. Since its independence in September 1991, the government has largely maintained its Soviet-style command economy with subsidies and tight controls on production, prices, and access to foreign currency. Despite ongoing efforts to diversify crops, Uzbek agriculture remains largely centered on cotton; Uzbekistan is the world's fifth-largest cotton exporter and seventh-largest producer. Uzbekistan's growth has been driven primarily by state-led investments, and export of natural gas, gold, and cotton provides a significant share of foreign exchange earnings. In early 2016, Russia’s Gazprom announced it planned to increase purchases of Uzbek gas.
- External debt stocks
- US$ 14,837,919,000
- Total tax rate (% of commercial profits)
- Real Interest Rate
- Manufacturing, value added (% of GDP)
- Current Account Balance
- Labor Force, Total
- Employment in Agriculture
- Employment in Industry
- Employment in Services
- Unemployment Rate
- Imports of goods and services
- US$ 14,443,742,140
- Exports of goods and services
- US$ 13,859,452,500
- Total Merchandise Trade
- FDI, net inflows
- US$ 1,068,393,000
- Commercial Service Exports
cotton, vegetables, fruits, grain; livestock
textiles, food processing, machine building, metallurgy, mining, hydrocarbon extraction, chemicals
- energy products, cotton, gold, mineral fertilizers, ferrous and nonferrous metals, textiles, foodstuffs, machinery, automobiles
- Switzerland 25.9%, China 17.6%, Kazakhstan 14.2%, Turkey 9.9%, Russia 8.4%, Bangladesh 6.9% (2015)
- machinery and equipment, foodstuffs, chemicals, ferrous and nonferrous metals
- China 20.8%, Russia 20.8%, South Korea 11.9%, Kazakhstan 10.8%, Turkey 4.6%, Germany 4.4% (2015)
- Country Risk Rating
- A very uncertain political and economic outlook and a business environment with many troublesome weaknesses can have a significant impact on corporate payment behavior. Corporate default probability is high.
- Business Climate Rating
- The business environment is very difficult. Corporate financial information is rarely available and when available usually unreliable. The legal system makes debt collection very unpredictable. The institutional framework has very serious weaknesses. Intercompany transactions can thus be very difficult to manage in the highly risky environments rated D.
- Abundant and diversified natural resources (gas, gold, cotton)
- Low debt levels and comfortable foreign exchange reserves
- Ambitious public investment program
- Poor economic diversification and dependence on commodity prices
- Slow pace of reforms
- Under-developed banking sector and practice of directed credit
- State interventionism and difficult business climate
Uzbekistan is expected to continue to be one of the most dynamic economies in the CIS in 2017. The public investment program, aimed at improving industrial plant and infrastructure, should continue to sustain activity, especially in the construction sector. Industrial output (machines, light industry and agri-food) and services (almost 45% of GDP) are also expected to remain buoyant.
The contribution of exports (almost 20% of GDP) is likely to be weak, given the persistently low prices for most Uzbek export products (gas, cotton, copper). Moreover, external demand is expected to remain moderate (notably from China and Russia). Investment could be stimulated by the steps taken by the new Head of State, specifically the creation of a special economic zone (Urgut district). Meanwhile, the country will continue to benefit from Chinese interest in transport infrastructure on the "New Silk Road".
Household consumption (more than 50% of GDP) is expected to be sustained by higher social spending and wages, as well as a modest recovery in remittances by Uzbek expatriates in Russia (estimated at nearly 2 million), and to thus offset the adverse impact of higher prices on real income.
Inflation is set to remain high, fueled by the soum's steady depreciation and higher utility prices (water, gas, electricity) announced in October 2016.
The government is expected to continue its policy of supporting activity in 2017. Increases in wages and social spending are expected to moderate, but public investment is likely to continue to climb. Export income is unlikely to increase by much and tax revenues could fall because of lower tax rates on some businesses under the 2017 budget. Public debt levels will remain low.
Uzbek exports are expected to increase slightly, thanks to a modest recovery of growth in Russia and relatively high activity levels in China, even though these are not expected to accelerate. The price of gold, Uzbekistan's leading export product, and the price for the country's other exports (cotton, gas) is not likely to rise much. Import growth might also be modest. Increased remittances may, nonetheless, help prevent the current account balance from worsening.
The gradual depreciation of the soum against the dollar is set to continue in 2017, notably because of movements in the rouble's exchange rate, which determines the competitiveness gap with Russia. The massive foreign exchange reserves (around 18 months of imports, including gold) shield the country from financial tensions. The central bank can also resort to exchange control measures (obligation to convert export income) which helps reduce foreign exchange risk.
The underdeveloped banking system is tightly controlled by the State, especially its lending policy, which weakens the quality of its portfolios. However, the sector will be supported by the government in the event of any difficulties.
The death in September 2016 of Islam Karimov, in power since the country became independent, brought Prime Minister Shavkat Mirziyoyev to the position of head of state, contrary to the provisions of the Constitution, which provides for the takeover as temporary head of state by the President of the Senate. Thereafter, Mr Mirziyoyev won with a comfortable majority (89% of votes) the presidential election held on 4 December 2016. He is likely to continue the policies of his predecessor founded on a strong State, ensuring political stability. Meanwhile, he could restart negotiations with neighboring countries, notably Kirghizstan and Tajikistan, which would help reduce regional tensions.
The risk of a rise in Islamist groups is likely to persist. Meanwhile, poverty, unemployment and restrictions on freedom provide fertile ground for protests by a very young population (almost half are under 25).
The new president, who is more positive about economic reform, could, however, take steps to encourage investors. But restrictions on access to foreign currency, the grip of public bodies on the economy and the high level of corruption (ranked 187th out of 204 by the World Bank), is likely to continue to affect the business climate.