2017 Republic of Uzbekistan the CENTRAL ASIA COUNTRY SERIES

2017 Republic of Uzbekistan the CENTRAL ASIA COUNTRY SERIES

2017 Republic of Uzbekistan THE CENTRAL ASIA COUNTRY SERIES Republic of Uzbekistan November 2017 Acknowledgements: Team Leader: Samir S. Amir Lead Researcher: Mustafa Gul Kaliya Disclaimer: The findings, interpretations and conclusions expressed do not necessarily reflect the views of the Board of Directors and Members of The Pakistan Business Council or the companies they represent. Any conclusions and analysis based on data from ITC, UN Comtrade, World Bank, Doing Business and CIA World Factbook are the responsibility of the author(s) and do not necessarily reflect the opinion of the UN, WTO, World Bank, or CIA. Although every effort has been made to cross-check and verify the authenticity of the data, The Pakistan Business Council, or the author(s), do not guarantee the data included in this work. All data and statistics used are correct as of September 1st, 2017, and may be subject to change. REPUBLIC OF UZBEKISTAN 2017 UZBEKISTAN OF REPUBLIC For any queries or feedback regarding this report, please contact [email protected] or [email protected] ii The Pakistan Business Council: An Overview The Pakistan Business Council (PBC) is a business policy advocacy platform, established in 2005 by 14 (now 62) of Pakistan’s largest private-sector businesses and conglomerates, including multinationals. PBC businesses cover nearly all sectors of the formal economy. It is a professionally-run organization headed by a full-time chief executive officer. The PBC is a not-for-profit entity, registered under Section 42 of the Companies Ordinance 1984. Though it is not required under the law to do so, the PBC follows to the greatest extent possible, the Code of Corporate Governance as applicable to listed companies. The PBC is a pan-industry advocacy group. It is not a trade body nor does it advocate for any specific business sector. Rather, its key advocacy thrust is on easing barriers to allow Pakistani businesses to compete in regional and global arenas. The PBC conducts research and holds conferences and seminars to facilitate the flow of relevant information to all stakeholders in order to help create an informed view on the major issues faced by Pakistan. The PBC works closely with the relevant government departments, ministries, regulators and institutions, as well as other stakeholders including professional bodies, to develop consensus on major issues which impact the conduct of business in and from Pakistan. The PBC has submitted key position papers and recommendations to the government on legislation and other government policies affecting businesses. It also serves on various taskforces and committees of the Government of Pakistan as well as those of the State Bank, SECP and other regulators with the objective to provide policy assistance on new initiatives and reforms. The PBC’s Founding Objectives: The major objectives of the PBC as stated in its founding documents are: • To provide for the formation and exchange of views on any question connected with the conduct of business in and from Pakistan. • To conduct, organize, set up, administer and manage campaigns, surveys, focus groups, workshops, seminars and field works for carrying out research and raising awareness in regard to matters affecting businesses in Pakistan. • To acquire, collect, compile, analyze, publish and provide statistics, data analysis and other information relating to businesses of any kind, nature or description and on opportunities for such businesses within and outside Pakistan. • To promote and facilitate the integration of businesses in Pakistan into the World economy and to encourage in the development and growth of Pakistani multinationals. • To interact with governments in the economic development of Pakistan and to facilitate, foster and further the economic, social and human resource development of Pakistan. More information on the PBC, its members, and its workings, can be found on its website: www.pbc.org.pk REPUBLIC OF UZBEKISTAN 2017 UZBEKISTAN OF REPUBLIC iii The PBC’s Member Companies REPUBLIC OF UZBEKISTAN 2017 UZBEKISTAN OF REPUBLIC iv The PBC’s Member Companies REPUBLIC OF UZBEKISTAN 2017 UZBEKISTAN OF REPUBLIC v Summary In order to promote Pakistan’s trade with its non-traditional trading partners, the Pakistan Business Council (PBC) since 2015 has been doing a Country Profile Series aimed at introducing non- traditional markets to Pakistan’s exporters. In 2015 ‘6’ countries from Africa – Angola, Ethiopia, Ghana, Mozambique, Nigeria and South Africa were showcased. In 2016, ‘5’ countries from South America – Argentina, Brazil, Chile, Columbia and Mexico were featured. In 2017 the ‘5’ countries of Central Asia – Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan are being covered by the PBC. This is the first publication of the Central Asian Country Series and features the Republic of Uzbekistan. The Republic of Uzbekistan is a Central Asian Economy bordered by five landlocked countries. This makes it one of only two doubly landlocked countries in the world. It covers a total area of 447,400 km2 and has a population of 31.8 million, 88% of which are Muslim, with a growth of 0.93% per annum. The literacy rate is about 99.6% with Uzbek as the dominant language. Uzbekistan has a very rich history which dates back to the first millennium BC (1,000 BC to 1 BC). The land was once occupied by Iranian nomads, and over the course of time it has been subject to conquests from Alexander the Great, Ghaznavids, Mongols and finally Russians. After the dissolution of the Soviet Union, Uzbekistan achieved its independence in December 1991 with Islam Karimov as its first president. In 2016, after the death of President Karimov, Shavkat Mirziyoyev became the President. Though in comparison to Pakistan, Uzbekistan has a much smaller population and a lower GDP, its per capita income is much higher than Pakistan’s. Table below provides a brief comparison of the economies of Pakistan and Uzbekistan: Pakistan Uzbekistan Population 207,774,520 - (2017) Census 31,848,200 - (2016) Estimate Year 2014 2015 2016 2014 2015 2016 GDP (Current US$ billions) 244.36 271.05 283.66 63.07 66.9 67.22 GDP per capita (Current US$) 1,316 1431 1468 2,050 2,138 2,111 GDP growth (%) 4.7 4.7 5.7 7.8 8 7.8 Inflation 7.2 2.5 3.8 9.1 8.5 8 Official exchange rate (US$, period average) 101 103 105 2,422 2810 3218 Uzbekistan’s economic growth went through a rough patch in the early years after its independence, however, over the past 15 years the growth rate has averaged 7.16 %. Growth has been fueled by investments and exports of its natural resources; gold, natural gas, cotton and copper. Oil and natural gas exports have been facilitated by Uzbekistan’s network of pipelines that provide links to Kazakhstan, Russia, Afghanistan, China, Kyrgyzstan, and Turkmenistan. Moreover, in order to expand trade, Uzbekistan is actively involved in China’s One Belt One Road (OBOR) initiative, which envisages exchange of energy and technology through an improved system of transport. Furthermore, 50% of Uzbekistan’s GDP is generated by the tertiary sector, while secondary and primary sectors each contribute 33% and 17% respectively. Favorable foreign direct investment rates were achieved by commercial policies which have included high customs tariffs, closure of the border, and fiscal exemptions. Uzbekistan has received investments from China, South Korea, and Japan. In 2016, Uzbekistan had an inflation rate of 8%, unemployment rate of 8.9%, and a monetary policy rate of 8%. As a major part of the ancient silk road, Uzbekistan is home to five of UNESCO’s World Heritage Sites. These sites include the Historic Center of Bukhara, Samarkand, Itchan Kala (Khiva), Historic Centre of Shakhrisyabz and the Western Tien-Shan. REPUBLIC OF UZBEKISTAN 2017 UZBEKISTAN OF REPUBLIC vi Trade plays an important role in the economy of Uzbekistan contributing about 10% of the GDP. In 2016, Uzbekistan exported $7 billion worth of goods and imported goods valued at $9.1 billion, which resulted in a negative trade balance of about $2.1 billion. The major exports of Uzbekistan include gold, natural gas, pure cotton yarn and refined copper while the top imports are vehicular parts, machinery, iron and steel and pharmaceuticals. The most significant commodity exported by Uzbekistan is gold which makes up 40% of total Uzbek exports. The major export destinations of Uzbek goods are Switzerland, China and the Russian Federation; most of the exports from Uzbekistan to Switzerland comprise of gold and gold plates. Uzbekistan imports most of its products from China, the Russian Federation and Kazakhstan. Bilateral trade between China and Uzbekistan has increased ten folds over the last 10 years. Exports to China amounted to $1.6 billion in 2016 which consisted mainly of mineral fuels, cotton and inorganic chemicals. Imports totaled $2 billion which included machinery, mechanical appliances, electrical machinery, plastics and iron and steel. Russia, another major trading partner, exports mineral fuels, wood, iron and steel and vegetable oils to Uzbekistan, and imports cotton and clothing accessories, fruits and nuts, knitted or crocheted fabrics and plastics. Moreover, remittances from Russia amount to roughly 16% of Uzbekistan’s GDP. Nearer home, Uzbekistan trades with the other Central Asian Republics, Kazakhstan, Turkmenistan, Tajikistan, and Kyrgyzstan, out of which Kazakhstan holds a prominent position. In 2016, Imports from Kazakhstan included cereals, iron and steel and products for milling industries and amounted to $922.5 million, meanwhile, exports amounted to $588 million and included fruits, vegetables, mineral fuels and plastics., Uzbekistan supplies fertilizers, plastics, fruits, nuts and carpets to Kyrgyzstan, and receives vehicles, iron, steel, machinery, and mineral fuels. Total exports to Kyrgyzstan were $70 million and total imports amounted to $125 million in 2016. Due to lack of data, Uzbekistan’s trade with Turkmenistan and Tajikistan cannot be commented upon.

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