Uzbekistan Economy Facts
Cotton cultivation has long dominated Uzbekistan’s economy, but in recent years natural gas has taken over the role of the country’s most important export commodity. Despite a series of market reforms since 2016, the economy is still influenced by the legacy of the Soviet government’s (1924-1991) central government.
Cotton cultivation is still economically important for Uzbekistan, which is one of the world’s largest cotton producers. The industry employs a large part of the country’s workforce. Attempts to replace some of the cotton crops with food production have not been very successful.
- Countryaah.com: Major imports by Uzbekistan, covering a full list of top products imported by the country and trade value for each product category.
In the Soviet economy, Uzbekistan would supply the other sub-republics with cotton and in turn constitute a market for their products. This trading system was ravaged when the Soviet Union disbanded in 1991. At the same time, the annual subsidies from the Russian government were halted, which accounted for around 40 percent of Uzbekistan’s state budget.
During the first years of the 1990s, the country’s GDP shrank and prices rose. In 1993, inflation was around 1000 percent, while the external debt and trade deficit increased. Inflation was fueled by price increases in Russia, which contributed to Uzbekistan abandoning the ruble zone in 1993 and introducing its own currency, called as. From the mid-1990s, GDP again increased, although growth according to the World Bank has long been significantly lower than the statistics indicated.
- Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including SKD which represents the country of Uzbekistan. Check findjobdescriptions to learn more about Uzbekistan.
Privatization of state-owned enterprises began as early as 1991, but then went on for a long time. In many cases, the companies were entrusted to former managers and collective workers without new capital or expertise being added. For a long time, privatization has taken place in the trade, service sector and housing market. Several large state companies have not been sold, as the state wants to retain control of key sectors such as energy, mining, transport and cotton production.
The Karimov regime’s (1991–2016) resistance to a rapid liberalization of the economy kept the interest of foreign investors and lenders such as the IMF and the World Bank. But while many Western investors felt the business climate as unfriendly, Russia and China increased economic cooperation through trade credits and investments in sectors such as the oil and gas industry and the telecom industry.
The new regime under President Mirzijojev (2016–) has succeeded in curbing inflation, counteracting the extensive black exchange trade and reducing the gap between the official exchange rate and the exchange rate. In order to make the business climate more favorable, in the autumn of 2017, the fixed exchange rate against the dollar was dropped and the currency flowed freely. At the same time, private individuals and companies were allowed to handle foreign currency in unlimited quantities.
In the 2010s, economic growth was relatively high, thanks to good weather for agriculture and high prices for important export goods such as cotton, gold and natural gas. This in turn enabled the government to invest in various development projects, not least in infrastructure, which is absolutely necessary. For example, gas deliveries have sometimes been hampered by overly poor pipelines.
The government’s efforts have so far not benefited the poorest residents to a particularly high degree. Instead, many well-off people have enriched themselves, including through corruption.
Russia was for a long time Uzbekistan’s largest single trading partner, but in the 2010s became a strong competitor in China. Trade has also increased with countries such as Turkey, South Korea, Germany and Kazakhstan.
Natural gas has passed cotton as the most important export product. Minerals such as gold, silver, uranium and tungsten are also of great economic importance. Uzbekistan also exports vehicles, textiles, food and chemicals. Imports are dominated by machinery, chemical products, cereals and other foods.
The government is investing in tourism, especially around the old Silk Road, to bring in foreign currency. Despite bureaucratic hassle, poor infrastructure and fairly low service levels, a few million foreign visitors come to Uzbekistan every year.
FACTS – FINANCE
GDP per person
US $ 1,532 (2018)
US $ 50,500 million (2018)
5.1 percent (2018)
Agriculture’s share of GDP
28.8 percent (2018)
The service sector’s share of GDP
31.6 percent (2018)
14.7 percent (2019)
Government debt’s share of GDP
20.6 percent (2018)
US $ 17,708 million (2017)
US $ 11,386 million (2018)
US $ 18,252 million (2018)
– US $ 3,577 million (2018)
Commodity trade’s share of GDP
56 percent (2018)
Main export goods
energy products (mainly natural gas), gold and other metals, cotton, food, fertilizers (2017)
Largest trading partner
China, Russia, Kazakhstan, Switzerland, Turkey (2017)
Parliamentary elections begin
The first round of the parliamentary elections is held. Only regimented parties are allowed to participate.
Soviet energy grid is scrapped
Uzbekistan announces that the country will stop using the Soviet-era joint grid for electricity and gas supplies and instead build its own distribution network. The decision is feared to lead to energy shortages in neighboring Tajikistan and Kyrgyzstan.
The last EU sanctions are abolished
The EU abolishes arms embargo on Uzbekistan, the last of the sanctions imposed after the 2005 Andizyan massacre.
Sharpened location at the Kyrgyz border
Relations between Uzbekistan and Kyrgyzstan are deteriorating as Uzbekistan begins digging trenches along disputed border areas to prevent attackers from entering the country.
Attacks against police officers
A police officer is killed in a suicide attack in Andizan and a police posting in Chanabad is attacked by a group of armed men. In Uzbekistan, Kyrgyzstan is accused of letting in the attackers, which the Kyrgyz people reject.
US transportation is allowed
Karimov confirms that the US will be allowed to transport supplies through Uzbekistan to its troops in Afghanistan. A formal agreement is signed in April of the same year.
Energy agreement with Russia
Russian President Dmitry Medvedev makes an official visit to Uzbekistan. A number of energy agreements are signed between Russia and Uzbekistan.