Development finance assessment

Investment treaties
As important as the quantity of FDI is its quality
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. Bilateral investment treaties (BIT) 
can be an important instrument to attract better quality FDI. Uzbekistan has signed BITs 
with 51 countries, of which five haven’t been ratified, including with Belarus, Republic of 
Korea, United States, Turkey, and Bahrain
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. There is some degree of difference across these 
BITs, notably regarding dispute settlement provisions (Tulyakov, 2019). Furthermore, recent 
case law demonstrates that the enforcement of foreign arbitral awards in Uzbekistan is still 
unpredictable in its application of the 1958 “New York Convention on the Recognition and 
Enforcement of Foreign Arbitral Awards” to which Uzbekistan is bound
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Streamlining and 
applying a standard and transparent approach to international dispute arbitration across 
the existing and future BITs may underpin government efforts to position Uzbekistan as a 
regional arbitration hub. The World Bank supported ‘International Centre for Settlement of 
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The Addis Ababa Agenda specifically refers to the need to regulate to align private investment and public goals, 
including incentivizing the private sector to adopt sustainable practices, and foster long-term quality investment.
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Unctad’s International Investment Agreements Navigator
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http://arbitrationblog.kluwerarbitration.com/2019/11/11/enforcement-of-arbitral-awards-in-uzbekistan-challenges-
and-uncertainties/?doing_wp_cron=1596964744.9815208911895751953125

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DEVELOPMENT FINANCE ASSESSMENT FOR THE REPUBLIC OF UZBEKISTAN
Investment Disputes’, to which Uzbekistan is a signatory, could be a useful mechanism to 
strengthen international arbitration practices in the country.
Furthermore, the country may benefit from an exhaustive review of the SDG alignment 
of its BITs and free trade agreements (FTAs). The SDG alignment of BITs and FTAs could be 
strengthened by e.g. including provisions on social and environmental standards as well as 
public health
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. Environmental clauses in BITs may allow treating socially and environmentally 
desirable investments more favorably than investments in brown sectors (Page, 2018). It is 
important that future BITs safeguard sufficient policy space for host states to enable regulating 
when FDI is deemed damaging to the country’s sustainable development priorities
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. 
Only nine free trade agreements (FTAs) are in force between Uzbekistan and other 
countries, and the country has no FTA covering services, which could help the economy not 
only link up to value chains but also higher value added activities.
The GoU plans to develop a ‘Medium-Term Investment Policy Strategy until 2025’. This 
Strategy would link the key indicators of the investment program with socio-economic 
development priorities of the country towards achieving positive structural changes in the 
economy of Uzbekistan. The Strategy guides the placement of new production capacities, 
infrastructure and social facilities according to available resources and the comprehensive 
development plans for a territory. It also determines the requirements for preparation of priority 
investment proposals involving the use of environmentally clean technologies, efficient use 
of natural resources, and staff training; and develops measures to provide special benefits 
and preferential terms at individual territories being in difficult socio-economic situation. To 
date, the status and the effective implementation of this Strategy remain unclear. 
For this Strategy to become a strategic pillar of Uzbekistan’s green and resilient COVID-19 
recovery programme requires its effective coordination with other key strategies. These 
include the draft Poverty Reduction Strategy, the ‘Strategy on the Transition to a Green 
Economy’ and the new ‘Concept for ensuring reliable energy supply to Uzbekistan towards 
2030’.