Development finance assessment

DIMENSION 3: 
PRIVATE-PUBLIC COLLABORATION
DIMENSION 3:
PRIVATE-PUBLIC COLLABORATION
A growing private sector is essential for future growth and formal job creation. This 
underpins a solid tax base that can support financing the transition from a state-dominated 
economy to one driven by the private sector. 
This section looks at looks at how public and private actors collaborate around the 2030 
Agenda and how they act to promote not just economic gains, but also sustainable, inclusive 
private finance. It identifies opportunities to enhance the policy environment, strengthen 
incentives and deepen public-private collaboration in pursuit of this objective.
INVESTMENT CLIMATE
Since 2016, Uzbekistan has been pursuing ambitious reforms as it opens to inter-
national investors. Uzbekistan offers all the incentives commonly used around the world 
except investment allowances, investment tax credits, and R&D incentives. In 2019, the 
Uzbek Investment Promotion Agency was created under the Ministry of Investments and 
Foreign Trade. The country counts 21 free-economic zones where investors benefit from full 
exemptions on income tax and custom duties, social infrastructure and uniform SME taxes 
and the compulsory contributions to the Road Fund. It provides incentives for “Innovative 
Techno-parks” with the purpose of encouraging investment into innovative technologies 
including chemicals, bio-technology and information technology. 
Speeding up FDI flow into the country’s SDGs requires a level playing field for foreign 
commercial investors. Investors value a stable economic environment, strong rule of law, 
and effective property rights more than the availability of tax incentives. Government 
control of key industries has discriminatory effects on foreign investors. For example, the 
GoU retains strong control over all economic processes and maintains controlling shares of 
key industries, including energy, telecommunications, airlines, and mining. The government 
regulates investment and capital flows in the raw cotton market and controls all silk sold in 
the country, dampening foreign investment in the textile and rug-weaving industries. The 
recent economic reforms are important steps in the right direction.