Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth

Establishing a single investment and export promotion agency to 
disseminate business opportunities. 
That Uzbekistan attracts less FDI 
inflows than any other Central Asian economy suggests the government 
needs to survey existing and potential investors to understand their negative 
perceptions about Uzbekistan. Better coordination between government 
agencies, foreign investors, and domestic enterprises is needed to promote 
investment opportunities and to help enterprises with their export plans, as 
also suggested by the World Bank (2018). Creating a single public–private 
or private agency could help promote export opportunities for domestic 
enterprises and attract investors by providing research on new markets, 
measuring export capacities, and assisting with all regulatory aspects of 
establishing a new project in Uzbekistan. 

---

Trade and Foreign Direct Investment in Uzbekistan
205
Improving transport and logistics infrastructure to increase trade flows. 
The gravity equation analysis (section 5.6) underlines the important role of 
transport costs and hence of the extent and quality of Uzbekistan’s transit, 
logistics, and infrastructure, which are among the lowest in Central Asia. This 
suggests that for transit services to become more important in Uzbekistan’s 
economy, a push for cross-border investment is required to improve transport 
infrastructure. In this context, the BRI could play a substantial role in improving 
the country’s transport and logistics infrastructure. Modern infrastructure 
would help leverage Uzbekistan’s central location in the region and reduce 
transit costs, expand market access, and integrate domestic markets with 
those abroad. 
Greater investment in human capital development, innovation, and 
research. 
Greater investment in human capital and research and development 
(R&D) is needed for several reasons. First, exports in Uzbekistan are 
concentrated in low-value-added products and resource extractive industries, 
which suggests a lack of entrepreneurial and innovative activities. Second, a 
significant part of the working age population is low-skilled or does not have 
the skills most demanded in the market (World Bank 2018). Third, Uzbekistan 
invests very little in R&D, amounting in 2017 to just 0.19% of GDP, which is one 
of the lowest rates in the world.
8
Most importantly, opening up to both trade 
and FDI would ensure that domestic firms compete with foreign firms, which 
are larger, have higher labor productivity, and have more capital per worker. A 
stronger focus on R&D, innovation, and skill upgrading would lead industries 
to enhance their technologies and employ better-trained workers. That in turn 
would increase domestic competitiveness and create new and better jobs for 
meeting market trends globally. 
8
World Bank. World Development Indicators. https://databank.worldbank.org/source/world-development-
indicators (accessed December 2019)

---