Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth

Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth
Trading across borders.
Trade facilitation and the cross-border regime in 
Uzbekistan remain complex and time-consuming. Being a landlocked country, 
the cost of Uzbekistan’s cross-border transport is high compared with that of 
neighboring countries. From 2005 to 2012, the cost of transport rose by 230% 
for railway shipments and by 240% for road shipments. Depending on the type 
of good, the transport costs range from 15%–20% to 60%–70% of the value 
of cargo for exports, significantly higher than the 5%–7% in European Union 
countries. The share of the cost of transport in the final price of the bulk of 
Uzbekistan’s consumer goods exports is 2.5–2.6 times higher than the world 
average (CER 2013b). 
A study by the CER (2013a) argued that the increase in the cost of rail 
transport services is largely because the UTY lacks incentives to reduce costs. 
From 2008 to 2013, prices for transporting rail freight increased 1.7 times. The 
relatively high prices for railway freight transport are due to (i) the current cost-
plus methodology of setting tariffs for railway transport; (ii) the lack of bidding 
processes among domestic and foreign freight forwarders to conclude direct 
freight forwarding contracts with the UTY; and (iii) insufficient development of 
container freight transport—transporting freight on high-capacity containers 
is on average 10%–12% less expensive than on railway wagons. 
CER (2013a) cited the following reasons for high prices in trucking: (i) rising 
fuel prices; (ii) an antiquated trucking fleet and the poor condition of road 
surfaces, resulting in low trucking speeds and higher fuel consumption;
(iii) high customs fees for truck imports, generating price increases for trucks in 
the domestic market, an increase in shipping companies’ costs, and an increase 
in tariffs for truck shipments; and (iv) the trucking companies’ small sizes, so 
they are unable to achieve economies of scale. The rising cost of shipping, 
despite growing investments in the transport sector, suggests that public and 
private freight companies do not manage their costs efficiently. Rather, they 
simply pass on additional costs to customers by increasing their prices. 
Uzbekistan also performs poorly in terms of time and cost associated with 
documentary and border compliance. It takes 128 hours to comply with 
documentary and border requirements for exports, and 261 hours for imports. 
The associated costs are $570 for exports and $520 for imports, higher 
than most countries in the region. Uzbekistan’s overall ranking in World 
Bank’s Trading Across Borders indicators in 2020 is 152nd of 190 countries 
(Table 2.4). 

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