Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth

Figure 5.6: FDI Inflows and Share of GDP, Uzbekistan, 1996–2018
$ billion (nominal)
Percentage
Value (LHS)
Share of GDP (RHS)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
1996
1997
1998
1999
2000
2002
2004
2006
2008
2010
2001
2003
2005
2007
2009
2011
2012
2014
2013
2015
2016
2018
2017

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Trade and Foreign Direct Investment in Uzbekistan
187
5.3. why Does Uzbekistan Need to Liberalize Its
Trade and foreign Direct Investment?
Uzbekistan’s current trade policy challenge is to expand its investment and 
trade opportunities. To do so, the country needs to open up to foreign trade 
and liberalize its FDI. The government’s past strategies limited foreign trade 
to a certain group of commodity exports, and protected domestic firms 
from external competition. The total trade (the sum of exports and imports 
of goods and services) as a share of GDP in Uzbekistan has been declining 
since 2008 and this has also happened in other Central Asian economies
(Figure 5.8). The fall was triggered by a sharp decline in global commodity 
prices, plus government restrictions on interregional trade activities (World 
Bank 2018). Moreover, the ratio of trade to GDP has been smaller in Uzbekistan 
throughout the entire period since 1995 than in comparator countries. During 
2013–2017, the average has been 40% of GDP for Uzbekistan, 61% of GDP in 
Kazakhstan, 115% in the Kyrgyz Republic, and 58% in Tajikistan. This suggests 
that Uzbekistan’s state-driven approach of import substitution, together 
with its relatively high trade costs because it is double-landlocked, has led its 
economy to be less reliant on foreign trade than the comparators’ economies. 
FDI = foreign direct investment, GDP = gross domestic product, IT= information and technology.
Sources: ADBI (2014) and Uzbekistan Statistics (2018).