Ўзбекистон иқтисодчилари XIII форуми

Over 2015
–2020, Uzbekistan’s score in ‘Getting Electricity’ component of the indicator 
has improved by 16 points, increasing from 70 to 87 
Source: Doing Business

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subsistence electricity consumption level of 30 kWh per month has been estimated to be unaffordable for 
40% of households in a half of these countries. 
Being closely linked to firms’ output, electricity is consumed for various purposes starting from 
production, storage, powering equipment, and display of a product. Electricity is a major production input 
required for making goods and providing services. Given that the significance of electricity infrastructure for 
business environment, Uzbekistan’s score in ‘Getting Electricity’ component of the Doing Business indicator 
(Figure 1) has improved since 2017, increasing from 72 (2017) to 87 (2020). 
Multiple research studies observed a long-run causal relationship between economic growth and 
energy consumption, including Uzbekistan’s context. According to Salahodjaev et al. [5], economic growth 
causes energy consumption. In this case, however, the causal relationship does not run in opposite direction, 
i.e., improving efficient use of energy does not deteriorate economic growth. In addition, persistent lack of 
electricity supply constraints economic and social development of the country generating negative spillovers 
for employment creation [6]. Lack of adequate access to electricity may be affecting private investments and 
entrepreneurs’ risk-taking attitude. Firms affected by electricity disruptions incur higher losses during 
economic expansion phase because it deteriorates the economic growth and development process [7]. This 
negative impact is severe in emerging economies since infrastructure in those countries carries on 
provisioning unreliable and low-quality services and susceptible to external shocks [7]. 
These persistent issues suppress novel entrepreneurial
1
initiatives and financial innovations that 
could have enhanced digital economy of Uzbekistan. Although electricity blackouts are well-known barrier 
for business development across developing countries, little research has been done on its impact on firms 
[8], particularly in the context of Central Asian countries. In Uzbekistan, little research has been done on the 
impact of electricity outages on firms’ operations which disguises the real costs of disruptions. In this paper, 
we fill in a gap in the empirical literature by investigating the effects of electricity outages on the firms’ 
performance in terms of total annual sales in Uzbekistan.