Baku, Azerbaijan, May 16
By Fakhri Vakilov - Trend:
Prospects of foreign direct investments (FDI) for Uzbekistan in the light of recent changes in the country have expanded significantly, according to experts of the Boston Consulting Group (BCG), a member of the "big three management consulting" in the world, Trend reports with reference to Uzbek media.
The investment potential of Uzbekistan for the period of the next ten years is expected to reach $65 billion, of which non-primary industries account for up to $20 billion.
“If the rate of change and willingness to change will remain as high as in the previous two years, the country will be able to offer investors interesting opportunities for long-term investments. Thus, in a very short time, Uzbekistan managed to make a jump from 166th to 76th place in the rating Doing Business," Partner&Managing Director, Head of BCG in the Central Asian and Caspian regions Rza Nuriev said.
BCG believes that Uzbekistan may become a new driver for attracting foreign direct investment and economic growth in the Central Asian region. The main prerequisites for this forecast are the large domestic market, rise of the solvent population, macroeconomic stability, favorable geographical position, rich natural resources, diversified economic structure and steady GDP growth.
Traditional industries namely, oil and gas, chemical and mining, agriculture and textile industry have the greatest investment potential alongside new promising areas such as construction, banking, tourism and telecommunications sectors. Foreign investment will attract new technologies, accelerate the development of reserves and ultimately stimulate regional economic activity, increasing employment and tax revenues.
According to BCG assessment, the economy of Uzbekistan is quite diversified: the share of individual sectors of the economy accounts for no more than 20 percent of GDP. However, the survey conducted by the Boston Consulting Group in 2017-2018, demonstrates that a number of barriers for investors in the most diversified sectors including agriculture, the oil and gas sector, finance, technology and IT, the chemical and pharmaceutical sector, the food industry, and retail trade.
To eliminate these barriers, Uzbekistan initiated, among others, the following reforms: repatriation of profits and capital facilitation reforms; ensuring equal conditions for participants and increasing transparency in economic activities; elimination of unequal customs conditions for market players and simplification of customs clearance procedures; reducing the tax burden and simplifying the tax regime.
The BCG experts estimate that although oil and gas sector, mining industry, agriculture and textile production already occupy stable positions, their FDI potential has not yet been fully realized. In the meantime, modern digital technologies, growth of incomes of the population and the current demographic trends create significant development potential in relatively new sectors for Uzbekistan including the financial and banking sectors, the construction industry, and telecommunications.
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