Uzbekistan: ‘An economic hub with strategic value’
Rönesans International’s Kaan Ekermen on the perks and perils of investing in UzbekistanUzbekistan’s reform agenda has not gone unnoticed to foreign investors. Average foreign direct investment levels have been steadily growing since 2016, when president Shavkat Mirziyoyev took office.
One of the companies that set its sights on opportunities in the country is Turkish construction company Rönesans International, a subsidiary of Rönesans Holding. Rönesans International CEO, Kaan Ekermen, tells fDi his company sees Uzbekistan as a “compelling economic hub with substantial strategic advantages”.
Q: What makes Uzbekistan so compelling?
A: Uzbekistan, the most highly populated country in central Asia with approximately 35 million inhabitants, achieved a GDP of $90.9bn with a growth rate of 6% in 2023, solidifying its significance as a pivotal market in the region.The country benefits greatly from abundant raw materials and labour resources, direct market access to all central Asian nations, and a range of incentives and preferences. These factors collectively position Uzbekistan as a compelling economic hub with substantial strategic advantages, especially when considering public–private partnership (PPP) models.
Q: What are some of the challenges of investing and doing business in Uzbekistan?
A: Uzbekistan is known for its elevated transportation costs, thereby impacting capital expenditures. This influences overall infrastructure outlays. Thus, the quality and extent of the highway network assume paramount importance when considering investments across sectors. Achieving uniformly high standards across the entire highway network remains a challenge, yet ongoing enhancements are anticipated.Q: How does Uzbekistan compare with other markets in central Asia in terms of opportunity and ease of doing business?
A: Prosperity serves as a fundamental prerequisite for fostering growth within the central Asian region. Uzbekistan notably boasts the highest literacy rate among its regional peers, achieving full literacy as of 2019. Moreover, the nation’s population is a growing, younger generation situated strategically at the heart of Asia. Uzbekistan also has substantial potential for development, underscored by its abundant natural resources including gold, copper, gas and uranium, which significantly bolster its economic potential.Looking ahead, Uzbekistan’s economic trajectory is very promising in the medium-to-long term for Rönesans. Ongoing reforms aimed at enhancing resource efficiency, coupled with initiatives to spur privatisation and attract private investment, are anticipated to sustain robust growth rates from 2024 through to 2030. These factors distinguish Uzbekistan within the Asian landscape, fostering an environment conducive to business operations.
Q: What reforms would you like to see to improve the business environment?
A: Uzbekistan presents significant opportunities, particularly within its energy sector and PPP frameworks. While further development is essential in the implementation of infrastructure and healthcare projects based on PPP models, addressing these pivotal changes will position Uzbekistan as an essential market, appealing to investors globally. For Rönesans Holding, Uzbekistan’s potential is boundless.Source: https://www.fdiintelligence.com/content/interview/uzbekistan-an-economic-hub-with-strategic-value-83950