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The economy of Uzbekistan was formerly associated with a Soviet-style
command economy A planned economy is a type of economic system where investment, production and the allocation of capital goods takes place according to economy-wide economic plans and production plans. A planned economy may use centralized, decentralized, p ...
, with a slow transformation to a
market economy A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand, where all suppliers and consumers ...
. However, in recent years and since the election of President Shavkat Mirziyoyev the country has seen rapid economic and social reform, aimed at boosting growth and transforming Uzbekistan into a true, modern market economy. International Financial Institutions, including
EBRD The European Bank for Reconstruction and Development (EBRD) is an international financial institution founded in 1991. As a multilateral developmental investment bank, the EBRD uses investment as a tool to build market economies. Initially foc ...
,
Asian Development Bank The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966, which is headquartered in the Ortigas Center located in the city of Mandaluyong, Metro Manila, Philippines. The bank also maintains 31 field of ...
and the
World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...
are actively engaging in supporting Uzbekistan's successful reform process and have rapidly increased their presence in the country. To this point, governmental economic policy reforms had been cautious. Under the administration of
Islam Karimov Islam Abduganiyevich Karimov ( uz, Islom Abdugʻaniyevich Karimov / Ислом Абдуғаниевич Каримов, italics=no; russian: link=no, Ислам Абдуганиевич Каримов; 30 January 1938 – 2 September 2016) was t ...
currency A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general ...
conversion capacity was restricted and many other government measures to control economic activity, including the implementation of severe import restrictions and sporadic closures of Uzbekistan's borders with neighboring
Kazakhstan Kazakhstan, officially the Republic of Kazakhstan, is a transcontinental country located mainly in Central Asia and partly in Eastern Europe. It borders Russia to the north and west, China to the east, Kyrgyzstan to the southeast, Uzbeki ...
,
Kyrgyzstan Kyrgyzstan,, pronounced or the Kyrgyz Republic, is a landlocked country in Central Asia. Kyrgyzstan is bordered by Kazakhstan to the north, Uzbekistan to the west, Tajikistan to the south, and the People's Republic of China to the ea ...
, and
Tajikistan Tajikistan (, ; tg, Тоҷикистон, Tojikiston; russian: Таджикистан, Tadzhikistan), officially the Republic of Tajikistan ( tg, Ҷумҳурии Тоҷикистон, Jumhurii Tojikiston), is a landlocked country in Centr ...
led international lending organizations to suspend or scale back credits. Uzbekistan is a major producer and exporter of cotton, and bans on cotton import were implemented in the early 2010s due to international human rights concerns. However, in 2022, the Cotton Campaign and other agencies, including the US Government, lifted all bans on the import of Uzbek cotton. Uzbekistan is also a big producer of gold, with the largest open-pit gold mine in the world. The country has substantial deposits of silver, strategic minerals, gas, and oil. Since 2016 and the new president Shavkat Mirziyoyev coming to his position, there have been significant economic reforms in Uzbekistan. The country liberalised the currency in 2017, allowing freer flows of foreign currency and allowing the import and export of goods, and the path to foreign investment. 2019 tax reforms also allowed company consolidation, tax simplification and the professionalisation of the Private sector. The Government is also committed to privatisation of State Owned Enterprises (SOEs), with the domstic IPO of UzAuto predicted in 2022. Th
Uzbekistan Economic Forum
run by the Ministry of Finance of the Republic of Uzbekistan, brings together IFIs, businesses, government officials and other stakeholders on an annual basis. The first iteration was in Tashkent, and the Uzbekistan Economic Forum II took place in Samarkand. In December 2022, the Uzbek Government received a loan from the World Bank of almost US$1bn to "implement strategic reforms".


GDP and employment

This is a chart depicting the trend of the
gross domestic product Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is of ...
in Uzbekistan in constant prices of 1995, estimated by the International Monetary Fund with figures in millions of soum. The chart also shows the
consumer price index A consumer price index (CPI) is a price index, the price of a weighted average market basket of consumer goods and services purchased by households. Changes in measured CPI track changes in prices over time. Overview A CPI is a statisti ...
(CPI) as a measure of inflation from the same source and the end-of-year U.S. dollar exchange rate from the Central Bank of the Uzbekistan database. For purchasing power parity comparisons in 2006, the
U.S. dollar The United States dollar ( symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...
is exchanged at 340 som. Uzbekistan's GDP, like that of all CIS countries, declined during the first years of transition and then recovered after 1995, as the cumulative effect of policy reforms began to be felt. It has shown robust growth, rising by 4% per year between 1998 and 2003, and accelerating thereafter to 7%-8% per year. In 2011 the growth rate came up to 9%. Given the growing economy, the total number of people employed rose from 8.5 million in 1995 to 13.5 million in 2011. This healthy increase of nearly 25% in the labor force lagged behind the increase in GDP during the same period (64%, see chart), which implies a significant increase in
labor productivity Workforce productivity is the amount of goods and services that a group of workers produce in a given amount of time. It is one of several types of productivity that economists measure. Workforce productivity, often referred to as labor product ...
. Official
unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work during the refe ...
is very low: less than 30,000 job seekers were registered in government labor exchanges in 2005-2006 (0.3% of the labor force). Underemployment, on the other hand, is believed to be quite high, especially in agriculture, which accounts for fully 28% of all employed, many of them working part-time on tiny household plots. However, no reliable figures are available due to the absence of credible labor surveys. The minimum wage, public-sector wages, and old-age pensions are routinely raised twice a year to ensure that base income is not eroded by inflation. Although no statistics are published on average wages in Uzbekistan, pensions as a proxy for the average wage increased significantly between 1995 and 2006, both in real terms and in U.S. dollars. The monthly old-age pension increased in real (CPI-adjusted) soums by almost a factor of 5 between 1995 and 2006. The monthly pension in U.S. dollars was around $20–$25 until 2000, then dropped to $15–$20 between 2001 and 2004, and now is $64. The minimum wage was raised to $34.31 in November 2011. Assuming that the average wages in the country are at a level of 3-4 times the monthly pension, we estimate the wages in 2006 at $100–$250 per month, or $3–$8 per day. According to the forecast by the Asian Development Bank, the GDP in Uzbekistan in 2009 is expected to grow by 7%. Meanwhile, in 2010 the Uzbekistan GDP growth is predicted at 6,5%.


Labor

Literacy in Uzbekistan is almost universal, and workers are generally well-educated and trained accordingly in their respective fields. Most local technical and managerial training does not meet international business standards, but foreign companies engaged in production report that locally hired workers learn quickly and work effectively. The government emphasizes foreign education. Each year hundreds of students are sent to the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...
,
Europe Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a Continent#Subcontinents, subcontinent of Eurasia ...
, and
Japan Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the n ...
for university degrees, after which they have a commitment to work for the government for 5 years. Reportedly, about 60% of students who study abroad find employment with foreign companies upon completing their degrees, despite their 5-year commitment to work in the government. Some American companies offer their local employees special training programs in the United States. In addition, Uzbekistan subsidizes studies for students at
Westminster International University in Tashkent Westminster International University in Tashkent (WIUT) is the first international university in Uzbekistan and first in Central Asia to offer Western education, with United Kingdom (UK) qualifications. WIUT was established in 2002 in partnersh ...
—one of the few Western-style institutions in Uzbekistan. In 2002, the government "Istedod" Foundation (formerly as "Umid" Foundation) is paying for 98 out of 155 students studying at Westminster. For the next academic year, Westminster is expecting to admit 360 students, from which Istedod is expecting to pay for 160 students. The education at Westminster costs $5,200 per academic year. In 2008 Management Development Institute of Singapore at Tashkent started its work. This university provides high quality education with international degree. Tuition fee was $5000 in 2012. In 2009 Turin Polytechnik University was opened. It is the only university in Central Asia that prepares high quality employees for industries. With the closing or downsizing of many foreign firms, it is relatively easy to find qualified employees, though salaries are very low by Western standards. Salary caps, which the government implements in an apparent attempt to prevent firms from circumventing restrictions on withdrawal of cash from banks, prevent many foreign firms from paying their workers as much as they would like. Labor market regulations in Uzbekistan are similar to those of the
Soviet Union The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen nationa ...
, with all rights guaranteed but some rights unobserved. Unemployment is a growing problem, and the number of people looking for jobs in Russia, Kazakhstan, and
Southeast Asia Southeast Asia, also spelled South East Asia and South-East Asia, and also known as Southeastern Asia, South-eastern Asia or SEA, is the geographical south-eastern region of Asia, consisting of the regions that are situated south of mainland ...
is increasing each year. Uzbekistan's Ministry of Labor does not publish information on Uzbek citizens working abroad, but Russia's Federal Migration Service reports 2.5 million Uzbek migrant workers in Russia. There are also indications of up to 1 million Uzbek migrants working illegally in Kazakhstan.
International Crisis Group The International Crisis Group (ICG; also known as the Crisis Group) is a transnational non-profit, non-governmental organisation founded in 1995. It is a think tank, used by policymakers and academics, performing research and analysis on global ...

Uzbekistan: Stagnation and Uncertainty
Asia Briefing N°67, 22 August 2007
Uzbekistan's migrant workers may thus be around 3.5-4 million people, or a staggering 25% of its labor force of 14.8 million. The U.S. Department of State also estimates that between three and five million Uzbek citizens of working age live outside Uzbekistan.
March 2007
After 2016 Uzbekistan has admitted the lack of higher education offers in the country to support its labor market needs. Since 2016 a number of higher educational providers have started operating in Uzbekistan, including in cooperation with foreign universities. Moreover, private higher education providers started to emerge on the market to provide students with necessary skills, knowledge and competencies required on the labor market. One of the private universities in Tashkent TEAM University aims at development of skills necessary for starting entrepreneurial activities, thus contributing to development of businesses and private enterprises.


Prices and monetary policy

Uzbekistan experienced galloping
inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduct ...
of around 1000% per year immediately after independence (1992–1994). Stabilization efforts implemented with active guidance from the
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster glo ...
rapidly paid off, as inflation rates were brought down to 50% in 1997 and then to 22% in 2002. Since 2003 annual inflation rates averaged less than 10%.IMF World Economic Outlook Database
October 2007
The severe inflationary pressures that characterized the early years of independence inevitably led to a dramatic depreciation of the national currency. The exchange rate of Uzbekistan's first currency, the "notional" rouble inherited from the Soviet period and its successor, the transient "coupon soum" introduced in November 1993 in a ratio of 1:1 to the rouble, went up from 100 roubles/US$ in the early 1992 to 3,627 roubles (or coupon soum) in mid-April 1994. On July 1, 1994 the "coupon soum" was replaced with the permanent new Uzbek soum (UZS) in a ratio of 1000:1, and the starting exchange rate for the new national currency was set at 7 soum/US$, implying an almost two-fold depreciation since mid-April. Within the first six months, between July and December 1994, the national currency depreciated further to 25 soum/US$ and continued depreciating at a fast clip until December 2002, when the exchange rate had reached 969 soum/US$, i.e., 138 times the starting exchange rate eight and a half years earlier or nearly 10,000 times the exchange rate in early 1992, soon after the declaration of independence.Central Bank of Uzbekistan database
, February 2008
Then the depreciation of the soum virtually stopped in response to the government's stabilization program, which at the same time dramatically reduced the inflation rates. During the four years that followed (2003–2007) the exchange rate of the soum to the US dollar increased only by a factor of 1.33, from 969 soum to around 1,865 soum in May 2012. From 1996 until the spring of 2003, the official and so-called "commercial" exchange rate – both set administratively by the Central Bank – were highly overvalued. Many businesses and individuals were unable to buy dollars legally at these "low" rates, so a widespread black market developed to meet hard currency demand. The spread between the official exchange rate and the curb rate widened especially after the Russian financial crisis of August 1998: at the end of 1999 the curb rate stood at 550 soum/US$ compared with the official rate of 140 soum/US$, a gap by nearly a factor of 4 (up from a factor of "only" 2 in 1997 and the first half of 1998). By mid-2003, the government's stabilization and liberalization efforts had reduced the gap between the black market, official, and commercial rates to approximately 8% and it quickly disappeared as the soum was made convertible after October 2003. Today, four foreign currencies—the U.S. dollar, the euro, the pound sterling, and the yen—are freely exchanged in commercial booths all around the cities, while other currencies, including the
Russian rouble ''hum''; cv, тенкĕ ''tenke''; kv, шайт ''shayt''; Lak: къуруш ''k'urush''; Mari: теҥге ''tenge''; os, сом ''som''; tt-Cyrl, сум ''sum''; udm, манет ''manet''; sah, солкуобай ''solkuobay'' , name_ab ...
and the Kazakh tenge, are bought and sold by individual ("black market") money changers, who are allowed to operate openly without harassment. The foreign exchange regime since October 2003 is characterized as "controlled floating rate". Liberalization of the trade regime remains a prerequisite for Uzbekistan to proceed to an IMF-financed program. In 2012, "black market" rate is again significantly higher than official rate, 2,850 soum/US$ vs. 1,865 soum/US$ (as of mid-June 2011). This curb rate is often referred to as 'bazar rate', because money changers operate at or near 'bazars' - large farmer markets. Tax collection rates remained high, due to the use of the banking system by the government as a collection agency. Technical assistance from the
World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...
, Office of Technical Assistance at the U.S. Treasury Department, and
UNDP The United Nations Development Programme (UNDP)french: Programme des Nations unies pour le développement, PNUD is a United Nations agency tasked with helping countries eliminate poverty and achieve sustainable economic growth and human dev ...
is being provided in reforming the Central Bank and Ministry of Finance into institutions capable of conducting market-oriented fiscal and monetary policy.


Agriculture

In 2018, Uzbekistan produced:Uzbekistan production in 2018, by FAO
/ref> * 5.4 million tonnes of
wheat Wheat is a grass widely cultivated for its seed, a cereal grain that is a worldwide staple food. The many species of wheat together make up the genus ''Triticum'' ; the most widely grown is common wheat (''T. aestivum''). The archaeologi ...
; * 2.9 million tons of
potato The potato is a starchy food, a tuber of the plant ''Solanum tuberosum'' and is a root vegetable native to the Americas. The plant is a perennial in the nightshade family Solanaceae. Wild potato species can be found from the southern Uni ...
; * 2.2 million tons of
cotton Cotton is a soft, fluffy staple fiber that grows in a boll, or protective case, around the seeds of the cotton plants of the genus '' Gossypium'' in the mallow family Malvaceae. The fiber is almost pure cellulose, and can contain minor pe ...
(8th largest producer in the world); * 2.2 million tons of
tomato The tomato is the edible berry of the plant ''Solanum lycopersicum'', commonly known as the tomato plant. The species originated in western South America, Mexico, and Central America. The Mexican Nahuatl word gave rise to the Spanish word ...
(14th largest producer in the world); * 2.1 million tonnes of
carrot The carrot ('' Daucus carota'' subsp. ''sativus'') is a root vegetable, typically orange in color, though purple, black, red, white, and yellow cultivars exist, all of which are domesticated forms of the wild carrot, ''Daucus carota'', na ...
(2nd largest producer in the world, just behind China); * 1.8 million tons of
watermelon Watermelon (''Citrullus lanatus'') is a flowering plant species of the Cucurbitaceae family and the name of its edible fruit. A scrambling and trailing vine-like plant, it is a highly cultivated fruit worldwide, with more than 1,000 varie ...
(8th largest producer in the world); * 1.5 million tons of
grape A grape is a fruit, botanically a berry, of the deciduous woody vines of the flowering plant genus '' Vitis''. Grapes are a non- climacteric type of fruit, generally occurring in clusters. The cultivation of grapes began perhaps 8,000 years a ...
(15th largest producer in the world); * 1.4 million tons of
onion An onion (''Allium cepa'' L., from Latin ''cepa'' meaning "onion"), also known as the bulb onion or common onion, is a vegetable that is the most widely cultivated species of the genus '' Allium''. The shallot is a botanical variety of the on ...
(15th largest producer in the world); * 1.1 million tons of
apple An apple is an edible fruit produced by an apple tree (''Malus domestica''). Apple trees are cultivated worldwide and are the most widely grown species in the genus '' Malus''. The tree originated in Central Asia, where its wild ancest ...
(14th largest producer in the world); * 857 thousand tons of
cucumber Cucumber (''Cucumis sativus'') is a widely-cultivated creeping vine plant in the Cucurbitaceae family that bears usually cylindrical fruits, which are used as culinary vegetables.cabbage Cabbage, comprising several cultivars of ''Brassica oleracea'', is a leafy green, red (purple), or white (pale green) biennial plant grown as an annual vegetable crop for its dense-leaved heads. It is descended from the wild cabbage ( ''B.&n ...
; * 493 thousand tons of
apricot An apricot (, ) is a fruit, or the tree that bears the fruit, of several species in the genus '' Prunus''. Usually, an apricot is from the species '' P. armeniaca'', but the fruits of the other species in ''Prunus'' sect. ''Armeniaca'' are al ...
(2nd largest producer in the world, just behind Turkey); * 413 thousand tons of
maize Maize ( ; ''Zea mays'' subsp. ''mays'', from es, maíz after tnq, mahiz), also known as corn (North American English, North American and Australian English), is a cereal grain first domesticated by indigenous peoples of Mexico, indigenous ...
; * 254 thousand tons of
garlic Garlic (''Allium sativum'') is a species of bulbous flowering plant in the genus '' Allium''. Its close relatives include the onion, shallot, leek, chive, Welsh onion and Chinese onion. It is native to South Asia, Central Asia and northeas ...
; * 221 thousand tons of
rice Rice is the seed of the grass species '' Oryza sativa'' (Asian rice) or less commonly ''Oryza glaberrima'' (African rice). The name wild rice is usually used for species of the genera '' Zizania'' and '' Porteresia'', both wild and domesticat ...
; * 172 thousand tons of
cherry A cherry is the fruit of many plants of the genus ''Prunus'', and is a fleshy drupe (stone fruit). Commercial cherries are obtained from cultivars of several species, such as the sweet ''Prunus avium'' and the sour '' Prunus cerasus''. The n ...
; * 161 thousand tons of
peach The peach (''Prunus persica'') is a deciduous tree first domesticated and cultivated in Zhejiang province of Eastern China. It bears edible juicy fruits with various characteristics, most called peaches and others (the glossy-skinned, n ...
; * 134 thousand tons of
plum A plum is a fruit of some species in ''Prunus'' subg. ''Prunus'.'' Dried plums are called prunes. History Plums may have been one of the first fruits domesticated by humans. Three of the most abundantly cultivated species are not found ...
(17th largest producer in the world); In addition to smaller productions of other agricultural products. At the end of 2013, the government announced through the Central Bank of the Republic of Uzbekistan that it predicted agriculture as playing a major component of the country's economic development in the future.
Agriculture in Uzbekistan Agriculture in Uzbekistan employs 28% of the country's labor force and contributes 24% of its GDP (2006 data). Crop agriculture requires irrigation and occurs mainly in river valleys and oases. Cultivable land is 4.5 million hectares, or about 10% o ...
employs 28% of labor force and contributes 24% of GDP (2006 data).State Committee of the Republic of Uzbekistan on statistics
2006
Another 8% of GDP is from processing of domestic agricultural output.
Cotton Cotton is a soft, fluffy staple fiber that grows in a boll, or protective case, around the seeds of the cotton plants of the genus '' Gossypium'' in the mallow family Malvaceae. The fiber is almost pure cellulose, and can contain minor pe ...
, once Uzbekistan's star cash earner, has lost much its luster since independence as wheat began to gain prominence from considerations of food security for the rapidly growing population. Areas cropped to cotton were reduced by more than 25% from 2 million hectares in 1990 to less than 1.5 million hectares in 2006, while wheat cultivation jumped 60% from around 1 million hectares in 1990 to 1.6 million hectares in 2006. Cotton production dropped from 3 million tons annually in the pre-independence decade to around 1.2 million tons since 1995, but even at these reduced levels Uzbekistan produces 3 times as much cotton as all the other Central Asian countries and Azerbaijan combined. Cotton
export An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is a ...
s tumbled from highs of around 45% of Uzbekistan's total exports in the early 1990s to 17% in 2006. Uzbekistan is the largest producer of jute in West Asia and it also produces significant quantities of
silk Silk is a natural protein fiber, some forms of which can be woven into textiles. The protein fiber of silk is composed mainly of fibroin and is produced by certain insect larvae to form cocoons. The best-known silk is obtained from th ...
(Uzbek
ikat ''Ikat'' (in Indonesian languages means "bind") is a dyeing technique originating from Indonesia used to pattern textiles that employs resist dyeing on the yarns prior to dyeing and weaving the fabric. In ''ikat'', the resist is formed by b ...
),
fruit In botany, a fruit is the seed-bearing structure in flowering plants that is formed from the ovary after flowering. Fruits are the means by which flowering plants (also known as angiosperms) disseminate their seeds. Edible fruits in partic ...
, and
vegetable Vegetables are parts of plants that are consumed by humans or other animals as food. The original meaning is still commonly used and is applied to plants collectively to refer to all edible plant matter, including the edible flower, flowers, ...
s, with food products contributing nearly 8% of total exports in 2006. Virtually all agriculture requires
irrigation Irrigation (also referred to as watering) is the practice of applying controlled amounts of water to land to help grow crops, landscape plants, and lawns. Irrigation has been a key aspect of agriculture for over 5,000 years and has been devel ...
, but because of budgetary constraints there has been practically no expansion of irrigated area since independence: it remains static at 4.2 million hectares, the level reached by 1990 after rapid growth during the Soviet period. Government intervention in agriculture is reflected in the persistence of state orders for the two main cash crops, cotton and wheat. Farmers receive binding directives on the area to be cropped to these commodities and are obliged to surrender their harvest to designated marketers at state-fixed prices. The incomes of farmers and agricultural workers are substantially lower than the national average because the government pays them less than the world prices for their cotton and wheat, using the difference to subsidize capital intensive industrial concerns, such as factories producing
automobile A car or automobile is a motor vehicle with wheels. Most definitions of ''cars'' say that they run primarily on roads, seat one to eight people, have four wheels, and mainly transport people instead of goods. The year 1886 is regarded ...
s,
airplane An airplane or aeroplane (informally plane) is a fixed-wing aircraft that is propelled forward by thrust from a jet engine, propeller, or rocket engine. Airplanes come in a variety of sizes, shapes, and wing configurations. The broad ...
s, and
tractor A tractor is an engineering vehicle specifically designed to deliver a high tractive effort (or torque) at slow speeds, for the purposes of hauling a trailer or machinery such as that used in agriculture, mining or construction. Most commo ...
s. Consequently, many farmers focus on production of
fruit In botany, a fruit is the seed-bearing structure in flowering plants that is formed from the ovary after flowering. Fruits are the means by which flowering plants (also known as angiosperms) disseminate their seeds. Edible fruits in partic ...
s and
vegetable Vegetables are parts of plants that are consumed by humans or other animals as food. The original meaning is still commonly used and is applied to plants collectively to refer to all edible plant matter, including the edible flower, flowers, ...
s on their small household plots, because the prices of these commodities are determined by supply and demand, not by government decrees. Farmers also resort to smuggling cotton and especially wheat across the border with Kazakhstan and Kyrgyzstan in order to obtain higher prices. The government's discriminatory pricing for the main cash crops, cotton and wheat, is apparently responsible for the exceptionally rapid growth of the cattle herd in recent years, as the prices of milk and meat, like those of fruits and vegetables, are also determined by market forces. The number of cattle increased from 4 million head in 1990 to 7 million head in 2006, and virtually all these animals are maintained by rural families with just 2-3 head per household. Sales of own-produced milk, meat, and vegetables in town markets are an important source for augmenting rural family incomes. The Soviet practice of using "volunteer labor" to help gathering the cotton harvest continues in Uzbekistan where schoolchildren, university students, medical professionals, and state employees are driven en masse out to the fields every year. A recent article posted by a domestic news agency (admittedly with strong anti-government leanings) describes Uzbekistan's cotton as "riches gathered by the hands of hungry children".


Natural resources and energy

In 2019, the country was the 5th largest world producer of
uranium Uranium is a chemical element with the symbol U and atomic number 92. It is a silvery-grey metal in the actinide series of the periodic table. A uranium atom has 92 protons and 92 electrons, of which 6 are valence electrons. Uranium is weak ...
; 12th largest world producer of
gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile ...
; 7th largest world producer of
rhenium Rhenium is a chemical element with the symbol Re and atomic number 75. It is a silvery-gray, heavy, third-row transition metal in group 7 of the periodic table. With an estimated average concentration of 1 part per billion (ppb), rhenium is one ...
; 12th largest world producer of
molybdenum Molybdenum is a chemical element with the symbol Mo and atomic number 42 which is located in period 5 and group 6. The name is from Neo-Latin ''molybdaenum'', which is based on Ancient Greek ', meaning lead, since its ores were confused with lead ...
; 21st largest world producer of
phosphate In chemistry, a phosphate is an anion, salt, functional group or ester derived from a phosphoric acid. It most commonly means orthophosphate, a derivative of orthophosphoric acid . The phosphate or orthophosphate ion is derived from phosph ...
, and the 19th largest world producer of
graphite Graphite () is a crystalline form of the element carbon. It consists of stacked layers of graphene. Graphite occurs naturally and is the most stable form of carbon under standard conditions. Synthetic and natural graphite are consumed on la ...
Mineral In geology and mineralogy, a mineral or mineral species is, broadly speaking, a solid chemical compound with a fairly well-defined chemical composition and a specific crystal structure that occurs naturally in pure form.John P. Rafferty, ed. (2 ...
s and
mining Mining is the extraction of valuable minerals or other geological materials from the Earth, usually from an ore body, lode, vein, seam, reef, or placer deposit. The exploitation of these deposits for raw material is based on the econom ...
also are important to Uzbekistan's economy.
Gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile ...
, alongside cotton, is a major foreign exchange earner, unofficially estimated at around 20% of total exports. Uzbekistan is the world's seventh-largest gold producer, mining about 80 tons per year, and holds the fourth-largest reserves in the world. Uzbekistan has an abundance of
natural gas Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbon d ...
, used both for domestic consumption and export;
oil An oil is any nonpolar chemical substance that is composed primarily of hydrocarbons and is hydrophobic (does not mix with water) & lipophilic (mixes with other oils). Oils are usually flammable and surface active. Most oils are unsaturated ...
used for domestic consumption; and significant reserves of
copper Copper is a chemical element with the symbol Cu (from la, cuprum) and atomic number 29. It is a soft, malleable, and ductile metal with very high thermal and electrical conductivity. A freshly exposed surface of pure copper has a pink ...
,
lead Lead is a chemical element with the symbol Pb (from the Latin ) and atomic number 82. It is a heavy metal that is denser than most common materials. Lead is soft and malleable, and also has a relatively low melting point. When freshly cut, ...
,
zinc Zinc is a chemical element with the symbol Zn and atomic number 30. Zinc is a slightly brittle metal at room temperature and has a shiny-greyish appearance when oxidation is removed. It is the first element in group 12 (IIB) of the periodi ...
,
tungsten Tungsten, or wolfram, is a chemical element with the symbol W and atomic number 74. Tungsten is a rare metal found naturally on Earth almost exclusively as compounds with other elements. It was identified as a new element in 1781 and first isol ...
, and
uranium Uranium is a chemical element with the symbol U and atomic number 92. It is a silvery-grey metal in the actinide series of the periodic table. A uranium atom has 92 protons and 92 electrons, of which 6 are valence electrons. Uranium is weak ...
. Inefficiency in energy use is generally high, because the low controlled prices do not stimulate consumers to conserve
energy In physics, energy (from Ancient Greek: ἐνέργεια, ''enérgeia'', “activity”) is the quantitative property that is transferred to a body or to a physical system, recognizable in the performance of work and in the form of ...
. Uzbekistan is a partner country of the EU
INOGATE INOGATE was an international energy co-operation programme between the European Union (EU), the littoral states of the Black and Caspian seas and their neighbouring countries. The programme was operational from 1996 to 2016. INOGATE was one of ...
energy programme, which has four key topics: enhancing
energy security Energy security is the association between national security and the availability of natural resources for energy consumption. Access to (relatively) cheap energy has become essential to the functioning of modern economies. However, the uneven d ...
,
convergence Convergence may refer to: Arts and media Literature *''Convergence'' (book series), edited by Ruth Nanda Anshen *Convergence (comics), "Convergence" (comics), two separate story lines published by DC Comics: **A four-part crossover storyline that ...
of member state
energy market Energy markets are national and international regulated markets that deal specifically with the trade and supply of energy. Energy market may refer to an electricity market, but can also refer to other sources of energy. Typically energy developme ...
s on the basis of EU internal energy market principles, supporting
sustainable energy Energy is sustainable if it "meets the needs of the present without compromising the ability of future generations to meet their own needs". Most definitions of sustainable energy include considerations of environmental aspects such as green ...
development, and attracting
investment Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing is ...
for energy projects of common and regional interest. The country's larget steel manufacturer is Uzmetkombinat. The company is planning an IPO in 2023.


External trade and investment

Since the 2017 liberalisation of the foreign exchange market, Uzbekistan has seen rapid growth in exports. Traditional export products such as gas and cotton are now kept domestically for processing. They have been replaced by a vast growth in exports in areas such as fruit, textiles and home appliances. In recent years textile export has doubled in revenue to almost US$3bn worth of goods exports. Home appliance manufacturer
Artel An artel (russian: арте́ль) was any of several types of cooperative associations and (later) corporate enterprises in the Tsardom of Russia, the Russian Empire, and the Soviet Union. They began centuries ago but were especially prevalent ...
has seen exports rise from $5.6m in 2017, to around $100m in 2021. Before this, the system of multiple exchange rates combined with the highly regulated trade regime caused both imports and exports to drop each from about US$4.5 billion in 1996 to less than US$3 billion in 2002. The success of stabilization and currency liberalization in 2003 has led to significant increases in exports and imports in recent years, although imports have increased much less rapidly: while exports had more than doubled to US$15.5 by 2011, imports had risen to US$6.5 billion only, reflecting the impact of the government's import substitution policies designed to maintain hard currency reserves. Draconian tariffs, sporadic border closures, and border crossing "fees" have a negative effect on legal imports of both consumer products and capital equipment. Uzbekistan is a member of the
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster glo ...
,
World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...
,
Asian Development Bank The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966, which is headquartered in the Ortigas Center located in the city of Mandaluyong, Metro Manila, Philippines. The bank also maintains 31 field of ...
, and
European Bank for Reconstruction and Development The European Bank for Reconstruction and Development (EBRD) is an international financial institution founded in 1991. As a multilateral developmental investment bank, the EBRD uses investment as a tool to build market economies. Initially fo ...
. It has observer status at the
World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. With effective cooperation in the United Nations System, governments use the organization to establish, revise, and ...
, is a member of the
World Intellectual Property Organization The World Intellectual Property Organization (WIPO; french: link=no, Organisation mondiale de la propriété intellectuelle (OMPI)) is one of the 15 specialized agencies of the United Nations (UN). Pursuant to the 1967 Convention Establishi ...
, and is a signatory to the '' Convention on Settlement of Investment Disputes Between States and Nationals of Other States'', the ''
Paris Convention for the Protection of Industrial Property The Paris Convention for the Protection of Industrial Property, signed in Paris, France, on 20 March 1883, was one of the first intellectual property treaties. It established a Union for the protection of industrial property. The convention is c ...
'', the '' Madrid Agreement on Trademarks Protection'', and the ''
Patent Cooperation Treaty The Patent Cooperation Treaty (PCT) is an international patent law treaty, concluded in 1970. It provides a unified procedure for filing patent applications to protect inventions in each of its contracting states. A patent application filed und ...
''. In 2002, Uzbekistan was again placed on the special "301" Watch List for lack of intellectual copyright protection. Until 2017, according to
EBRD The European Bank for Reconstruction and Development (EBRD) is an international financial institution founded in 1991. As a multilateral developmental investment bank, the EBRD uses investment as a tool to build market economies. Initially foc ...
transition indicators, Uzbekistan's investment climate remains among the least favorable in the CIS, with only Belarus and Turkmenistan ranking lower. The unfavorable investment climate has caused foreign investment inflows to dwindle to a trickle. It is believed that Uzbekistan has the lowest level of
foreign direct investment A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct c ...
per capita in the CIS. Since Uzbekistan's independence, U.S. firms have invested roughly $500 million in the country, but due to declining investor confidence, harassment, and currency convertibility problems, numerous international investors have left the country or are considering leaving. In 2005, the Central Bank has revoked the license of the nascent Biznes Bank citing unspecified violations of local currency exchange rules. The revocation prompted immediate bankruptcy procedures, under which clients' deposits stay arrested for two month. No interest was accrued during that two-month period. In 2006, the Government of Uzbekistan forced out
Newmont Mining Corporation Newmont Corporation is a gold mining company based in Greenwood Village, Colorado, United States. It is the world's largest gold mining corporation. Incorporated in 1921, it owns gold mines in Nevada, Colorado, Ontario, Quebec, Mexico, the Domin ...
(at the time the largest U.S. investor) from its gold mining joint venture in the Muruntau gold mine. Newmont and the government resolved their dispute, but the action adversely affected Uzbekistan's image among foreign investors. The government attempted the same with British-owned Oxus Mining. Coscom, a U.S.-owned telecommunications company, involuntarily sold its stake in a joint venture to another foreign company. GM-DAT, a Korean subsidiary of GM, is the only known U.S. business to have entered Uzbekistan in over two years. It recently signed a joint-venture agreement with UzDaewooAuto to assemble Korean-manufactured cars for export and domestic sale. Other large U.S. investors in Uzbekistan include
Case IH Case IH is an American agricultural machinery manufacturer. It was created in 1985 when Tenneco bought selected assets of the agricultural division from International Harvester and merged it into its J.I. Case Company (IH then became Navistar).T ...
, manufacturing and servicing cotton harvesters and tractors;
Coca-Cola Coca-Cola, or Coke, is a carbonated soft drink manufactured by the Coca-Cola Company. Originally marketed as a temperance bar, temperance drink and intended as a patent medicine, it was invented in the late 19th century by John Stith Pembe ...
, with bottling plants in
Tashkent Tashkent (, uz, Toshkent, Тошкент/, ) (from russian: Ташкент), or Toshkent (; ), also historically known as Chach is the capital and largest city of Uzbekistan. It is the most populous city in Central Asia, with a population of 2 ...
,
Namangan Namangan (; ) is a city in eastern Uzbekistan. It is the administrative, economic, and cultural center of Namangan Region. Administratively, it is a district-level city. Namangan is located in the northern edge of the Fergana Valley, less than ...
, and
Samarkand fa, سمرقند , native_name_lang = , settlement_type = City , image_skyline = , image_caption = Clockwise from the top:Registan square, Shah-i-Zinda necropolis, Bibi-Khanym Mosque, view inside Shah-i-Zinda, ...
;
Texaco Texaco, Inc. ("The Texas Company") is an American oil brand owned and operated by Chevron Corporation. Its flagship product is its fuel "Texaco with Techron". It also owned the Havoline motor oil brand. Texaco was an independent company unt ...
, producing lubricants for sale in the Uzbek market; and
Baker Hughes Baker Hughes Company, organized in Delaware and headquartered in Houston, is one of the world's largest oil field services companies. The company provides products and services for oil well drilling, formation evaluation, completion, produc ...
, in oil and gas development.


Banking

Uzbekistan's banks have demonstrated reasonably stable performance in a largely state-dominated local economy. Sector stability is currently supported by rapid economic growth, low exposure to external financial markets and the strong external and fiscal position of the sovereign. However, the sector remains vulnerable to possible economic shocks due to weak corporate governance and risk management, fast recent asset growth, significant directed lending and acquisitions of problem assets. Banks’ foreign currency obligations, specifically those arising from trade finance, are particularly vulnerable due to existing foreign exchange constraints. According to
Fitch Ratings Fitch Ratings Inc. is an American credit rating agency and is one of the " Big Three credit rating agencies", the other two being Moody's and Standard & Poor's. It is one of the three nationally recognized statistical rating organizations (NRS ...
, there are notable risks of asset quality deterioration in case of a reversal in economic trends. The funding base is mainly short-term, largely sourced from corporate current accounts, while retail funds account for only a small 25% of total deposits. Longer-term funding is provided by the Ministry of Finance and other state agencies, which comprise a notable proportion of sector liabilities. Foreign funding is small, estimated at about 10% of the total liabilities, and plans for further borrowings are moderate. Liquidity management is constrained be the lack of deep capital markets, and banks generally tend to hold substantial cash reserves on their balance sheets. The quality of capital is sometimes compromised by less conservative regulatory requirements for recognition of credit impairment and by investments in non-core assets.


Retail

Uzbekistan's retail sector remains dominated by traditional markets, known as ''bozorlar'', where individual vendors sell food, housewares, clothing, and other consumer goods. But the country's retail sector is rapidly modernizing. The construction of modern supermarkets and malls has accelerated in recent years. The country's retail market was estimated at $17 billion in 2017 and rising incomes, population growth, and a move from informal to formal retail are expected to drive continued expansion of the sector. Major supermarket chains include local players Korzinka.uz and
Makro (Uzbekistan) Makro is an Uzbek supermarket chain headquartered in Tashkent. The company operates a network of 108 stores across 25 urban areas in Uzbekistan, making it the country's largest food retailer by store count. The company has 3,500 employees. Makro ...
and the French multinational chain
Carrefour Carrefour () is a French multinational retail and wholesaling corporation headquartered in Massy, France. The eighth-largest retailer in the world by revenue, it operates a chain of hypermarkets, groceries stores and convenience stores, whic ...
, which will open its first store in Uzbekistan in 2021. The country's first modern shopping malls are located in Tashkent, and include the Samarkand Darvoza and Compass developments. The sector has also seen growth in online retail. In 2021, Korzinka acquired a US$40m stake in Angelsey Foods, the Singapore mother entity of Korzinka. In 2021, the company also signed a signed $12 million in debt financing to promote food security and sustain the livelihoods of more than 5,000 employees and 1,200 farm workers in Uzbekistan.


Tourism

Silk road route's three important cities are located in Uzbekistan, namely
Khiva Khiva ( uz, Xiva/, خىۋا; fa, خیوه, ; alternative or historical names include ''Kheeva'', ''Khorasam'', ''Khoresm'', ''Khwarezm'', ''Khwarizm'', ''Khwarazm'', ''Chorezm'', ar, خوارزم and fa, خوارزم) is a district-level city ...
,
Bukhara Bukhara ( Uzbek: /, ; tg, Бухоро, ) is the seventh-largest city in Uzbekistan, with a population of 280,187 , and the capital of Bukhara Region. People have inhabited the region around Bukhara for at least five millennia, and the city ...
and
Samarkand fa, سمرقند , native_name_lang = , settlement_type = City , image_skyline = , image_caption = Clockwise from the top:Registan square, Shah-i-Zinda necropolis, Bibi-Khanym Mosque, view inside Shah-i-Zinda, ...
. There are numerous well connected tourist destinations in Uzbekistan. There are five
UNESCO The United Nations Educational, Scientific and Cultural Organization is a List of specialized agencies of the United Nations, specialized agency of the United Nations (UN) aimed at promoting world peace and security through international coope ...
World Heritage Sites in Uzbekistan In its most general sense, the term "world" refers to the totality of entities, to the whole of reality or to everything that is. The nature of the world has been conceptualized differently in different fields. Some conceptions see the worl ...
and 30 are on tentative list.


Miscellaneous data

The following table shows the main economic indicators in 1993–2017. Household income or consumption by percentage share: * ''lowest 10%:'' 2.8% * ''highest 10%:'' 29.6% (2003) Distribution of family income - Gini index: 36.8 (2003) Agriculture - products: cotton, vegetables, fruits, grain; livestock Industrial production growth rate: 6.2% (2003 est.) Electricity: * ''production:'' 47.7 TWh (2002) * ''consumption:'' 46.66 TWh (2002) * ''exports:'' 4.5 TWh (2002) * ''imports:'' 6.8 TWh (2002) Electricity - production by source: * ''fossil fuel:'' 88.2% * ''hydro:'' 11.8% * ''other:'' 0% (2001) * ''nuclear:'' 0% Oil: * ''production:'' (2004 est.) * ''consumption:'' (2001 est.) * ''exports:'' NA * ''imports:'' NA * ''proved reserves:'' (1 January 2002) Natural gas: * ''production:'' 63.1 billion m³ (2001 est.) * ''consumption:'' 45.2 billion m³ (2001 est.) * ''exports:'' 17.9 billion m³ (2001 est.) * ''imports:'' 0 m³ (2001 est.) * ''proved reserves:'' 937.3 billion m³ (1 January 2002) Current account balance: $3.045 billion (2007 est.) Exports - commodities: cotton 17.2%, energy products 13.1%, metals 12.9%, machinery and equipment 10.1%, food products 7.9%, chemical products 5.6%, services 12.1%( 2006) Imports - commodities: machinery and equipment 40.3%, chemical products 15.0%, metals 10.4%, food products 8.1%, energy products 4.3%, services 9.1% (2006) Reserves of foreign exchange & gold: $5.6 billion (Dec. 2007 est.) Exchange rates: * UZS per USD - 1,865 (early 2012) * UZS (s'om) per USD - 10,097 (Apr 2020) * UZS per EUR - 2,900 * UZS per EUR - 10,981 (Apr 2020) Current economy growth (6 months of 2009) * ''GDP growth'' +8,2% * ''Volume of industrial production'' +9.1% * ''Volume of agricultural production'' +4,6%


See also

* Special economic zones of Uzbekistan


References


''Uzbekistan: Accession of Uzbekistan to the Free Trade Area (FTA) CIS''
{{Asia in topic, Economy of