Economic trends
After the independence, the authorities chose a strategy of gradual reform and import substitution, aimed in particular at achieving energy self-sufficiency, thanks to the country's food and gas resources. Deliberate government policy of economic diversification, export development and investment, which includes the "Program of localization of production of finished products," encouragement of the production of consumer goods, aid to exports, support for SMEs and a program of developing the services, seems to be bringing results.
Loans to SMEs and private companies multiplied by 1.5 in 2010 compared to 2009 and have remained strong since. Similarly, microcredit has multiplied by 1.6. SMEs employ 74% of the workforce. The Uzbek government has reaffirmed its commitment to strengthening legislation on private property, particularly in order to contribute to the development of private industry. However, both the considerable levels of corruption in the government and a highly restrictive trade policy are hindering the economy. Uzbekistan is still reluctant to move forward in the field of privatization, especially in agriculture. The private sector share is only 45% according to the EBRD.
The government's pro-active policy favors the diversification of its economy, the development of exports and investments which form part of the "Program of localization of manufacture of the finished products" encourages the production of consumption goods, aid in export, support to SME and and a program of service development. This program seems to be giving results. The credits granted to SME and private companies multiplied by 1.5 in the first nine months of 2010 in relation to the same period in 2009. The micro-credit has also multiplied by 1.6. The SMEs employ 74% of the active population.
Uzbekistan's GDP growth remained strong in 2011 (7.1%), after a growth rate of 8% in 2010. This is explained by the establishment of an "anti-crisis" program intended for commercial banks but also because these are not too dependent of the international financial system.
Uzbekistan faces a very high inflation rate (over 10% since 2010).Unemployment rate too is high. Almost one in three people lives under the poverty line.
Main branches of industry
Services represent up to 43% of the GDP, industry contributes 31% and agriculture around 26% to the GDP. The main agricultural productions are fruits and vegetables and livestock. Cotton, silk and wool are the basis of the country's large textile industry. Traditional crafts such as silk dying and carpet weaving, which had been placed aside during the Soviet rule, have restarted again since the country's independence.
Moreover, the country has plenty of natural resources: coal, zinc, copper, tungsten, uranium and silver. Uzbekistan is also a significant producer of gas and oil. Machinery manufacturing, metallurgy, food-processing, chemical products manufacturing, fertilizers and construction materials are in high development.
International trade
Uzbek trade policy remains restrictive (temporary closures of borders, higher tariffs, heavy import procedures) and therefore generates risk for economic agents. The over-regulated trade policy leaves little space for imports, with the aim of maintaining reserves of convertible currency. The results of the country's foreign trade depend largely on the international price of gold and cotton. The country benefits, in particular, from the record price of gold, which has been rising steadily since 2006.
Agriculture remains a key economic sector (21% of GDP, 40% of the workforce). However, its specialization in cotton (fifth largest producer, second largest exporter) is the result of a historical legacy rather than a real comparative advantage. Uzbekistan has major extractive resources: gold (the fourth largest reserve), uranium (8th largest reserve, the fifth largest producer) and gas (15th in terms of reserves, 10th largest world producer). Finally, from the Soviet era Uzbekistan inherited a dense industrial fabric (metallurgy, chemistry, aeronautics) which the state is trying to modernize and which includes some success stories (a large investment by General Motors in the production of export cars and a recent investment by Mercedes-Benz and MAN in the production of buses and trucks in the region of Samarkand).
The limited increase in imports should be attributed to the country's policy of strict control, as well as to its very high tariff barriers. However, this should not hide the fact of a very large amount of cross-border smuggling. The country mainly imports machinery and equipment, chemicals, food products and ferrous and nonferrous metals.
The countries of the Commonwealth of Independent States contribute about one third to foreign trade. The main export partners of Uzbekistan are Russia (19%), China (13.4%), but also Kazakhstan and Ukraine.
The share of Russian imports from Uzbekistan amounts to nearly 25%. Russia provides manufactured goods (equipment and weapons). China is a partner of growing importance for Uzbekistan (about 20% of imports) since the amount of their trade reached nearly 2 billion USD in 2010. The third most important is South Korea, whose share of imports is more than 10%.
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Last updates: May 2012
