In today’s global landscape, finding new markets is crucial, especially with ongoing trade restrictions. This effort is vital for boosting population income, creating jobs, and increasing production. The free market also drives product quality improvements, cost reductions, technological advancements, market reforms, and integration into the global production system.
Current Trade Landscape
As of the first half of this year, Uzbekistan has established trade relations with 186 countries, achieving a foreign trade turnover of $31.8 billion. Exports alone accounted for $13 billion, marking a 5.5% increase from the previous year. China leads as Uzbekistan’s top export destination with an 18.5% share, followed by Russia, Kazakhstan, Turkey, and Korea.
Rising Exporters
The number of Uzbek exporters has reached 5,682, with goods and services worth about $8.7 billion exported in the last six months, excluding non-monetary gold. This figure represents a 10.9% increase from the same period in 2023. The largest share of foreign trade in the first half of 2024 was with CIS countries ($11 billion), EOII countries ($8.4 billion), other countries ($20.9 billion), and EU countries ($3.1 billion).
Vision 2030: A Strategic Outlook
The “Uzbekistan – 2030” strategy outlines key tasks to enhance the national economy’s export potential and increase the share of high-value products. The plan aims to double exports to $45 billion, increase the number of exporting enterprises from 6,500 to 15,000, and boost the volume of finished and semi-finished products by 3.3 times. Additionally, the export of finished and technological products to European countries under GSP+ and other systems will be expanded. The number of enterprises meeting international standards will increase tenfold to 5,000. Special economic zones will be established with 50 prestigious global brands, and national brands will be supported in foreign markets under the “New Uzbekistan – the country of competitive products” initiative.
Support for Local Enterprises
A list of 1,426 enterprises has been formed to help local businesses enter foreign markets. In 2023, 132 of these enterprises received natural gas and electricity, 103 were introduced to international standards and certificates, 10 received $4.8 million in export financing loans, and 9.2 billion soums were allocated to enhance product competitiveness. As a result, 183 enterprises found foreign partners and exported a total of $130 million. Additionally, 2,185 enterprises were involved in export activities, exporting $735 million.
Future Projections
By the end of 2023, Uzbekistan’s exports (excluding special exports) are projected to reach $16.2 billion, a 104% increase from the previous year. This growth reflects the country’s strategic efforts to expand its export markets and integrate more deeply into the global economy.
Uzbekistan’s Export Boom: Key Drivers and Future Prospects
Uzbekistan’s export volumes have surged, driven by significant growth in several key sectors. Electrical engineering exports hit $1 billion, up 26%, while the automobile industry saw $682 million in exports, a 23% increase. The oil and gas sector contributed $509 million (10% growth), pharmaceuticals $130 million (95% growth), transport $1.6 billion (8% growth), tourism $2.1 billion (32% growth), and information technology $487 million (73% growth).
Regional Highlights
Tashkent city and the Khorezm region led the way in export growth. Tashkent’s export volume reached $1.9 billion, a 9% increase, while Khorezm achieved $340 million, up 24%.
Semi-Finished Products and Services
Exports of semi-finished products soared to $1.479 billion, a 117% increase, raising their share in the export structure from 8.9% to 9.9%. Notable contributions came from copper and copper products ($288 million, 117% growth), flour products ($376 million, 131% growth), metal products ($158 million, 124% growth), and oil products ($142 million, a 3.4-fold increase).
Services exports also saw a significant rise, reaching $4.823 billion, a 119% increase. The share of services in total exports grew from 28% to 32% compared to the previous year.
Strategic Goals and Raw Materials
The strategic focus on high-value products has led to a reduction in raw material exports, which amounted to nearly $3 billion, 79% of the previous year’s figure. The share of raw materials in the export structure decreased from 27% to 20%.
GSP+ System and Future Plans
Uzbekistan’s use of the “GSP+” system, which allows for the preferential supply of 6,200 types of goods to the European Union, has been extended until the end of 2027. In 2023, 1,351 enterprises benefited from this system, receiving support in standards, metrology, certification, quality management, packaging, labeling, and consulting services. In 2024, practical assistance will be extended to 2,000 enterprises, with international standards introduced to 822 of them. This initiative aims to double the export of local products to European markets, reaching $1 billion.
Exporter Registration System (REX)
Goods exported to European markets are now registered in the Exporter Registration System (REX) in accordance with EU regulations. This system allows for the declaration of origin on invoices without issuing certificates, with EU customs authorities providing preferences electronically. Currently, 1,022 Uzbek exporters are registered in the REX system to receive benefits under “GSP+”.
Uzbekistan’s strategic efforts and reforms are clearly paying off, positioning the country for continued growth and deeper integration into the global economy.
Началоформы
Uzbekistan’s New Trade Horizons: Strategic Moves and Future Plans
Preferential Trade Agreements
Uzbekistan’s preferential trade agreements with Pakistan and Turkey, effective from March 13, 2023, and July 1, 2023, respectively, have eliminated or reduced import customs duties for Uzbek products in these countries. This move is set to boost trade relations and open new markets for Uzbek goods.
Expanding Fruit and Vegetable Exports
To further increase exports of fruit and vegetable products to China, South Korea, and Japan, a comprehensive “Road Map” project has been developed. This project, awaiting approval from the Government Commission on Investment Attraction, Industry Development, and Trade Regulation, outlines tasks for relevant ministries and agencies. Key initiatives include:
Ensuring local enterprises’ participation in international exhibitions and fairs.
Enhancing mutual transport infrastructure.
Placing products on electronic trading platforms.
Accelerating the signing of mutual trade agreements.
Optimizing partial reimbursement of transportation costs during export.
Simplified Export Guide to the EU
A simplified guide for exporting fruit and vegetable products to the EU is in the works. This manual will equip local enterprises with the knowledge and skills to leverage the GSP+ system of general preferences, facilitating their entry into European markets. Competing with EU manufacturers will incentivize Uzbek producers to modernize production and reduce costs.
Reducing Barriers and Costs
Efforts are underway to reduce tariff and non-tariff barriers for importing necessary raw materials and to lower transport costs for delivering export goods to the EU and third countries. These measures aim to enhance the competitiveness of Uzbek goods in foreign markets.
Global Economic Integration
Uzbekistan’s integration into the global economy is progressing rapidly, with active participation in international economic organizations. The country is prioritizing its membership in the World Trade Organization (WTO) to benefit from uniform trade rules that liberalize and reduce trade barriers. Closer cooperation with the Eurasian Economic Union (EOII) will also expand export opportunities for domestic products and help local businesses adapt to competitive environments.
Support for Exporting Enterprises
To diversify export products and markets, Uzbekistan is fostering “horizontal and vertical cooperation” among ministries, agencies, commercial banks, and local government bodies. This coordinated effort supports exporting organizations from production to foreign consumer. The republican and regional export headquarters have received 382 appeals from exporting enterprises, with 255 resolved positively.
Uzbekistan’s strategic initiatives and reforms are paving the way for a robust export growth trajectory, positioning the country as a competitive player in the global market.
In 2023, the Export Promotion Agency’s financial assistance led to an additional $2.4 billion in exports. Specific achievements include:
41 out of 59 issues resolved for working capital loans.
6 out of 11 credit period extensions granted.
65 out of 87 value-added tax returns processed.
91 out of 108 issues resolved for uninterrupted electricity and natural gas supply.
52 out of 117 problems addressed in customs control, quarantine inspection, and other areas.
Banking Support
Through 18 commercial banks, $284 million was allocated to 334 enterprises for export-related trade operations and pre-export financing loans, resulting in $330 million in export volumes.
E-Commerce Initiatives
Modern online trading platforms have been pivotal in finding and developing promising foreign markets. In 2023, the Export Promotion Agency provided 4.2 billion soums to 112 local exporting enterprises for registration on platforms like Alibaba, Global Pulses, EuroPages, Tendata, and Pulscen. These enterprises have listed over 8,500 products, leading to significant exports and increased interest in e-commerce.
National Pavilion on Alibaba
A permanent national pavilion of Uzbekistan was launched on Alibaba, showcasing over 1,600 types of exportable national products from the textile, agriculture, and food industries. This pavilion is a unique opportunity for Uzbek entrepreneurs to enter the global market, as only a few countries have established national pavilions on this platform.
Future Plans
In 2024, plans include opening sections for electrical engineering, furniture and equipment, leather shoes, national handicraft products, and sports equipment on the trading platform. Service partners of Alibaba in Tashkent and Namangan are helping exporters utilize platform opportunities, further boosting e-commerce exports.
Uzbekistan’s strategic initiatives and reforms are paving the way for robust export growth, positioning the country as a competitive player in the global market.
Boosting Uzbekistan’s Exports: Strategic Moves and Global Outreach
In line with Cabinet of Ministers Decision No. 167 (March 30, 2021), Uzbekistan has implemented partial reimbursement for foreign expenses related to opening and maintaining trading houses, renting office, trade, and warehouse buildings, and organizing advertising campaigns. To be included in the register of organizations abroad, legal entities must have at least 51% participation from the exporting organization or a share in their charter fund.
Promoting “Made in Uzbekistan”
The “Made in Uzbekistan” project launched on BBC World News aims to showcase the export potential of Uzbekistan’s agricultural and textile industries. From April 24 to June 24, 2023, a promotional video under the slogan “Sunshine as a Compliment” was broadcast to over 150 countries.
To support local producers, the number of enterprises growing and processing fruit and vegetable products will increase to 59 by the end of 2023, with 116 enterprises receiving 9.7 billion soums in funding. By mid-2024, 24 international and European standards worth 1.9 billion soums will be financed for 13 enterprises.
Comprehensive Export Assistance
The Export Promotion Agency provides financial assistance to cover expenses abroad for opening and maintaining trading houses, renting office, trade, and warehouse buildings, and organizing advertising campaigns. This information is disseminated through social networks and mass media to constantly exporting enterprises.
Summary
Uzbekistan’s systematic efforts in export development are yielding significant results. New markets foster a competitive environment, enhance the competitiveness of exporting companies, and provide greater financial stability. The strategic initiatives and global outreach projects are positioning Uzbekistan as a strong player in the international market.
Nadir JUMAEV,
Doctor of Economics, Professor
