Uzbekistan’s economy is going from strength to strength. The European Bank for Reconstruction and Development (EBRD) expects the country’s GDP to show 6.5% growth in 2023 – higher than the 4.9% forecast for the overall Central Asia region. One of the key actors that will support this growth is a new focus by president Shavkat Mirziyoyev’s government on developing trade and other business relations with its neighbouring countries – and also with other states in the wider Eurasia region.

At Mr Mirziyoyev’s annual address to parliament in 2022, the president noted: “We will continue to pay a priority attention to the strengthening of multifaceted, mutually beneficial partnership with all our neighboring countries in Central Asia, our Strategic Partner Countries and international organizations.”

New opportunities in Central Asia
Businesses in Uzbekistan have been cooperating more with the neighbouring republics since the start of Mr Mirziyoyev’s presidency in 2016. In the last five years the volume of Uzbekistan’s trade with the other four Central Asian states has more than doubled. But it is only in the last year, as incoming investment from Russia and China has fallen away, that this
has been spoken of publicly as a distinct policy.

In his address at a round-table of ambassadors and representatives of international companies in December 2022 – an event at the resort town of Archazor named “The New Uzbekistan: a reliable partner in a changing and interconnected world” – the Uzbek minister of foreign affairs commented: “In recent years we have managed to bring relations with all the states of the region to a high strategic level, through our joint efforts to form an entirely new, positive atmosphere of mutual trust and cooperation. Uzbekistan and brotherly neighbouring countries have embarked on joint industrial co-operation projects, the creation of effective value-added
chains, and the development of transport and energy infrastructure.” The minister added: “[The policy] is based on adherence to the principles of international law and an aspiration to peace, good-neighbourliness, comprehensive cooperation and the strengthening of regional stability and international security, all of which are in Uzbekistan’s national interests.”

The projects that the minister alluded to include several ventures with the region’s largest economy, Kazakhstan. In December 2022 the countries signed a further 40 bilateral agreements worth $2.5 billion at an Uzbek-Kazakh business forum in Tashkent. One contract for $80 million centres on the two countries’ joint work to repair the Angren-Pap-Kokand-Andijan-Savay railway section, a key trade route in the region. Uzbek and Kazakh companies are also working together to implement artificial intelligence software in the Uzbek healthcare sector, as well as more traditional business, including trade in aluminium and food products.

In Kyrgyzstan, meanwhile, Uzbekistan’s Temir Yollari JSC has opened a joint project office for the two countries to coordinate the construction of the China-Kyrgyzstan-Uzbekistan
(CKU) railway. This project was conceived in the 1990s, but had made very little progress due to the historically strained relations between Tashkent and Bishkek. The CKU has been
resurrected in recent months, as Uzbekistan and Kyrgyzstan have found common ground, both governments realising the practical need for greater cooperation between the Central
Asian states. In total, bilateral trade between Uzbekistan and Kyrgyzstan reached $1 billion for the first time in 2022, thanks also to projects in the industrial, energy, electrical
engineering, agriculture, transport and other sectors.

Mr Mirziyovev’s government has also considered the issues of further deepening Uzbek-Turkmen relations of strategic partnership, enhancing cooperation in economy, trade, industrial cooperation, energy, transport and logistics, activation of interregional contacts, cultural and humanitarian exchange. Since the beginning of the year, the volume of mutual trade between Uzbekistan and Tajikistan has grown by 16%. The joint cooperation projects are being implemented in various sectors of the economy, including light and electrical industries, agriculture and water management, transport and others.

Afghanistan, which for many years played the role of a buffer, a watershed in the global confrontation between global powers and regional centers of power, is now trying on a new consolidating mission, bringing the positions of different players closer together on the basis of common trade, economic, transport and communication interests.

The path to peace in Afghanistan: the contribution of Uzbekistan.
Uzbekistan’s policy of ensuring peace and stability in the region has not abandoned Afghanistan. President Shavkat Mirziyoyev said: “It is important to prevent isolation of Afghanistan and its transformation into a ‘rogue country’. Uzbekistan is a leader in regional efforts to provide humanitarian assistance to Afghanistan. The Termez Regional Humanitarian Logistics Centre, located two kilometers from the border, plays a huge role in supporting UN emergency operations in Afghanistan. The Afghan Citizens Education Centre, established in 2017 by the Government of Uzbekistan, provides a wide range of higher and vocational education and training for Afghans living in Termez, including girls. Uzbekistan has completed a project to rehabilitate the Mazar-e-Sharif International Airport in Afghanistan. Uzbekistan is the main supplier of electricity to Afghanistan – 2.7 billion kWh. (52% of the electricity imported by Afghanistan).

New strategic ties with Europe.
The Uzbek government is also looking to strengthen partnerships with countries further afield. In 2022 Samarkand hosted the first conference between Central Asia and the European Union, entitled “EU-Central Asia Connectivity: Global Gateway for Sustainable Development”. At the conference Uzbekistan, again represented by foreign minister Norov, expressed a hope that ties between Central Asia and the EU would continue to develop, with the transport and green energy sectors mentioned as possible fields for cooperation. In keeping with the conference’s theme of connectivity, it was announced that the European delegation had proposed a new project to improve digital connectivity in Central Asia.

As promising as the short-term picture may look for Uzbekistan’s regional policies, there are still some significant barriers to be overcome for these new initiatives to be sustained. High rates of inflation within the country may limit Uzbek companies’ ability to invest in foreign projects, while the biggest projects in the region still depend upon cooperation from China and Russia to succeed. But nonetheless, in Central Asia today, Uzbekistan is unrecognisable from the indifferent and difficult neighbour that it used to be known as.

by Jonathan Campion