MAY 1-15, 2023: Uzbekistan Market Report
EUROUZ.EU & Uzbek.Review present the bi-weekly report on key developments in Uzbekistan for MAY 1-15, 2023.

Notable Quotes
“A foreign investor should associate Uzbekistan primarily with stability, reliability, and predictability... We are ready to create all conditions for every German businessman to feel free and confident in our country."
Shavkat Mirziyoyev, The President of Uzbekistan
“Indeed, this is a very worrying situation (US sanctions against Akhangaran cement plant) for us. Because more than 10,000 of our fellow citizens work there."
Mamarizo Nurmuratov, The Chairman of the Central Bank
"As an emerging demographic and economic power in Central Asia, Uzbekistan has embarked on ambitious economic and social reforms in recent years, to which France has given particular attention, while the Uzbek authorities seek to strengthen cooperation with Europe... President Macron also expressed his desire to visit Uzbekistan this year."
Olivier Becht, French Minister Delegate for Foreign Trade, Economic Attractiveness, and French Citizens Abroad
UPCOMING EUROUZ & MEMBER EVENTS
17 May | 19h00-21h00 | Samarkand Regency Amir Temur 5* (Uzbekistan)
EUROUZ is excited to announce that together with the Delegation of the European Union in the Republic of Uzbekistan, we are organising the European Networking Reception & Informal Discussions on Central Asia's Economic Connectivity & Transformation, which will take place in person in Samarkand (Uzbekistan) on the sidelines of the EBRD Annual Meeting & Business Forum in Samarkand.
This exclusive reception will bring up to 100 high-level European and Uzbek government & business officials and VIP guests participating in the EBRD Annual Meeting. Notable attendees such as the Deputy Prime Minister of Uzbekistan, Mr Jamshid Khodjaev, the Head of EBRD Central Asia, Mr Alkis Vryenious, and the Acting Director of the European Commission, DG Trade, Mr Léon Delvaux, already confirmed their participation.
Members and non-members still have a chance to register interest via the following link
Second EU - Central Asia Business Forum
May 18-19, 2023 | Almaty (Kazakhstan)
The Forum, at which EUROUZ Board Member Louis Skyner will be speaking on the panel titled "Improving Business Climate at Central Asia" on day two, seeks to enhance and put into practice the involvement of the EU and Central Asia in three crucial priority areas: the green and digital transition, improving the business environment, and promoting trade and connectivity. Drawing on the outcomes of the Economic Forum in Bishkek on November 5, 2021, the event will evaluate the advances achieved thus far and deliberate on strategies for policies, programs, and investments necessary to foster more unified and interconnected regional market participation.
Read more about the Forum.
Tashkent Textile Week
Date: May 29- June 2| Tashkent
One of the most important textile-sector events in Central Asia. The programme
EUROUZ & MEMBER NEWS
EUROUZ Board Chairman Supports President’s Visit to Germany
EUROUZ Board Chairman & Chairman of Mangold Consulting GmbH,
Prof.Dr. Klaus Mangold took an active part in supporting Uzbekistan’s Ministry of Industry, Investments & Trade and Embassy of Uzbekistan in Berlin to season with several German companies, who have signed important agreements with their Uzbek counterparts during the visit of Uzbekistan’s President to Germany on May 2-3. Mangold Consulting also co-sponsored a unique historical exhibition, which opened its doors in Berlin’s James-Simon-Galerie Archaeological Treasures of Uzbekistan: From Alexander the Great to the Kushan Empire. The collection of historical exhibits, many of which left Uzbekistan for the first time, guides visitors through the lively cultural landscape of Uzbekistan from the 4th century BC to the 4th century AD. The exhibition runs through January 2024 in Berlin.
EUROUZ welcomes new Association members:
EastCham Finland
EastCham Finland is a distinguished expert organisation that operates in the Team Finland network. They aim to provide comprehensive internationalization services to all Finnish companies by offering a range of benefits, including daily news updates focused on Central Asia, the South Caucasus, and Eastern Europe, as well as visibility opportunities for their members. EastCham also monitors economic signals and supports Finnish businesses operating in Central Asia and the Southern Caucasus markets while providing expert guidance on sanctions.
Learn more about EastCham: https://www.eastcham.fi/en/
East Office of Finnish Industries
East Office of Finnish Industries is a community of 16 leading Finnish companies and one university, founded in 2008 to represent their interests in the Eastern markets of Ukraine and the CIS. With the high level of expertise and knowledge and having the Finnish Ministry for Foreign Affairs and the Confederation of Finnish Industries have representatives on the East Office Board, the organisation is well-positioned to pursue its new strategy for 2023-2025 with the particular focus on Central Asia and especially Uzbekistan and Kazakhstan.
Read more here: https://www.eastoffice.fi.
EUROUZ looks forward to supporting EastCham Finland & East Office of Finnish Industries in Uzbekistan and Europe.
Stay tuned for more updates and our joint activities coming soon.
Podcast on Central Asia featuring EUROUZ
EUROUZ's Secretary General, Mr Oybek Shaykov, was featured on the latest "Business East" podcast episode, sharing exclusive insights on President Mirziyoyev's recent official visit to Berlin, discussing the opportunities and challenges that lie ahead for Uzbekistan.
Whether you're a business professional, investor, or simply curious about the evolving economic landscape of Uzbekistan, this episode is a must-listen!
The links to the episode:
Not a member yet?
Join EUROUZ to access exclusive market support for your business activities in the country.
1. INTERNATIONAL COOPERATION
1.1. EUROPE
Uzbekistan’s President visits Germany.
Uzbekistan and Germany signed business agreements for USD 9 billion in the areas of green energy, chemical industry, pharmaceuticals, transport, and digitalization of agriculture, among others. Currently, German investments in Uzbekistan have reached USD 5.5 billion, and mutual trade over the past five years has doubled to EUR 1 billion a year. Moreover, Germany announced its willingness to support the early accession of Uzbekistan to the WTO and help develop the Trans-Caspian Corridor to enhance trade between the regions.
The President will visit Italy in June.
A bilateral Business Forum is scheduled in Rome on June 6th, 2023.
Italian companies can register to take part via the following link until May 26th.
Vice-President of the European Commission Valdis Dombrovskis will visit Uzbekistan on May 17-18.
He will participate in the EBRD Annual Governors’ Meeting in Samarkand.
New EU sanctions may affect Uzbekistan.
By the end of May, the EU's 11th package of sanctions against Russia may include export restrictions on countries trading with Russia. According to Bloomberg, this primarily concerns "Russia's closest neighbours", including those in Central Asia. During the visit of the EU's Special Envoy for Sanctions last month, the Uzbek government received a list of goods from the EU that can be used by the Russian military, including high-tech block diagrams, microchips, optical equipment, and more. Recently, there has been a 125% increase in the exports of such goods through Uzbekistan. With that in mind, the Uzbek government assured that it would closely monitor the transportation of such goods.
A French delegation visits Uzbekistan.
A delegation led by Olivier Becht highlighted French companies' interest in cooperating in renewable and nuclear energy, water supply and resources management, transportation, the textile industry, and construction.
1.2. CENTRAL ASIA & CAUCASUS
Intentions to increase trade turnover with Kazakhstan to USD 10 billion.
1.3. RUSSIA & CHINA
A member of the Russian State Duma urges to send migrants from Central Asia to the war in Ukraine. Furthermore, the UK's Ministry of Defence suggests that the Russian government is already attempting to recruit them.
The President will visit China with other Central Asian leaders May 18-20.
1.4. NORTH & SOUTH AMERICA
The US authorities have imposed sanctions against the Akhangarancement cement plant, in which Akkermann Cement CA has a 98.6% stake. Akkermann Cement CA is a subsidiary of the Russian Akkermann Cement and is part of Alisher Usmanov's USM group. The Chairman has stated that the plant employs over 10,000 people and is one of the largest taxpayers, and the imposition of sanctions against the plant and its owner will not halt its enterprise. The President has formed a special working group to work with the US Treasury Department to resolve the US sanctions against the plant and its owner company.
1.5. INTERNATIONAL ORGANISATIONS
2. PUBLIC POLICY
Implementing the Chinese model for poverty reduction.
In recent years, the government has taken measures to create jobs, including providing UZS 15 trillion of concessional loans and subsidies to family businesses, allocating 200 thousand hectares of land for agriculture, and establishing 300 thousand business entities. To further these efforts, the government will collaborate with Chinese specialists to implement more localized approaches to poverty reduction and effectively allocate UZS 13 trillion in loans and UZS 1,5 trillion in subsidies designed for family businesses this year.
Expecting sharp increases in electricity consumption due to abnormal heat.
According to this year's estimates, the electricity shortage will amount to 3 billion 400 million kilowatt-hours. The daily demand on the hot days of the upcoming summer may increase from the current 195 million to 255 million kilowatt-hours. This year, the government plans to begin operating solar and wind power plants with a capacity of 2,000 megawatts and install solar panels with 1,200 megawatts. Furthermore, USD 100 million attracted from international organizations will be utilized as preferential loans for solar panels. The governors have been instructed to complete planned repair works on electrical networks and stock up on electrical equipment and materials. In addition, restrictions on importing diesel fuel and gasoline were lifted to allow regions to form reserves. To date, illegal consumption of energy resources totalling UZS 250 billion has been detected, and the General Prosecutor's Office has been directed to continue preventing such crimes. Finally, it is intended to install 900 chargers for electric vehicles by the end of the year.
Plans to increase coal production.
In the first quarter, coal production decreased by 14% (1.1 million to 989.1 thousand tons) relative to last year's period. In 2023, the demand for coal is predicted to increase by 1.5 times, driven mainly by the transfer of the heat supply from over 5000 social facilities, 1000 greenhouses, and 250 factories to coal to save gas. To prevent excess demand, the government plans to increase annual coal production by 22.6%, from 5,3 million to 6,5 million tons.
KfW allocated EUR 200 million to improve water supply and sanitation in two regions.
3. LEGISLATION
3.1. LEGISLATIVE CHANGES
The President calls snap presidential elections.
The new constitution introduces significant changes to the structures and aims of the government. In particular, relations and balance between branches of the government are to be reformed and changed, and new political, social, and economic tasks are to be set for all levels of the government. More importantly, the President emphasized that the new document stipulates that the people are the only source of state power and said, "In the updated system of state power, a mandate should be issued only to the leader whom our people trust…". Soon afterwards, the Political Council of the Liberal Democratic Party of Uzbekistan (UzLiDeP) nominated Shavkat Mirziyoyev as a presidential candidate for the early election on July 9th, 2023.
Tightened control over drug prices.
3.2. GOVERNMENT & BUSINESS APPOINTMENTS
o Head of Uzkimyosanoat
Appointed - Timur Muhamedjanov
Previously served as - Director of Uzkimyoimpeks LLC
o Deputy Minister of Transport
Appointed - Ilhomjon Abdugafarov
Previously served as - Deputy Chairman of the Central Bank
4. ECONOMY
4.1. KEY ECONOMIC INDICATORS, LOANS, & PUBLIC FINANCE
Monthly inflation in April amounted to 0.82%, which is a five-year low.
In 2022, the growth in supply was 14% compared to the previous year. This year's increase is mostly driven by the departure of many migrants, specifically Russians who arrived last year, and the increase in new offerings from commissioned residential complexes. In the first quarter, the average monthly rent for an apartment in Tashkent was about USD 370, and for a house, it was about USD 590, compared to USD 350 and USD 570, respectively.
4.2. TRADE AND BUSINESS
4.3. BANKING & FINANCE
Yangi Bank has been registered, making it the 35th bank.
Kazakhstan's Eurasian Bank will most likely begin operations in Uzbekistan by the end of the year.
4.4. TRANSPORTATION & LOGISTICS
Uzbekistan Airways has closed the quarter with a profit for the first time in three years.
The after-tax profit of UZS 71 billion was mainly driven by a 57% increase in sales and reduced losses on the difference in exchange rates. However, direct transportation costs have increased by 71% compared to the last year, leading to a mere 1.1% increase in gross income or UZS 406 billion. By comparison, Uzairways was unprofitable, with UZS 239 billion in the first quarter of 2022.
4.5. AGRICULTURE, MINING, & MANUFACTURING
Uzmetkombinat issues new shares for almost UZS 2 trillion.
4.6. INFORMATION TECHNOLOGY & R&D
KfW allocated EUR 50 million for the digitalization of healthcare.
4.7. ENERGY & PETROCHEMICALS
Siemens will implement new projects.
Siemens will build four energy-efficient gas turbines, each with a capacity of 54 MW, that will annually generate 1,7 million kWh of electricity and 1,5 Gcal of thermal energy. The total cost is estimated to be EUR 72 million.
The list of dominant companies in the electric meters market.
USEFUL LINKS & NOTABLE PUBLICATIONS
1. Uzbekistan calls snap presidential election for July 9 (The Washington Post)
2. Uzbekistan: President Mirziyoyev announces snap election (DW)
3. Uzbekistan's leader calls for snap presidential election in July (Al Jazeera)
4. Uzbek president calls for snap elections (The Diplomat)
5. IsDB, Uzbekistan sign agreements to boost sustainable economic growth (Gulf Today)
6. Uzbeks vote on constitutional changes that extend the president's time in power (France 24)
7. Uzbekistan passes reform extending president's term limit (DW)
8. Uzbekistan's referendum could see the president staying in power until 2024 (Euronews)
9. A closer look at the growing Chinese presence in Uzbekistan (The Diplomat)
10. Uzbekistan's President Mirziyoyev visits Germany (The Diplomat)
11. Italy builds closer ties to Uzbekistan (The Jamestown Foundation)
12. Azerbaijan-Uzbekistan bilateral trade up 54% (Silk Road Briefing)
13. Uzbekistan-Russia energy relations: a tale of 2 problems (The Diplomat)
14. Uzbekistan attracts foreign investors thanks to extensive government reforms (Euronews)
15. Uzbekistan: Why Karakalpakstan deserves its guidebook (Eurasianet)