Uzbekistan
In-depth country-focused analysis on Uzbekistan's economic, political and operational risk environment, complemented by detailed sector insight

Our comprehensive assessment of Uzbekistan's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Uzbekistan, as well as the latest industry developments that could impact Uzbekistan's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Uzbekistan before your competitors.

Country Risk

Uzbekistan Country Risk

BMI View:

CORE VIEWS

  • We believe the deteriorating domestic demand outlook for Central Asia will make the region more susceptible to Islamist radicalisation. Out of the five Central Asian states - Kazakhstan, Turkmenistan, Uzbekistan, Kyrgyzstan and Tajikistan, we believe the latter two to be most exposed to the threat of radicalisation.

  • We expect the Kyrgyz som to remain on a more gradual depreciatory trajectory in 2015 than its Tajik counterpart. The Kyrgyzstani economy faces more limited depreciatory pressure from falling remittance inflows and smaller inflation costs, while the authorities face higher political pressure than Tajikistan, underpinning our view.

  • Tajikistan's social and political scene will become increasingly unstable in the coming quarters, as the country grapples with the shock stemming from Russia's economic...

To read the full article Register for Free or Login

Uzbekistan Operational Risk Coverage (9)

Uzbekistan Operational Risk

BMI View:

BMI View : Although it has enjoyed economic growth above 7% for the past three years, Uzbekistan is a challenging investment destination, with foreign direct investment (FDI) into the country faltering in recent years. Key deterrents for investors include a deeply corrupt and inefficient public administration, stifling border controls and high levels of government involvement in private economic activity. However, a stable financial system and lucrative natural resource opportunities mean investors are likely to continue to take an interest in the country. We have given Uzbekistan a score of 40.8 out of 100 for Trade and Investment Risks. This is low by regional standards, putting Uzbekistan ahead only of Kyrgyzstan and Tajikistan out of 29 Emerging Europe countries.

Constraints on trade are one...

To read the full article Register for Free or Login

Uzbekistan Crime & Security

BMI View:

Uzbekistan poses a high degree of security risks to foreign business travellers, expatriates, and tourists. For the most part, the greatest risks to these groups are petty crime such as pick-pocketing and theft, rather than violent crimes. Uzbekistan's murder rate, at 3.7 per 100,000 in 2012, was significantly lower than its fellow Central Asian republics Kazakhstan and Kyrgyzstan, where the rate is around nine per 100,000. Organised crime and drug-related crime also exist in Uzbekistan, but are unlikely to affect foreigners. Corruption is a major problem in Uzbekistan, and erodes the integrity of the country's law enforcement agencies.

Terrorism poses a significant threat to the Uzbek state, and combating this is arguably the government's top security priority. The main threat has stemmed from the Islamic Movement of Uzbekistan (IMU), although a major crackdown drove its militants into neighbouring countries. Uzbekistan's adjacency to...

To read the full article Register for Free or Login

Uzbekistan Labour Market

BMI View:

There are significant risks to investors associated with both the labour market and the education system, with particular problems including low levels of workforce participation, low levels of secondary school enrolment and poor educational attainment by those who do attend. These disadvantages are compensated for somewhat by the benefits of a cheap and flexible workforce. We have awarded Uzbekistan a score of 45.2 for Labour Risk, putting it close to the bottom of the table when compared to regional peers; only Albania and Bosnia-Herzegovina perform worse.

Weaknesses in the availability of labour are perhaps the most disappointing element of the employment landscape in Uzbekistan, given the country's strong economic growth, low costs and flexible legal regime. Despite a good level of female employment, participation in the workforce is 54.4%, the third lowest proportion in the region. Causes include the country's low level of urbanisation...

To read the full article Register for Free or Login

Uzbekistan Logistics

BMI View:

BMI View: Uzbekistan's logistics network offers considerable risks to supply chains and business activity, which along with its command-style economy make it an unattractive location for investment. The country's geographic position conveys a number of disadvantages, including making access to seaports difficult, and restricting the availability of freshwater resources. Even though it enjoys substantial oil and gas reserves, electricity and fuel shortages pose a substantial risk to business operations. A lack of investment in the transport network also means that internal supply chains are subject to disruption and delays, and regional trade flows are restricted. Consequently, Uzbekistan is one of Emerging Europe's underperformers in the overall BMI Logistics Risk Index, with a score of 39.6 out of 100 placing it fifth...

To read the full article Register for Free or Login

Uzbekistan Trade & Investment

BMI View:

Although it has enjoyed economic growth above 7% for the past three years, Uzbekistan is a challenging investment destination, with foreign direct investment (FDI) into the country faltering in recent years. Key deterrents for investors include a deeply corrupt and inefficient public administration, stifling border controls and high levels of government involvement in private economic activity. However, a stable financial system and lucrative natural resource opportunities mean investors are likely to continue to take an interest in the country.

We have given Uzbekistan a score of 40.8 out of 100 for Trade and Investment Risks in our Logistics Risk Index. This is low by regional standards, putting Uzbekistan ahead only of Kyrgyzstan and Tajikistan. Uzbekistan's poor performance results from a number of factors, with a government policy of discouraging and replacing imports probably the most serious issue facing the country, particularly as it...

To read the full article Register for Free or Login

Uzbekistan Industry Coverage (6)

Autos

Uzbekistan Autos

BMI View:

BMI View:  BMI's outlook on auto production and sales in Kazakhstan and Uzbekistan remains positive, despite a slowdown in sales figures in the first eight months of 2014. Both countries boast solid macroeconomic fundamentals and both are seeing strong demand for cars from their citizens.

Turning to production first, Kazakh auto production looks set for strong growth over BMI's five-year forecast period to 2017. This reflects new production plans by carmakers  Toyota Motor and Russia's AvtoVAZ and Kazakh AutoBIPEK.

Kazakh auto production looks set for strong growth over BMI's forecast period to 2018. We ...

To read the full article Register for Free or Login

Defence & Security

Uzbekistan Defence & Security

BMI View:

BMI View:  At present, Kazakhstan and the other four Central Asia countries, Turkmenistan, Tajikistan, Uzbekistan, and Kyrgyzstan have limited defence budgets, yet numerous requirements. While BMI expects these budgets to increase incrementally over the coming years, BMI also expects the budgetary and underdevelopment challenges to limit those increases considerably. These countries face numerous internal and external security challenges, including border disputes, criminality, and domestic and transnational terrorism.

BMI expects Kazakhstan's defence spending to have reached USD2.4bn by the end of 2014 and USD2.6bn by the end...

To read the full article Register for Free or Login

Oil & Gas

Uzbekistan Oil & Gas

BMI View:

BMI View: Uzbekistan's gas sector is expected to continue its expansion with the production and export figures rising over the forecast period to 2023. However, the country's oil sector is set to remain on a downward slope rendering the country increasingly more dependent on refined-fuels imports and subjecting it to potential fuel shortages.

Headline Forecasts (Uzbekistan 2012-2018)
2012 2013 2014f 2015f ...

To read the full article Register for Free or Login

Petrochemicals

Uzbekistan Petrochemicals

BMI View:

Russia's economic problems stemming from its trade war with the West are having a negative impact on the Central Asian petrochemicals market with Kazakhstan's imports dropping sharply in 2014. BMI's latest Kazakhstan and Uzbekistan Petrochemicals Report anticipates further falls in imports as both states prepare for a surge in capacity in 2016.

Both Kazakhstan and Uzbekistan will have sufficient production to cover domestic needs with a surplus likely to stimulate polymers conversion and boost exports. The Central Asian market is robust and growing fast, providing a sound basis for new petrochemicals capacities.

Most consumption will be focused on finished products with a lack of domestic plastics converters to fulfil demand. This could change as domestic petrochemicals capacities evolve, enabling local sourcing of cheap raw material for the manufacturing of end products.

  • The ongoing...

To read the full article Register for Free or Login

Pharmaceuticals & Healthcare

Uzbekistan Pharmaceuticals & Healthcare

BMI View:

BMI View: Economic growth will allow the Uzbek government to sustain the expansive trend in healthcare investment and expenditure over the next years. Rising wages and private consumption will also contribute to drive pharmaceutical and healthcare sector growth, albeit from a low base. Despite recent steps by the Uzbek government to improve business operating legislation and attract foreign technology transfer in pharmaceutical production projects, restrictive capital controls and poor governance will continue to weigh on the market's ...

To read the full article Register for Free or Login

Telecommunications

Uzbekistan Telecommunications

BMI View:

BMI View: The return of MTS to Uzbekistan is a strong indicator for the potentially high rewards that the Central Asian region offers. Uzbekistan's low penetration and high population size means it is the most attractive market from an organic growth outlook. Russian telecoms operator Multiregional Transit Telecom (MTT) has also entered the region as an mobile virtual network operator (MVNO); the first of its kind it will be able to tap into the large numbers of migrant workers living in Russia, Tajikistan, Uzbekistan and Kyrgyzstan. Demand will...

To read the full article Register for Free or Login