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on the radar

Shukhrat Vafaev, deputy chairman of Uzbekistan’s Committee for Investments and executive director of Uzbekistan’s Reconstruction and Development Fund, speaks to Sebastian Shehadi about reforms to attract outside investment into the country, including liberalising foreign exchange and changes to the legal system.

Q: Here at the FT UK-Uzbekistan Energy Forum [hosted by fDi Magazine and Financial Times Live in London in April] there has been a lot of discussion about reforms that have been taking place in Uzbekistan over the past two years, because previously the country was somewhat shut off economically and politically. Could you elaborate on some of those reforms, and explain why they are making Uzbekistan a more attractive investment destination?

A: As a first attempt to improve the transparency of our economy, we opened up all economic statistics and [improved] our general data dissemination so that we could share information on our current developments and the economic situation of Uzbekistan with all interested international parties. This is important for information sharing and for investors.

Next we liberalised the foreign exchange regime, which eliminated all price distortions in the existing economy and made the operations of our private sector, of our state sector and of foreign investors in Uzbekistan – as well as [relations] with the outside world – much more efficient. We are reforming the economy in general to make the environment more conducive for the private sector and for foreign investment.

The introduction of a strong legal framework – which protects the interests of ordinary citizens, as well as foreign and private investors – is an absolute priority of our government. A lot of changes are happening in the legal framework, a lot of changes are happening in the practice of applying these rules, a lot of changes are happening in terms of introducing strong checks and balances, so that Uzbekistan provides a level playing field for everybody in all areas of the economy.

Q: What are the investment opportunities that maybe haven’t been explored enough, outside the oil and gas industry?

A: Now that price signals much better reflect the opportunities in Uzbekistan, I think many sectors previously not considered by investors have become very effectiveFirst of all, there is agriculture: Uzbekistan produces very high-quality horticulture, fruits and vegetables. Second, there is tourism, which has a lot of potential thanks to cities such as Samarkand, Bukhara and KhivaThen there are areas such as pharmaceuticals, where Uzbekistan can provide an educated workforce, a strong R&D foundation and various supporting institutions and production facilities, thanks to the strong engineering schools and traditions in the country.

This is a country that introduced large-scale modernisation by setting up modern combined cycle power generation plants [for use in industrial production] – a very interesting area with potential for investors. This is thanks to the infrastructure being available, thanks to our human resources, and thanks to energy prices that are relatively cheap when compared with many other destinations.

Q: Not much is known about Uzbekistan in Europe but it is one of the largest countries in terms of population in central Asia. What are its other big selling points?

A: Our most important asset is human resources. Our young people are well educated. We are talking about not only a 100% literacy level, but they are also well placed to compete in labour markets, both in the country and abroad, thanks to our strong educational system. We also have abundant natural and agricultural resources. And hopefully, all the efforts we are putting into creating a strong environment for the private sector and foreign investors will become a distinctive asset for Uzbekistan in terms of attracting investors.

This article is sourced from fDi Magazine
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