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

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  • In light of the extreme oil price weakness into 2016, the macroeconomic and social stability outlook for Kazakhstan - the biggest oil exporter in Central Asia - has deteriorated even further, prompting us to take an even more bearish outlook on the country's growth prospects. Nevertheless, the possibility of economic and/or banking sector collapse remains limited due to the strong sovereign risk profile.

  • While the Kyrgyz som has been stable in recent trading against the US dollar, we expect the currency to depreciate significantly in 2016. The National Bank of Kyrgyzstan, which has propped up the som through heavy FX intervention, will discontinue this policy due to limited FX reserves. As a result, mounting depreciatory forces in the form of lower remittances from Russia and reduced gold exports will come to the fore, significantly weakening the som....

Uzbekistan Operational Risk Coverage (9)

Uzbekistan Operational Risk

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BMI View: Uzbekistan poses multiple risks to investors with regards to crime and security, the majority of which relate to the endemic corruption which permeates at all levels of society and the country's proximity to unstable countries such as Afghanistan, which increases the threat of terrorism. Businesses therefore face considerable costs associated with bribery and extortion, while instability along Uzbekistan's borders increases conflict risks. Uzbekistan receives a score of 31.0 out of 100 for overall Crime and Security Risk, placing it second from bottom out of 31 states in Emerging Europe.

High Risk Operating Environment
Uzbekistan & Emerging Europe Regional Average - Crime And Security Risk Scores

Uzbekistan Crime & Security

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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...

Uzbekistan Labour Market

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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...

Uzbekistan Logistics

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BMI View: Uzbekistan's geographic location, as a double-landlocked country in the middle of Central Asia poses considerable risks to potential investors. A lack of adequate road and rail connectivity hampers supply chains and importing and exporting goods is costly and time-consuming. Although fuel and electricity costs are low, this benefit is largely offset by the extensive risk of interruptions to supply due to poor quality power infrastructure. The lack of adequate water protection is also a substantial risk, with Uzbekistan considered to be one of the world's most vulnerable states in terms of water security. Overall, Uzbekistan is a regional underperformer on the BMI ...

Uzbekistan Trade & Investment

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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...

Uzbekistan Industry Coverage (8)


Uzbekistan Autos

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BMI View: A combination of a still-sluggish economy and a weakening currency will lead to further challenges for the Kazakh new vehicle sales market in 2016. We are forecasting 2% sales growth for the sector as a whole, with commercial vehicles set to outperform passenger cars. For Uzbekistan, the near-term outlook is also challenging and we are forecasting 1.5% sales growth for the sector, with commercial vehicles again set to outperform passenger cars.

Vehicle Sales By Country
f = BMI forecast. Source:...

Defence & Security

Uzbekistan Defence & Security

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BMI View: Kazakhstan's determination to develop a solid domestic defence manufacturing base has been exemplified in its strong push to setting up numerous joint ventures and partnerships with key foreign industry players as well as its efforts to organise its own international exhibition of weapons and military equipment - KADEX. With a somewhat unstable regional environment, Kazakhstan will see to its defence expenditure being increased over our forecast period in an effort to be ready to combat any potential breaches in security. However, BMI believes that if it is to truly excel in this field and achieve its goal of creating a strong...


Uzbekistan Infrastructure

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BMI View: Russia's economic slowdown has taken a toll on Uzbekistan's Construction industry. However, growth will resume its moderate long-term trajectory in 2016, with a raft of major projects in a pipeline that receives significant development bank and government investment, as well as from key trade partners such as China and South Korea. Growth will average 4.5% annually over our 10 year forecast to 2024, when the industry value will reach UZS45.8bn (USD8.5Bbn).

Lastest Updates And Key Trends


Oil & Gas

Uzbekistan Oil & Gas

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BMI View: Our outlook for Uzbekistan's gas sector remains positive as we expect gas production and export figures to remain strong across our forecast period to 2024. However, the country's oil sector will continue on a downward slope leaving the country increasingly more dependent on refined fuels imports and subjecting it to potential fuel shortages.

Headline Forecasts (Uzbekistan 2013-2019)
2013e 2014e 2015f 2016f


Uzbekistan Petrochemicals

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While Uzbekistan and Kazakhstan are set to open new petrochemicals facilities, there are strong downside risks associated with depressed export markets, uncompetitive feedstock prices and sluggish domestic demand. Investment decisions are being postponed and plant construction is being delayed due to ongoing problems facing the Central Asian economies.

In 2015, Central Asia's petrochemicals capacities include 240,000 tonnes per annum (tpa) ethylene, 125,000tpa polyethylene (PE) and 120,000tpa polypropylene (PP). The size of the industry was far less than the size of just one world-scale petrochemicals complex in the Middle East, yet Central Asia is only just leveraging its significant potential in terms of feedstock due to massive upstream resources.

  • Uzbekistan should begin commercial operations in 2016 at an ethane cracker with capacity to produce 400,000tpa of ethylene as well as downstream units with...

Pharmaceuticals & Healthcare

Uzbekistan Pharmaceuticals & Healthcare

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BMI View: Uzbekistan's healthcare system will continue to suffer from human resource constraints, impeding improvements in healthcare outcomes in the long term. Drugmakers focused on infectious and communicable diseases can expect to see continued revenue growth given the significant burden of diseases such as HIV/AIDS, tuberculosis and respiratory diseases, although we expect that this will be moderated by the low affordability of pharmaceuticals and the limited capacity of the Uzbek healthcare system to purchase medicines for the population.

Headline Expenditure Projections

  • Pharmaceuticals: UZS2.21trn (USD956mn) in 2014 to UZS2.78trn (USD1.03bn) in 2015; 26.1% in local currency terms and 7.4% in US dollar terms. Forecast...


Uzbekistan Power

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BMI View: Turkmenistan and Uzbekistan will rely on gas-fired power generation during our 10-year forecast period, as a result of large domestic gas supplies coupled with few export commitments. Tajikistan and Kyrgyzstan, on the other hand, will suffer from power generation shortfalls, due to headwinds preventing diversification away from unreliable hydropower. The deteriorating macroeconomic backdrop - with China slowing down and Russia experiencing poor economic performance and commodity prices falling - underscores our muted view for the region this quarter.

Latest Updates And Structural Trends

  • The devaluation of the Kazakh tenge puts pressure on the currencies of Kyrgyzstan, Tajikistan, Turkmenistan...


Uzbekistan Telecommunications

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BMI View: We maintain a cautiously optimistic outlook for the Central Asian telecommunications market as a whole. There are some growth opportunities in the region, particularly with regard to 3G and 4G technology Uptake. Nevertheless, state interference and political risk remains the most important risk of doing business in the Central Asian region. This was again amplified as government involvement became a key theme over the course of 2015. In Turkmenistan, a new state-owned company was created to spur competition, in Kyrgyzstan, state-owned Kyrgyz Mobile Company was sold to state-owned MegaCom and in Uzbekistan, state-owned Uzmobile launched a GSM network to better...

Latest Uzbekistan Articles

  • We have revised down our CME milk price forecast for 2016 and now see price...

  • We believe that there is currently disconnect between oil prices and fundam...

  • Price-elastic consumption growth and more limited growth in supply will mai...

Latest Uzbekistan Blogs

  • China's ambitious plan to build connections with Europe and the Middle East...


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