Free economic zones for export-only production to be established in Uzbekistan

A decision has been made to establish free economic zones in Uzbekistan that will focus exclusively on export production. This announcement was made today, January 16, during a videoconference meeting chaired by President Shavkat Mirziyoyev, which reviewed the progress of efforts to attract investments and increase exports, while outlining key future tasks.

It was reported that last year, 589 enterprises operating across 22 free economic zones produced goods worth 42 trillion soums. However, only 16% of these products were high-tech, and just 18% were sold to foreign markets, with 372 enterprises failing to export any goods at all. Despite receiving benefits based on invested capital, it was noted that these funds have not effectively reduced costs or boosted exports.

As a result, the government has decided to establish new free economic zones focused solely on export production. These zones will specialize in the manufacturing of high-value products, featuring foreign brands in demand on international markets. The success of this model in other countries was highlighted as a key reason for its implementation.

The first such zone will be established in Namangan and will specialize in textiles. The heads of the economic complex have been tasked with reviewing the existing free economic zones and submitting proposals to focus them on export activities.

President Mirziyoyev emphasized the importance of increasing the local component in investment projects, which will create jobs, save foreign currency, and stimulate the development of related industries. Regional governors have been instructed to hold monthly fairs with entrepreneurs and implement systems for producing new products. It was estimated that local products could cover up to $28 billion of the currently planned $75 billion in large investment projects.

Officials, in collaboration with regional leaders and sector heads, have been tasked with preparing a program for new product production by 2025 at the district and enterprise levels.

Furthermore, this year, $5.2 billion worth of projects will be implemented with the support of international financial institutions. It was noted that the level of bureaucracy in investment development remains high, prompting the creation of a dedicated Emergency Headquarters to work with financial institutions under the leadership of the Prime Minister. The new headquarters will review each project in detail, hold weekly project-specific discussions, and provide direct support to entrepreneurs.

This year, it is also planned to implement projects worth $1.1 billion in collaboration with the European Bank for Reconstruction and Development and $1 billion with the Islamic Development Bank. Officials have been directed to work closely with these two international banks, visit districts, and increase the number of projects that can be implemented without state guarantees, helping entrepreneurs access funding.

It was previously reported that in 2024, Uzbekistan’s GDP is expected to grow by 6.5% to $115 billion, with foreign investment rising 1.6 times to $34.9 billion, and exports reaching $27 billion for the first time.