Author: Fotikhjon Kodirov – 06/02/2024
Partnership of Uzbekistan with Major Asian Financial Institutions to Diversify Economic Growth
Fotikhjon Kodirov, Chief specialist,
Development Strategy Center, Uzbekistan
A new wave of reforms to consistently liberalize the economy of Uzbekistan is contributing to the improvement of the overall economic condition of the country, especially in the field of cooperation with international economic organizations.
The priority areas for the country’s development reflected in the “Uzbekistan – 2030” Strategy include goals to expand the geography of international cooperation, in particular by strengthening of partnership with the countries of the Asia-Pacific region (APR), as well as providing of infrastructure projects with stable and long-term sources of financing.
To achieve these goals of the Strategy, there have been defined goal to increase the level of interaction with leading economic organizations from the Asia-Pacific region, increase the volume of attracted financial resources, and implement technological and infrastructure projects. In this regard, activities are being carried out to increase the dynamics of partnerships with such financial institutions as the Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB) and etc.
Uzbekistan – Asian Development Bank
ADB has been one of the largest partners of Uzbekistan among international financial institutions in terms of the volume of financial and material assistance since 1995. The main share of the Bank’s funds is allocated for the implementation of projects for the transition of Uzbekistan to an inclusive and market economy. This includes carrying out of structural reforms to improve the efficiency of public administration in the development of private property, entrepreneurship and the social sphere, as well as improving of transport and trade links.
ADB provides political and economic advices to the government of Uzbekistan on optimizing of regional cooperation and integration, supporting the private sector, and reducing economic and social inequality.
In recent years, there has been significant growth in the dynamics of cooperation with ADB. This is reflected in an increase in the number of projects and the volume of credits, loans, grants and technical assistance. If by 2021 the Asian Development Bank had implemented 252 projects worth $10.9 billion, then by 2023 it had implemented 268 projects worth $12.05 billion. At the same time, the largest amount of funds was allocated for the implementation of projects in the field of transport – 42 projects worth $2.62 billion, energy – 40 projects worth $2.56 billion, and finance – 44 projects worth $2.24 billion.
Despite of the fact that relations between Uzbekistan and ADB remained consistently effective during the entire period of cooperation, a new wave of reforms to liberalize the economy and increase the productivity of interaction with international economic organizations gave a powerful impetus to interaction between the parties.
In this context, bilateral meetings between representatives of the Bank’s management and the Republic of Uzbekistan have increased.
On the sidelines of the 1st Tashkent International Investment Forum, Sh. Mirziyoyev held a meeting with the head of the ADB, during which an agreement was reached to adopt a “road map” to promote priority areas of strategic partnership.
In 2023, the ADB delegation held a series of meetings with the leadership of the Ministry of Economy and Finance, the Ministry of Agriculture and the Ministry of Employment and Poverty Reduction. During the meetings, were discussed further ways to expand cooperation on the development of a “green” economy in Uzbekistan, modernization of agriculture, and also strengthening of bilateral partnerships in the field of human capital development.
As it is known, the Asian Development Bank regularly publishes its forecasts on the economic growth rates of the member countries of this financial institution. According to ADB estimates, Uzbekistan’s GDP growth in 2024 will be 5.5%. The bank associates this development to strong performance in the manufacturing and mining sectors.
Based on existing experience and achieved results of cooperation, it can be assumed that in order to further attract financial resources for the development of renewable energy sources and water supply systems, modernization of urban infrastructure, and improvement of the mortgage market, partnership with ADB should be continued at a consistently high level.
Uzbekistan – Asian Infrastructure Investment Bank
Since the establishment of cooperation in 2016, the AIIB has been financing projects in the fields of energy, water supply, healthcare, agriculture and public utilities, business support, construction and reconstruction of highways, electrification of railways, comprehensive development of basic infrastructure in Uzbekistan.
The Bank is currently implementing 13 projects worth $2.4 billion.
Diagram 1. Amount of financing aimed at implementing of projects on the territory of the Republic of Uzbekistan (millions of US dollars)
Source: Asian Infrastructure Investment Bank. (2023). Our Projects. https://www.aiib.org/en/projects/list/year/All/member/Uzbekistan/sector/All/financing_type/All/status/All
The amount of AIIB funding (Diagram 1) invested in projects in Uzbekistan has increased significantly since 2019. This is directly connected with economic reforms aimed at increasing of the inflow of investment into Uzbekistan by deepening of cooperation with major international financial institutions.
This circumstance, of course, is facilitated by the increase in bilateral contacts between the leadership of the AIIB and the Republic of Uzbekistan. Following the results of negotiations between Sh. Mirziyoyev and the head of the AIIB, Jin Liqun, held during the state visit of the head of our state to China in 2023, the Bank declared its readiness to provide comprehensive support for ongoing reforms in Uzbekistan.
In order to increase the volume of attracted financial resources for the implementation of projects in the field of poverty alleviation, job creation, development of solar energy, introduction of public-private partnership mechanisms and mixed financing of projects, as well as expanding of support for entrepreneurship, it is expedient to increase the dynamics of cooperation with the Asian Infrastructure Investment Bank.
It should be noted that over the past period it was possible to attract a significant amount of investment funds, which were aimed at implementing of projects in the field of agriculture, water resources management, energy, transport, healthcare, education, social sphere, modernization of urban and rural infrastructure, attracting of investment funds in innovation, etc.
Based on the existing results and experience of fruitful cooperation with international economic organizations, it can be assumed that further increasing of interaction with these Asian financial institutions will directly lead to the implementation of goals of the “Uzbekistan – 2030” Strategy to rise in the use of renewable energy and increase of the investment attractiveness of Uzbekistan.
 “New Uzbekistan” (Yangi O‘zbekiston) newspaper. (2023, December 4). Within the framework of COP 28, a meeting on the development of cooperation with ADB representatives was held in Dubai. https://yuz.uz/ru/news/v-ramkax-cop28-v-dubae-proshla-vstrecha-po-razvitiyu-sotrudnichestva-s-predstavitelyami-abr
 SNG.TODAY. (2023, April 12). The Minister of Agriculture of Uzbekistan met with a delegation of the Asian Development Bank (Министр сельского хозяйства Узбекистана встретился с делегацией Азиатского банка развития).
 SNG.FM. (2023, September 13). Uzbekistan and ADB signed an agreement worth $93 million (Узбекистан и АБР подписали соглашение на сумму 93 млн долларов).
 Ministry of investments, industry and trade of the Republic of Uzbekistan. (2023, July 4). The Asian Infrastructure Investment Bank intends to expand cooperation with Uzbekistan. https://miit.uz/ru/news/aziatskij