UBTIC Tashken photo

At the heart of the silk road

Chinese silk as a luxury material was enthusiastically adopted by the Roman Empire in the 1st century BCE and was a catalyst for the development of trading routes between the East and West. The so-called Silk Road was active until the mid-15th century and spanned 4,000 miles. Not only did the Silk Road contribute to the growth of trade between East and West but it also supported cultural exchange in cities along its route and the transmission of knowledge and ideas between peoples. The role of the Silk Road in the development of diverse societies across Eurasia is hard to overestimate.

One of the countries that lies along the ancient route is Uzbekistan, located at the heart of Central Asia and with an ambitious goal to become an upper-middle-income country by 2030. Its potential was clear to me when I recently attended the 26th Uzbek British Trade and Industry Council (UBTIC) forum held in the capital Tashkent to speak on its Privatisation and Financial Services panel.

Since the country started its structural reforms and economic modernisation programme in 2016, its transformation from an old Soviet-style command system and inward-looking model dominated by abundant natural resources towards a more dynamic, competitive, diversified and open market has been increasingly visible each year.

In 2019, The Economist named Uzbekistan the ‘country of the year’ based on its progress with economic and other reforms. While there is still a long way to go and long-term improvements in issues such as human rights, corporate governance and labour efficiency are still needed, the country’s progress is reflected in its rapidly growing international cooperation and dialogue.

Last year’s Uzbekistan Economic Forum, held in the beautiful 2,750-year-old city of Samarkand, hosted more than 1,500 delegates. Senior representatives of the Uzbek Government, international investors and economists as well as local businesses and financial institutions held in-depth discussions on Uzbekistan’s growth strategy, prospects, opportunities and challenges in its journey towards a market economy, energy transition and access to international capital markets.

The UBTIC had more than 250 participants from the government and the country’s largest companies as well as businesses from the UK to discuss bilateral trade, cross-border investment opportunities, multi-billion dollar public-private partnerships and infrastructure projects and the development of Uzbekistan’s business environment and financial markets. Keynote speeches were delivered by Jamshid Khodjaev, Deputy Prime-Minister for Investments and Foreign Economic Affairs – Minister of Investments and Foreign Trade of Uzbekistan, Kenan Poleo, HM Trade Commissioner for Eastern Europe and Central Asia and Tim Torlot, British Ambassador to Uzbekistan.

A key focus of the event was Uzbekistan’s ambitious privatisation programme outlining the reduction in state ownership in more than 620 companies and properties from across various sectors by 2025. While most are small and medium enterprises, the list also includes the largest state companies in the energy, mining, industrial and transport sectors, which are planning to conduct IPOs on the local stock exchange and potentially also an international exchange in the near to medium term. The green economy was also highlighted as a priority focus for the government and business as an important component of a sustainable and resilient future.

I welcomed the opportunity to share Hudson Sandler’s views on how critical early and thorough preparation in advance of a potential capital markets or M&A transaction is for corporate reputation and for the success of a deal and provided recommendations on building and effectively communicating a credible and compelling investment case and a robust ESG profile.

According to Anna Bjerde, Vice President for Europe and Central Asia at the World Bank, continuous market reforms have helped Uzbekistan become much more resilient to external shocks. With GDP projected to expand by 5.3 per cent in 2022, Uzbekistan will be one of the fastest growing of the Europe and Central Asia region’s 23 countries, along with Armenia, Croatia, Georgia, and Montenegro. According to the World Bank, growth this year is projected at 4.9 per cent, currently the region’s highest forecasted growth rate.

Uzbekistan flourished in the heyday of the Silk Road and today, once again, there is an infectious dynamism about the country as a vibrant business hub focused on international collaboration and resilient and sustainable growth.