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Kazakhstan lags behind Uzbekistan in the speed of attracting foreign investment

Investors are attracted to Uzbekistan for oil refining, oil production, and chemical industry  

In Uzbekistan, unprecedented measures are being taken to further form a favorable investment climate and increase investment attractiveness, which contributes to an increase in the inflow of foreign investment, writes the Finprom.kz edition.

In recent years, the country has shown fairly good results in this direction. So, in the ” pre-coronavirus ” 2019, Uzbekistan became the leader in the growth of the inflow of foreign direct investment.    

Over the year, the number of external investments increased by 2.3 times at once and amounted to $ 4.2 billion.   

Oil refining, oil production, and chemical industries are attracting investors into Uzbekistan. The greatest interest was shown by China, Germany, the USA, and Russia.  

The measures taken by Uzbekistan to create a favorable investment climate allowed the country to improve its position in the international ranking of ease of doing business: in 2020, Uzbekistan rose by 7 positions and took 69th place, which is one of the best indicators in the region.         

“The country has strengthened the protection of minority investors by increasing the rights of shareholders and their role in major corporate decisions, clarifying ownership structures, and increasing corporate transparency. They also simplified the payment of taxes by combining the two and stimulated cross-border trade by introducing risk-based checks and simplifying the requirements for import documents,” the publication says.           

Meanwhile, Kazakhstan has improved its position in the ranking from 28th to 25th – this is the best result in the region, although the country still lags behind Uzbekistan in terms of the speed of development and attraction of investments.       

Competition between Central Asian countries in improving the investment climate has a positive effect on the region’s reputation, the newspaper notes.  

However, in Kazakhstan, the inflow of foreign investment in 2019 did not change compared to the previous year, nevertheless the country remains the leader in terms of attracted investments. In Kyrgyzstan and Tajikistan, growth was 26.4% and 1.4%, respectively.         

Another confirmation of the investment attractiveness of the Central Asian countries is the growth of accumulated investments during the period of the pandemic and crisis.   

So, as of January 1, 2021, their amount increased by 6.7%. As in the case of the gross inflow of foreign direct investment, the largest increase in accumulated foreign investment is observed in Uzbekistan – 29.8%.         

In Kazakhstan, the growth was only 3.6%, in Tajikistan – 1.6%.