The devaluation of the Uzbek currency can have negative consequences for the country’s economy. It may also reverse progress made in reforming its economy. The World Bank and the Asian Development Bank are implementing necessary reforms in cooperation with the country. Fortunately, the external debt of Uzbekistan is not as high as that of other Central Asian countries. According to the data of Uzbekistan, this is 20% of the gross domestic product, and 41% according to the International Monetary Fund. The problem is that as the value of the currency falls, it becomes more difficult to repay the foreign debt. However, Uzbekistan is in a unique position to avoid this situation, as its total foreign reserves are much larger than its total foreign debt.
The Uzbek government has implemented the opposite policy and is skeptical of the main theoretical arguments. According to Williamson and Mahar (1998), liberalization and regulation eliminate market distortions and increase capital accumulation. However, in reality, the Uzbek government has adopted many anti-corruption measures that benefit investors and citizens alike. These policies will help the country recover from the economic crisis and restore economic stability.
Fortunately, the government has a strong and independent judiciary. Although local officials are often incompetent, these officials do not make internal judicial decisions. Instead, they focus on economic issues. In 2013, the IMF mission noted the improvement of the country’s monetary and fiscal statistics and encouraged the government of Uzbekistan to participate in the General Information Dissemination System, which provides this information to the public.
In 1989, the economy of Uzbekistan relied on the import of basic food and energy resources. This led to the government redistributing land away from cotton to staple agricultural products such as wheat and potatoes. As a result, these products were able to increase their value by 520 percent and almost double their volume. During the same period, the country’s oil and gas production also increased by 35 and 80 percent, respectively.
While having the right information and access to the markets is important, it is not easy to do without sufficient transparency. A lack of E-GDDS data could undermine the IMF’s economic assessments and reform recommendations. In addition to the lack of transparency, the government should provide better statistics to improve the quality of cooperation with the IMF. The Uzbek government needs to provide more information and transparency to facilitate economic reforms.
In December 2016, Shavkat Mirziyoyev was elected President of Uzbekistan. After that, he implemented a large-scale liberalization policy and began the process of transition to a market economy. As with most countries in transition, the first few years of economic transition can be difficult. However, it should be understood that the economy of Uzbekistan inherited relatively stable macroeconomic conditions from the Karimov regime, and it can accelerate growth.
In July 2021, President Mirziyoyev approved the new law “On International Commercial Arbitration”. This new law strengthens the independence of the Supreme Council of Judges, which is an important institution of judicial control. The Law “On International Commercial Arbitration” defines the procedures for concluding arbitration agreements, appointing arbitrators and conducting arbitration proceedings. The International Commercial Arbitration Act provides for the enforcement of foreign arbitral awards.
