The government of Uzbekistan is focusing on attracting foreign direct investment. It is also aimed at reducing the role of the state in the economy, particularly in public procurement and the financial sector. The government has taken a number of measures to encourage private sector participation, including the establishment of an anti-corruption agency. This agency is responsible for monitoring and investigating public and private entities for corruption and enforcing laws and regulations governing these entities. In addition, the new Tax Code, which entered into force on January 1, 2020, reduced the income tax from legal entities and individuals by almost 50%, and simplified the taxation procedures for private entrepreneurs.
The country’s economy is tightly controlled by the government, but it is slowly beginning to transition to a market economy. Although the government has been cautious about the transition period, Uzbekistan has made a number of respectable achievements. However, the country still has a very restrictive trade regime and generally interventionist policies. In order to increase the country’s economic potential, it is necessary to implement structural reforms such as improving its investment environment and strengthening the banking system. It should also free agriculture from state control.
In 2019, Uzbekistan achieved success in the fight against corruption. Since President Mirziyoyev took office, the number of officials being prosecuted under anti-corruption laws has increased. In the 2018-2019 fiscal year, 2,300 corruption-related crimes were registered. As of 2020, 838 criminal cases related to corruption were initiated, and 647 civil servants were prosecuted. However, the government has not yet introduced a mandatory declaration of assets and income for officials. Nevertheless, this new law was welcomed by the public and the government alike.
In Uzbekistan, the government limited the ability of private organizations to convert foreign currency. In addition, the government imposed severe restrictions on imports. It has also closed borders with neighboring countries from time to time. The stock market is not developed in Uzbekistan. As a result, foreign companies should be very careful when making investment decisions in this country.
The government of Uzbekistan requires foreign citizens to apply for a work visa and register their place of residence in official offices. If they meet the requirements, the local labor market is more developed. Literacy is high here and the government is trying to promote foreign education. Many foreign firms have reported that young Uzbeks are more flexible and less educated than their older counterparts trained in the Soviet era. In addition, corruption is widespread in the education sector. Many unqualified students have entered prestigious universities.
