Uzbekistan: One of the World’s Fastest-Growing Economies
Uzbekistan is one of the world’s youngest countries – earning independence from the Soviet Union in 1991, and holding China’s silk road economic belt first parliamentary elections three years later, Uzbekistan is full of potential and opportunity. Many economists agree that the nation is home to one of the fastest-growing economies in the world and should be on everyone’s list as one of the emerging markets of the 21st century. But the question a potential investor should ask is ‘why?’ What is it about Uzbekistan leaving investors champing at the bit to get in on the action? The simplest answer to that question is resources.
Though a landlocked country, Uzbekistan has many different resources, and it has them in abundance. In 2006, it was estimated that Uzbekistan was sitting on 1.798 trillion cubic metres of natural gas reserves. Annually, Uzbekistan is producing 60 billion cubic metres, which is nearly the same amount as Turkmenistan. However, roughly 80 per cent of that production is for domestic use, with the other 20 per cent divided among other Central Asian nations and Russia. Today, however, there are plans to run pipelines through Afghanistan into some big, powerful markets like India and China.
In 2010, the Uzbek-China relationship took another step forward when another piece of the monstrous China- to -Turkmenistan pipeline, which will run through Uzbekistan, was completed. This pipeline is part of an even bigger project to essentially recreate the Silk Road from the ancient world. The old Silk Road was a series of trade routes between the Chinese dynasties and the European world. In the modern day, this New Silk Road will run right through Uzbekistan and Central Asia. This new Silk Road will generate lots of activity to the area, and its natural gas and oil reserves will play a major role in Uzbekistan’s economy continued growth. However, Uzbekistan has a lot more to offer than just oil and natural gas.
In a 2006 poll, it was found that 28 per cent of Uzbekistan’s labour force is employed through agriculture, and it also makes up 24 per cent of GDP. The star crop produced in Uzbekistan is cotton. It produces nearly three times as much cotton as all the other Central Asian countries combined. Wheat is another major agricultural investment for the nation. In 2006, it cultivated 1.6 million hectares’ worth. All this agriculture gives Uzbekistan a stronger base to stand on than solely the energy market. This agriculture market is complemented by an abundance of more natural resources. It is estimated that gold makes up around 20 per cent of Uzbekistan’s total export. The country also has significant reserves of copper, lead, zinc, tungsten and uranium.
With all these resources at the country’s disposal, the economic ceiling is miles high. Currently, Uzbekistan focuses its trade with its closest neighbours as well as Russia. However, it is beginning to make expansions towards China in the East and Europe in the West. A good investor should recognise this and use this opportunity to get ahead of the competition.