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The American-Uzbekistan Chamber of Commerce (AUCC) seeks to promote trade and investment ties, cultural exchanges and bonds of friendship between the United States of America and the Republic of Uzbekistan. In performing these functions, the AUCC places primary emphasis on serving the needs and interests of its members.
Interview with AUCC Chairperson Carolyn Lamm Before 2012 Uzbekistan-US Annual Business Forum
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Boosting Foreign Investment in Uzbekistan
Uzbekistan has been pursuing comprehensive economic and social reforms aimed at boosting growth, expanding international relations, and creating favorable legal conditions for foreign direct investments (FDI). The country’s strategic geographic position, abundant and diverse natural resources, and sizable domestic market of 33 million people represent enormous potential for investment and growth. The Government of Uzbekistan is prioritizing the increase of FDI to stimulate the growth of businesses and bring in modern technologies with the ultimate goal of improving the well-being of its citizens.
“As Uzbekistan is turning into a full-fledged member of the international business community, the value of attracting foreign investments cannot be overstated and we are determined to take every step so foreign investors feel welcome and confident in Uzbekistan,” says Minister of Justice Ruslanbek Davletov.
The government’s efforts to facilitate the entry of foreign businesses into Uzbekistan’s economy are already paying off. In the World Bank’s Doing Business 2020 ranking, Uzbekistan was among the top 20 most improved economies on the ease of doing business score. However, despite the promising analyses and recognition, certain challenges remain. Particularly, foreign businesses have found the process of signing investment agreements with their business counterparts in Uzbekistan to be extremely bureaucratic and unpredictable due to the lack of a single model investment agreement. Additionally, clauses in bilateral investment treaties were often considered outdated and in need of re-alignment with international standards.
The USAID Legal Reform Program has assisted the Ministry of Justice in preparing successful models of an investment agreement and bilateral investment treaties. The new investment agreement has made Uzbekistan more attractive to foreign businesses, while also improving protections for Uzbekistan’s interests in the event of a dispute. The new bilateral investment treaties equally contribute to creating a positive investment climate for foreign businesses, as it incorporates international experience and best practices and protects the interests of both parties.
Moreover, collaborating with USAID, the Ministry of Justice staff and other state agencies involved in the development of these two important new model documents have gained a greater understanding of negotiating and designing investment agreements.
The model investment agreement has already been used to conclude 22 international agreements, valued at over $2 billion U.S. dollars, with investors from Turkey, Germany, Russia, the U.S., Canada, the United Arab Emirates, France, China and other countries – a sizable contribution in comparison to the overall FDI, which in 2019 reached $9.3 billion. Of these investment agreements, six were in the field of information technology, five in mining, and four in energy. Among these is an investment agreement with a UAE company, Masdar, to develop, build and operate a 500-megawatt wind farm, which will support the country’s long-term clean energy goals.
“These two documents have become instrumental in signing new investment agreements and significantly contributed to making Uzbekistan truly an investor-friendly country. We are witnessing an increase in investor confidence, and Uzbek businesses are already benefiting as a result,” says Minister Davletov.
According to the Ministry of Justice, the new investment agreements should help create more than 1,000 new jobs in the near future, lead to the development of modern manufacturing facilities in Uzbekistan and the introduction of cutting edge technology, as well as continue to play an important role in sustaining growth and development in multiple sectors of the economy.
USAID is proud to partner with the Government of Uzbekistan in its efforts toward greater integration into the world economy and improving the lives of its citizens.
The USAID Legal Reform Program cooperates with the Government of Uzbekistan to ensure further development of rule of law principles and create a healthier investment climate by providing expert support and building the capacity of legal professionals to achieve alignment of its investment-related and other documents with international standards.