US, Uzbekistan sign $2.6 billion in contracts in sign of 'new era'

TASHKENT -- Wide-ranging economic reforms adopted by Uzbekistan in 2017 are making the country more attractive to investors, say economists.

In one sign of new openness to foreign investment after years of relative isolation, business leaders from both countries attended the US-Uzbekistan Business Forum in New York September 20.

Representatives from more than 100 US companies, such as General Electric, ExxonMobil, Coca-Cola, Visa and Boeing, attended the event.

The "unprecedented" scale of the forum shows the desire of both countries' business communities to expand their co-operation, said various speakers at the event, including Azim Akhmedkhadjaev, chairman of the Uzbekistani State Committee on Investments, according to the Uzbekistani presidential press office.

Beginning of a 'new era'

In 2016 the countries' trade amounted only to $454 million (3.6 trillion UZS), according to the Uzbekistani Foreign Ministry. Presently, 164 companies with some US ownership have more than $1 billion (8 trillion UZS) invested in Uzbekistan.

"In years past, investing in Uzbekistan was complicated by the absence of a freely convertible currency," Tashkent economist Shukurullo Mavlonov told Caravanserai. "That's why US businesses weren't willing to come here."

The September 5 reform in which Uzbekistan devalued its currency and made it fully convertible created a "new era", he said.

With the government no longer imposing an artificially high exchange rate for the som, US businesses have an incentive to look around Uzbekistan.

"Sudden 50% Devaluation May Attract Bargain Hunters," Bloomberg headlined September 5, quoting economic analysts who said Uzbekistan is clearly courting foreign investment.

Developing aviation, machine building

Uzbekistan's delegation, headed by President Shavkat Mirziyoyev, signed contracts worth $2.6 billion (20.9 trillion UZS) during the US-Uzbekistan Business Forum held in New York September 20, according to Mirziyoyev's press office. These included agreements to export uranium and import aircraft as well as contracts involving co-operation in oil and gas, petrochemicals, electronics and machine building.

Nukem Inc. plans to buy $300 million (2.4 trillion UZS) of uranium concentrate during the next seven years from Uzbekistan, Foreign Trade Minister Elyor Ganiev said in Tashkent September 27, according to Gazeta.uz.

Uzbekistan Airways is expecting to take delivery of two Boeing 787's within the next few years, he added.

The US Export-Import Bank, which is only now resuming work with Uzbekistan after a 13-year hiatus, is facilitating the deal, said Sukhrob Kholmuradov, board chairman of the National Bank for Foreign Economic Activity of Uzbekistan, at the same event, according to Gazeta.uz.