The economic partnership between Kazakhstan and Uzbekistan is showing impressive growth dynamics, reports Zakon.kz.
The year 2023 marked an unprecedented increase in direct investments from Uzbekistan into Kazakhstan's economy, reaching a record high of $22.2 million.
This figure is the highest in the past 18 years, demonstrating the growing trust of Uzbek investors in the economic potential of the neighboring country.
The scale of investment cooperation between the two Central Asian states is impressive: over the past few years, numerous production projects have been implemented with a total investment exceeding $2.5 billion.
These projects cover key sectors of the economy, including the agro-industrial complex, the raw materials sector, and light industry, contributing to the diversification of both countries' economies.
The year 2023 was particularly fruitful in terms of launching new investment initiatives. Among the most significant projects are:
- The organization of "Chevrolet Onix" car production in the Kostanay region using the small-knot assembly method. Investments in this project amounted to 33.7 billion tenge (about $70.5 million), which not only strengthens the position of the automotive industry in the region but also creates new jobs.
- The construction of a modern plant for the production of rolled metal in the Almaty region: with an investment volume of 27.0 billion tenge (approximately $56.5 million), this project aims to meet the growing demand for metal products in the region.
- The launch of the production of sterile dosage forms and hygiene products in Shymkent: investments amounting to 4.4 billion tenge (about $9.2 million) are aimed at developing the pharmaceutical industry and increasing the availability of quality medical products.
The growing attractiveness of Kazakhstan for Uzbek investors is due to a combination of factors. Notably, these include a favorable business climate, an effective system for protecting investors' rights, the availability of attractive investment incentives, political stability, a rich resource base, and a highly skilled workforce.
However, despite the positive dynamics of investment cooperation, trade turnover between the two countries in 2023 showed some decline.
The total trade volume amounted to $4.4 billion, which is 10.2% less than the previous year's figure.
At the same time, Kazakhstan maintained significant positions in Uzbekistan's foreign trade balance, accounting for 7.0% of total trade turnover, 5.6% of exports, and 7.9% of imports.
Regarding prospects for 2024, preliminary data indicate a substantial improvement in bilateral trade. It is expected that trade turnover between Kazakhstan and Uzbekistan will reach $5.1 billion, exceeding the 2023 figure by 15.9%.
This growth is driven by several factors:
- An increase in the export of agricultural products from Kazakhstan to Uzbekistan, especially grain and oilseeds.
- Expansion of supplies of machinery and chemical industry products from Uzbekistan to Kazakhstan.
- Implementation of new joint projects in the energy and digital technology sectors.
- Improvement of logistics infrastructure between the two countries, contributing to lower transport costs and increased trade volumes.
It is anticipated that Kazakhstan's share in Uzbekistan's foreign trade in 2024 will rise to 8.2% of total trade turnover, 7.0% of exports, and 9.1% of imports.
This indicates further strengthening of economic ties between the two countries and increased interdependence in the regional context.
Thus, despite the temporary decline in trade turnover in 2023, the overall trend of developing economic cooperation between the two countries remains positive.
Record direct investment figures and the expected growth in trade turnover in 2024 create a solid foundation for further strengthening the partnership between the two key Central Asian states.
CentralasianLIGHT.org
July 10, 2024