Page 52 - BNE_magazine_06_2019

52 I Eurasia bne June 2019
MACRO ADVISORY: Uzbekistan Terraforming: Privatisation is the next stage
Chris Weafer of Macro-Advisory
Since the election of Shavkat Mirziyoyev in December 2016, Uzbekistan has been on a fast- track programme to transform what was, for the previous 25 years, a no-go investment zone for most investors
and international corporations. The president has largely delivered on promises made and the government largely remains on the course outlined. It means that confidence remains
high that promised reforms will be delivered and investment opportunities will continue to be available. All that
has happened so far can be described
as Phase 1 of the economic building project. This phase focused primarily on:
• clearing up legacy problems from the previous regime
• removing investment and business obstacles
• starting to fix the basic infrastructure problems and inefficiencies
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• plugging the economy into the inter- national financial markets
Having now largely completed the “basics” of creating a new economy,
the government needs to broaden
the appeal of the country to a greater number of investors and to increase both the availability of opportunities and the mechanism for participation in assets across a broad swathe of the economy.
A good way to look at what has been achieved so far, and where this fits into the longer-term development strategy, is to look at the sequence of actions
as a sort of terraforming exercise, but for the economy rather than a desert. The recently announced focus on privatisations can be considered stage 6 of the Phase 1 of the transformation exercise. The sequence we have seen so far can be broken down as such:
Stage 1. Political change and stability.
After 25 years of an authoritarian gov- ernment, which kept many of the struc- tures inherited from the Soviet system, President Mirziyoyev moved quickly
to replace people in key positions and started the process of de-bureaucratizing the economy, e.g. changes to the tax and customs procedures. He also surprised many with changes at the top of the security services, effectively also ending the soviet-era apparatus.
At the same time, the president improved relations with neighbouring states and concluded deals that make it easier for goods, services and people to cross borders and ended the threat of conflict over the management of scarce water resources and electricity sharing.
Stage 2. Critical reforms
In the first twelve months, the govern- ment completed some critical reforms in