Page 44 - bne_Magazine_October_2017

44 I Eurasia bne October 2017
Uzbekistan lifts currency controls driving hopes of investment renaissance
Kanat Shaku in Almaty
The winds of change are blowing
in Central Asia. The removal of currency controls in Uzbeki-
stan on September 5, abolishing the country’s dual exchange rate, marks a historic event both for the country and for the region. No less importantly, the move confirms Uzbek President Shavkat Mirziyoyev has seriously reformist goals, bringing to life one of his first major promises since he came to power a year ago after the end of the quarter-century reign of the late autocrat Islam Karimov.
The dual rate exchange system converged at UZS8,100 on September 5. One day prior, the strict currency controls saw the Uzbek sum trading at around UZS4,210 to the dollar at the official rate and UZS7,700-8,000 at the black market rate.
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Uzbekistan is the natural destination of choice for a would-be investor in Central Asia. It has by far the largest population (which is growing fast) and is the only
exchange rate go back to the early 1990s when Uzbekistan saw a boom in private enterprise. As stores opened up across Central Asia’s most populated country
“Uzbekistan is the natural destination of choice for a would-be investor in Central Asia”
one of the 'Stans that has a border
with all the others. It is the obvious production and distribution centre for the whole region. Foreign investors flocked to the country in the early 1990s only to leave again when Karimov killed the ability to convert the currency.
The origins of the now defunct dual
to fill the insatiable demand for imports, Karimov was horrified when he discov- ered his country was running a $1bn trade deficit.
“We are not going to waste our precious hard currency reserves on importing chewing gum,” Karimov announced
in a famous speech, and went on to