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ensuring all Uzbeks returning from abroad are isolated accordingly so as not to potentially spread the virus throughout the general population.
Where the economy is concerned, on March 19 the government approved a handful of measures to ensure stability. The stability package is valued at $1bn (UZS
10 trillion). It is likely to be funded by gold reserves the government sold late last month, luckily before gold prices corrected due to the liquidation in the global financial system.
The stability package includes broad tax breaks and holidays for the economy, with the deepest breaks (estimated at 30%) to be given to the tourism industry; companies in the hospitality, catering and education industries being given
“Ironically, the virus is also giving Uzbekistan the impetus to
speed up reforms in streamlining bureaucratic procedures”
a holiday on debt service until October 1, guaranteed by the government; UZS 500bn in loans/support made available to small and medium sized enterprises; and fast-tracking the implementation of infrastructure projects in the regions (they
Who is most exposed to remittances stop- shock?
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had that many in the first place – but the sudden halt to the cash their migrant workers are sending home to their families. In some countries remittances make up as much as a third of GDP.
If you are a young Tajik, Uzbek, Ukrainian or even Romanian, then the poor pay at home often means you have left the country to look for work elsewhere. Some 5mn Ukrainians have left the country in recent years and headed for the labour
were on the agenda but their start dates have been moved up).
When the stability package was announced the finance minister stated that he expected a decrease in GDP growth of 1.8pp which means 2020 GDP growth expectations have been revised to +4% for the year. The major contributors to the decrease in GDP growth are an expected impact of $150mn on the tourism industry and a decrease in materials exports
of $400mn (agriculture and fertilisers at $100mn, textiles at $80mn and copper at $60mn), in addition to a decrease in natural gas exports. The government aims to transition to zero gas exports by the middle of the decade anyway as it prefers to instead increase production of value-added petrochemical products for export.
Ironically, the virus is also giving Uzbekistan the impetus to speed up reforms in streamlining bureaucratic procedures, specifically in the import and export arena, which should significantly stimulate exports over the coming years. This includes the elimination of export guarantees and creating new border procedures to streamline import/export permit issuance and simplifying customs clearance.
Uzbekistan has the opportunity to emerge from this crisis stronger, especially if the government can utilise its large gold reserves (which should see a marked increase in value over coming years) to support the economy through exchange
rate support and investment into education, healthcare and infrastructure.
he global crisis has caused an all-time record $83bn to flee emerging markets, but for the poorest countries the
problem is not investors making for the door – they never
Migrant workers in Yekaterinburg from Central Asia. Remittances make up just under 30% of Tajikistan's GDP
markets of Poland, amongst other places, where they can earn four times more than they can at home. The fields of western Europe are filled with Romanian labour every year, while the construction sites of Russia and the taxis on the road team with migrants from Central Asia and the Caucasus.
Many counties of Central Europe have become dependent on these migrant workers to provide the cheap labour they need after a five-year long boom, as they were increasingly facing
a labour shortage. However, as the pandemic has grown many of the workers have gone home to sit out the global lockdown.
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