Page 68 - bne Magazine February 2023

68 I Eurasia bne February 2023
After three decades of transition Central Asia has finally reached the point where its economies are strong enough for a middle class to emerge. That will transform these countries again and as this mass market opens up it is already creating new opportunities for business and investment. / bne IntelliNews
A middle class emerges in Central Asia Ben Aris in Berlin
Central Asia is bouncing back from the coronavirus (COVID- 19) pandemic and after three decades of growth, incomes have risen to a point where a middle class is emerging in the steppe. And nothing says middle class more than a hoover.
“Incomes are going up and one of
the first thing people will spend their money on is the appliances that help to make household chores a little easier. That means buying a hoover,” Bektemir Murodov, the CFO of Artel, Central Asia’s biggest maker of white goods, told bne IntelliNews in an exclusive interview.
Central Asia is coming of age and Uzbekistan, as by far the most populous country in the region, is going through a dramatic transformation since President Shavkat Mirziyoyev opened the country up to the rest of the world in 2016. It has
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been putting in 6% growth a year and
it is rapidly embracing its role as the natural production centre for the region; Uzbekistan is by far the largest of the five ‘Stans, by virtue of its young and fast- growing population, and is the only one of the five countries in the region to have borders with all the others.
Consumer electronic sales are mushrooming in the large domestic market of 38mn consumers, the third-largest consumer market in
the CIS, which provides a solid base
for the growing manufacturing base. With an average age of only 29 years, Uzbekistan’s population is due to double to 70mn by 2050, according to the UN. Leading companies like Artel and the national car maker UzAvto have also started to export to their neighbours, with Kazakhstan as the richest country in the region, thanks to its oil, being the most popular destination.
The low cost of labour and good transport connections to the rest of the Former Soviet Union (FSU) have made manufacturing in Uzbekistan a profitable business.
Rising income
In the first half of this year Central
Asia became the world’s leader in wage growth, according to the International Labour Organisation, while almost all of the other countries in the FSU are seeing incomes decline, led by Ukraine. According to its Global Wage Survey, average earnings in the region rose by 2.5% in six months, showing the most positive dynamics. For comparison, in 2021 it was 12.4%.
The increase comes at a time when for the first time in 20 years, global wage growth has not been able to outpace inflation and has fallen by an average of 0.9%, and excluding China, was down by 1.4%.