BCG: Uzbekistan and Central Asia Attract Investor Attention

Tashkent, Uzbekistan (UzDaily.com) — The next five to ten years present Uzbekistan and the wider Central Asia and Caspian region with unique opportunities to attract significant investments and stimulate new economic growth. These prospects are driven not only by changes in the global trade and investment landscape but also by rising demand for new suppliers of raw materials.

Deeper regional integration will allow Central Asian and Caspian countries — Uzbekistan, Kazakhstan, Azerbaijan, and Kyrgyzstan — to significantly strengthen their positions in the global competitive environment. This can be achieved through both the expansion of a shared market and the creation of a more open, transparent, and attractive business environment. Integrated economies can complement each other in resources and competencies while coordinating the implementation of large infrastructure, transport, and industrial projects. Ultimately, the region has the potential to become a strategic hub for Eurasian trade and economic interaction.

Uzbekistan possesses several competitive advantages: geopolitical neutrality, a highly skilled workforce, modernized infrastructure, and substantial natural resources. These factors enable the country to expand its participation in global supply chains and maintain stable economic growth over the next decade. Alongside Kazakhstan, Uzbekistan is well-positioned to play a leading role in regional integration and in establishing the region as a strategic center for economic and trade flows.

These conclusions are supported by a new Boston Consulting Group (BCG) study, Why Investors Are Focusing on the Central Asia and Caspian Region, based on in-depth interviews with local and international business representatives, government officials, investors, and experts from Uzbekistan, Kazakhstan, Azerbaijan, and Kyrgyzstan.

Today, the share of foreign trade in the region’s GDP exceeds the global average, reaching approximately 48% in Uzbekistan, largely driven by import growth. Central Asia and the Caspian region continue to see increasing trade turnover, reflecting its role as an economic bridge between Europe and East Asia, as well as the significance of its consumer market and industrial and raw material base.

Most of the region’s exports are concentrated in energy resources and primary processing, primarily due to Kazakhstan and Azerbaijan. Mineral resources, by contrast, represent a smaller share of total exports, around USD 20 billion per year, with base metals from Kazakhstan and gold, copper, and uranium from Uzbekistan playing the leading roles.

Kazakhstan remains the largest economy in the region, accounting for roughly 60% of total GDP and 75% of foreign investment over the past decade. Uzbekistan, on the other hand, has the most diversified export structure, reducing its vulnerability to commodity market fluctuations. With a population of around 38 million and a GDP of USD 115 billion in 2024, the country has the region’s largest workforce and a growing industrial base. Long-term investments in heavy and labor-intensive industries, coupled with a workforce in which nearly half hold secondary-technical education, provide a strong foundation for further economic development.

In recent years, Uzbekistan has actively pursued educational reforms to expand access to higher education and develop highly skilled professionals. By 2030, the share of students continuing to university education is expected to reach 50%. At the same time, some projects in the raw material and manufacturing sectors face a shortage of engineering and technical specialists, highlighting the need for systemic reforms in vocational education.

Andrey Novitsky, Managing Director and Partner at BCG, noted that Uzbekistan was among the first Central Asian countries to open its economy to foreign partners, providing a powerful boost to GDP growth. To maintain long-term leadership, the country must continue developing all sectors, including ancillary ones such as education, healthcare, and science.

Despite growing interest from global investors, investment volumes in the region still do not match its potential. Key obstacles include the small scale of individual economies and their fragmentation compared to integrated trade blocs. Limited economic integration means that investments often remain within national borders, restricting access to neighboring markets. Konstantin Polunin, BCG Partner, notes that only by unifying the four regional markets can they compete with mid-sized economies such as the Philippines, South Africa, or Egypt.

Investment needs remain high and continue to grow. In 2024, foreign investment in Uzbekistan reached USD 11.9 billion, but this is still insufficient for sustainable growth. Between 2025 and 2029, BCG estimates that the country will need to attract an additional USD 82 billion. Expanding the investment funnel and reducing risks will require measures including a single-window system for investors with project support and legal reforms aimed at reducing legal uncertainties.

BCG’s study highlights five key regional prospects: abundant natural resources, the role of a trade corridor between Europe and China, status as a strategic buffer among Eurasian powers, a growing market of over 70 million people, and a skilled workforce of 21 million. Based on these factors, four development scenarios for 2025–2035 have been outlined: Klondike, Era of Complex Deals, Calm, and Renaissance of Mediation.

The scenarios differ in demand for raw materials and trade barriers, creating various opportunities and risks for Uzbekistan. In the Era of Complex Deals, the country can simultaneously develop its raw material base and industry through long-term investments with commitments to local production and technology transfer. The Klondike scenario assumes rising raw material demand supports extractive growth but limits economic diversification. Calm implies slower growth and the need for active regional cooperation, while Renaissance of Mediation offers opportunities to expand export and processing projects.

According to Konstantin Polunin, while uncertainty itself is not new, the pace of change is much faster, requiring the government and businesses to plan for multiple scenarios, using indicators and adaptation mechanisms. Joint efforts can guide the economy toward the desired scenario, turning challenges into real opportunities for sustainable growth, expanded investment, and industrial development.