Tashkent, Uzbekistan (UzDaily.com) –– On 28 October 2020, the Center for Economic Research and Reforms conducted a study of investment activity and the efficiency of using investments in the regions of Uzbekistan.

If at the end of 2017 the share of investments in GDP was 23.9%, then in 2019 it increased to 38.3%. Of the total investment, 66.2% was financed by domestic investment, and 33.8% by foreign investment, including 21.3% by foreign direct investment.

Activity in attracting FDI to the regions

Over the past three years, the activity of regions and cities of the country in attracting foreign direct investment (FDI) has grown significantly. If in 2017 only 83 territorial subdivisions out of 203 districts and cities attracted FDI, then by the end of 2019, FDI was attracted in 195 of them. The volume of attracting FDI in the context of districts and cities of regions of the republic varies depending on the prevailing conditions and the opportunities provided for investors.

Over the past three years, in all regions, except for Bukhara, there has been an increase in FDI absorption, which is highest in Surkhandarya (76.2 times), Khorezm (46 times), Syrdarya (31.3 times) and Tashkent (20, 7 times) areas.

It is noteworthy that in 2017, Bukhara region accounted for 65% of FDI, Kashkadarya region - 13.6% and Tashkent city - 16.3%. In 2019, the share of Surkhandarya (+16 pp), Tashkent (+10 pp), Ferghana (+5 pp), Syrdarya (+ 5 pp) regions and Tashkent city. In Samarkand, Khorezm, Namangan, Navoi regions and the Republic of Karakalpakstan, it remains at a low level.

Sectoral structure of attracting FDI

Over the past few years, the sectoral structure of FDI development by regions has significantly diversified. In the sectoral structure of FDI by region for 2017-2019, a significant outflow of FDI to industrial sectors, compared to other industries, was noted in Namangan (from 0% in 2017 to 73% in 2019), Surkhandarya (from 17% in 2017 to 57% in 2019), Syrdarya (from 28% in 2017 to 90% in 2019), Khorezm (from 25% in 2017 to 89% in 2019), Ferghana (from 50% in 2017 to 80% in 2019) regions and Tashkent city ( from 35% in 2017 to 62% in 2019).

FDI per capita

For the period 2017-2019, the group of top 10 regions with the highest rates of attracting FDI per capita includes the following: Baysun district of Surkhandarya region (39.6 million soums), Akhangaran city of Tashkent region (35.8 million soums), Nishan district of Kashkadarya region (25.3 million soums), Zafarabad district of Jizzakh region (14.5 million soums), Yakkasaray district of Tashkent city (14.4 million soums), Shaikhantakhur district of Tashkent city (8.2 million soums), Shirin, Syrdarya region (7.2 million soums), Karaulbazar district of Bukhara region (6.8 million soums), Alat district of Bukhara region (6.6 million soums) and Sardoba district of Syrdarya region (5.4 million soums).

The group of districts and cities with the lowest rates of attracting FDI per capita includes Amu Darya (0.9 thousand soums), Elikalinsky (2.7 thousand soums), Turtkul (3.9 thousand soums) and Beruniy (6, 5 thousand soums) districts of the Republic of Karakalpakstan, Buvaida district of Ferghana region (7.9 thousand soums).

The differentiation between the maximum and minimum values for attracting FDI per capita in districts and cities is very large and reaches 10 thousand times. One of the main reasons for this gap in attracting FDI is the dependence of the attractiveness of regions and cities for external investors on the available natural resource potential, the development of industrial infrastructure and industry, as well as the SEZs (FIEZs) and MPZs created in the regions. In districts and cities with a small volume of attracted FDI, the main reason for this is the low level of development of production infrastructure and natural resources, remoteness from production centers, etc.