This chapter examines Uzbekistan’s investment promotion and facilitation policies, evaluating the institutional framework with a particular focus on the Investment Promotion Agency (UzIPA) and its role within the Ministry of Investment, Industry, and Trade (MIIT) as well as the broader investment ecosystem. The chapter further reviews Uzbekistan’s investment climate and the government’s initiatives to attract and retain investment, including investor services, strategies and digitalisation efforts. Finally, it provides policy recommendations to enhance Uzbekistan’s investment promotion and facilitation strategy, ensuring greater efficiency, institutional clarity and alignment with national development objectives.
Roadmap for Sustainable Investment Policy Reforms in Uzbekistan
Abstract
As part of its broader reforms to the business environment, Uzbekistan has made notable progress in strengthening the policy and institutional framework for investment promotion and facilitation. A central goal of these reforms, as emphasised in key strategic documents, including the Uzbekistan 2030 Strategy, is increased foreign direct investment (FDI) by improving the investment climate and strengthening promotion and facilitation mechanisms. Since 2018, over 20 Presidential Decrees have sought to overhaul administrative, licensing and registration processes. The government has automated approximately of public services, with a target of reaching 80%, and is currently developing a new Entrepreneurship Code. The Agency for Strategic Reforms has also recently developed a methodology to evaluate the investment environment across Uzbekistan's 14 regions and assess how public institutions are addressing business climate challenges. Surveys indicate that businesses have responded positively, reflecting growing confidence in the reform agenda.
These policy reforms have been complemented by institutional developments. The Investment Promotion Agency of Uzbekistan (UzIPA) was created by Presidential Decree in 2019 as a distinct unit under the Ministry of Investments, Industry and Trade (MIIT) which has also established additional departments working on investment-related tasks. The government has introduced special economic zones (SEZs) to attract investment, and increased collaboration with the private sector, civil society and academia on investment promotion and facilitation by inaugurating the Foreign Investors Council and the Foreign Investment Forum. These efforts, combined with a strong vision for national development, have enhanced investor visibility and helped improve the ease of doing business for domestic and foreign investors. Yet, frequent regulatory changes continue to complicate co-ordination among institutions, delaying effective policy implementation, and, in turn, hindering business climate improvements. For instance, the investment portal, launched in 2019 to track and monitor investment projects, remains underutilised. At the same time, access to finance, regulatory unpredictability, state dominance, regulatory barriers in key sectors and skilled labour shortages continue to constrain both foreign and domestic firms, raising the business costs and limiting competitiveness, particularly in construction, manufacturing and high-tech industries.
These challenges are compounded by a complex institutional landscape, marked by unclear and overlapping responsibilities between UzIPA and MIIT, whereby the function of UzIPA is unclear and insufficiently integrated into national strategies. While MIIT, the Ministry of Economy and Finance, and other bodies have clearly defined responsibilities in forming, implementing and monitoring the Investment Programme, an annual document outlining the upcoming priorities for investment projects, the IPA’s role is not formally recognised or integrated into this process. Decision-making processes between the Cabinet, MIIT and UzIPA lack coherence, leading to delays in the adoption of investment strategies, fragmented strategic directions and inconsistencies in investment priorities, with unaligned priority sectors for tax incentives and promotion (see Chapter on Tax Incentives), weakening the overall effectiveness of investment promotion efforts. Although national development strategies are in place, the absence of the IPA from those processes limits its ability to contribute effectively. The omission of references to UzIPA – or the state body responsible for investment promotion – in the draft investment law risks further weakening its institutional position. Adding to this institutional ambiguity, MIIT has gradually assumed many functions traditionally handled by IPAs, including investment promotion, policy advocacy and aftercare. This consolidation has come at the expense of UzIPA, which has experienced declining financial and human resources, and it now unable to fully implement key initiatives like the Investor Centre. Meanwhile, MIIT has expanded its investment-related departments, some of which are now double UzIPA’s entire staff, consolidating functions that in many countries are reserved for IPAs.
Institutional inefficiencies also extend to other core areas of investment promotion, including policy advocacy, monitoring and evaluation (M&E), and digital infrastructure. UzIPA faces severe resource constraints, limiting its ability to represent investor interests, particularly for small and medium-sized investors. While MIIT’s aftercare unit handles some investor grievances, its focus on large-scale investments leaves smaller firms underserved. UzIPA could play a complementary role by drawing on its full investment lifecycle expertise to address this gap. Meanwhile, M&E processes are fragmented across MIIT departments, regional offices and contract managers. Although MIIT’s strategic planning unit monitors investment-related data, this information is not shared with UzIPA, creating misalignment and inefficiencies. The absence of a unified customer relationship management (CRM) system further hampers co-ordination and evidence-based decision making. A 2019 legal requirement to create an electronic portal to track investment projects has yet to be fully implemented. Existing databases remain siloed and inaccessible to UzIPA, undermining efforts to build a coherent, data-driven investment facilitation system.
Consider restructuring the institutional framework for investment promotion and facilitation to clarify roles between MIIT and the IPA, eliminate overlaps, and ensure each body focuses on its core competencies. This restructuring should build on existing UzIPA services, including the Investor Centre and the “Single Window” digital platform integrated with 17 government service platforms, to avoid duplication and maximise operational efficiency. The draft investment law does not define UzIPA’s mandate or role, leaving the institutional framework for investment promotion insufficiently clarified. Executive regulations implementing the law could address this gap by formally outlining UzIPA’s core functions, with the agency regaining its mandates of investment promotion, facilitation, policy advocacy and the operation of the Investor Centre, and delineating them from the strategic responsibilities of MIIT. In this context, MIIT units working on investment-related matters could focus on policymaking, legislative and regulatory functions, with a strategic oversight of investment promotion policies, providing overall direction while leaving the operational aspects to UzIPA. Establishing a clear co-ordination framework and reporting mechanism between MIIT and UzIPA will ensure that the agency’s activities are guided by MIIT’s strategic direction, without redundancies.
Reinforce UzIPA’s institutional capacity through adequate resource allocation. Increase the financial and human resources allocated to UzIPA to enable the agency to fully implement its mandate, including the operation of newly introduced functions such as the Investor Centre. If institutional restructuring is pursued, consider transferring personnel and budgets from MIIT’s investment-related departments to UzIPA to consolidate expertise and avoid redundancy. This reallocation would strengthen the agency’s ability to deliver core services, particularly in investment generation, facilitation, and policy advocacy, and help position UzIPA as a central point of contact for investors.
Establish a comprehensive and unified government-wide strategic plan for investment promotion and facilitation that aligns the objectives of MIIT, UzIPA, and other relevant bodies. This should be supported by a formal inter-agency coordination mechanism to ensure consistent messaging to investors, and coherent policy alignment. Consider instating mechanisms for better alignment between the broad strategic goals of MIIT and the more targeted initiatives of UzIPA. This includes developing a comprehensive prioritisation strategy, narrowing down priority sectors and investors to improve resource allocation and effectiveness in attracting high-value investments in high-potential sectors. While the investment law can provide the legal basis for defining a classification of priority investment projects and establishing co-ordination principles, the identification of specific priority sectors could be addressed through supporting executive regulations or strategies. This would allow greater flexibility to adapt to evolving national development priorities and global investment trends, while ensuring transparency and coherence in the selection process.
Streamline and consolidate legislative processes by reducing the frequency of legislative changes and enhancing the clarity and consistency of existing regulations to ensure better alignment with institutional capacity and reform priorities. This could include establishing a centralised legal review mechanism to minimise redundancies, providing comprehensive guidelines to implementing bodies to facilitate co-ordination and focusing on addressing vague legal references to reduce misinterpretation and enforcement challenges. Uzbekistan should also consider joining the WTO Agreement on Investment Facilitation for Development in the context of its renewed membership discussions.
Develop comprehensive linkage programmes between multinational enterprises (MNEs) and domestic firms to facilitate the integration of local businesses into global supply chains. This includes the creation of a centralised and publicly accessible database of local suppliers to improve transparency and connectivity for foreign investors. UzIPA, in collaboration with the Chamber of Commerce and Industry of Uzbekistan and other relevant agencies, should take the lead in offering targeted services such as matchmaking, cluster development, and capacity-building initiatives aimed at increasing domestic firms' competitiveness and fostering technology transfers. Establishing a robust aftercare programme for investors would further promote local workforce development and enhance linkages with local suppliers, boosting investment spillovers and driving productivity growth across sectors.
Conduct a thorough review of both UzIPA and MIIT's indicators, as well as their data-sharing processes, to identify data to identify ways to enhance the investment promotion strategy’s alignment with and support for national development objectives. This review should focus on refining prioritisation, improving monitoring, and standardising data tracking methods to enhance co-ordination between institutions. Additionally, implementing a centralised CRM system would streamline data management, ensuring timely and accurate information sharing across stakeholders. Establishing a dedicated M&E department within MIIT could further support systematic analysis and dissemination of investment-related data, ultimately improving decision-making processes and the effectiveness of investment promotion activities.
Strengthen UzIPA’s role in policy advocacy and better representing small investors. UzIPA may consider creating dedicated platforms for small investor engagement in policy discussions and focus on developing targeted initiatives that specifically address the challenges faced by smaller investors, enabling them to participate actively in policy reform processes. By improving co-ordination between ministries and ensuring that the needs of both large and small investors are included, UzIPA can foster a more inclusive and balanced investment facilitation approach, bridging the gap in policy advocacy for underrepresented smaller investors.
Institutional frameworks for investment promotion and facilitation differ widely across countries, reflecting differences in policy goals and focus on attracting investment. Although nearly all countries have an investment promotion agency, the scope of their responsibilities, structure, and objectives varies greatly, shaped by each country’s institutional context and political environment (OECD, 2018[1]). To gain a deeper understanding of its own investment promotion and facilitation institutional framework and practices, Uzbekistan participated in an OECD-IDB survey of IPAs for the second time (Box 5.1). The survey findings provide a comparative analysis that positions UzIPA alongside its counterparts in OECD member countries and other regions. This benchmarking exercise offers crucial insights into UzIPA's performance, identifying potential areas for improvement to better align with international best practices.
The OECD and the Inter-American Development Bank (IDB) partnered to design a comprehensive survey of IPAs. The questionnaire provides detailed data that reflect rich and comparable information on the work of national agencies in different countries. The survey was displayed in the form of an online questionnaire and divided into the following parts:
Basic profile.
Budget and personnel.
Offices (home and abroad).
Activities.
Prioritisation.
Monitoring and evaluation.
Institutional interactions.
IPA perceptions on FDI.
In 2017-2018, the survey was shared with IPA representatives from 32 OECD and 19 Latin America and Caribbean countries. In 2018, 10 national agencies from the Middle East and North Africa participated in the same survey and 10 additional countries from Eastern Europe, Southern Caucasus and Central Asia joined the same exercise the following year. The results of the survey are presented in comprehensive IPA mapping reports, which provide a full and comparative picture of IPAs in selected regions. The reports benchmark agencies against each other as well as the average IPA in a region against other regions.
UzIPA took part in the Survey for the first time in 2019 as part of a regional mapping of Eurasia and again in 2024 as part of the Roadmap for Sustainable Investment Policy Reforms in Uzbekistan. The answers have been verified with the agency and the results have been used to analyse and benchmark UzIPA’s institutional characteristics and the work it carries out against other agencies around the world.
Source: OECD’s Investment Promotion and Facilitation initiative
While the OECD-IDB survey primarily concentrates on IPAs, as they are typically the central institutions responsible for investment promotion and facilitation in most countries, it is crucial to recognise the significant role that MIIT plays in Uzbekistan’s investment promotion and facilitation landscape. Although it is common for IPAs to collaborate with other government institutions throughout the investment cycle, the distinct and often dichotomous relationship between MIIT and UzIPA warrants closer examination. Thus, any comprehensive analysis of Uzbekistan’s investment promotion and facilitation framework would be incomplete without thoroughly examining MIIT's wider contributions and involvement.
5.2.1. The role of UzIPA in investment promotion and facilitation is overshadowed by the magnitude of MIIT departments
A wide range of public institutions are engaged in driving investment promotion and facilitation in Uzbekistan, primarily led by MIIT, which oversees the strategic direction of the country’s economic development. The Investment Promotion Agency of Uzbekistan operates as a governmental body under MIIT and plays a crucial role in attracting FDI, offering targeted support to investors, and streamlining administrative processes, but is often overshadowed by the size and resources of its line ministry (Figure 5.1).
Note: The figure only shows the MIIT departments that are directly involved in investment promotion and facilitation activities in Uzbekistan, representing approximately one-third of all departments in MIIT. UzIPA Agency operates as a distinct entity under MIIT.
Source: Compilation based on MIIT inputs.
UzIPA, the most recent IPA in Eurasia, was established by Presidential Decree on 28 January 2019 as a distinct unit under MIIT. Despite its recent inception, UzIPA has experienced several organisational reforms, a trend common among Eurasian IPAs, indicating a need for continuous adaptation in response to changing political, institutional and governance landscapes (OECD, 2020[2]). These frequent reforms, while necessary to stay relevant, can pose challenges in establishing stability and long-term strategic direction. UzIPA’s core functions include investment attraction, policy advocacy, investor aftercare, and the operation of an Investor Centre to centralise some investor services. According to its website, UzIPA is organised around the following divisions and functions:
Event Organisation: promotes Uzbekistan's investment potential by planning and executing investment forums, conferences, and seminars both domestically and internationally. It prepares promotional materials, engages with the media, co-ordinates meetings between foreign investors and government or business representatives, and facilitates visits to foster co-operation and highlight Uzbekistan's favourable investment climate.
Foreign Investment Attraction: focuses on attracting FDI by developing general upcoming priorities, identifying priority sectors and projects, and providing comprehensive support to investors, including advisory assistance, and support with permit acquisition and funding opportunities. It also fosters connections between foreign investors and local suppliers.
Analytical Data Preparation: maintains an electronic database of foreign investment projects, monitors their implementation, and produces statistical reports on investment flows by sector, region, and country. It also conducts comparative analyses of global investment climates, tracks international trends, surveys investors, and examines international ratings, providing strategic insights and recommendations to enhance Uzbekistan's competitiveness.
Investor Centre Coordination: operates a "single window" scheme, including running its online services. It welcomes investors upon arrival, assists with obtaining visas, including investment visas, and ensures necessary conditions for conducting negotiations.
In practice, as described in the following sections on overlapping mandates and resource constraints, many of these functions remain unserved or are performed by other departments within MIIT due to resource limitations and understaffing of the IPA. MIIT is responsible for setting investment policies, co-ordinating investment strategies, and ensuring their alignment with the country’s broader economic goals. MIIT has undergone numerous organisational reforms, the last in 2023 after the merging of the Ministry of Investment and Foreign Trade and the Ministry of Industry, that have often resulted in additional responsibilities and departments. According to its governing legislation, the general investment mandates and activities of MIIT (except those that do not cover specialised investment promotion and facilitation tasks, for example departments concerning special economic zones and state funded projects) by division are as follows:
Department of Investor Attraction and Project Development: generating investor proposals and new projects, conducts image-building campaigns by representing Uzbekistan during events, mostly advertising Uzbekistan’s positive investment climate through fairs and forums.
Division to Accompany New Investors: supports new investors navigating administrative procedures, obtaining necessary permits and licences, and facilitates communication between investors and relevant government agencies. It guides investors from entry through to the establishment and operation of their projects, ensuring a smooth investment process.
Investment Climate and Ratings Office: Assesses the investment climate in regions and formulates proposals for improving the investment climate and business environment and enhancing the country's position in international ratings and indices.
Department of Attracting Foreign Investments to the Capital Market: organisations and platforms with Uzbekistan's participation and assists in attracting investment from foreign investors, attracting foreign investors for privatisation, supporting the development of mutual and venture funds, drafting sectoral regulatory documents
Department of Strategic Planning and Analysis: collects, analyses, and evaluates investment data to guide policy decisions, develop strategies, and identify priority sectors for investment. It monitors investment indicators, oversees project evaluation.
Department for Monitoring the Execution of Tasks of the Government Commission: ensures that directives and tasks assigned by the Government Commission are executed in a timely and effective manner, monitors progress, identifies any issues or delays, and provides reports on the status of task completion to ensure government objectives are met efficiently.
Department of Regional Development: ensuring co-operation between the Ministry and regional units, forming and monitoring regional Investment Programmes, and developing regional development concepts.
Several state agencies also play a role in investment promotion and facilitation. The Agency for Strategic Reforms under the President’s Office drives the implementation of the Uzbekistan Developmental Strategy 2022-2026 and develops reform proposals with experts, monitors implementation, and addresses systemic issues such as bureaucracy and corruption. Moreover, the Commission on Foreign Trade, Investment, Development of Local Industry, and Technical Regulation in Uzbekistan was established under Presidential Decree 6042 of 18 August 2020 to assist in the investment policy process According to its founding legislation, the Commission’s objective is to strengthen the country’s export and investment potential. Its responsibilities span a range of strategic priorities, including overseeing investment projects, fostering export growth, promoting industrial development, and ensuring the implementation of agreements through detailed roadmaps. The Commission’s functions are broad, addressing export forecasts, removing obstacles to trade, managing investment initiatives, developing industrial clusters, and ensuring adherence to high-level agreements. It operates under the leadership of senior government officials, with a structured framework that includes specialised working bodies and an inspectorate to monitor project execution and adjust export and investment indicators. The Commission also comprises the role of co-ordinating economic policies and initiatives across various government sectors, but, despite its ambitious scope, it remains unclear how active the Commission is in practice, as limited information or public reporting is available on the extent of its operations.
5.2.2. Coinciding mandates between UzIPA and MIIT hinder investment promotion efforts
Overlapping mandates generate challenges in investment promotion efforts. Globally, IPAs are established to attract FDI and provide facilitation services, with their scope and mandates varying widely across regions. According to the OECD-IDB survey of IPAs in the OECD, Middle East and North Africa (MENA), Latin America and the Caribbean (LAC), and Southeast Asia, IPAs in Southeast Asia and MENA often operate within larger agencies with broader responsibilities beyond core investment promotion, such as negotiating trade agreements or managing privatisations and economic zones. In contrast, IPAs in OECD and LAC countries typically have a more focused set of responsibilities. UzIPA currently operates under five official mandates: inward foreign investment promotion, domestic investment promotion, operation of an OSS (Investor Centre), business registration and prior approval of investment projects, and issuing business permits. This mandate expansion, growing from three to five since 2019, aligns UzIPA with OECD IPAs, which average 5.7 mandates out of a potential 18 (Figure 5.2).
Note: Mandates carried out by UzIPA are outlined in red.
Source: OECD-IDB Investment Promotion Agency Survey, 2018.
While a modest number of mandates often ensures that IPAs remain specialised, focusing on core tasks such as marketing and facilitating investments, the situation in Uzbekistan deviates from this norm. Both UzIPA and MIIT engage in overlapping responsibilities, creating inefficiencies and blurring the institutional boundaries (Table 5.1). For instance, MIIT's departments for investor attraction and investment climate, alongside its regional departments for investment, replicate many of UzIPA’s roles in promoting both foreign and domestic investment. MIIT also duplicates the IPA's work in facilitating business licensing, which is officially managed by UzIPA’s OSS, creating uncertainty for investors seeking a clear point of contact. Furthermore, MIIT’s Division to Accompany New Investors overlaps with UzIPA’s Division of Foreign Investment Attraction. Both engage in identifying and supporting foreign investors and fostering connections and partnerships with local suppliers, leading to uncoordinated outreach efforts and duplication of services. Moreover, there is considerable disconnect when it comes to developing Investment Programmes, which are designed to identify short-term annual priority projects and provide support to investors for those projects selected. However, a notable limitation is the exclusion of UzIPA from the preparation of these programmes, with MIIT and MoF assuming primary responsibility. In practice, this results in UzIPA having limited involvement despite its mandate to promote investment.
Note: The table only shows the MIIT departments that are directly involved in investment promotion and facilitation activities in Uzbekistan, representing approximately one-third of all departments within MIIT.
Source: OECD compilation
The latest draft investment law does not clarify the institutional framework or mandate of UzIPA. While executive regulations implementing the law may still provide further guidance, the absence of explicit provisions defining UzIPA’s functions, such as investment promotion, facilitation, image-building, and investor support, leaves its institutional role insufficiently anchored in the legal framework. In the context of MIIT’s broad and expanding mandate, this lack of legal clarity could pose challenges for co-ordination and delineation of responsibilities, particularly in areas like investor services and facilitation.
The complexity of Uzbekistan’s investment promotion framework extends beyond MIIT and UzIPA. Sector-specific ministries, such as the Ministry of Energy, also play an active role in promoting investment within their domains. For example, the Ministry of Energy focuses on attracting FDI to energy infrastructure and renewable energy projects. While this expertise is valuable, it adds further layers of institutional responsibility, increasing the need for structured co-ordination among agencies (see Chapter on Promoting Green Investment).
Regional Development Agencies (RDAs) also participate in investment promotion and facilitation, especially for smaller projects valued under USD 5 million. RDAs collect data on regional investment opportunities, submit proposals to MIIT for approval, and support local-level investor servicing. While regional departments are able to tailor investment proposals to local economic conditions, this decentralisation can affect facilitation aspects, such as obtaining local licences and often leads to inefficiencies and delays, particularly when navigating tax, customs or accessing critical infrastructure if information exchange between different levels of government is weak (OECD, 2023[3]). Consultations with the government revealed that communication between national and regional governments is inconsistent and regional governments can be difficult to reach at times. RDAs play a role in facilitating investments, particularly for projects valued below USD 5 million, which remain under regional jurisdiction. Yet, according to authorities, the involvement of multiple administrative layers, from district offices to regional departments and then national agencies, has created more complex and prolonged processes that have led to slower decision-making and delays in project approvals and implementation. The reduction in national IPA staff stationed in regional offices, who were responsible for co-ordination, has exacerbated communication challenges between these agencies.
IPAs also typically work with a broad network of government bodies and the private sector, fostering essential relationships. Effective collaboration with ministries and public administrations is crucial for attracting large investment projects and resolving policy issues. Co-ordinating efforts at international and sub-national levels ensures consistent promotion of the country as an attractive investment destination, while engaging with the private sector helps identify and address barriers to foreign investment. According to the survey results, since 2019, Uzbekistan has expanded its institutional collaborations significantly, growing from interactions with just 6 institutions to now engaging with 27, aligning more closely with the 25 institutions OECD IPAs typically work with like the ministry responsible for investment and foreign affairs, embassies and local governments. This increase in co-operation, especially given the absence of collaboration with the private sector, civil society and academia, is a positive development. The agency now maintains five active relationships with these groups.
Although investment promotion and facilitation often involve various ministries and public agencies, the case of Uzbekistan is particularly multifaceted, and co-ordination needs to be optimal to respond to investors’ needs while also serving the government’s short and long-term national development objectives. Yet, co-ordination between the numerous entities involved in the investment promotion and facilitation process presents a significant challenge. Consultations with the OECD in 2024 indicated limited top-down co-ordination between the Cabinet of Ministers, MIIT and the IPA, resulting in fragmented policy-making and inconsistent strategic implementation, demonstrated by several unsuccessful attempts by MIIT to secure approval for an investment strategy after submission to the Cabinet of Ministers. This lack of coherence at the highest levels of government trickles down to operational inefficiencies, where strategic decisions are not effectively communicated or implemented across the different departments. Furthermore, horizontal co-ordination within the MIIT, particularly between the IPA and other departments, is also lacking. This disjointed approach also limits the RDAs' ability to effectively advocate for regional investment priorities, as the risk of receiving conflicting instructions, redundant tasks, or unclear responsibilities is greater. Consequently, without a coherent direction from UzIPA and MIIT, the RDAs face difficulties in presenting a unified regional investment strategy to potential investors which is an issue already present at the national level. A robust institutional co-ordination mechanism is crucial for carrying out seamless investment promotion and facilitation (Box 5.2).
Uruguay: Law 19.472 of 2017 outlines the different actors in the area of productive transformation and competitiveness and provides a basis for inter-institutional co-operation. In particular, the Inter ministerial Committee for Productive Transformation and Competitiveness (Gabinete Ministerial de Transformación Productiva y Competitividad), created in 2016, performs the overall oversight role and is supported by co-ordination teams composed of representatives of different Ministries and by the technical Secretariat (Secretaría de Transformación Productiva y Competitividad, or Transforma Uruguay). The role of the Committee is to provide the overall strategy and objectives, approve the national plan, set the guidelines, priorities and objectives for Transforma Uruguay, and evaluate its activities. Meanwhile, Transforma Uruguay and the co-ordination teams are in charge of articulating and co-ordinating specific projects and activities, overseeing the implementation of the Plan as well as monitoring and evaluation. Individual agencies are responsible for proposing and executing actions in the area of their responsibility and providing inputs for monitoring and evaluation.
Source: (OECD, 2021[4])
A clearer division of roles between UzIPA and MIIT is critical to addressing these challenges, and reconsidering the institutional structure for investment promotion and facilitation in Uzbekistan could lead to more effective outcomes. IPAs are often better equipped than ministries to handle specific activities such as shaping a country’s image, building investor relationships, targeting investors and providing them with services in during and after their establishment. Their flexibility allows them to engage a wide range of investors, from small investors to large corporations, offering tailored facilitation and aftercare services. In contrast, MIIT tend to focus on managing relationships with larger investors and addressing high-level policy and regulatory concerns, which can result in smaller investors being sidelined. These institutional strengths may better position IPAs to excel in carrying out operational aspects of investment promotion, while ministries may better excel in broader strategic and policymaking roles. Strengthened co-ordination mechanisms, such as shared CRM systems or formal agreements, could also help reduce redundancies and improve operational efficiency. The government could provide specific guidance on how MIIT and the IPA will co-ordinate their efforts in the forthcoming implementing regulations to the draft investment law, including delineating their respective roles in investment promotion and facilitation, specifically regarding the operation of the Investor Centre, addressing gaps in cross-institutional co-ordination and ensuring that the IPA’s functions are integrated into the broader national investment strategy.
5.2.3. Enhanced governance and overlapping activities require better resource allocation
Uzbekistan’s expanded institutional collaboration reflects the broader need for strong relationships within the government and the private sector, which are crucial for attracting investment and addressing business environment challenges. However, as UzIPA expands its network and faces growing demands, its governance structure, shaped by its legal framework and political context, becomes increasingly vital in how effectively it manages these relationships and resources. This governance framework, which includes legal status, reporting channels and managerial arrangements, significantly influences the IPA’s level of autonomy within the government, particularly in managing financial and human resources.
IPAs typically adopt various legal forms: a governmental body within a ministry, an autonomous public agency, a joint public-private entity, or a fully private organisation. Like most Eurasian IPAs, UzIPA functions as a government body within MIIT. Governmental IPAs show no consistent trend regarding the presence of a board: half have one while the other half do not (Figure 5.3). UzIPA currently functions without a board, yet, a board can provide independent oversight and strategic guidance from both the public and private sectors, and in some cases, inputs from civil society and research and academia. Several government-run OECD IPAs, such as those from Japan, Korea, Slovakia and the United Kingdom, have implemented boards to strengthen institutional oversight. Such a board could provide UzIPA with independent oversight, strategic guidance and a range of expertise from the public and private sectors, and other stakeholders, helping to establish a clear strategy and implement effective monitoring mechanisms that are currently lacking.
Source: OECD-IDB Investment Promotion Agency Survey (2018).
The allocation of resources across the four core functions varies among IPAs, influenced by their structure, context and objectives. Some functions can be more costly than others, as they are more personnel intensive, for example, as is the case for investment generation. Nevertheless, the resource allocation pattern of an IPA should be relatively aligned with its activities and is often tied to its mission statement and strategy, highlighting the importance of strategic orientation. More importantly, downward trends in resource allocation for IPAs may indicate a waning prioritisation of investment promotion activities in overall government strategies, organisational restructuring or strategic realignment between functions.
In Uzbekistan, resource allocation exacerbates existing co-ordination and efficiency challenges. The IPA faces a shrinking budget and limited resources, which is likely to severely impact its ability to fulfil its mandates (Figure 5.4). According to interviews conducted in the context of this Review, with inadequate funding and staffing, the IPA struggles to maintain its operations in investor facilitation and policy advocacy, which are essential for attracting and retaining investors. MIIT confirms that future changes in the IPA’s resources are uncertain as discussions about potential budget reinforcements are still ongoing and decisions will depend on government priorities. Yet, the lack of clarity in the amount and timing of resource allocation decisions makes objective-setting and planning of workstreams even more difficult for the IPA.
Source: OECD-IDB Investment Promotion Agency Survey
By reducing the IPA’s resources rapidly after its establishment, the agency has not been able to showcase its full potential when it comes to investment promotion and facilitation. In its early stages, an IPA needs adequate funding and personnel to build its capacity, establish networks, and develop a strong reputation among investors (Steenbergen, 2023[5]). Cutting resources prematurely weakens its ability to market the country, provide investor services, and manage projects, ultimately limiting its potential to generate long-term economic benefits. For example, under Presidential Decree No. 111 of 2023, the same year personnel were cut by an additional eight staff, the agency was tasked with operating a new Investor Centre, designed to function as a “single window” entry point for investors. The centre was intended to facilitate visa services, provide logistical support for negotiations and centralise key investor services. However, implementation has lagged due to lack of personnel and organisational capacity, remaining largely non-operational, despite its potential to serve as a strategic focal point for investor engagement.
More broadly, the sharp reduction in UzIPA’s staff, down nearly 60% since 2019, has occurred alongside MIIT’s expansion, with five new departments created during the same period. These departments have assumed many functions originally intended for the IPA, including investor generation, facilitation and post-establishment services. This shift in institutional balance has created redundancies, blurred responsibilities and raised concerns about the overall efficiency of Uzbekistan’s investment promotion framework. Rebalancing mandates and restoring UzIPA’s capacity, while allowing MIIT to focus on high-level strategy and policy co-ordination, could create a more functional and effective division of labour. Empowering UzIPA to act as the country’s operational lead on investment promotion, while preserving MIIT’s policy-making role, could streamline processes, enhance investor servicing and ensure greater alignment with national priorities.
5.3.1. Ambitious reforms have targeted both public administration and business procedures
A supportive regulatory framework that minimises administrative costs and promotes transparent, competitive markets is vital for attracting investors. Investment facilitation, beginning when investors express interest in a new market, involves addressing inquiries and removing potential obstacles and continues with aftercare support to sustain and encourage reinvestment in existing businesses (OECD, 2015[6]). Business climate reforms are crucial in enhancing the appeal, predictability, and efficiency of the business environment, namely by simplifying firm registration, minimising bureaucratic delays, and optimising licensing and permit processes. Streamlined regulatory procedures in various domains enable investors to navigate the whole investment cycle, fostering seamless transactions and bolstering investor trust. Effective policy advocacy, influenced by input from the business sector, plays a crucial role in recognising persistent issues and directing necessary related changes (De Crombrugghe, 2019[7]).
Uzbekistan has made considerable progress in this area since the launch of wide-ranging economic reforms in 2017. The initial phase focused on liberalising the monetary regime and easing currency restrictions, which marked a significant opening of the domestic market. While the country’s development strategy still includes broader social and environmental goals, in recent years the focus has shifted towards improving the business climate and modernising public administration. Flagship policy documents, such as the Uzbekistan 2030 Strategy and the 2022–2026 Development Strategy, outline a reform agenda that includes reducing government interference in private sector activity, decentralising state functions, and fostering public-private partnerships
At the operational level, more than 20 Presidential Decrees since 2018 have aimed to simplify business procedures and reduce administrative burdens. These reforms have been welcomed by the private sector. In a 2022 joint EU-OECD survey of investors in Uzbekistan, the vast majority of respondents reported improvements in the business environment—particularly in licensing and registration procedures, which had historically been major pain point (Figure 5.5) (OECD, 2023[8]). This positive response highlights the significance of ongoing reform initiatives and the significant progress achieved in the last five years in tackling ongoing obstacles to the local business environment while enhancing investor confidence.
As a percent of the total number of respondents
Source: EU-OECD Business Climate Assessment Survey in Uzbekistan (2022)
Over the last few years, processes for establishing a business in Uzbekistan have become relatively quick and effective, characterised by less bureaucracy and better-defined regulatory procedures. Uzbekistan attained a commendable score of 96.2 out of 100 in the "Starting a Business" category in the now discontinued Ease of Doing Business Index, placing it in the 8th position within the Europe and Central Asia group (World Bank, 2020[9]) At the same time, companies have indicated that there are outstanding obstacles regarding important elements of the business environment, namely in relation to competition policy, duplication of reforms, and execution (OECD, 2023[8]). Consultations in June 2024 confirmed these observations, adding that a complicated institutional structure for investment makes it difficult to interact with the right authorities when necessary. A cumbersome tax administration characterised by poor efficiency and complicated procedures for declaring taxes, including value-added tax (VAT) was also raised as a challenge for businesses. Other aspects of setting up a business in Uzbekistan also prove difficult to navigate, particularly for acquiring land permits which is difficult for foreign investors to apply for. Labour market legislation faces challenges due to unclear employment definitions, misalignment with international standards and restrictive regulations that hinder formalisation and adaptability in the labour market (Anderson, Ginting and Taniguchi, 2020[10]). These issues can impede competitiveness and growth prospects of enterprises operating in Uzbekistan. Resolving these concerns by implementing targeted reforms, particularly continuing to streamline licensing procedures and considering institutional changes, could further improve the business climate and attract more investment.
5.3.2. Digitalisation of regulatory procedures has been extensive
Significant endeavours have been undertaken to streamline and digitise the processes to establish businesses. According to the EBRD’s Index of Digitalisation, the country outperforms the region in online services and e-government participation, reflecting significant advancement on the digitalisation agenda (EBRD, 2024[11]). As stated by the government, around 50% of public services have been digitised, with plans to raise that figure to 80% (President of the Republic of Uzbekistan, 2023[12]). These changes made to the digitalisation of the business environment have been well-received and are useful for the private sector. Respondents to the 2022 EU-OECD business climate survey in Uzbekistan reported that the digitalisation of procedures was even more useful that the removal of redundant licences and permits (OECD, 2023[8]).
Corporate registration has been available online since 2017, and a reduced price is levied to encourage the adoption of eGovernment processes. Uzbekistan's business registration process operates on a "one-stop-shop" model, requiring the submission of all registration paperwork to unified centres for the delivery of state services to business entities. Businesses may now choose to register online via the "e-government" portal (https://new.birdarcha.uz) using a specialised electronic digital key. The procedure for online company registration using the electronic digital key is identical for both Uzbek nationals and foreigners. Consequently, foreigners are no longer obligated to personally register the firm with the Public Service Centre of the corresponding district, as was previously mandated (Baker McKenzie, 2021[13]).
The government has recently further simplified and digitalised the process for the issuance of business licences and permits. Consolidation of licensing regimes began in 2020, when 70 out of 266 licences and 34 out of 140 permits were abolished. The enactment of Uzbekistan's Law on Licensing, Permission and Notification Procedures (No. LRU-701 of 14 July 2021) has simplified the process of acquiring licences, permissions, and notification procedures by implementing a specialised electronic system. Presidential Decrees issued in 2022, 2023, and 2024 have further simplified the licensing regime by cancelling specific types of licenses and permits. Additional simplification measures should be implemented with adoption of the new Entrepreneurship Code, currently under development. The Code is expected to streamline and consolidate existing business legislation, define the rights and obligations of firms and clarify the process for opening and closing a business (OECD, 2024[14]).
Established under Presidential Decree No. 6044 in 2021, Uzbekistan's Licence Information System (https://license.gov.uz) was created to simplify and digitalise licensing and permitting procedures. Developed under the Ministry of Justice, operated by the Agency of State Services, and Ministry of Information Technology in co-operation the EU and United Nations Development Programme, the initiative aimed to reduce bureaucratic barriers and corruption in Uzbekistan's licensing processes. As of January 2021, the system had fully transitioned to digital operations, allowing businesses to apply for licences, submit required documents, and receive authorisations using QR codes, effectively replacing traditional paper-based methods.
The platform supports electronic payments and streamlines the process by adopting a one-stop shop approach, where agencies can independently gather necessary documents without further business involvement. This feature ensures quicker decisions and facilitates a more efficient review process by authorised bodies. In addition, the system incorporates remote compliance monitoring, public oversight of licensing decisions, and a risk analysis mechanism, improving regulatory control and transparency. To enhance accessibility, the Licence Information System is available via mobile applications, enabling users to apply for licences, access licence information, and search the licence register directly from their devices. The mobile app has seen widespread adoption, with over 3 million downloads. Since its launch, the system has processed more than 310 000 applications, significantly reducing costs for applicants and streamlining the overall process (Tskhakaia, 2024[15]). However, OECD consultations gathered mixed reviews from both government agencies and the private sector regarding the functionality of the system.
5.3.3. Reforms are not fully implemented, partly due to frequent and sometimes redundant legislative changes
The breadth of economic and social reforms has sometimes been emphasised more than the depth and quality of implementation or measurable outcomes. Presidential Decrees aimed at improving the business environment and advancing reform agendas are abundant. For example, since 2017, the government has issued nearly 23 000 legal and regulatory documents to support the 2017-2021 Development Strategy (World Bank, 2022[16]). However, frequent changes in legislation regarding reforms, licensing, and administrative frameworks create difficulties for implementing bodies, which struggle to stay updated with the latest guidelines and effectively co-ordinate when multiple institutions are involved (see also Chapter 2 on the Policy and Legal Framework for Investment). This is further exacerbated by limited government capacity due to ineffective institutional structures and high staff turnover, impeding progress on key reforms and affecting the quality of public services (EBRD, 2024[11]).
Overly complex and abundant legislation can cause delays for organisations attempting to comply with new regulations, placing additional pressure on them to constantly update practices, which in turn leads to higher costs and resource burdens. The rapid pace of legislative change has also challenged both domestic firms and public administration, creating uncertainty and undermining business confidence—a longstanding issue acknowledged by the OECD in 2020 and echoed by the World Bank and UNCTAD (OECD, 2021[17]; World Bank, 2022[16]; UNCTAD, 2019[18]). Current legislation continues to include vague or incomplete definitions and references, creating space for misinterpretation and, in some cases, enforcement difficulties for private businesses (World Bank, 2020[19]). There is a tendency for Ministries to over-use sub-legislative regulation rather than primary laws adopted by the Parliament, which has led to the adoption of a large swathe of regulations which were not subject to the ordinary legislative scrutiny applicable to primary laws (see Chapter on Investment Policy). This has led to a considerable redundancy in Uzbekistan's business reforms, particularly in areas such as licensing, registration and administrative procedures (OSCE ODIHR, 2023[20]). Business associations and investors have consistently expressed concerns about these issues in consultations held with the OECD in 2023 and 2024, further highlighting the need for more effective and streamlined legislative processes (OECD, 2023[21]).
These issues can be seen in several legislative acts. For instance, in a 2019 reform aimed at improving investment management, which called for the creation of a centralised database to track investment project implementation and investor appeals on an "Investment Portal" (PF-5643). While MIIT launched the portal, it is not fully operational, and key agencies like the IPA do not have access, creating gaps in data sharing. Addressing these issues will require regulatory bodies to provide stronger guidance and support, as well as establish a co-ordination mechanism for smoother transitions during legislative changes. Moreover, a robust monitoring and evaluation framework is essential to track reform implementation, identify redundancies, and ensure alignment with institutional capacity.
MIIT has initiated and developed a methodology to evaluate the investment environment across Uzbekistan's 14 regions and assess how state bodies are addressing business climate challenges. The methodology assesses two main aspects: 70% of the score evaluates investment potential based on factors such as labour, natural and financial resources, technological and innovative capabilities, infrastructure, and competitiveness. The remaining 30% assesses the efficiency of administrative processes, focusing on regulatory environments, institutions, and support mechanisms for businesses, as well as infrastructure, and available resources. These evaluations, conducted biannually since 2021, aim to promote transparency and identify areas for regional improvement. In 2024, the Investment Climate and Rating Department of MIIT took over the administration of the rating system with the aim of making the system cover a more comprehensive set of indicators measured and to facilitate the collection of data and information through MIITs direct representation in the regions. Relevant agencies will continue co-operating with MIIT to ensure co-ordinated data collection for certain specific indicators. MIIT will be implementing a new software and new indicators as they continue adapting the rating system to ensure a more comprehensive and detailed collection and sharing of indicators for better comparison of regional business climates. The information will continue to be included in the public reports on the findings, which have been shared by MIIT since 2022 to guide regional reform efforts.
One important initiative that aims to ensure consistent and co-ordinated improvement of the business environment and provide clear recommendations on necessary reforms takes place at the WTO, where over 120 members finalised a plurilateral agreement on Investment Facilitation for Development in July 2023. This agreement is development-oriented, aimed at encouraging national investment climate reforms and enhancing confidence in the global trade and investment system (Box 5.3). Following a 15-year hiatus, Uzbekistan resumed WTO membership discussions in 2020, leading to the preparation of an accession roadmap, submission of an updated Foreign Trade Regime Memorandum, and inclusion of WTO membership as a key objective in the 2022 Development Strategy of New Uzbekistan. In the context of its renewed engagement with the global economic system, Uzbekistan should also consider joining the Investment Facilitation for Development initiative to strengthen the role of FDI in its foreign economic policy, demonstrate its commitment to investment climate reforms, and guide the design and implementation of domestic measures to facilitate investment.
Initiated in 2017 by a consortium of developing and least-developed members of the World Trade Organization (WTO), the Joint Initiative on Investment Facilitation for Development (IFD) seeks to establish a global agreement that enhances the investment and business climate, simplifying processes for investors across all sectors. After years of discussions, formal negotiations began in September 2020. On July 6, 2023, participating members announced the successful conclusion of the Agreement's text. The focus is on increasing the involvement of developing and least-developed countries in global investment flows. With 126 members, the IFD is member-driven, transparent, and inclusive.
The Agreement includes the following topics:
improving the transparency and predictability of investment measures
simplifying and speeding up investment-related administrative procedures
strengthening the dialogue between governments and investors, and promoting the uptake of RBC practices by firms, including to prevent and fight corruption; and
ensuring special and differential treatment, technical assistance and capacity building for developing and least-developed countries.
The IFD Agreement aims to establish consistent global standards, reduce regulatory uncertainties, and create a favourable environment for investment. It will support domestic reforms based on shared commitments, sending a positive signal to potential investors. Developing and least-developed countries will receive the necessary support to implement and benefit from the agreement, promoting inclusive participation and sustainable development. The initiative does not cover market access, investment protection, or dispute settlement.
Source: www.wto.org
5.4.1. A strong vision for national development is present but the IPA’s role is unclear
Uzbekistan has a strong vision for national development, as reflected by its long-term strategies and economic programmes. The first comprehensive strategy in 2017, known as the "Strategy of Actions on Five Priority Areas of Development of the Republic of Uzbekistan (2017-2021)," followed by the Developmental Strategy 2022-2026 Resolution No. 72 of 30 December 2021, charts a long-term investment strategy through 2026 to attract foreign investment. MIIT operates under the strategic framework outlined in the ambitious "Uzbekistan-2030" strategy, which aims to attract USD 250 billion in investments by 2030 with a focus on technological advancements, infrastructure, and growth in other strategic sectors. These overarching strategies are supported by additional decrees to guide business and investment objectives. Resolution No. 292 of 04 September 2023 emphasises the implementation of Investment Programmes and the development of a supportive business environment, while Decree No. 111 of 21 July 2023 aims to optimise public administration within the investment and trade sectors. Together, these frameworks guide the MIIT in using analytical tools, such as gap analysis, performance scorecards, and inter-ministry secondments, to ensure alignment with national development goals.
MIIT has implemented an online system to monitor the national Investment Programme’s progress, in accordance with Resolution No. 16 of 16 January 2023. It outlines a six-stage process for forming a three-year Investment Programme, including drafting by relevant ministries, reviews by the Cabinet of Ministers, and monthly progress reports submitted by MIIT to both the Presidential Administration and the Cabinet of Ministers. While this encourages regular oversight and necessary adjustments at the highest level, it does not ensure co-operation with peer ministries and agencies, other than the Ministry of Economy and Finance.
Despite this robust strategic framework, the role of the IPA remains unclear and insufficiently integrated into these national strategies. While the MIIT, Ministry of Economy and Industry, Ministry of Finance, and other government bodies have clearly defined responsibilities in forming, implementing, and monitoring the Investment Programme, the IPA’s involvement is notably absent. For instance, in the 2023 Investment Programme, the establishment of a monitoring and evaluation mechanism was assigned to the MIIT and the Strategic Development Agency, without the inclusion of the IPA. This omission indicates a lack of integration between the IPA and other key institutions, which risk undermining efforts to create a unified and cohesive investment strategy. This disconnect reflects broader issues of weak cross-institutional co-ordination between MIIT and the IPA that result in fragmented efforts and inefficiencies for investors navigating Uzbekistan’s investment environment.
5.4.2. A strategic framework for investment promotion is absent
Uzbekistan's investment promotion efforts lack a comprehensive strategic framework, which is essential for guiding activities and ensuring image building and targeting functions are aligned with the country’s needs and development objectives. A comprehensive strategy provides coherence and direction, enabling IPAs to work more effectively and efficiently. Clear objectives within this framework help allocate resources wisely, establish key performance indicators (KPIs) for measuring progress, and communicate goals to stakeholders, thus fostering transparency and building investor trust. A well-defined investment promotion strategy enhances an agency's effectiveness by establishing specific, measurable goals and priorities (Box 5.4).
Uzbekistan establishes annual investment programmes aimed at fostering economic growth through the implementation of specific projects across various sectors. These programmes are formulated by MIIT and focus on aligning national priorities with investment opportunities. The process begins with the collection of proposals and culminates in the development of a draft Investment Programme, which includes key investment parameters, targeted projects, and anticipated economic impacts. These programmes emphasise domestic investment, public-private collaboration, and the efficient disbursement of funds from various sources, such as the Fund for Reconstruction and Development and other public financing mechanisms. While Uzbekistan's Investment Programme aims to drive economic development by prioritising projects in key sectors such as energy, infrastructure and regional development, they lack the flexibility and focus of a dedicated investment promotion strategy. These programmes are comprehensive, focusing on both domestic and foreign investments, but the absence of UzIPA’s involvement in their preparation is a notable limitation. MIIT and the Ministry of Finance and Economy assume primary responsibility for the development of these programmes, which restricts UzIPA's role despite its mandate to attract investments. Furthermore, the Investment Programmes tend to be rigid, with an emphasis on short-term project completion, which may overlook the dynamic nature of investor engagement.
The absence of a comprehensive strategic framework is particularly challenging in Uzbekistan's context, where the investment landscape has undergone various reforms to attract FDI and boost investor confidence. Currently, the lack of clarity in roles means that both the IPA and MIIT are involved in similar activities, such as investor outreach and policy advocacy, leading to potential inefficiencies and confusion among stakeholders. A well-defined strategic framework would clarify these roles, allowing each organisation to leverage its strengths and create a seamless, investor-friendly environment. Furthermore, a strategic framework would greatly improve resource allocation by prioritising key sectors and regions for investment. The government may consider using the forthcoming implementing regulations of the draft investment law to clarify the role of MIIT in implementing a unified state investment policy and for co-ordinating the actions of all relevant state bodies involved in regulating investment activities. This targeted approach would allow both the IPA and MIIT to focus on industries that align with Uzbekistan’s development priorities included within broader national strategies, such as energy, infrastructure, and technology, ensuring a more co-ordinated and efficient use of resources. This would, in turn, build stronger investor confidence, as potential investors would see a unified, strategic effort to attract investments in these priority sectors.
Countries can adopt different types of strategies to guide their government’s actions on investment. An investment promotion strategy and a comprehensive national investment strategy typically share common features that guide a country's efforts in attracting and facilitating FDI. These features include the presentation of national development objectives and key economic sectors, which help align investment activities with broader economic goals. They also outline key FDI trends to provide insight into the current investment landscape. Additionally, these strategies establish investment policy principles and values, as well as clear objectives for investment promotion and policy measures needed to achieve these goals. They highlight the country’s unique value propositions to attract investors, identify target sectors and markets, and outline the specific activities required to engage these areas. They also often include an analysis of the country's performance in international rankings, which helps to benchmark progress and identify areas for improvement.
IPAs must also be able to adjust their strategic orientations to more effectively meet both public and private sector needs, especially during changing economic situations. The COVID-19 crisis prompted IPAs to shift focus from marketing to aftercare, prioritising support for existing investors, particularly in hardest-hit sectors like SMEs and export-oriented businesses. For example, in the OECD area, IDA Ireland and Business Sweden incorporated more digital tools to maintain investor services. Additionally, IPAs such as Business Sweden and the UK Department for Business and Trade, among others, are enhancing their strategies to prioritise high-impact FDI projects, focusing on sustainable growth to aid economic recovery.
Source: (OECD, 2020[22]) and (OECD, 2020[23])
To enhance investment promotion, strategies should ensure that efforts align with national development objectives and recognise the unique contributions FDI can make beyond domestic investment. Prioritising sectors, countries, and projects should be based on well-defined criteria that align with Uzbekistan’s economic, social, and environmental goals. For instance, attracting FDI to sectors with high labour-absorptive capacity, such as financial services, healthcare, creative industries, and software, can maximise employment benefits and support broader economic objectives.
5.4.3. Prioritisation is mostly ad hoc and is not driven by set criteria
IPAs use prioritisation strategies to focus on specific sectors, countries, or investors to maximise the impact of their limited resources, which enables agencies to strategically target projects or investors that offer the highest potential benefits to the host economy, including job creation and technology and know-how transfer. Studies have shown that targeted investment promotion can significantly increase FDI inflows, with research indicating that promoting a particular sector can yield substantial returns in investment (Harding and Javorcik, 2011[24]). For this reason, prioritisation is a dominant practice in OECD countries, with all OECD respondents to the OECD-IDB survey confirming that they prioritise certain sectors or countries, or both, while three quarters prioritise specific investment projects and over one third specific investors.
Despite its overwhelming relevance for OECD IPAs, prioritisation efforts and sectoral focus for investment promotion in Uzbekistan lack clarity and coherence, reflecting the broader challenges in the country’s investment framework. Systematic application is absent, as different institutions and documents present varying lists of priority sectors. For example, the UzIPA website identifies 12 sectors for investment promotion on its website, including detailed project proposals and investment statistics. The Strategy 2030, which outlines Uzbekistan’s long-term development goals, highlights 13 key sectors, 10 of which correspond to UzIPA’s list. Additionally, the Working Group on Priority Sectors of the Foreign Investors Council has recommended focusing investment attraction on four industries. Between these bodies, four sectors (renewable energy, mining, agriculture, and tourism) are consistently identified as priority areas (Table 5.2).
The latest draft of the Investment Law removed provisions that previously defined “priority investment projects” by scale (small, medium, large, strategic) and provided a legal basis for sector prioritisation through presidential decrees. Similarly, a separate outline of priority sectors eligible for investment incentives was also removed from the draft law, which would have been an important distinction given that fiscal, financial and other incentives are used as a method of attracting investment in Uzbekistan and should therefore be aligned with sectors being targeted for investment promotion efforts. The change further obscures the legal foundation for prioritisation efforts and reduces transparency around how investment projects are selected and supported. As such, there is no unified, data-driven strategy that systematically guides investment promotion and sector prioritisation efforts across these key institutions.
Source: OECD compilation based on information from UzIPA and FIC websites, Strategy 2030 and Draft Investment Strategy (forthcoming)
While some variation between sectors prioritised by agencies is normal, it is important that the investment promotion strategy including prioritisation is developed through a whole-of-government approach, as investment priorities need to be aligned with other major policy strategies including trade, innovation and skills. A well-defined prioritisation strategy will guide resource allocation and investment promotion efforts in sectors most capable of driving economic growth, job creation, and technology transfer. The absence of a clear strategy has led to fragmented efforts by the IPA and MIIT, missing opportunities to focus resources on other sectors with the highest growth potential, such as ICT and pharmaceuticals, which are not consistently promoted despite their possibility for spillovers. A structured approach would enable agencies to concentrate on key sectors, develop expertise, and offer tailored incentives, making Uzbekistan’s investment opportunities more attractive in specific global markets.
In terms of sector and country mix selection, IPAs tend to adopt different strategies when selecting priority sectors and countries, reflecting diverse national goals and capacities. While many IPAs use a combination of both sectoral and country priorities, customising their propositions to align with specific country-sector opportunities, others focus exclusively on one dimension. For instance, SelectUSA prioritises 32 countries but does not target specific sectors. When it comes to selecting priority sectors, each agency varies in specificity and scope based on factors such as natural resources, domestic capabilities, and economic objectives. Priority countries are often chosen for their potential to provide high technology (58% of IPAs) or for alignment with sectors where the host country has competitive advantages or economic diversification goals (Figure 5.6). However, factors such as international investment agreements (IIAs), regulatory frameworks, and environmental or responsible business conduct considerations play a limited role in these decisions. Overall, the trends indicate a focus on leveraging domestic strengths and attracting investments that align with long-term competitiveness and economic diversification goals.
Source: OECD-IDB Survey of Investment Promotion Agencies (2018)
While UzIPA and MIIT express a desire to attract projects that contribute to economic development, as elaborated on through the OECD-IDB survey and in national development strategies, this ambition could be equipped with clear objectives and more specific criteria. Prioritising investment promotion efforts should be conducted according to a set of criteria in line with national development objectives. The decision to prioritise should follow an evaluation of the economy’s strengths, weaknesses, opportunities and threats, to ensure that it is based on carefully crafted economic rationales rather than political agendas. The Investors Attraction Department of MIIT uses unclear objectives of increasing economic resilience, diversifying the economy and growing productivity under the Uzbekistan 2030 Strategy to focus efforts on some sectors which have a significant impact on GDP. However, projects are not systematically evaluated based on how they align with Uzbekistan's long-term economic objectives, nor is there an established process for differentiating among projects that could have a high impact versus those that might yield marginal benefits. These are characteristics seen in other agencies’ successful prioritisation strategies (Box 5.5).
EDB Mauritius prioritises well-established sectors with a history of economic success and a competitive advantage, including real estate, education and accommodation and food service activities, which collectively account for over three-quarters of FDI inflows. The prioritisation extends to sectors with proven success in attracting investments and those where Mauritius holds a competitive edge due to factors like infrastructure or location, such as financial services and ICT, reflecting the strategic focus of the EDB.
The government has opened its prioritisation strategy to further develop infrastructure (by targeting renewable energy and freeports and logistics), industry and innovation (agro-industry, blue economy, life sciences and creative industries) as well as services and specialised sectors (healthcare, pharmaceuticals and the sports economy). While investment in Mauritius’ real estate sector has largely supported the economy and acted at a catalyst for sectoral investment in the past, the EDB has begun working to diversify investment directly through the promotion of smart cities. These cities offer substantial opportunities for local and international businesses to establish operations across various sectors, including ICT, seafood and logistics, knowledge services, light manufacturing, high-tech medical services, financial services and land-based oceanic industry. The criteria employed for determining priority sectors are predominantly rooted in economically focused market studies.
Source: (OECD, 2024[25])
Uzbekistan's investment promotion framework also faces challenges in systematically prioritising target countries and investors. While larger investors often receive VIP treatment upon meeting financial thresholds or investing in sectors deemed high value by the government (see Section on UzIPA’s investment facilitation services below), this practice is not part of a comprehensive strategy aligned with national development goals. Preferential treatment, such as appointing dedicated investment managers and streamlining processes, is limited to a small number of high-profile investors, resulting in inconsistent prioritisation efforts.
5.5.1. Investment attraction activities are extensive, but some undertakings are duplicated
Each core function of an IPA serves a distinct purpose, with image-building activities focusing on enhancing the country's visibility and branding it as an attractive investment destination. These activities are designed to create awareness and foster positive perceptions among potential investors about the country's investment environment. Image building, while accounting for only 18% of the average OECD IPA's total budget and 17% of its total staff, remains a critical function for most agencies. In fact, out of nine key activities, seven are undertaken by at least 80% of IPAs in the OECD, and five are implemented by over 90%. UzIPA carries out all these image-building activities, including both marketing activities and public relations events.
Every OECD IPA engages in marketing their country through websites and produces promotional materials such as brochures and investment guides, making these two tools the foundation of image-building strategies. A well-designed website serves as a cost-effective means to provide centralised, up-to-date, and essential information to a broad audience of potential foreign investors. It also conveys a professional and inviting investment climate. Conversely, the absence of an effective website could signal an unwelcoming environment to investors and may hinder investors who rely on this information to make informed decisions. Investment guides and brochures complement this by offering a more targeted approach, allowing agencies to tailor content to specific audiences while remaining more affordable compared to traditional advertising mediums. UzIPA overhauled its website in October 2024, replacing outdated information that had not been updated since 2021 and addressing previous shortcomings such as broken links, language barriers, missing critical information, and a lack of clarity about UzIPA's role in the investment landscape. The updated platform now provides comprehensive details on Uzbekistan's investment opportunities, including a sector-specific investment guides with detailed investment offers, significantly enhancing the country's image as an investment destination. The new website also includes numerous testimonials from successful investors, highlighting the ease of doing business in Uzbekistan and recommending it as a positive investment opportunity.
In addition to online presence, over 90% of IPAs in OECD countries organise or participate in public relations events abroad and at home, including general business forums, roadshows, trade fairs, and high-level missions featuring top government officials. For Uzbekistan, the Tashkent International Investment Forum, first held in 2022, has emerged as a prominent platform to showcase the country's investment potential, notably that, despite global economic uncertainty, Uzbekistan has demonstrated consistent growth and is transforming into a significant investment hub in Central Asia. The forum has also demonstrated that the country has taken decisive steps to improve its investment climate, gradually eliminating obstacles and enhancing the business environment.
By 2024, the Tashkent International Investment Forum had held its third annual event, with remarkable success in investment generation. The value of signed deals has nearly quadrupled since the inaugural forum, and participation has expanded to include representatives from 37 additional countries (Table 5.3). The forum has effectively showcased Uzbekistan's diverse investment opportunities across sectors, underscoring the country's strategic advantages such as its large and growing market of 37 million people, its strategic location between Asia and Europe, tariff-free access to the EU market for over 6 000 products, abundant natural resources, and competitive costs. Key sectors highlighted for investment include energy, infrastructure, food, textiles, agriculture, tourism, mining, digitalisation, construction materials, metallurgy, pharmaceuticals, healthcare, chemistry, automotive, electrical engineering, and electronics.
Source: UzIPA website
In parallel, UzIPA has also led the national investment campaign “New Uzbekistan: Big Country with Big Opportunities,” launched under Cabinet of Ministers Resolution No. 621 of 24 July 2019. The campaign is designed to build Uzbekistan’s image abroad and promote priority sectors through coordinated international outreach. In addition to hosting the Tashkent International Invest Forum, activities include targeted roadshows in strategic markets, active participation in global investment forums abroad, and integrated media coverage across multiple platforms.
While event organisation and attendance contribute to both image-building and investment generation, functions like handling investor enquiries and arranging one-to-one meetings are specific to investment generation. UzIPA carries out many of these activities, including intelligence gathering and direct contact with investors. Yet, significant redundancies exist between MIIT and UzIPA when it comes to some of these investment attraction activities. Not only are both entities responsible for organising investment forums, including the Tashkent International Investment Forum, but each also engages in generating investment proposals and targeting potential investors. In theory, these functions are well organised and comprise of a whole-of-government approach to addressing investment needs and comparative advantages between sectors and regions (Figure 5.7). Consultations undertaken by the OECD in 2024 revealed that, in practice, these functions are compartmentalised and do not use the necessary co-ordination to ensure that generation proposals devised by individual agencies or departments are not duplicated or that resources are pooled effectively to come up with such proposals. While UzIPA is intended to focus more on the direct facilitation and engagement aspects, MIIT also actively participates in similar activities, particularly regarding investment generation. Currently, UzIPA has generated over 300 investment proposals, with 250 having visibility studies and specific plans, many developed alongside local stakeholders.
Source: OECD compilation based on consultations conducted in June 2024.
Clarifying roles and ensuring each agency focuses on their strengths would enhance the overall investment promotion process. By establishing a more defined co-operation structure, with clear delineation of responsibilities, both agencies can complement each other's efforts, thereby improving efficiency and making investment routes more transparent, ultimately fostering greater investor confidence. UzIPA should adopt a more focused and prioritised investment promotion strategy to improve its effectiveness. Selection criteria for target sectors should balance the government's goal of diversifying the economy with leveraging Uzbekistan's existing strengths. Emphasis should be placed on emerging and green sectors such as the digital industry, renewable energy, and eco-tourism, which align with Uzbekistan's broader development goals. Prioritising sectors where foreign investments outperform domestic ones, particularly in productivity and innovation, such as chemicals and food processing, can be beneficial (see Chapter on FDI Qualities). Similarly, sectors like energy, transport services, and those that promote environmental sustainability and clean technologies, such as energy efficiency, should be prioritised. UzIPA should also target sectors that generate strong linkages with domestic firms, such as automotive, manufacturing, and electronics, to maximise FDI's positive impact on the local economy.
5.5.2. UzIPA’s facilitation services are expansive but under-resourced
Both UzIPA and MIIT play a role in investment facilitation, albeit in different capacities and with different types of investors. Through a range of specialised services, UzIPA ensures that investors are supported at every stage of their journey, from initial inquiries to the successful implementation of projects. New initiatives like the Investor Centre have expanded UzIPA’s practical assistance and facilitation services including activities like airport pick-ups, visa facilitation, and arrangements for negotiation spaces, ensuring that investors experience a seamless and professional welcome to the country.
Operated through the “Single Window” digital platform, it also aims to centralise and streamline investor services beyond initial assistance, providing a seamless entry point for registration, project submission, and service requests. This platform is already integrated with 17 government service portals, offering access to regulatory, licensing and operational procedures. Planned enhancements include multilingual functionality, an expanded investment project database, and interoperability with other national digital systems, further improving the efficiency, accessibility and transparency of investor services.
Beyond these digital services, UzIPA delivers a suite of facilitation services aimed at equipping investors with the tools and information needed to succeed. Central to this is the provision of comprehensive business information and conditions, where the agency offers detailed insights into Uzbekistan’s economic environment, regulatory frameworks, and market opportunities. This information enables investors to make informed and strategic decisions, ensuring their ventures align with the country’s business climate. Complementing this, UzIPA provides expert guidance in identifying and securing optimal locations and land for investment projects, helping investors navigate site selection processes and ensuring they find locations that meet their operational and strategic goals.
UzIPA’s functions on investment facilitation extend to addressing challenges that arise during the investment process. The agency adopts a proactive approach to issue resolution, ensuring minimal disruptions to investors’ operations and fostering confidence in Uzbekistan’s investment environment. Additionally, UzIPA offers sectoral analyses and investment reports, providing investors with in-depth knowledge of specific industries, emerging market trends, and opportunities for growth. These reports serve as vital resources for investors seeking to understand and capitalise on Uzbekistan’s dynamic economic landscape.
Recognising the importance of building relationships, UzIPA also facilitates strategic meetings with key stakeholders, including government officials and local business leaders. These meetings promote networking, collaboration, and the establishment of meaningful connections that are critical for the success of investment projects. Moreover, UzIPA tailors its services to meet the unique needs of each investor, ensuring personalised support for the effective implementation of their projects. Yet, UzIPA has raised the concern that insufficient funds significantly hamper its ability to carry out many of these functions, particularly the provision of more services offered under the Investor Centre.
To address these limitations and strengthen its facilitation role, UzIPA could establish an investment accelerator and SME support platform designed to identify, prioritise and accelerate high-potential investment projects, including those led by SMEs. The platform could operate through a structured process encompassing project intake, selection, tailored facilitation, investor matchmaking and targeted promotion. By integrating this platform with the Single Window system and linking SMEs to multinational enterprises through supply chain development programmes and a supplier database, UzIPA could provide more strategic facilitation services for high-potential investments, supporting their development and long-term impact.
Complementary efforts are also being undertaken by MIIT through the introduction of investment managers, a new initiative announced by the President in 2023. Operating under a newly created department within MIIT, managers are assigned to individual investors, report directly to the Minister, and work within a new system designed to streamline processes and enhance investment attraction. However, their effectiveness in policy advocacy is somewhat limited due to their selective focus. Investment managers primarily cater to investors who a threshold of investment over USD 10 million, which means that the interests of smaller investors or those not meeting specific criteria may be overlooked (Figure 5.8). This selective approach can narrow the scope of the provision of facilitation services and policy advocacy, potentially limiting the inclusivity of the government’s services and policies being developed.
Source: OECD compilation
5.5.3. Extensive ministry-led public private dialogue initiatives are leading reform agendas
Uzbekistan has made notable progress in enhancing policy advocacy, establishing more direct and responsive communication between the government and the private sector. A key initiative is the creation of an electronic platform that allows businesses to submit queries, track progress, and receive timely responses. This system improves transparency and accountability, while also helping the government identify and address common business challenges through centralised data collection. By streamlining communication, the platform plays a crucial role in improving the business environment and demonstrating how technology can enhance governance. Another high-level initiative is the annual dialogue between the President and entrepreneurs. Now in its third year, this platform addresses key business concerns directly, building trust and credibility. The government systematically collects and responds to inquiries from businesses, fostering a participatory approach to policy-making that aligns economic goals with the needs of entrepreneurs. This engagement not only strengthens trust between the government and the private sector but also ensures that policies reflect the real challenges faced by businesses.
At the provincial and local levels, the government holds regular in-person discussions with entrepreneurs, with the President and senior officials visiting different regions to address specific local challenges. This approach promotes collaboration between national and regional authorities, ensuring a unified investment strategy that aligns local needs with national economic goals. By improving co-ordination across all levels of government, Uzbekistan creates a more cohesive and attractive investment climate. The establishment of a working group to tackle the topics addressed in these discussions ensures that the process goes beyond formality, leading to concrete policy reforms. This assembly, comprising government executives, oversees progress and ensures that the commitments made during the deliberations are upheld. The ongoing interchange of input between the government and corporations ensures that policy advocacy continues to be a dynamic process, rather than a time-limited event. The integration of online meetings highlights the government's commitment to adaptability and inclusivity, allowing enterprises across the country, particularly those located in remote areas, to participate in policy deliberations. By using both face-to-face and online interactions, the government ensures that its efforts to promote policies are thorough and encompassing.
5.5.4. UzIPA can help address underrepresentation of small investors in policy advocacy
Several initiatives aimed at dialogue with large investors have been established over the last five years. The Foreign Investors Council was established in 2019 under the Presidency of Uzbekistan as an institutional forum for direct communication between the government and both foreign and domestic businessmen engaged in business or investing in Uzbekistan. The membership of this organisation consists of more than 50 major corporations from many industries and global financial institutions. With the President of Uzbekistan as the chairperson and the President of the EBRD as a co-chair, the FIC convenes yearly plenary sessions to assess significant advancements. These sessions are supplemented by interim meetings led by the Minister of Investment at least twice a year.
At a general level, the Council serves as a central point of contact for investors through the Committee for the Protection of Foreign Investors' Rights. An eminent characteristic of the FIC is its sector-specific working groups that focus on specific concerns rather than the general business environment, allowing the FIC to offer more comprehensive and accurate recommendations for each domain. Comprising representatives from both the business sector and government, working groups examine proposals from FIC members, do research, assemble analytical studies, recommendations, assessments, and summaries of viewpoints to develop comprehensive proposals for the FIC interim and plenary sessions. The groupings encompass a diverse array of industries, such as finance, energy, and agriculture, consequently enabling the FIC to effectively address the unique requirements of investors within each area. Through its emphasis on the complexities of specific industries, the FIC is able to provide customised suggestions that specifically tackle the distinct obstacles encountered by enterprises operating in various sectors.
Although Uzbekistan has made strides in promoting communication between the government and the business sector, small investors are routinely overlooked during public consultations, as the majority of efforts tend to prioritise major investors and corporations. Although venues such as the web site and dialogues among the President, ministries, and entrepreneurs facilitate communication, their main advantage is in the ability of larger enterprise to interact with greater effectiveness. Furthermore, the FIC consists of several major firms and concentrates on policy matters that predominantly impact these categories of investors. Small investors, characterised by their restricted ability and representation, frequently encounter difficulties in expressing their opinions and having their distinct issues effectively tackled. Integrating small investors into policy advocacy activities is essential to establish a more equitable business climate that allows all companies, irrespective of their size, to actively participate in and gain advantages from economic changes.
UzIPA can play a critical role in bridging the gap between small investors and the government’s policy advocacy efforts in Uzbekistan. While ministries have the advantage of direct access to decision-making, UzIPA's specialised focus on improving the overall investment climate enables it to better tailor strategies that engage small investors. By offering dedicated platforms and targeted initiatives for smaller firms, UzIPA can ensure that small investors are more involved in policy discussions and reforms. Additionally, the agency can facilitate inter-ministerial co-ordination, aligning the needs of both large investors and smaller businesses, creating a more inclusive and balanced approach to policy advocacy.
Unlike ministries, which often prioritise sector-specific regulations and development strategies, the IPA is designed to address cross-sectoral challenges, engage with both domestic and foreign investors, and provide a more cohesive, streamlined approach to investor relations. Its singular focus allows it to better advocate for broad policy reforms, navigate inter-ministerial co-ordination, and ensure that the business environment is shaped by investor needs, making it more agile and responsive than ministries with narrower mandates. However, a lack of resources has hindered the agency's ability to fully carry out its potential role in policy advocacy. Without adequate funding and support, UzIPA faces challenges in engaging stakeholders, conducting research, and implementing strategies that could attract investment and stimulate economic growth. It is crucial for the government to recognise this gap and provide the resources needed to empower UzIPA in promoting a more competitive and inclusive investment climate.
Despite Uzbekistan's progress in policy advocacy, a lack of co-ordination between various advocacy initiatives significantly undermines their effectiveness. Multiple channels, such as electronic platforms, presidential dialogues, and regional meetings, are in place to foster communication between the government and the business community. Yet, these efforts often operate in silos, with the Ministry, IPA, and other bodies working independently rather than in a unified, co-ordinated manner. This fragmentation leads to overlapping efforts, missed opportunities for synergy, and gaps in addressing cross-sectoral challenges, particularly for smaller businesses. Effective policy advocacy requires a cohesive strategy that integrates efforts across all levels of government and includes diverse stakeholders, ensuring that policies are more comprehensive, streamlined, and reflective of the entire business ecosystem (Box 5.6).
Business France's policy advocacy process is structured as a year-long cycle, involving multiple stages aimed at improving the business environment in France. The process begins with the aftercare and investor facilitation services team, which engages directly with investors to identify bottlenecks in the business environment. This team also provides assistance in solving issues and supporting reinvestment projects. The identified issues are subsequently passed to the policy advocacy team, which conducts an analysis of these bottlenecks, evaluates the potential impact of policy reforms, and prepares a set of recommendations for further action. These recommendations are then presented to the French Government, which engages in discussions with CEOs to gather feedback and prioritise necessary reforms. Based on this input, the government determines new measures to enhance the business climate, and publicly announces these decisions. The process concludes with media communications and the implementation of business reforms, followed by an assessment of their impact. This cyclical process ensures continuous feedback and improvements to the investment landscape in France.
ICEX-Invest in Spain’s business climate barometer ICEX-Invest in Spain produces an annual report on the “Barometer of the Business Climate in Spain from the Perspective of Foreign Investors”. The report is based on responses from over 500 companies to a survey on their experience as foreign firms in Spain and on their future prospects. Survey responses allow the IPA to identify both strengths and weaknesses in the Spanish investment climate. The report aims to reflect the positive aspects highlighted by surveyed companies but also to stress the efforts that are needed to improve its weaknesses. This survey contains a series of questions that address the main business climate areas and reflect the most pressing concerns for foreign investors. The questions asked relate to their prospects in Spain, including investment, employment and exports. The survey also seeks their opinion on issues such as the labour market, taxation, human capital, quality of life, infrastructure, costs, financing, innovation and the size of the market. ICEX-Invest in Spain enquires on the reasons for settling in Spain and on the measures that they perceive as necessary to increase investment. ICEX then uses the data collected to conduct analysis on the strengths and weaknesses in the Spanish investment climate. It also performs some firm-level analysis to understand better the characteristics and specific needs of foreign firms, depending on their sectors and countries of origin.
Source: Business France, July 2019; ICEX-Invest in Spain, July 2019; (De Crombrugghe, 2019[7])
5.5.5. Fostering linkages with local businesses can help capitalise on investment spillovers
Fostering linkages with local businesses can help capitalise on investment spillovers by facilitating technology transfers and innovation, especially through the creation of local supplier relationships. MNEs often bring new technologies into recipient economies, and FDI can create both direct and indirect jobs through backward and forward linkages with small and medium-sized domestic companies. This can enhance human capital by disseminating new skills, know-how, and management techniques, benefiting both MNE workers and local firms acting as suppliers. Due diligence is critical when MNEs engage with local suppliers to ensure compliance with international standards, mitigate risks related to human rights, environmental sustainability, and governance, and support sustainable development goals. Proper due diligence practices allow MNEs to enhance supplier capabilities and ensure alignment with corporate social responsibility goals, further deepening the benefits of local spillovers (see chapter on responsible business conduct). Investment promotion efforts by governments aim to attract FDI that aligns with these practices and public policy objectives, such as job creation, productivity growth, green investment and fostering local business linkages. A key element of FDI’s value lies in its spillover potential—the productivity gains that result from the diffusion of knowledge and technology from foreign investors to local firms and workers. Government policy and programmes play a crucial role in maximising these spillovers. Governments act as providers of information, facilitators, and regulators, all of which are necessary to generate backward linkages and local supply chains. Creating a favourable investment climate for local firms is just as important as doing so for foreign investors. Well-targeted programmes to build capacity and competitiveness among domestic firms can further enhance these outcomes (OECD, 2022[26]).
Despite the many vital activities carried out by the IPA and MIIT, there are gaps in their mandates, particularly regarding initiatives that support sustainable development. Specifically, Uzbekistan lacks linkage and cluster programmes that could maximise the local impact of investments. Clustering related sectors can boost productivity and innovation by promoting resource sharing and collaboration, which in turn can lead to employment generation and increased investment in research and development. Though these services are growing in availability, IPAs often collaborate with strategic partners, such as chambers of commerce and industrial zones, to offer an integrated service portfolio to investors. In Uzbekistan, no such programme exists, showcasing a missed opportunity to boost the economy’s productivity (Table 5.4).
Note: Light blue colour means that the country has the business support programmes.
Source: OECD-IDB Survey of Investment Promotion Agencies (most recent years available).
Linkages between international investors and domestic enterprises integrate local firms into global supply chains, facilitating technology transfer. Uzbekistan currently lacks a centralised government database of local suppliers, leaving the landscape fragmented with private entities providing supplier directories. The Chamber of Commerce and Industry, overseeing 13 sectoral associations, maintains a local supplier database, but it is not publicly accessible which limits foreign investors' access to local partners. In response, the Chamber is creating an open platform to allow foreign businesses to easily connect with local suppliers, potentially improving investment relations and supply chain integration.
While private sector and business associations play a vital role in facilitating linkage programmes, IPAs are ideally positioned to lead these efforts, but they sometimes lack the necessary resources to offer a comprehensive aftercare programme for investors. Although matchmaking services are available, cluster programmes, capacity building, and local recruitment assistance are less commonly provided. When such programmes are implemented, they typically involve collaboration between chambers of commerce, industrial zones, and public administrations. To strengthen Uzbekistan’s economic framework, UzIPA should develop a robust aftercare programme that includes cluster development, matchmaking, and training initiatives. Such a programme, established alongside other government agencies and private associations, could promote sustainable growth, boost local workforce development, and enhance the integration of domestic firms into global supply chains. However, this would require reinforcing UzIPA’s human and financial resources to manage the additional activities effectively.
Monitoring and evaluation (M&E) allows governments to assess the efficiency of public actions, ensures that objectives are met both in quality and timeliness, and drives strategic orientations based on that information. To ensure impact, IPA managers must establish clear objectives, define KPIs, and systematically monitor both employee and activity performance. An effective M&E system supports strategic decision-making by providing evidence on which activities yield the best results, enabling IPAs to reallocate resources, adjust their offerings, and enhance overall effectiveness. An inclusive M&E strategy for investment promotion and facilitation is essential for aligning government efforts with broader economic objectives and ensuring that investment attraction and retention efforts are effective. Such a strategy, which can be a standalone approach or a part of a wider investment promotion strategy, allows for ongoing evaluation of the impact of investment policies, helping to identify inefficiencies and service delivery gaps while tracking the effectiveness of promotional activities. By leveraging data-driven insights, the government can make timely adjustments to improve outcomes, adjust targeting measures, increase transparency, and maintain competitive investment incentives (Sztajerowska, 2019[27]).
5.6.1. A systematic monitoring and evaluation strategy is absent, affecting the IPA’s orientation and harmonisation of activities between agencies
UzIPA currently lacks a comprehensive M&E strategy, limiting its ability to measure the impact of its investment promotion and facilitation efforts. In OECD countries, IPAs typically implement robust M&E systems to assess the performance of their agency, producing detailed annual or quarterly reports on both financials and activities. These reports are often made publicly available, fostering transparency and accountability about the agency’s performance in achieving investment targets. While UzIPA has made strides by publishing annual reports since 2022 and conducting quarterly internal activity reports, there is a noticeable absence of systematic data collection on key indicators, which can hamper meaningful reporting and limit the agency's ability to set and adjust priorities. Additionally, although UzIPA has begun issuing annual work plans as of 2023, these plans fall short of including specific, measurable targets, making it difficult to assess performance and make necessary adjustments.
A comprehensive M&E system would not only enhance UzIPA’s effectiveness but also improve co-ordination with MIIT, which has its own system for collecting and monitoring indicators, by addressing the overlap in activities and responsibilities between the two institutions. Such a system must also include mechanisms for generating feedback, which informs management about identified issues and suggests corrective actions, such as adjusting strategic goals or reallocating resources. This feedback loop contributes to institutional learning by formalising performance insights and enabling continuous improvement (OECD, 2019[28]). According to the OECD-IDB survey, 71% of OECD IPAs not only respond when their targets are unmet but also act when they detect irresponsible or problematic behaviour from investors (Figure 5.9). Corrective measures may include revising strategies, reviewing internal operations, establishing improvement plans, and, in some cases, facing financial consequences or government intervention if performance objectives are not achieved.
Source: OECD-IDB Survey of Investment Promotion Agencies (most recent years available)
The lack of a structured M&E strategy means both agencies often operate in isolation, resulting in duplicated mandates, inefficiencies and a lack of information sharing. This is particularly problematic for processes like policy advocacy, which require a cohesive approach to gathering and analysing insights from investors and stakeholders. For example, MIIT collects critical investor information that is not consistently shared with UzIPA, limiting the agency’s ability to tailor its initiatives and set objectives that respond to investor needs. Furthermore, the absence of a shared information system between the two entities results in fragmented data, which impedes collaboration and leads to less efficient activities.
5.6.2. Strong tracking of key performance indicators could help Uzbekistan tailor prioritisation strategies and ensure informed decision-making
Developing and tracking key KPIs is a crucial element of a successful M&E strategy, as it enables better prioritisation of investment sectors, regions, and projects. Well-defined KPIs help determine, on the one hand, the extent to which the agency performs in attracting FDI, and, on the other hand (if more sophisticated KPIs are utilised), how investment projects contribute to essential goals such as job creation, technological advancement, regional development, and economic diversification. For example, using KPIs that focus on these areas would allow UzIPA and MIIT to direct their resources toward investments that generate long-term economic benefits, ensuring that they are targeting the right types of investors and projects. Once a clear investment promotion strategy is established, systematically tracking these indicators will be key in adjusting shared prioritisation efforts between UzIPA and MIIT. These metrics will also help evaluate whether their strategies are successfully driving investments toward critical sectors such as renewable energy, information technology, and manufacturing, which are vital for Uzbekistan’s sustained economic growth.
In addition to prioritisation, KPIs play an important role in monitoring and evaluating the efficacy of IPAs.. By regularly tracking performance metrics, both UzIPA and MIIT could assess how well they are meeting their targets and identify areas for improvement. This is particularly critical for ensuring that resources are used efficiently and that investment promotion efforts are delivering measurable results. For example, KPIs can assess how quickly investment proposals are processed, the rate of conversion from investment leads to active projects, or how well aftercare services support investor satisfaction and retention. Monitoring such metrics provides ongoing feedback, allowing for timely adjustments to strategies and operations, ensuring continuous improvement in performance.
IPA performance indicators can be categorised into two main types: output indicators and outcome indicators, reflecting the dual objectives of M&E. Output indicators typically track internal agency metrics such as the number of investment projects facilitated, client satisfaction, and the number of assisted firms. These indicators measure the effectiveness and efficiency of an agency’s activities, from inputs and processes to final results. On average, OECD IPAs track around 4.9 output indicators, focusing on data related to investment projects, investing firms, and client satisfaction. UzIPA, by comparison, tracks only four output indicators, focusing on response times, replies to requests, time taken to organise visits, and client satisfaction, leaving many key areas of performance unmonitored (Figure 5.10, Panel A). Without a broader set of output indicators, it is difficult to fully evaluate the agency’s effectiveness and identify bottlenecks in service delivery.
Note: Indicators used by UzIPA highlighted in light blue
Source: OECD-IDB Survey of Investment Promotion Agencies (most recent years available)
In contrast, outcome indicators focus on broader policy objectives, assessing the economic benefits generated by IPA activities. Among OECD IPAs, outcome indicators commonly include job-related metrics (tracked by 88% of agencies) and FDI value (tracked by 81%), with an average of 4.8 outcome indicators monitored. In Uzbekistan, however, UzIPA only tracks indicators related to the country’s image and business climate reforms, neglecting more common outcome data such as total FDI value, job creation, innovation, R&D (tracked by 53% of OECD IPAs), and regional development (41%) (Figure 5.10, Panel B). These outcome indicators often rely on data provided by firms, highlighting the importance of strong co-operation between the IPA and businesses. Currently, UzIPA does not formally request data from companies on output indicators, which presents a significant challenge in evaluating the broader impact of its activities due to the lack of detailed information.
Moreover, while standard FDI metrics like job creation and total FDI inflows are widely used, more complex indicators related to innovation, exports, wages, regional development, sustainability, and responsible business conduct are less frequently applied (see also Chapter on Responsible Business Conduct). For example, while innovation and R&D are priorities in Uzbekistan’s development strategies, relevant metrics are not being tracked, making it difficult to assess progress in these areas or how UzIPA can strengthen its efforts to attract investments in these high-value sectors.
Incorporating more specific indicators, such as sustainability-related KPIs, would complement the broader prioritisation and monitoring efforts by ensuring that investments align with both national and global goals, such as the SDGs. For example, other countries like Czechia and Estonia have integrated sustainability into their performance metrics, prioritising projects that contribute to nature conservation and regional development. Similarly, in Southeast Asia, the Philippines prioritises projects that contribute to nature conservation and coastal protection, while Indonesia tracks the geographical distribution of FDI, ensuring that investments support regional development outside the main island of Java (Figure 5.11).
Note: ASEAN Member States refers to Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Viet Nam.
Source: OECD survey on IPA Monitoring & Evaluation and Prioritisation.
These KPIs would allow IPAs to track not only the economic impact of investments but also their contributions to environmental sustainability, social inclusion, and long-term development. Implementing similar sustainability focused KPIs in Uzbekistan would enable the country to guide investments toward generating both economic and environmental benefits, while also addressing development priorities across various sectors and regions, as is done in other countries (Box 5.7).
KPIs also aid in transparent reporting and accountability. Regularly reviewing and publishing performance data can help the government, private sector and civil society understand how well UzIPA and MIIT are performing in meeting their investment promotion goals. This transparency builds trust with investors and signals that Uzbekistan is committed to making data-driven decisions in its investment promotion activities. Moreover, KPIs enable comparisons with international best practices, allowing Uzbekistan to benchmark its performance against other countries and identify areas for improvement.
To fully leverage the benefits of these KPIs, Uzbekistan should ensure that data collection and sharing mechanisms are robust, standardised, and transparent. Harmonising methodologies for tracking and reporting across government agencies will enable better co-ordination and more effective decision-making. It will also help reduce information silos, ensuring that all stakeholders have access to the same data and can make informed decisions. A centralised database for KPI monitoring could facilitate this process, allowing for real-time tracking of both economic and sustainability indicators. Such a system would also make it easier to evaluate the success of investment policies and make necessary adjustments.
IDA Ireland rolled out a new CRM platform in 2022 as part of the agency’s Digital Transformation Programme. This platform was designed to increase IDA’s efficiency in client engagement and enhance its abilities in client targeting and pipeline development. In addition to tracking basic KPIs like most OECD IPAs, IDA Ireland consistently tracks various sustainable and granular performance and impact indicators. The agency employs a comprehensive data collection strategy for monitoring and evaluation, with a specific focus on innovation, export, and regional development indicators. It conducts surveys for its own clients and collaborates with the Department for Enterprise, Trade and Employment (DETE) to collect data of a wider range of foreign companies through combined surveys. This partnership allows IDA to efficiently access a large pool of verified data. It also relies significantly on project data to address challenges related to data availability, calculating metrics such as R&D expenditures, training and talent development and corporate social responsibility engagement in the investment projects it assists.
IDA Ireland has explicitly identified increased productivity and innovation support as a strategic priority. The agency utilises R&D expenditure as a key metric in determining the prioritisation of specific investment projects. By amalgamating industry-level FDI and R&D expenditures per unit of value added into a single indicator, IDA Ireland assesses whether sectors receiving larger FDI shares exhibit higher or lower R&D intensity. This metric serves a dual purpose by not only informing prioritisation decisions but also functioning as a tool to retrospectively evaluate the effectiveness of the prioritisation strategy and overall work of the agency. The systematic recording of these applications in the CRM system over time provides a comprehensive view of the IPA's impact on Ireland's overall investment promotion and facilitation strategy, aligning with broader economic development goals. Furthermore, the agency keeps track of the number and scale of investment projects in various regions. These indicators undergo monitoring through surveys conducted by IDA Ireland’s parent ministry, enabling a holistic assessment that considers both short-term direct effects and long-term indirect effects of FDI. While ensuring a thorough evaluation, there exists a potential risk of emphasising short-term, direct effects at the expense of fully capturing long-term and indirect impacts.
Source: Sztajerowska and Volpe Martincus (2021[29]); IDA Ireland Annual Reports 2017-2023.
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