Emerging ICT Services HUB in the East - Population, politics, and economics

Uzbekistan is located between two major rivers, the Syr Darya and the Amu Darya in Central Asia, and it is one of the two double landlocked countries. The country is the 56th largest globally by area with its 447,400 square kilometers. (https:/ /www.countries-ofthe-world.com/ largest-countries.html)

Although 80% of Uzbekistan is a sandy desert, Fergana Valley is also located here. That is the most desirable agricultural land and climate in Western Asia. The mountains of the southeast and northeast are an extension of the Himalayas, its highest point in the country is the 4,301 m tall Adelunga Toghi. And the far west of the country is dominated by vast lowlands, the Amu Darya River valley, the Ustyurt Plateau, and the southern half of the Aral Sea. There are two other major lakes, Lake Ayddrkul and Lake Sarykamish. (https://www.worldatlas.com/maps/uzbekistan)

The Republic of Uzbekistan is divided into 12 administrative regions (see page 33), one autonomous republic, and one independent city, Tashkent, the capital, the largest and most populous city in Central Asia. In 2023, its population was approx. 2,999,500 (https://stat. uz/en/press-center/news-of-committee/42451-toshkent-shahridoim-iy-aholisi-sonining-taqsimlanishi-4.)

There are currently 11 airports in Uzbekistan, and six of them are international: Tashkent, Samarkand, Bukhara, Urgench, Termez, and Navoi airports. (https://www.uzbekistan-airlines.de/?page_id=109) The total length of Uzbekistan's railway network is 6.500 kilometers (Uzbekistan ICT Book by IT Park, p19), the public roads are 183,000 km, and 42,500 km from them are the major highways. (https://dlca. logcluster.org/display/publicDLCA/2.3+Uzbekistan+Road+Network)

Uzbekistan is generally safe for visitors. Uzbeks are friendly and hospitable, and small talks with a cup of tea are part of their culture.(https://www.worldnomads.com/ travel-safety/central-asia/uzbekistan/crime-and-laws).

Among 190 economies, Uzbekistan is ranked 69 in the Ease of Doing Business, according to the World Bank ratings in 2020. The country rose by 78 positions in 2012. When it comes to starting a business, Uzbekistan has the upscale 8th place.

So, to start a company, it is one of the most accessible place in the world. Non-resident foreigners should open an IP OOO, a special kind of LLC. The starting capital must be at least 400 million Uzbek Soms - about 30.000 EUR. (https://www.usemultiplier.com/uzbekistan/company-registration)

Population

By population, the country ranked 43rd in the world (https://www.worldometers.info/demographics/ uzbekistan-demographics/). In 2024, with its estimated 35,163,944 citizens, it was the most densely populated country in Central Asia. However, this population is very young, and the median age was 27 years in 2023.

Uzbekistan’s population growth is slowing down, but still nearly three times greater than Europe or Central Asia’s population growth in the same period. In 2023, 49% of the population had been urban (https://www. worldometers.info/demographics/ uzbekistan-demographics/#urb), but its level is declining because the urban population is growing slower than the rural population. (Uzbekistan - World Bank Documents p3)

By ethnicity, the majority (80%) are Uzbeks, about 10% are from other Central Asian countries, and the remaining 10% are Russian and other Slavic ethnic minorities. (Uzbekistan ICT Book by IT Park, p 8) The nation is 88% Muslim, 9% Eastern Orthodox, and 3% other faiths. (https://en.wikipedia.org/wiki/Uzbekistan#Demographics)

Politics

The Republic of Uzbekistan is a presidential constitutional republic. (https://en.wikipedia.org/wiki/Government_of_Uzbekistan) Between 1924 -1991, the Uzbek Soviet Socialist Republic was created as one of the constituent republics of the Soviet Union, led by the Soviet Communist Party. In 1991, Uzbekistan declared independence from the Soviet Union. There have been six elections since then. The latest was in July 2023, with an 80% voter turnout. The President now is again Shavkat Mirziyoyev, who can continue and extend his reform campaign and improve foreign trade and investment. (https://en.wikipedia.org/wiki/2023_Uzbek_ presidential_election)

The current political system is far from democratic, but since 2016 there has been the "Quiet Revolution" led by the President and its' reforms. There are no social disturbances, and the exchange system has been unified. (https:// asiasociety.org/switzerland/ episode-2-closer-look-uzbekistan)

Today, Uzbekistan is a new market attracting millions of dollars from foreign investors, opening its doors after long years of isolation and an authoritarian regime, setting up immense business opportunities, and a big market with hardworking people with a 99% literacy rate. (Uzbekistan ICT Book by IT Park, p 6)

The country has been an active member of the Commonwealth of Independent States since 1991, the United Nations since 1992, the Euro-Atlantic Partnership Council (EAPC), Partnership for Peace (PfP), and the Organization for Security and Co-operation in Europe (OSCE). Uzbekistan is also part of the Organisation of Islamic Cooperation (OIC) and the Economic Cooperation Organization (ECO).

The state is a member of the Shanghai Cooperation Organization (SCO) and hosts the SCO's Regional Anti-Terrorist Structure (RATS) in Tashkent. In addition, Uzbekistan joined the new Central Asian Cooperation Organisation (CACO) in 2002.

The country also applied for the World Trade Organization membership and received observer status, but they are not a member of the Organization yet. In 2006, UNESCO presented an award for Uzbekistan's preservation of its rich culture and traditions to showcase the improving relationships between Uzbekistan and the West. (https://en.wikipedia.org/wiki/Uzbekistan#Foreign_ relations)

2. Demographics and languages

Uzbekistan's population is growing at a steady pace. The current population is 33.56 mln people, and the growth rate is currently 1,58%, which decreased from 1,66% (2016). The fertility rate in Uzbekistan is 2.43 births per woman, and the median age is 27.8 years, allowing the population to continue to grow. (https:// worldpopulationreview.com/ countries/uzbekistan-population)

The population's 45,68% is between the ages of 25-54, and the life expectancy at birth is 75.03 years (male: 71.98 years, female: 78.25 years). 50.4% of the total population lives in urban areas, where the drinking water source is 100%. School life expectancy for males is 13 years, and 12 years for females. About 88% of the population are Sunni Muslims, 9% are Eastern Orthodox, and 3 % are others. (https://www.indexmundi.com/uzbekistan/demographics_profile.html)

Uzbekistan is diverse and highly multilingual. Thirty-two of these languages are listed on Ethnologue. com, but over 100 of them are spoken across the country. (https:// u.osu.edu/uzbekistan/language/)

During Soviet times, Russian was the mandatory language of government and instruction. The official language became Uzbek in 1995, and now 74.3% of the population speaks it. It is fascinating that Uzbek was written for centuries in Arabic. Between 1920-1940, they started to use Latin instead, and after 1940, Cyrillic letters. The Roman alphabet came back on signs and printed matter since the government made it to the official alphabet in the late 1990s. (https://factsanddetails.com/ central-asia/Uzbekistan/sub8_3d/ entry-4699.html)

Today still some Uzbeks use Russian as primary language, but about 86 % of the population only use Russian as second. However, at present, a large percentage of school-going children have zero proficiency in the Russian language in urban centers (https://w w w.worldatlas.com/ a r t i c l e s / w h a t - l a n g u a g e s - a re - spoken-in-uzbekistan.html).

Tajik, Kazakh, Korean, Armenian, Tatar, Karakalpak and Turkish are other widely used languages in the country. It is pretty natural for most citizens of Uzbekistan to speak two or more languages. Schooling is primarily offered in Uzbek and Russian, and from the first grade, English is taught as a foreign language. Many young people speak some English, but it is not yet a daily language in Uzbekistan. (https://u.osu. edu/uzbekistan/language/)

3. Economy and trade

Uzbekistan's economy grew by 7.4 per cent in 2021, and it was led by strong industrial and services growth. Before the war in Ukraine, the estimated growth was about 6 % for 2022, and proceeded in 5.7%. The growth slowed due to the crisis and the collapse of Russia's economy, on which Uzbekistan strongly depends, and resulted in 5,5% in 2023. (https:/ /www.worldbank.org/en/country/ uzbekistan/overview#economy)

The country is 12th globally in mining; with around 100 tons of gold annually, fourth in the world. In addition, Uzbekistan is one of the world's leaders in the range of coverage of other minerals like uranium (ranked seventh in the world), copper, phosphate, molybdenum, etc. Only 20% of Uzbekistan’s territory has been explored, leaving vast potential mineral resources yet to be evaluated. (https://www.dentons.com/en/insights/newsletters/2022/january/ 17/dentons-global-mining-guide/ dentons-global-mining-guide - 2022/uzbekistan)

The Uzbek national gas company, Uzbekneftegas, ranks 11th in the world in natural gas production, and the country is also significant in cement production.

The growth of investments in fixed assets increased significantly from 3.3% in 9 months of 2022 to 11.8% in the same period of 2023. (https:// review.uz/en/post/infografi karazvitie-ekonomiki-uzbekistanav-yanvare-sentyabre-2023-g)

We have to mention the country's agriculture, which employs 26% of Uzbekistan's labor force and contributes about 25% of its GDP. The country's principal crops are cotton and grain, but eliminating price controls and quotas will facilitate a shift to fruit and vegetable cultivation.

In 2020, approximately 8.4% of Uzbekistan's external earnings were from exported agricultural products (2022). The government hopes to double farmers’ income and ensure a minimum 5% annual growth of agriculture in 2022- 2026 through development programs, application of advanced scientific achievements, digitalisation, and new technologies. (https://www.trade.gov/countrycommercial-guides/uzbekistanagricultural-sectors)

In 2022, the country’s major trade partners are Russia, 18.6%, China, 17.8%, and Kazakhstan, 9.2%. (https://www.trade.gov/countrycommercial-guides/uzbekistanmarket-overview)

The fiscal deficit increased to 5.7% of GDP in H1 2023 from 4.1% in H1 2022. Despite these fiscal challenges, there has been progress in poverty reduction. The poverty rate fell to 14% in 2022, down from 17% in 2021 (using the national poverty line).

The unemployment rate for the period of Jan-Sept 2022 was 8,6%, and returned to the pre-pandemic level of 9 per cent. (https://stat.uz/ en/press-center/)

Read the full market overview here: https://www.outsourcing-destinations.org/portfolio/outsourcing-destination-guide-uzbekistan/