Market Access Series 2020-21: The Republic of Uzbekistan
In order to promote Pakistan’s trade with its non-traditional trading partners, the Pakistan Business Council (PBC) in 2020 – 21...
In order to promote Pakistan’s trade with its non-traditional trading partners, the Pakistan Business Council (PBC) in 2020 – 21 has initiated under its Market Access Series Country Profiles of major non-traditional trading partners of Pakistan. This profile of the Republic of Uzbekistan is the first in the Central Asia Series 2020 – 21.
The Republic of Uzbekistan is a Central Asian country bordered by five landlocked countries. It is also one of only two doubly landlocked countries in the world. It covers a total area of 447,400 square kilometers and has a population of 33.6 Million.
The table below shows a comparison of the economies of Pakistan and Uzbekistan.
| Pakistan | Uzbekistan | |||||
|---|---|---|---|---|---|---|
| Economic Indicators | 2017 | 2018 | 2019 | 2017 | 2018 | 2019 |
| Population (Millions) | 207.9 | 212.2 | 216.6 | 32.4 | 33.0 | 33.6 |
| GDP (Current US$, Billions) | 304.6 | 314.6 | 278.2 | 59.2 | 50.4 | 57.9 |
| GDP Per Capita (Current US$) | 1,465 | 1,482 | 1,285 | 1,827 | 1,529 | 1,725 |
| GDP Growth (%) | 5.6 | 5.8 | 1.0 | 4.5 | 5.4 | 5.6 |
| Inflation (%) | 4.0 | 2.5 | 8.6 | 19.4 | 27.5 | 19.2 |
| Official Exchange Rate (US$, period average) | 105 | 122 | 150 | 5,114 | 8,070 | 8,837 |
| FDI, net inflows (Current US$, Billions) | 2.5 | 1.7 | 2.2 | 1.8 | 0.6 | 2.3 |
Uzbekistan has the highest population among the Central Asian Republics (CAR), but the country’s population is still roughly a sixth of the population of Pakistan. Pakistan also has a GDP almost five times that of Uzbekistan, though per capita GDP of Uzbekistan is much higher than that of Pakistan.
Uzbekistan ranked 69th in the world on the Ease of Doing Business Indicator as of 2019.
The figure below shows the trade overview of Uzbekistan with the world.
Kazakhstan is the main trading partner within the region. Turkey also remains among the top trading partners of Uzbekistan while South Korea has emerged as a major export partner for the country. The top export commodities of Uzbekistan to the world in 2019 were pearls, mineral fuels, cotton, copper, fruits and vegetables while the country’s top imports from the world were machinery, vehicles, iron and steel etc.
Though Uzbekistan’s trade with Pakistan is relatively small, it has always had a deficit in its trade with Pakistan. In 2019, Uzbekistan’s exports to Pakistan were worth US$ 5.4 Million, its major exports were salt, sulfur, zinc, edible vegetables and cotton among others while its imports from Pakistan were valued at US$ 22.6 Million resulting in a trade deficit of US$ 17.2 Million. Uzbekistan’s major imports from Pakistan were pharmaceutical products, edible fruits and nuts, products of the milling industry and textile articles etc.
Pakistan’s export potential in its trade with Uzbekistan was US$ 373.1 Million for the top 25 export products in 2019. The products which showed the highest potential for exports to Uzbekistan were: pharmaceutical products, wheat, potatoes, sugar, bananas and surgical instruments.
Pakistan and Uzbekistan signed a Memorandum of Understanding (MOU) for a Joint Working Group on Trade and Investment in May 2020 to encourage bilateral trade. From Pakistan’s perspective the country needs to focus on increasing its exports of pharmaceutical products, wheat, potatoes, sugar, surgical instruments, bananas, lead-acid accumulators and milled rice to Uzbekistan. Other products for which a market can be developed in Uzbekistan include Portland cement, polyethylene, parts of gas turbines, vegetable fats, food preparations and products of iron.
The lack of formal banking channels is a major impediment to the development of trade with Uzbekistan. It is important that the State Bank of Pakistan (SBP), the Ministry of Finance & Commerce, private businesspersons and other stakeholders develop a viable framework to help overcome the challenges posed by the financial regulatory regime in that country.
For promoting trade, the Government of Pakistan needs to send trade delegations to Uzbekistan in order to help develop better insights into the Uzbek market. The Trade Development Authority of Pakistan (TDAP) should start organizing international exhibitions in Uzbekistan for the products where Pakistan has an advantage. And finally, it is important to promote direct transport linkages between the two countries.
The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 83) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. More information about PBC, its members, objectives and activities can be found on its website: www.pbc.org.pk
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