In his new article, the Director of Uzbekistan’s Center for Economic Research and Reforms (CERR), Obid Khakimov, has recently reflected on Uzbekistan-France cooperation. In particular, his report examines the large-scale reforms ongoing in the republic since 2016 that riveted a great interest of the European Union and France.
In 2021, the EU accepted the Central Asian country as the ninth beneficiary of its expanded General System of Preferences (GSP+) trade arrangement, which removes tariffs on two-thirds (6,200 titles) of the product lines covered by GSP. Furthermore, the Expanded Partnership and Cooperation agreement between Uzbekistan and the EU created additional opportunities for the French-Uzbek partnership.
The analysis of the CERR shows that over the past five years, the trade turnover between Uzbekistan and France has increased by 10% from $257.2mn to $280.8mn. Moreover, thanks to Uzbekistan's GSP+ beneficiary status, 2021 saw a moderate increase in exports of fruit and vegetable products, textiles, carpets, and specific electrical products. And by the end of January-September this year, compared to last year's period, the trade turnover increased by another 5.6% and amounted to $232.2mn, and Uzbekistan's exports increased ninefold.
Over the past five years, the number of enterprises with French capital has grown 3.5 times. By the end of 2021, the volume of disbursed investments and loans from EU member countries amounted to $297.1mn, including foreign direct investment – $70.9mn and loans – $226.2mn. For the first half of 2022, $92.8mn of French assets have been disbursed. Currently, 46 enterprises with the participation of French capital operate in the Central Asian republic, including 26 joint ventures and 20 enterprises with 100% French capital.
The French investment has implemented a project for constructing a 100MW solar photovoltaic plant in the Samarkand region with the Total Eren company. Furthermore, joint geological exploration is carried out on promising areas for uranium extraction and construction of a combined-cycle power plant with a capacity of 1600 MW in the Syrdarya region. In addition, together with the French Development Agency (AFD), three projects have already been implemented, and five more projects are in the process of implementation, including projects within the framework of the Green Economy program for the development of the livestock sector, modernization of solid waste management in Samarkand.
It can be stated that the reforms carried out in Uzbekistan have already significantly expanded the potential of trade and economic cooperation between France and Uzbekistan since the Uzbek economy has become more open and diversified, the domestic market has grown considerably, the production of products with higher added value is actively developing, the private sector in the economy is growing, and this makes Uzbekistan more attractive to foreign partners.
It is essential to continue efforts to implement the agreement signed with the French side on financing projects through the French Development Agency in animal husbandry, waste processing, utilities, and green energy. This cooperation has contributed to the fact that 2.6 million tons of livestock and poultry and 11.3mn tons of milk were produced in Uzbekistan in 2021 and will contribute to bringing the share of renewable energy sources in Uzbekistan to 25% by 2026, as stipulated by the Development Strategy.
One of the crucial areas of cooperation is the expansion of French business activities, for example, in the textile sector and the processing of agricultural products. There are also prospects for investment cooperation in the food and pharmaceutical industries, agriculture, particularly winemaking, and the development of tourism infrastructure in Uzbekistan.
Uzbekistan can increase supplies to the French market of certain products that France imports in large volumes from foreign markets. These include metallurgical, chemical, and textile products, fruit and vegetable products, processed ones, polymers, and specific electrical products. A serious industrial base has already been created in Uzbekistan to increase the export of these products.
The Uzbek side is also interested in attracting major French clothing brands to open production facilities in Uzbekistan, in cooperation of the Textile Technopark with the Textile Engineering School (ENSAIT) and the Textile Research Laboratory (Gemtex). The report says that one of the new forms of economic cooperation between Uzbekistan and France could be industrial cooperation with French companies Michelin, SNF Floerger, Imerys, and Eramet.
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