Trade turnover between Uzbekistan and France increases by 10 percent in five years
Director of Uzbekistan’s Center for Economic Research and Reforms (CERR) Obid Khakimov in his new article has recently reflected on Uzbekistan-France cooperation. In particular, his report examines the period of large-scale reforms ongoing in the republic since 2016 that riveted a great interest of the European Union and France. Owing to this, 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. Agreement on Expanded Partnership and Cooperation 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. Thanks to Uzbekistan's GSP+ beneficiary status, 2021 saw a moderate increase in exports of fruit and vegetable products, textiles, carpets, and certain types of electrical products. And by the end of January-September this year, compared to the same period last year, the trade turnover increased by another 5.6% and amounted to $232.2mn, and Uzbekistan's exports increased 9 times.
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 country amounted to $297.1mn, including foreign direct investment – $70.9mn and loans – $226.2mn. For the first half of 2022, $92.8mn of French investments 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.
A project for the construction of a 100MW solar photovoltaic plant in the Samarkand region with the Total Eren company has been implemented with the French investment. 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), 3 projects have already been implemented and 5 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 due to the fact that the Uzbek economy has become more open and diversified, the domestic market has grown significantly, 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 important 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 important 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, in particular winemaking, as well as in the development of tourism infrastructure in Uzbekistan.
Uzbekistan can increase supplies to the French market of certain types of products that France imports in large volumes from foreign markets. These include metallurgical, chemical, and textile products, fruit and vegetable products, including processed ones, polymers, and certain types of electrical products. A serious industrial base has already been created in Uzbekistan to increase the export of these types of 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). 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, the report says.