Daryo gathered some of the key takeaways from Uzbekistan's 2030 strategy, which was unveiled on July 31 and is currently open for public discussion.
The "Uzbekistan - 2030" strategy outlines the country's development directions for the next seven years, along with proposed measures for its implementation in 2023. Below are some of the key points regarding the future of capital markets, investment, and banking in Uzbekistan.
Capital markets
There are four key takeaways concerning Uzbekistan's capital markets. The first is to increase the size of the capital market to $10bn and the free float to GDP ratio to 10.5%. Second is the continuation of the People's IPO program and the introduction of mechanisms that encourage the active participation of the population in IPOs. The third is to encourage the participation of foreign custodians and custodian banks in the local capital market through appropriate infrastructure. And lastly, is the transition of responsibility from the state market regulator to private associations of capital market participants.
Investments
Concerning investments as mentioned in the strategy there are six main points to highlight. By 2030 Uzbekistan plans to implement over 500 mega projects related to technology and infrastructure worth $150bn. An additional $5bn will be allocated to a long-term lending program for medium-sized businesses to encourage participation in the market. Another consideration is to maintain the investment ratings of each region based on their particular capabilities to further attract investment. Another provision is that local and foreign investors will be treaty equally and granted the same privileges. Uzbekistan also aims to increase portfolio investments by 3-5% per annum through private equity and venture capital funds. The final key point regarding investment in Uzbekistan is the aim to attract large-scale medium-long-term foreign capital flow to the local financial market through liberalization and privatization.
Banking
While the privatization of a few banks is already underway, as part of this 2030 strategy Uzbekistan aims to maintain state ownership of three or four banks while privatizing the rest. As part of this privatization move the strategy outlines plans to attract several prestigious foreign banks into the local market. The final key consideration of the strategy is to increase the volume of lending to $40bn within the banking and financial system of Uzbekistan per year and reduce interest rates to 10-12% on loans. Additionally, the volume of bank deposits is expected to increase by four times the current amount.
You can access the strategy through the regulation.gov.uz and 2030.strategy.uz portals.
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