The 2023 UNCTAD World Investment Report has brought to light a concerning annual investment gap faced by developing countries, which has grown from $2.5 trillion in 2015 to a staggering $4 trillion per annum. This widening disparity coincides with a global decline of 12% in foreign direct investments in 2022, highlighting the compounding impact of multiple crises and escalating public debts.
Despite these challenges, there is a glimmer of hope in the form of greenfield project announcements, which saw a 15% increase in 2022. Sectors grappling with supply chain disruptions, such as electronics and semiconductors, witnessed expansions. Additionally, investments in renewable energy, particularly in wind and solar, experienced growth. However, a notable disparity emerges as the majority of global renewable energy investments have flowed into developed nations, leaving developing countries sidelined.
Developing nations have a significant annual need of approximately $1.7 trillion for clean energy investments, while they attracted only $544bn in clean energy FDI in 2022. The barriers to achieving this investment aren't rooted in ambition but rather in perceived risks leading to high capital costs. Collaboration among international investors, financial institutions, and public sectors is seen as the key to overcoming these barriers.
Furthermore, sustainable finance markets saw a growth of over 10% to reach $5.8 trillion in 2022, yet untapped potential remains. Challenges like financing restrictions and greenwashing must be addressed. UNCTAD's proposed Global Action Compact offers a promising solution, with guiding principles aimed at democratizing sustainable energy access.
In parallel, Uzbekistan has been diligently crafting a state investment policy to drive robust economic growth and foster international integration. This multifaceted approach includes diversifying industries, aligning with international standards, and enhancing trade infrastructure to solidify Uzbekistan's position in the global economic landscape. Key initiatives include the appointment of specialized "investment managers" to support investors, the establishment of an Investor Center as a one-stop solution for investor needs, and the launch of the National Industrial Portal of Uzbekistan to ensure transparency. The restructuring of the Export Promotion Agency and the establishment of Project Offices and reporting mechanisms are also part of these efforts. Additionally, Uzbekistan has set up the Industrial Development Fund to finance various industrial projects.
The Foreign Investors Council, under Uzbekistan's leadership, is playing a pivotal role in nurturing global economic partnerships through its six core working groups. These groups are focused on modernizing investment legislation, incubating innovative Special Economic Zones, and integrating Islamic financing frameworks, among other strategic initiatives. While challenges, particularly in tax administration, are evident, the commitment to tax reforms, legislative revisions, and investor-centric platforms underscores Uzbekistan's dedication to economic revitalization.
Earlier Daryo reported that IFC has pledged $500mn in investments in Uzbekistan in September. The nation, the largest in Central Asia, is in the midst of an economic overhaul.
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