"After many years of discussion, we finally have a solid document to rely on, and we can anticipate substantial legislative changes, which had been a major impediment to progress for years," says Karen Srapionov of Avesta Investment Group.
Since September 2023, following the publication of the decree, work has already commenced at higher levels of the ministry and among key stakeholders. Uzbekistan's Ministry of Finance has initiated the transfer of authority to the new regulators and the agencies involved in prospective projects. Srapionov, sharing his insights into the financial sector, highlighted how the roadmap is interconnected and its significance.
"It's not just about regulation, which we've been waiting for years. It's a roadmap to connect Uzbekistan to international markets. Everyone talks about bringing all the 'Tans' to Uzbekistan. So, that's the ultimate goal, but there's a substantial amount of work and numerous changes required to reach that goal."
Srapionov shared his views on how this decree streamlines the entire process. Many of their prominent clients are engaged in mutual funds, including significant international investors. Unfortunately, they cannot currently invest in Uzbekistan due to technical constraints related to their mandates and compliance processes. However, there is a keen interest in Uzbekistan, and stakeholders need to facilitate and provide the necessary infrastructure.
He revealed that numerous discussions are ongoing with partners in Uzbekistan and, more importantly, with global partners. There is a plan to have everything in place by the second quarter of 2025, ensuring all necessary clearances and infrastructure are established. The plan for 2024-2025 is to attract significant foreign direct investment, not only through government-to-government initiatives but also in the private sector.
Once the appropriate protocols are in place, financial securities can be issued, providing greater assurance to investors and helping boost the local market.
Srapionov also provided detailed information about the Sandbox regime, the taxation process, and plans for an Anti-money Laundering regime under the new decree.
Several important points were raised regarding Shariah Compliance under the new decree. Considering Uzbekistan's push to strengthen relationships being built with the GCC and other Islamic nations in the region, it is crucial to focus on providing inclusive regulations to support these new partnerships.
Avesta's representation was also present at the recent European-Uzbekistan Investment Forum, which included several key players from both regions discussing ways to enhance regional developmental relations and shared targeted projects in the pipeline for the coming years. Notably, Avesta recently signed an MOU for a green initiative with AIFC Green Finance Center, a significant move for the future of Uzbekistan, as it will bring expertise in green development, regional structuring, certifications, green products, green bonds, Sharia compliance, and more.
The next two years in Uzbekistan's financial market are expected to be of utmost importance, with significant changes on the horizon. If all ministries can implement the decree plan as intended, it could be a substantial victory for Uzbekistan. It's crucial to closely monitor the country's financial market, banking system, the privatization of certain industries, and collaborative deals with Western partners.
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