FOREIGN INVESTMENTS AND SOCIAL STABILITY IN POST-SOVIET COUNTRIES: THE CASE OF UZBEKISTAN

Abstract

Since 2016 Uzbekistan has combined sweeping market reforms with a rapid rise in foreign direct investment (FDI). Annual inflows climbed from USD 1.8 billion in 2016 to more than USD 7.2 billion in 2023, and preliminary balance-of-payments data show a further 32 percent jump in 2024 . Unlike the resource-centric FDI patterns that long characterised the Commonwealth of Independent States (CIS), new capital now targets manufacturing, ICT, and renewable energy. This article asks a simple but under-researched question: does the quality and sectoral orientation of FDI matter for social stability in a transitional economy? Using panel regressions, perception surveys, and case evidence from the Ferghana Valley, the paper demonstrates that sector-specific FDI—when channelled into labour-intensive, high-value chains—correlates with lower unemployment, reduced regional income gaps, and a measurable decline in protest episodes. The analysis positions Uzbekistan as a laboratory for post-Soviet economies seeking to reconcile fast growth with social cohesion.