IMPACT OF FOREIGN INVESTMENTS ON THE ECONOMY OF UZBEKISTAN: A CROSS-SECTORAL ANALYSIS

Abstract

Since the launch of broad economic reforms in 2016, Uzbekistan has experienced a rapid expansion in foreign direct investment (FDI), driven by liberalization policies, sectoral diversification, and integration into global markets. FDI inflows rose from USD 1.8 billion in 2016 to USD 7.2 billion in 2023, with projections indicating continued double-digit growth through 2025. This article examines how foreign investments have reshaped Uzbekistan’s economy across key sectors—manufacturing, energy, ICT, and services—and evaluates their contribution to output growth, productivity gains, and export diversification. Using regional data and sectoral regressions, the study finds that high-quality, technology-intensive FDI has strengthened industrial output, expanded employment opportunities, and improved export competitiveness. However, sectoral imbalances and limited local linkages remain challenges. The paper concludes with policy recommendations to deepen the developmental impact of foreign investments through inclusive and innovation-oriented strategies.