The past decade has witnessed one of the most important transformations in the modern history of Uzbekistan. Since Shavkat Mirziyoyev took over the presidency in 2016, Uzbekistan has gradually begun to move away from the closed, state-controlled economic model that had prevailed for decades.
Economic and administrative reforms evolved into a broader transformation process that included foreign policy, social protection, investment, trade, agriculture, tourism, public administration, and the role of the state in the economy.
The importance of these changes is clearly evident in the economy. Since 2017, Uzbekistan has been working to unify the exchange rate system, eliminate many restrictions on foreign exchange transactions, liberalize prices and trade, and gradually reduce the dominant role of the state in economic activity.
According to the International Monetary Fund, these reforms have led to a fundamental change in the structure of the economy and have helped to attract large capital inflows, with real GDP growth averaging around 5.7% annually between 2018 and 2023, while the World Bank estimates that average annual growth was around 6% during the period 2017-2025. In 2025 alone, the economy grew by 7.7%.
Among the most notable economic transformations is Uzbekistan’s gradual opening up to the outside world, as the country has moved from a state of relative isolation to increasing integration into regional and global markets. Foreign investment has increased, international companies have entered new sectors, and privatization has become a more important part of economic policy.
In 2026, Uzbekistan took another important step when the National Investment Fund conducted the country’s first major international IPO on the London Stock Exchange, raising more than $690 million. The government continues to sell stakes in state-owned enterprises and improve the level of corporate governance.
The reforms have successfully transformed the environment in which local businesses operate. Tax reforms, deregulation, and easier access to foreign currency have made setting up and running businesses significantly simpler than they were a decade ago. The World Bank notes that following the 2018 tax reforms, approximately 1.4 million additional citizens and businesses registered with the tax authorities.
At the same time, Uzbekistan began to remove restrictions and licensing requirements that had limited competition and the development of the private sector.
The agricultural sector also witnessed a major transformation through the dismantling of the old system in which the state played a dominant role in agricultural production and cotton cultivation. Agricultural markets were liberalized, direct state control was reduced, and private investment and processing of agricultural products were encouraged.
One of the most notable social outcomes of these reforms is the elimination of forced labor and the systematic use of child labor in the cotton sector, an issue that has affected Uzbekistan’s international image for years.
The World Bank considers ending forced labor and child labor to be one of the most significant achievements of the reform process.
Social policy has also become central to the government's reform agenda. Instead of focusing solely on economic growth, Uzbekistan has increasingly begun linking economic development to poverty reduction, job creation, and the development of its social protection system. The results of this policy have become more evident in recent years.
According to the World Bank, the national poverty rate decreased from 17% in 2021 to 14.1% in 2022, and then to 11% in 2023. By 2025, the rate had declined to 5.8%.
The neighborhood has also become an important part of this approach, as local communities are increasingly being used to identify families in need, support employment, and provide social assistance.
The current reform agenda focuses largely on creating “poverty-free shops” and linking social policy to local economic development.
The authorities have set a target for 2026 of reducing poverty and unemployment rates to 4.5%.
Uzbekistan’s foreign policy has undergone a major transformation over the past decade, with Tashkent adopting a more open and pragmatic foreign policy, particularly towards neighboring Central Asian countries.
Relations with Kazakhstan, Kyrgyzstan, Tajikistan, and Turkmenistan have improved significantly, while trade, transport, energy, and water cooperation have become more active. This has strengthened Uzbekistan's role as a key driver of regional cooperation in Central Asia.
This openness was also evident in the tourism sector, with Uzbekistan shifting from viewing tourism primarily as a cultural sector to recognizing it as a significant part of the national economy. The liberalization of the visa regime, an increase in flights, hotel construction, infrastructure development, and international promotion have all contributed to this transformation. According to the World Bank, tourism revenues reached $1.3 billion in 2019, more than double the level recorded in 2017.
The reforms have also contributed to changing Uzbekistan’s international image. The country is no longer known only as a historical destination associated with Samarkand, Bukhara and Khiva, but is also seen as an emerging market that offers opportunities in manufacturing, energy, technology, logistics, agriculture and tourism.
The country’s increasing participation in international investment forums and its efforts to join the World Trade Organization reflect the same strategy: to become more integrated into the global economy.
However, the ten-year reform process should not be seen as complete. Some of the most difficult reforms are still pending implementation, state-owned enterprises still occupy an important position in the economy, and competition remains limited in some sectors.
Both the World Bank and the International Monetary Fund emphasize the need to continue reducing the state's economic footprint, promoting competition, and creating more space for private companies.
The World Bank estimates that Uzbekistan will need to create about 10 million additional, better-paying jobs over the next seven to ten years, because economic growth alone has not provided enough good jobs.
For this reason, the next phase of reforms is likely to differ from the first. The first phase focused primarily on opening up the country: liberalizing the exchange rate, changing laws and regulations, attracting investment, and improving relations with neighboring countries. The next phase will focus on making the economy more productive and competitive. The government is currently concentrating on technological development, innovation, digitalization, human capital development, green growth, energy sector reform, and deepening Uzbekistan's integration into international markets. The updated Uzbekistan 2030 strategy reflects this shift and sets a goal of moving the country into the upper-middle-income category by the end of the decade.
Therefore, the reforms are not merely a set of isolated economic measures, but rather reflect an attempt to reshape the relationship between the state, the economy, and society. Over the course of ten years, Uzbekistan has transitioned from a model based on state control and limited external openness to one that places greater emphasis on market mechanisms, private investment, international cooperation, and social protection.
Perhaps the most important achievement of the past decade has been the change in the direction of development itself. Uzbekistan has become more open, more connected to the international community, and more market-oriented, while the state retains a strong role in managing the transition process.
The challenge in the coming years will be to translate this openness into higher productivity, better-paying jobs, stronger institutions, and a larger private sector. The success of the next phase will determine whether the reforms of the past ten years will form the basis for a truly new economic model in Uzbekistan by 2030.
(Mirzohid Ishankulov – First Secretary of the Embassy of the Republic of Uzbekistan in Saudi Arabia)
