TASHKENT

The International Finance Corporation (IFC), a member of the World Bank Group, will help Uzbekistan modernise and attract foreign investment to its chemical industry, an area it identified as showing immense growth potential.

A cooperation agreement was signed between the government  and the IFC to attract investment in the chemical industry and encourage the introduction of sustainable practices in the production of mineral fertilizers, the Finance Ministry said.

Due to substantial domestic demand for products such as mineral fertilisers, Uzbekistan’s chemical industry has huge potential for growth. But it’s still largely under state control, run along inefficient lines and consumes an excessive amount of resources, and requires both reforms and private sector investment before it can meet the needs of the country, the ministry said.

“Uzbekistan has initiated reforms to modernise the outdated production and distribution of chemicals and fertilizers, encourage investment and create a competitive industry that will provide new highly skilled jobs and reduce the carbon footprint of Uzbekistan’s industry,” Timur Ishmetov, the finance minister, said in a statement.

The agreement with the IFC aims to make the sector more efficient through the implementation of market reforms, reducing the role of the state and creating equal conditions for private investors.

Uzbekistan, the most populous country in Central Asia, is undergoing an unprecedented economic transformation.  After more than two decades of economic isolation, it’s trying to leave behind an autarkic system that viewed most foreign investments as a threat. The death of Islam Karimov, who had led Uzbekistan since before the Soviet breakup, in 2016 gave his successor, Shavkat Mirziyoyev, the opportunity to open the country to the outside world, through an ambitious reform plan which puts attracting foreign investment at its heart.

As of May 1, 2021, the IFC’s investment portfolio in Uzbekistan was $160 million.

The IFC’s advisory programmes aim to assist Uzbekistan’s government in preparing for the privatisation of state-owned banks, developing and diversifying the financial market, transforming the cotton sector, developing the chemical industry, and piloting public-private partnerships in the energy and health sectors.