The report presents estimates of the potential effects of the integration of the Republic of Uzbekistan with the EAEU, as well as promising areas of cooperation between the current member states of the Union with Uzbekistan.

The structural changes and economic reforms initiated by the leadership of Uzbekistan in 2017 are significantly transforming the country's economy. At the same time, the republic still has work to do on infrastructure development, improving access to global and regional markets and creating a favorable institutional regime. According to the authors of the report, economic and institutional support within the framework of integration with the EAEU member states can serve as an incentive and driver for the integrated development of Uzbekistan.

What economic effects can Uzbekistan get from integration?

According to the calculations of EDB analysts, the potential volume of infrastructure investments from the EAEU to Uzbekistan may amount to 1-1.5 billion US dollars annually. This will provide an additional 0.3-0.4 percentage points of growth in the real GDP of the republic per year. The Bank's experts believe that Uzbekistan is attractive from the point of view of expanding business and directing foreign direct investment from the existing member states of the Union. The corporate sector of the EAEU countries is already actively interested in strengthening cooperation with enterprises of the republic.

Access to the common labor market of the EAEU will provide an additional inflow of remittances to Uzbekistan in the amount of 1.5–2 billion US dollars on average per year. According to the authors, an additional contribution from this to the annual growth of real GDP will amount to 0.3-0.4 percentage points. In addition, labor migration to the EAEU member states will help alleviate socio-economic tensions in the republic caused by unemployment and underemployment.

An important advantage of deepening integration for Uzbekistan is the opportunity to increase exports to the existing EAEU member states by an additional $ 1.2 billion. For comparison: in 2020, the republic's exports to the EAEU amounted to 3 billion US dollars. Increasing supplies by Uzbek exporters is possible not only in Russia, a key trading partner, but also in all EDB member countries.

From the point of view of the current member states of the Union, full integration with Uzbekistan also creates prospects for the growth of exports of goods to the capacious consumer market of the republic. EDB analysts estimated the unrealized export potential of the EAEU member states to Uzbekistan at $1.6 billion

Another advantage of economic integration with Uzbekistan for the current members of the Union is the expansion of access to labor resources and the raw material base of the republic. This will have a positive impact on economic cooperation in the EAEU space and will allow it to develop more dynamically.

The authors of the report believe that simplifying the access of labor migrants from Uzbekistan to the labor market of the EAEU will help offset the shortage of labor in a number of sectors of the integration association. At the same time, Uzbekistan's possible accession to the EAEU will increase competition among labor migrants from Armenia, the Kyrgyz Republic and Tajikistan, including due to the numerical superiority of migrants from Uzbekistan.

"Without the participation of Uzbekistan as a major and strategically located player in Central Asia, it is difficult to resolve issues of regional development," said Yevgeny Vinokurov, Chief Economist of the EDB and the EFSR. – This fully applies to transport, logistics and the water and energy complex. The depth and intensity of Uzbekistan's participation in regional and Eurasian integration processes will determine their balance and success. More active economic integration of Uzbekistan with the EAEU can become a significant driver of economic cooperation in the region."

The authors of the report conclude that an important condition for the sustainable long-term economic development of the EAEU is the construction of trade and economic ties between the countries of the region on the basis of effective projects (productions). Such projects should be competitive in the global market. The development of an integration association should not follow the principle of "expansion for the sake of expansion" – this path ultimately reduces the effectiveness of a regional organization.

Go back