nCa Report
In plans that may sound rather ambitious but are actually quite realistic, Kazakhstan and Uzbekistan are striving to double their GDP by 2030.
Uzbekistan
The GDP in Uzbekistan has recently crossed the USD 100 billion mark and its doubling by 2030 should see it rising to around USD 200 billion.
For Uzbekistan, it would be particularly remarkable as the country is currently transforming its economy in a massive drive.
The driving factor is the recognition that Uzbekistan cannot keep depending on its traditional sources of revenue – cotton and natural gas.
There has also been the reduction in the remittances from the Uzbeks working abroad, mainly because the Russia-Ukraine situation.
The budget deficit in 2023 was USD 5 billion and it could reach USD 6 billion by the end of this year.
The reserves have dropped from USD 31.4 billion in 2022 to USD 4.9 billion in 2023.
The finance minister announced earlier this year that the government had issued USD 1.5 billion worth of bonds in three currencies, aimed at both domestic and foreign markets.
Part of the strategy to reshape the economy includes the cooperation with China to develop production capacity of electric autos and solar power, Saudi Arabia for energy infrastructure investment and the EU as a market for green energy exports.
There is the increasing interaction with the neighbours, particularly Kazakhstan. Economic partnership with Russia, China, Saudi Arabia and other countries in the broader region is also growing.
The drive for reshaping the economy includes USD 20 billion package of deals signed with Russia in May this year. Of this, Russia may invest USD 10 billion by 2025.
IMF approves of economic strategy of Uzbekistan, offering praise for achieving a significant reduction in poverty, keeping inflation in check and fostering income growth.
Kazakhstan
Doubling of the GDP in Kazakhstan means that it should reach USD 450 billion by 2030.
Like Uzbekistan, Kazakhstan is also moving from resource-based economy toward processing, production and tech based economy.
The non-oil sectors are expected to be the growth drivers. In the industrial sector, this burden will come to the alloys and minerals sector. It will entail value added processing in gradual but quick steps.
In the oil sector, the focus will shift to deep processing of petrochemicals and polymers.
Agriculture is expected to carry some of the weight, not only bolstering the food security but also bringing more export revenues.
Doubling of the GDP by 2030 also requires more investor confidence.
The government is streamlining the tax legislation and creating other conditions to add to the attractiveness of Kazakhstan as destination of choice for the investors.
The development of the human capital by providing educational and training opportunities to the youth at home and abroad is part of the overall strategy.
Mutual support
Uzbekistan and Kazakhstan acknowledge that mutual support is absolutely necessary to strengthen their economies.
Over the past seven years, trade turnover between Uzbekistan and Kazakhstan has increased 2.4 times, reaching USD 4.5 billion in 2023. They aspire to raise it to USD 10 billion.
The countries have identified three areas for their joint work: industry, construction and transport. /// nCa, 19 August 2024