Until September 2017, any company operating in Uzbekistan had to pick one of two exchange rates, and neither option was good. The government set the official rate at about 4,200 som to the dollar. On the street, a dollar fetched close to 8,000. Foreign firms either took the loss at the official counter or broke the law at the unofficial one.
That ended on Sept. 5, 2017, when the central bank stopped pegging the som and lifted limits on foreign currency purchases. The two rates merged at the higher level. It was the first major move by Shavkat Mirziyoyev, who took office in 2016 after the death of Islam Karimov, the country's only leader since independence.
The numbers since then tell the rest. Gross domestic product passed $145 billion last year, foreign investment inflows reached $43.1 billion, and credit rating agencies moved the country up from BB- to BB.
Geography works against anyone trying to sell Uzbek goods abroad. The country is one of only two in the world that is doubly landlocked, meaning every neighbor it borders is landlocked as well. Liechtenstein is the other. A container leaving Tashkent crosses at least two borders before it reaches a port.
So the government bet on something that does not travel by ship. Digital Technologies Minister Sherzod Shermatov said information technology exports were worth less than $1 million in 2017 and now approach $1 billion. The target for 2030 is $5 billion. Companies based at IT Park, the Tashkent technology campus that offers tax breaks and easier hiring rules, exported $191.8 million in services in the first quarter of this year. A presidential decree issued last October set a target of 100 artificial intelligence projects running by the end of this year.
South Korea has been part of this from early on. The Ministry of the Interior and Safety opened a Korea-Uzbekistan center for electronic government and the digital economy in Tashkent on Jan. 30, 2020, as agreed at a summit the previous April. Uzbekistan has since climbed 71 places in the World Bank GovTech Maturity Index and now sits in the global top 10.
One door remains shut. Uzbekistan first applied to join the World Trade Organization in 1994, let it go dormant, and restarted the process only in 2020. At a working party meeting in July, the Uzbek delegation said again that it intends to finish the accession this year.
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