Analytical overview: Uzbekistan’s strategic focus on industrial development

Uzbekistan, despite the increasing global risks of instability, demonstrates fairly stable economic growth dynamics. Average annual growth rates ranged from 5.4% in 2018 to 6.0% in 2023 and overall, during this period, GDP increased by 1.3 times. One of the key factors of economic growth was the successful implementation of policies aimed at consistently increasing industrial potential. 

In the process of modernizing technical and technological re-equipment of production capacities, government policy was aimed at accelerating the diversification of industrial production, ensuring the prompt development of high-tech manufacturing industries. 

One of the areas of structural transformation of the industrial sector during the new phase of reforms outlined in the Development Strategy for 2022-2026, was stimulating the production of products with higher added value to achieve the target of increasing the share of industry in the GDP structure. 

These tasks required additional measures to attract investments, use the potential for localization of production, introduce modern cluster forms of production organization, and consistently liberalize basic industries.

As a result of the taken measures, industrial production increased almost 1.5 times compared to the 2017 level with positive growth rates achieved in all key industries, which strengthened the role of the industrial sector in the country’s economy. The share of industry in GDP increased during this period from 21.1% to 26.1%. 

The major dynamics of structural shifts were demonstrated by the manufacturing industry, which acted as a driver of industrial growth. The output of manufacturing products, the share of which in the industrial structure increased to 84.4%, grew more than 1.6 times during this period.

The accelerated dynamics of the development of manufacturing industries was formed under the influence of incentive measures to diversify production, contributing to an increase in the output of products with higher added value. The share of medium- and high-tech industries increased from 52.7% to 64.4%, which indicates the achieved qualitative shifts in the development of industry.

There was a growth trend in demand both on the domestic and foreign markets for many types of products. Particularly high growth was noted in the production of mechanical engineering products – 2.5 times, pharmaceutical products – 1.9 times, textiles and clothing – 1.7 times, food products – 1.4 times, building materials – 1.5 times, chemical products – 1.16 times, etc. A significant contribution to industrial growth was made by the metallurgical industry, the development of which was focused on the in-depth processing of raw materials and the development of higher value-added products.

As a result of the industrial policy, the dynamics of export growth was supported. The total volume of exports increased by 1.9 times compared to the level of 2017 and amounted to 24.4 billion dollars. Against the background of the growth of non-ferrous metal exports, the mechanical engineering and textile industries made a large contribution to the growth. The volume of mechanical engineering exports increased by 3.7 times, textile products – by 2.6 times. 

From the point of view of assessing the structural proportions of industrial development, then for the period 2018-2023 an increase in the aggregate indicator of added value and a positive change in the structure of its production were ensured – and this main achievement was achieved due to the positive results of the measures taken and the prioritization of structural transformations taking into account the specifics of each industry.

Thus, if the extractive and raw materials industries faced the task of increasing the level of processing of extracted raw materials in order to develop products of medium processing stages for further use in other industries, then its solution made it possible to solve the problems of expanding localizing production and developing new types of products of higher processing stages for manufacturing industries. 

At the same time, the cross-cutting priority in the industrial sector was the task of reducing production costs, that is, resource conservation, which was solved with the help of such mechanisms as optimization of current costs due to energy conservation and acceleration of technical re-equipment of leading enterprises.

As a result, positive integration of the production potential of all industries was achieved with an increasing role of the manufacturing and processing sectors and a trend towards improving the quality indicators of industrial growth. 

Meanwhile, in the context of accelerating further economic reforms and achieving the goal of doubling the volume of the economy by 2030, updated strategic development guidelines were adopted for all sectors of the economy. This became a logical continuation of the strategic actions implemented earlier. At the same time, special priority and tasks for involving new growth reserves were designated for the industrial sector. 

The main task of the upcoming period is to increase the share of industry in the GDP structure to 32-35% by 2030 due to further increase in technological shifts in production, a radical increase in efficiency indicators and growth in labor productivity.