Uzbekistan, Kyrgyzstan, Looking To Increase Bilateral Trade

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Both have strong trade ties with China as well as Russia as Central Asian nations seek to boost regional trade due to an expected Russian consumer slowdown  

Uzbekistan and Kyrgyzstan plan to increase trade turnover to US$2 billion, effectively doubling trade from 2021’s US$951 million.

The agreement was reached at the 4th meeting of the Plenipotentiary Representatives of the President of Kyrgyzstan in the border regions and the Council of khokims of the border regions of Uzbekistan in Osh.

According to the Kyrgyz government, the meeting was attended by the heads of government of the two countries – Prime Minister of Uzbekistan Abdulla Aripov and Chairman of the Cabinet of Ministers of Kyrgyzstan Akilbek Japarov.

According to the State Statistics Committee of Uzbekistan, the trade turnover with Kyrgyzstan in 2021 amounted to US$952 million (up 5% from 2020’s US$907.2 million), with exports from Uzbekistan dominating – US$791.1 million, with Kyrgyzstan exports to Uzbekistan standing at US$161.5 million. Kyrgyzstan accounts for 2.3% of Uzbekistan’s foreign trade – it is the sixth largest foreign trade partner after Russia (17.9%), China (17.7%), Kazakhstan (9.3%), Turkey (8.1%) and South Korea (4.5%).

The talks focused on important issues of bilateral cooperation and energy, agriculture, transport, cross-border trade, tourism, cultural-humanitarian spheres.

Abdulla Aripov noted that industrial cooperation between the two countries is actively developing, important joint projects in the field of energy, transport and logistics are being implemented. The Uzbek-Kyrgyz Development Fund with a capital of US$200 million has been launched to financially support the projects.

Akilbek Japarov noted that “Kyrgyzstan and Uzbekistan still have great untapped potential in the trade and economic sphere, and in this regard it is necessary to take concrete practical measures to establish direct contacts between regional administrations and business circles”.

The parties discussed the construction of the Irkeshtam-Daroot-Korgon-Uchkurgan road, the construction of a cross-border trade and logistics center in Kyzyl-Kiya, as well as joint infrastructure projects that could use the potential of the new development fund.

The meeting discussed the implementation of a project to create a complex of cotton and textile clusters in Nooken district, Jalal-Abad region (Kyrgyzstan), which includes a ginnery, yarn factory, textile factory and machine-tractor park and a plant for the production of vegetable oil.

The Kyrgyz side offered increasing supplies of cement, coal, quartz sand, potatoes, milk and dairy products to Uzbekistan.

The parties touched upon the implementation of projects in Kyrgyzstan on the development of the machine-building industry and the organization of assembly of cars and agricultural machinery.

The Council instructed the administrations of Namangan and Jalal-Abad regions to accelerate the establishment of joint farms for the breeding of cattle and sheep, including the use of cluster mechanisms.

Akilbek Japarov proposed to establish a Kyrgyz-Uzbek Friendship Park in Osh to mark the 30th anniversary of the establishment of diplomatic relations between the two countries. Following the meeting, the parties exchanged notes on mutual recognition of certificates of vaccination against COVID-19.

Kyrgyzstan is a full member of the Eurasian Economic Union, while Uzbekistan recently acquired observer status, typically a precursor to membership. The deal is significant for Bishkek as Uzbekistan has valuable trade agreements with the European Union and UK, and signifies a growing realisation that increased bilateral trade growth is needed within Central and South Asia as the Russian market is expected to shrink.

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Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates. The firm assists British and Foreign Investment into Asia and has 28 offices throughout China, India, the ASEAN nations and Russia. For strategic and business intelligence concerning China’s Belt & Road Initiative please email silkroad@dezshira.com or visit us at www.dezshira.com

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