2022 Kyrgyzstan – Uzbekistan Bilateral Trade Reaches Record Highs
Shifting supply chains and BRI developments are boosting Central Asian trade and investment with positive regional results
The bilateral trade turnover between Kyrgyzstan and Uzbekistan since the beginning of 2022 has reached US$1 billion, a record figure. The announcement was made by Shavkat Mirziyoyev, the President of Uzbekistan, following conversations with Sadyr Zhaparov, the President of Kyrgyzstan this week.
There are reasons for this mini-trade boom. The Uzbek-Kyrgyz Development Fund, which is already operating, has engaged with several projects which are being implemented in the industrial, energy, electrical engineering, agriculture, transport and other sectors. This has helped boost bilateral trade growth.
Additional cooperation documents and the recent signing and ratification of important bilateral agreements will contribute to the deepening of cooperation and development of the entire region, the two Presidents stated.
The bilateral trade increases are a classic case study of how China’s Belt and Road Initiative, which has been very active in both Kyrgyzstan and Uzbekistan, is leading to increased trade as infrastructure development leads to greater business intercourse between the recipients and China, when the funding is utilized for the correct purposes and not subject to local corruption – as has been the case in Sri Lanka.
The main products that Kyrgyzstan exports to Uzbekistan are cement, scrap iron, and coal briquettes. The main products that Uzbekistan exports to Kyrgyzstan are cotton, Other live plants, cuttings and slips; mushroom spawn, and pitted fruits.
Kyrgyzstan is a member of the Eurasian Economic Union (EAEU), which also includes Armenia, Belarus, Kazakhstan, and Russia. Uzbekistan is currently an Observer member and has an eye on joining the EAEU. Multilateral trade among the EAEU member states will amount to just over US$92 billion by the end of 2022.
Both are members are part of the Commonwealth of Independent States (CIS) whose mutual trade has risen by 6.8% this year to date. The CIS is not a Free Trade Group with common tariff and duty agreements between all members, but rather acts as a looser conglomerate whereby members agree specific bilateral trade agreements between each other, allowing for a more flexible approach.
Both Kyrgyzstan and Uzbekistan are also members of the Shanghai Cooperation Organisation. Given these recent developments and the continuing growth of Middle Corridor trade across the Central Asian region between Europe and China, the growth in trade between Kyrgyzstan and Uzbekistan can be expected to continue.