Saudi Arabia and Qatar’s interests in Uzbekistan’s Economy and Investment Opportunities
Geopolitical Report ISSN 2785-2598 Volume 36 Issue 4
Author: Giuliano Bifolchi
Both Saudi Arabia and Qatar have demonstrated their interests in investing in Uzbekistan’s economy and infrastructural projects in different fields.
Doha and Riyadh’s investments in the Uzbek market confirms how Central Asia has become attractive for Gulf Arab monarchies since the region plays a strategic role in connecting Europe and Asia and is a key asset for Beijing’s Belt and Road Initiative and Moscow’s Eurasian Economic Union.
Uzbekistan, considering the recent domestic political events and the process of modernisation strongly promoted by Uzbek President Shavkat Mirziyoyev, can exploit Saudi and Qatari investments to support the nations’ economic development and decrease Chinese and Russian pressures on the Central Asian republic.
Geopolitical Analysis
- Uzbekistan, in its strategy to diversify commercial partners and decrease Beijing and Moscow’s pressures, is looking at the Arab Gulf monarchies.
Tashkent consistently depends on Beijing’s investments in its market, because of China’s strategy to promote the Belt and Road Initiative. The fact that Uzbekistan holds the status of an observer member of the Eurasian Economic Union (EAEU), along with the consequences of Western sanctions against Moscow on the Uzbek economy, which also heavily depends on remittances from Uzbek migrants in Russia, substantiates Tashkent’s reliance on Moscow.
Therefore, enhancing and extending its network of trade and commercial partners and investors is essential for Uzbekistan’s economic diversification and development. In this context, Arab Gulf monarchies might find fertile ground in the country’s economy by supporting infrastructural projects in different fields. - Qatar and Saudi Arabia’s interests in Uzbekistan corroborate the Gulf countries’ interests in Central Asia.
The Gulf Cooperation Council (GCC) countries have several times shown their interests in Central Asia by investing in local development projects and providing humanitarian help.
Saudi Arabia, Qatar, United Arab Emirates have been extremely active in Central Asia because of a combination of factors, including energy security, economic diversification, investment opportunities, security cooperation, and geopolitical influence.
Gulf Arab monarchies view Central Asia as a region where they can extend their geopolitical influence. By forging diplomatic relations, participating in multilateral forums, and offering development assistance, Gulf states aim to bolster their presence in a region that has historically been within the sphere of influence of major powers such as Russia and China. - Recent presidential elections confirmed Mirziyoyev’s leadership and stable governance in Uzbekistan, essential characteristics for foreign investors.
Shavkat Mirziyoyev’s re-election brings much-needed stability to Uzbekistan, solidifying the current government and its leadership, providing a sense of continuity for the nation’s future.
The conclusion of the presidential elections in Uzbekistan represents the apex of the reform process started in 2022, incorporating substantial constitutional amendments, symbolising a new era of governance and policy orientation for the country.
An Uzbekistan that maintains stability through strong governance and capable local leadership has the potential to enhance regional stability in Central Asia and may attract the interest of foreign investors, such as the GCC countries.
Saudi Arabia and Qatar’s investment in Uzbekistan:
Background Information
On November 27th, 2023, Uzbek President Shavkat Mirziyoyev received a Saudi delegation led by the kingdom’s Minister of Investment, Khalid al-Falih. The parties discussed the expansion of bilateral cooperation on different fields and agreed on implementing projects in the fields of chemistry, energy, agriculture, pharmaceuticals, IT and infrastructure development worth $12 billion.
Indeed, they reached a deal to promote new projects and programs totalling $11 billion in the areas of transport infrastructure and utilities, geology, irrigation, household waste processing, higher education, and labour migration.
The partnership particularly highlights ACWA Power as the largest investor and strategic partner in the development of green energy in Uzbekistan. The company is currently implementing projects worth $7.5 billion in Uzbekistan.
On November 23rd, 2023, a Qatar delegation led by the Deputy Chairman of the Power International Holding, Maurice Ghattas, held a meeting with Umid Shadiev, Chairman of the Uzbek Tourism Committee.
The parties discussed Qatari investments in Uzbek tourism sector, including the construction of hotels in the country’s historical cities, issues of transport logistics, as well as projects to create an international all-season theme park in the Tashkent region. Qatari businessmen showed interests in the construction of green energy facilities, such as solar and wind power stations and the modernisation of aviation infrastructures.
Conclusion
The recent engagements between Uzbekistan and Gulf Arab monarchies, particularly Saudi Arabia and Qatar, signify a strategic shift in Uzbekistan’s economic and geopolitical approach. Uzbekistan, under the leadership of President Shavkat Mirziyoyev, is strategically leveraging investments from the Gulf countries to diversify its commercial partners and mitigate dependencies on China and Russia.
The Gulf Cooperation Council (GCC) countries view Central Asia as a region offering economic opportunities, energy security, and geopolitical influence, motivating their active engagement with Uzbekistan.
Uzbekistan should capitalise on the investments from Saudi Arabia and Qatar to catalyse infrastructural development across various sectors, including energy, agriculture, IT, and tourism. This influx of funds not only aids in economic diversification but also acts as a strategic manoeuvre to reduce Chinese and Russian influence.
Fostering diplomatic ties with the Gulf states (for instance, Saudi Arabia and Qatar) opens avenues for Uzbekistan to participate in multilateral forums, enhancing its regional stature. The partnership with ACWA Power, a major investor in green energy, aligns with global sustainability trends and positions Uzbekistan as a player in the renewable energy sector.
As Uzbekistan continues to navigate its modernisation journey, sustained collaboration with Gulf Arab monarchies can serve as a prerequisite for the nation’s economic development and geopolitical positioning in the Central Asian geopolitical scenario.
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