Russia – Uzbekistan. A Window of Opportunity for Expanding Trade and Economic Cooperation

Organizing partners: Ministry of Economic Development of the Russian Federation; Agency for Investment Development of the Republic of Tatarstan; Trade Representation of the Russian Federation in the Republic of Uzbekistan

Venue: Hall 6–7, 2nd floor, International Exhibition Centre Kazan Expo, Kazan.

Time: May 19, 2023, 14:40–16:30

Moderator: Konstantin Zlygostev, Trade Representative of the Russian Federation in the Republic of Uzbekistan

Speakers:

Dmitry Volvach, Deputy Minister of Economic Development of the Russian Federation;

Murat Mirzaev, Director of the Investment Promotion Agency under the Ministry of Investment, Industry and Trade of the Republic of Uzbekistan;

Dmitry Prokhorenko, Acting Director for Overseas Network Development of Russian Export Centre JSC;

Elena Medvedeva, Deputy Director of External Relations Department, Chamber of Commerce and Industry of the Russian Federation;

Airat Gizzatullin, General Director of Himgrad JSC;

Habib Abdullayev, General Director of the Navoi FEZ;

Elena Zamyatina, Deputy Director of Wildberries for the Development of Relations with Public Authorities;

Andrey Bodrov, Member of the Board, Director of Strategy, Investment and Business Development of “Magnit” chain.

Russia and Uzbekistan have traditionally been strategic partners. According to the Statistical Agency under the President of the Republic of Uzbekistan, in 2022 the trade turnover between Russia and Uzbekistan reached a record high of $9.3 billion. Moreover, Russia has become Uzbekistan’s main foreign trade partner. The topics discussed during the meeting included the expansion of industrial cooperation between the two countries, the structure of industrial and technology parks in Uzbekistan, the modern trade formats that emerge in this country.

Deputy Minister of Economic Development and Trade of the Russian Federation Dmitry Volvach named Uzbekistan a strategic partner of Russia with bilateral relations that have successfully passed the most difficult challenges. Russian entrepreneurs show significant interest in establishing production facilities in the country. At year-end of 2022, Russia ranked first in Uzbekistan’s foreign trade turnover, being ahead of China in terms of this indicator. Today in Uzbekistan there are more than 3,000 operating enterprises with a Russian share in capital, including 700 established during the last year.

Investment cooperation is growing: the volume of capital investing is already in excess of $10 billion. Dmitry Volvach notes: “Previously, money was put in oil and gas sector, automotive industry, telecommunications and agriculture. Now it goes in the “non-commodity” spheres: logistics, construction and science. Diversification of investment can become a driver of our economic cooperation.”

Another priority area of cooperation is logistics. This is due to the development of the International North-South Transport Corridor where Uzbekistan plays a very significant role.

Russia attaches great importance to cooperation in the sphere of education with Uzbekistan as a country with about 1 thousand schools that teach in Russian, and 16 branches of Russian universities. Dmitry Volvach assured that Russia is ready to provide organizational and technical support in this area.

Murat Mirzaev, Director of the Investment Promotion Agency under the Ministry of Investment, Industry and Trade of the Republic of Uzbekistan, stressed that trust, mutual respect, mutual understanding are the main factors of cooperation between Russia and Uzbekistan. 65% of the Uzbekistan’s population are young people under 35. The country is introducing innovative farming methods which can lead to the loss of jobs. That’s why it is highly relevant to create new jobs. Among the cooperation areas, Murat Mirzaev also mentioned the establishment of logistics centers. The country also faces the problem of agricultural product processing: so far, Uzbekistan lacks comprehensive processing capabilities.

Dmitry Prokhorenko, Acting Director for Overseas Network Development of Russian Export Centre JSC, noted that over 20 free economic zones have been established in Uzbekistan. They offer tax and customs privileges and preferences for their residents, as well as all necessary infrastructures for business development. The country adopts new laws for the protection of Russian investments in Uzbekistan, and business community shows growing interest in bilateral product supplies. In aggregate, this opens up significant opportunities for expanding industrial cooperation between Russia and Uzbekistan.

General Director of Himgrad JSC Airat Gizzatullin told about the development of the industrial and technology park structure in the country, and two projects implemented by Technopolis Himgrad in the Republic of Uzbekistan – “Chirchik” and “Jizzakh” technoparks for 50 and 36 residents respectively.

Elena Medvedeva, Deputy Director of External Relations Department of the Chamber of Commerce and Industry of the Russian Federation, told about the establishment of the Russian-Uzbek Business Cooperation Council. By now, it has united a considerable number of members – almost 200 small and large businesses. A number of agreements were signed within the framework of the Business Council’s VII meeting held in April 2023.

General Director of the Navoi FEZ Habib Abdullayev presented the production localization options using the Navoi Free Economic Zone as an example. This free economic zone is the biggest industrial site in Uzbekistan with a total area of 645 hectares, well-developed engineering infrastructure and convenient logistics, a rich raw material base, an advantageous location, inexpensive but skilled labour resources, and preferential treatment. Its residents enjoy customs and tax privileges and simplified business procedures. The customers purchase products at electronic platforms.

Deputy Director of Wildberries for the Development of Relations with Public Authorities Elena Zamyatina told about the development of modern trade formats in Uzbekistan. In such a traditional country as Uzbekistan they adhere to the policy of involving women in business. Wildberries, in its turn, focuses on traditional countries where women won’t have to choose between family, children and work. Elena Zamyatina stressed that, perhaps, Wildberries will be able to offer new entrepreneurial opportunities in Uzbekistan.

Member of the Board, Director of Strategy, Investment and Business Development of “Magnit” chain Andrey Bodrov said that Uzbekistan has been chosen as a partner, since most of its population are young people, it develops at an active pace, and this region is also attractive in terms of logistics. With consideration of the modern trends, the M-cosmetics format was selected which turned out to be unique for the Uzbek market. The format of stores in Uzbekistan differs from that in Russia: it assumes the introduction of halal products, organic food. Uzbekistan presents the “Magnit” chain’s first attempt reach beyond Russian market. The first store in Uzbekistan was opened in April 2022. The opening of the 24th store took place on May 19, 2023. The ambitious goal is to achieve absolute leadership in this segment.