Legal Market Overview
Uzbekistan’s President Shavkat Mirziyoyev is now four years into his tenure and Uzbekistan’s human rights record has continued to steadily improve. In January 2020 the Uzbek parliamentary election, the first to be conducted after the death of Uzbekistan’s previous president, Islam Karimov, was conducted without any issue.
Uzbekistan has also improved its ranking in the World Bank’s “Doing Business” for the second year in a row, this time moving from a ranking of 74th in 2019 to 69th. Previous attempts to cut VAT and the development of an investment visa for eligible foreigners also increased Uzbekistan’s profile for corporations seeking to invest into Uzbekistan.
The most significant change in the workplace occurred in March 2020, when Uzbekistan quickly responded to reports of Covid-19, with a push for remote working in the capital city of Tashkent, the wearing of masks, and the imposition of general restrictions on travel. Initial reports in the months after the government’s response were that Uzbekistan may have been using the pandemic to curtail civil liberties, but these fears about an overzealous response appear to have been misplaced.
Additionally, Uzbekistan requested an international cotton boycott first implemented in 2006 by the Cotton Campaign be abandoned in order to help maintain Uzbekistan’s exports. This coincided with President Mirziyovev ending the country’s decade-old state quota system for cotton, removing the primary motivator for forced labour in cotton production, as well as in 2019 introducing the criminalisation of forced labour.
In May 2020, in the Syrdario Region, the Sardoba dam collapsed after only three years in operation, leaving approximately 100,000 people temporarily without housing or food. The president called for a commission concerning the individuals responsible for building the dam, which includes the deputy prime minister and a senator.
Furthermore, restrictions on travel and a global economic downturn saw a drop-off in investment into Uzbekistan as many corporations attempted to mitigate the spread of Covid-19 by either temporarily pausing operations or delaying plans that had been in earlier stages of implementation. Naturally, this has put a pause on government programmes to increase movement into Uzbekistan as well, with the planned ‘Silk Visa’ travel zone being put on hold, alongside temporary stoppages regarding early-stage hydropower, solar, wind, and atomic power stations. However, Uzbek lawyers working in these sectors express confidence that once restrictions are lifted, power projects will quickly resume.
The confidence in Uzbekistan’s economy to rebound may be due, in part, to the fact that in spite of Covid-19, in December 2020, Exim Bank, on behalf of the government of India, extended a $448m line of credit to Uzbekistan, which followed the signing of nine memorandum of understandings between the two countries, regarding the use of the International North South Transportation Corridor, which includes the participation of India, Russia, and Iran. The Uzbek government does not look like it has any plans to return to its previous policy of isolationism under the previous president.
The legal market in Uzbekistan remains generally constant under the current government, with major firms dealing primarily in the power and oil and gas sectors, as well as PPPs for green energy; construction; and sovereign and international bond work. International firms include Kinstellar and Dentons, while established CIS-region firms like Centil Law, Kosta Legal, and GRATA International remain strong contacts for international investors.