U.S. companies have watched their profits grow in other markets within the last few years, despite the economic downturn. That is due to looking beyond the trending developing country markets (Brazil, Russia, India, China, South Africa, often referred to as the BRICS countries) toward countries that are not often discussed but that have stable economies and sound incentives for attracting foreign direct investment.
Here are five reasons why you should consider Uzbekistan to export your goods:
1. Stable economy
From 2008 to 2013, the GDP annual growth rate dropped down from 9% to 8%. Nevertheless, throughout the global economic recession, this small country with a GDP of US$51 billion did not experience a dramatic decline in economic growth. As a matter of fact, from 2009-2013, Uzbekistan’s GDP annual growth rate remained close to 8%.
This Central Asian country’s GDP growth rate of 8.2% in 2012 surpassed that of many larger economies during the same year. For example, the United States grew by 2.8%; Brazil, 0.9%; Russia, 3.4%; India, 3.2%; China, 7.8%; and South Africa, 2.5%. Uzbekistan also has the highest GDP growth rate compared to other Central Asian countries.
Furthermore, the country’s national debt is about 8% of its GDP, which is a lot lower compared to 55% in 2002. Uzbekistan’s external debt is 13% of its GDP, according to World Bank figures.
2. Human capital
Close to 60% percent of Uzbekistan’s budget goes to education and health care.
Uzbekistan’s literacy rate is 99.4%, which is higher than that of Brazil with 90.4%; India, 62.8%; China, 95.1%; and South Africa, 93%. Russia’s literacy rate is slightly higher at 99.7%.
3. Tax exemption in free zones
Foreign companies are able to set up factories in free zones and receive tax free benefits for up to 15 years depending on the type of investment. Additionally, there are no limits on foreign investments.
4. Geographical Location
Uzbekistan’s location in Central Asia allows for easier access to other parts of Asia, the Middle East and Europe.
5. Great improvement in business climate
Uzbekistan has made great strides in terms of making it easier to do business in the country. Uzbekistan ranks 21 out of 189 economies in starting a business. This is a huge increase from a rank of 87 last year. Other areas where this Central Asian country saw improvements are with regard to registering property, getting credit, paying taxes, trading across borders and enforcing contracts.
U.S. companies, such as General Motors (GM), take advantage of the opportunities in Uzbekistan. As a matter of fact, GM accounts for 94% of Uzbekistan’s car market. GM’s global sales increased 7.6% in 2011. Uzbekistan was among the top 10 foreign markets that contributed to the company’s growth in overseas markets.
Some of the industries for which there are potential opportunities for US companies in Uzbekistan include oil and gas, chemical, pharmaceutical, automotive and food processing.
Companies interested in increasing revenues and profits should look beyond the BRICS wall and take advantage of other opportunities in the global market.
Follow us on Twitter @intltradexaminr
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.