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ENHANCING INVESTMENT ATTRACTIVENESS TO ATTRACT FOREIGN
INVESTORS TO REGIONS
Po’latova Sug’diyona
Master’s student at Termez State University,
F.M. Olloqukova
Scientific Supervisor: PhD
https://doi.org/10.5281/zenodo.14406564
Abstract:
This article explores methods to enhance investment attractiveness in order
to attract foreign investors to specific regions. It highlights the importance of favorable
policies, infrastructure development, and sectoral prioritization in improving the investment
climate. The paper also examines case studies and global best practices while providing data-
driven strategies to overcome regional disparities and increase competitiveness.
Keywords:
Investment attractiveness, foreign direct investment, regional development,
economic policies, infrastructure development, investment climate, regional competitiveness.
Introduction
• Importance of attracting foreign investors to regions.
• Role of investment attractiveness in economic growth and regional competitiveness.
• Objectives of the paper: exploring strategies to improve investment attractiveness.
Current State of Regional Investment Attractiveness
Investment Inflows:
In 2023, Uzbekistan attracted $10 billion in foreign direct investments (FDI), marking a
15% increase compared to the previous year. The majority of these investments were
directed toward energy and agriculture sectors.
• Regional Disparities in Investment:
Tashkent city and the surrounding regions remain the primary destinations for FDI,
while remote areas such as Karakalpakstan and Surkhandarya lag behind due to
infrastructure deficits and limited investment promotion.
• Challenges Facing Regions:
Factors limiting investment attractiveness, such as poor infrastructure, regulatory
complexity, and lack of skilled labor.
Key Factors Affecting Investment Attractiveness
• Policy Environment:
Importance of stable, transparent regulations and investor protections.
• Infrastructure:
Role of transport, energy, and digital infrastructure in attracting investors.
• Market Potential:
Regions with better connectivity to key trade routes, such as the Fergana Valley, have
shown higher investment activity. Uzbekistan’s participation in the Belt and Road Initiative is
expected to improve this further.
• Human Capital:
Availability of skilled labor and vocational training programs.
Strategies to Enhance Investment Attractiveness
• Policy Reforms:
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• Simplifying regulations and creating a “one-stop shop” for investors.
• Offering targeted tax incentives and subsidies.
• Public-Private Partnerships (PPPs):
Engaging private and foreign entities in infrastructure and social projects.
• Regional Marketing Campaigns:
Promoting the region’s unique strengths, such as natural resources or strategic location.
• Investment in Infrastructure:
Prioritizing transport and energy projects to connect remote regions to major markets.
Special Economic Zones (SEZs):
• Creating additional SEZs with sector-specific focus (e.g., IT parks, agricultural zones) in
underdeveloped regions can attract targeted investments.
• Case Study: The Navoi Free Industrial-Economic Zone has attracted $1.8 billion in
investments since its establishment.
• Digitalization of Investment Processes:
• Implementing digital platforms for investment applications can reduce bureaucratic
delays and increase transparency.
• Support for SMEs:
• Providing access to affordable credit and technical assistance to local small and
medium-sized enterprises (SMEs) can complement FDI by strengthening regional supply
chains.
Global Best Practices in Attracting Foreign Investors
• Case Study 1: Singapore’s transformation through regulatory reforms and
infrastructure investment.
• Case Study 2: Poland’s regional development success via EU funds and policy
incentives.
• Relevance for Uzbekistan: Lessons learned and their applicability to regional
strategies.
• Kazakhstan:
Kazakhstan’s “National Company for Investment” actively promotes its regions to
foreign investors and has streamlined processes for land acquisition and permits, positioning
it as a regional FDI leader.
• India:
The “Make in India” initiative has focused on improving infrastructure and labor laws to
attract investments into underdeveloped states, a model applicable to Uzbekistan’s remote
regions.
Emerging Opportunities for Foreign Investors:
• Renewable Energy:
Uzbekistan’s target to achieve 25% renewable energy generation by 2030 presents
opportunities for investors in solar and wind projects.
• Logistics and Transport:
Investments in logistics hubs along key corridors (e.g., Tashkent to Termiz) can enhance
regional trade and reduce costs for businesses.
• Tourism Development:
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Cultural and eco-tourism projects, especially in Samarkand and Bukhara, offer untapped
potential for foreign investments.
Recommendations
1. Strengthen Institutional Frameworks:
• Ensure transparent governance and streamlined administrative processes.
2. Focus on Priority Sectors:
• Promote investments in high-potential industries like renewable energy, IT, and
agriculture.
3. Foster Regional Collaboration:
• Encourage cooperation between regions to pool resources and attract larger-scale
investments.
4. Enhance Skill Development:
• Create training programs tailored to investor demands in key sectors.
Conclusion
Attracting foreign investments to regions is a pivotal strategy for achieving balanced and
sustainable economic growth in Uzbekistan. By addressing the current challenges—such as
infrastructure gaps, regulatory hurdles, and skill shortages—the country can significantly
enhance its investment attractiveness.
Special attention must be given to creating a favorable business environment through
targeted policy reforms, the development of infrastructure, and the promotion of regional
strengths. The establishment of Special Economic Zones (SEZs), investment in renewable
energy, and digitalization of investment processes can serve as key drivers of regional
development. Global best practices, such as Kazakhstan’s centralized investment promotion
strategy and India’s focus on underdeveloped states, provide valuable lessons that can be
adapted to Uzbekistan’s unique context.
A cohesive and long-term approach that integrates policy, infrastructure, and human
capital development is essential for attracting foreign direct investments and ensuring
equitable regional progress. By implementing these strategies, Uzbekistan can unlock its
regional potential and solidify its position as a competitive investment destination in Central
Asia.
References:
1.
Qodirov, A. A. Investments and Economic Growth: Theory and Practice. Tashkent:
Uzbekistan National University Publishing, 2020.
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Islomov, S. R. The Role of Investments in Regional Economic Development. Tashkent:
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Juraev, K. T. Regional Economy: Investment Management Systems. Tashkent: “Science
and Technology” Publishing, 2021.
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Ollokulov, B. M. Investment Potential of Economic Reforms in Uzbekistan. Tashkent:
Economic Development Institute, 2022.
5.
Karimov, A. N. Strategic Approaches to Attracting Foreign Investments in Uzbekistan.
Tashkent: Investment Analysis Center, 2020.
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6.
Khudoyberdiev, F. R. Infrastructure Development and Investment Strategies in
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