Index trend
Previous Quarterly Editions
Expropriation Risk: 60 60 58 58 ►Political Violence Risk:48 48 48 48 ►Terrorism Risk:50 50 50 50 ►Exchange Transfer and Trade Sanction Risk: 64 64 64 64 ►Sovereign Default Risk:56 65 56 56 ►
Overall Risk Temperature: 57 (Significant) TREND ►
Special topic: Political polarization
Despite the long-running liberalization program fostered by the successor of President Islam Karimov, who died in 2016, Uzbekistan's political landscape continues to be characterized by centralized authority and limited pluralism. The absence of genuine opposition parties results in non-existent affective polarization. All registered political parties support President Shavkat Mirziyoyev’s policies, eliminating the possibility of partisan hostility. The latest parliamentary elections of October 2024, devoid of real opposition and criticized by the Organization for Security and Co-operation in Europe (OSCE) as “lacking a genuine choice,” underscore this uniformity.
Ideological diversity is scarce, insofar as political discourse aligns closely with presidential policies. The lack of opposition limits public debate on alternative policy proposals, leading to a homogenized ideological landscape. Following the July 2023 presidential election, which as expected was won by the incumbent in a landslide, the OSCE Office for Democratic Institutions and Human Rights election observer mission issued a report noting that all other candidates “refrained from presenting alternative political views” and “endorsed the President’s policies.”
While public political competition is minimal, recent events suggest potential elite tensions. In October 2024, Komil Allamjonov, a prominent political figure close to the president’s elder daughter, Saida, who has been her father’s chief of staff since 2023, survived an assassination attempt in Tashkent. The incident immediately raised concerns about factionalism and power struggles among Uzbekistan's political elites.
Shortly after, President Mirziyoyev dismissed several high-ranking officials, including his younger daughter’s husband Otabek Umarov, who was serving as deputy head of the presidential security service. According to local experts, the failed attempt on Allamjonov’s life took place against the backdrop of growing opposition among some elites to the liberalization and modernization policies promoted by Saida Mirziyoyeva. Subsequently, several businesspeople associated with Umarov were detained, casting doubt on the future of his informal business empire.
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Since coming to power in 2016, Mirziyoyev has engaged in a pro-market reform program that has brought about a degree of liberalization of the economy. One pillar of the program is privatization — a critical reform area given that state-owned enterprises account for about half of the entire economy. While this program has seen several successes, it has not lived up to expectations, in part due to the unrealistic goals set by the government and a drop in investor sentiment following Russia’s invasion of Ukraine.
In February 2024, a new law on privatization was passed, setting out a detailed legal and regulatory framework. Two months later, Mirziyoyev signed a decree instructing the government to speed up work to privatize 247 state-owned firms, more than 1,000 real estate properties and 12 leading state-run companies whose shares were to be floated on public stock exchanges. Three state-owned banks were initially slated for sale before the middle of 2023. Last December, their privatization was again postponed by one more year.
Despite the stated ambition of the presidential administration, however, the rule of law remains weak, and the degree of the government’s intervention in the economy is overbearing. When the president relaunched his privatization agenda in March 2023, Spanish engineering company Maxam was reported to have filed a claim against Uzbek state chemical company Uzkimyosanoat in London for alleged nonfulfillment of contractual obligations on a ‘systematic basis.’
In July 2022, the province of Karakalpakstan — among the poorest in the country — was rocked by mass protests against proposed amendments to the constitution that would have seen the region lose its autonomous status. Despite the government’s swift withdrawal of the amendments, the protests continued for several days, resulting in the deaths of around 20 people.
The unrest, while a major political shock, is symptomatic of underlying popular discontent over lagging economic development; the lack of opportunities for employment, especially among young workers; and chronic shortages of utilities such as gas and electricity.
Mass outages of power and heating in the capital and other cities during a severe cold snap at the end of 2022 and in January 2023 dented trust in the government. While a systemic threat to the Mirziyoyev administration and Uzbekistan’s overall stability is unlikely, localized protests are likely to remain a feature of the current authoritarian, centralized political system.
The rise of Islamic State Khorasan in the northern regions of Afghanistan created new security concerns in Uzbekistan. In 2022, at least two incidents were recorded of rocket fire from Afghanistan into Uzbekistan. In March 2023, 10 Western nations issued a joint communique that expressed grave concern about the increasing threat of terrorist groups such as Islamic State Khorasan.
Within Uzbekistan, the security services have consistently suppressed open demonstrations of religious commitment, such as Islamic dress. Periodic arrests of extremists are typically overreported in the media, likely with the intention of sending a message to other Islamist groups and to justify the repressive activities of the security apparatus. In practice, the threat of a serious terrorist attack within Uzbekistan remains low.
In February this year, the European Union sanctioned an Uzbek trading company called Uzstanex for its involvement in the illicit diversion of controlled goods to Russia. The same company was already designated by the U.S. Department of the Treasury in October 2024, alongside Tashkent-registered Elite Investment Group, which had supplied U.S.-made electrical transformers to Russia via Turkey.
Since Russia’s invasion of Ukraine in 2022, Uzbekistan and other Central Asian countries have been subject to growing scrutiny over their compliance with Western sanctions regimes as Western governments increasingly focus their attention on Russia’s trade partners that could be facilitating sanctions evasion. In a March 2023 advisory note, the U.S. government cited Uzbekistan — together with Kazakhstan, Kyrgyzstan and Tajikistan — as a potential transshipment hub through which goods might be re-exported to aid the Russian war effort.
Nevertheless, any sanctions against Uzbek nationals or entities are likely to be highly selective, meaning that the majority of the Uzbek economy will not be affected by any forthcoming sanctions action.
Uzbekistan has maintained consistently strong economic growth, despite the COVID-19 pandemic and geopolitical dislocations following the Russian invasion of Ukraine. In 2024, GDP grew 6.5%, on the back of 6% the year prior. The European Bank for Reconstruction and Development expects growth of at least 6% for 2025 . The World Bank and the International Monetary Fund forecast 5.8% and 5.7%, respectively. While it is the case that the population as a whole may not be feeling the benefit of this steadily high growth, there is little threat to Uzbekistan’s sovereign position.
In January, the central bank reported $41.2 billion worth of international reserves, mostly comprising gold (77.7%), up from $34.6 billion one year earlier. The increase was mainly due to a 27% rally on the spot gold market in 2024, driven by increased geopolitical uncertainty around the world. Thus, gold alone contributed more than $3 billion in additional value to Uzbekistan’s foreign exchange reserves.
All three major credit rating agencies — Standard & Poor’s, Moody’s and Fitch — have a stable macroeconomic outlook for Uzbekistan. Their current long-term ratings are BB–, Ba3 and BB–, respectively.
