2014 Index of Economic Freedom

Uzbekistan

overall score46.5
world rank163
Rule of Law

Property Rights15.0

Freedom From Corruption13.4

Limited Government

Government Spending70.4

Fiscal Freedom90.3

Regulatory Efficiency

Business Freedom75.7

Labor Freedom60.8

Monetary Freedom63.1

Open Markets

Trade Freedom66.1

Investment Freedom0.0

Financial Freedom10.0

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Quick Facts
  • Population:
    • 29.4 million
  • GDP (PPP):
    • $104.7 billion
    • 8.0% growth
    • 8.4% 5-year compound annual growth
    • $3,555 per capita
  • Unemployment:
    • 0.2%
  • Inflation (CPI):
    • 12.1%
  • FDI Inflow:
    • $1.1 billion
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Uzbekistan’s economic freedom score is 46.5, making its economy the 163rd freest in the 2014 Index. Its score is 0.5 point higher than last year, with improvements in business freedom and the control of government spending outweighing declines in freedom from corruption and labor freedom. Uzbekistan is ranked 37th out of 42 countries in the Asia–Pacific region, and its overall score is much lower than the world average.

Uzbekistan was first ranked in the Index in 1998. Since then, its economic freedom score has advanced by about 15 points, one of the top 20 improvements. Overall improvement has been driven by gains in six of the 10 economic freedoms including monetary freedom, business freedom, and fiscal freedom. However, property rights and investment freedom have declined by 15 points or more over the country’s history in the Index.

Uzbekistan remains economically “repressed.” Pervasive state controls persist in many areas, stifling progress in the development of a modern diversified economy. Corruption is widespread, and contract enforcement and protection of property rights are seriously deficient.

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Background

President Islam Karimov has held power since the late 1980s. Uzbekistan allowed NATO to use its Karshi-Khanabad air base after 9/11 but expelled all U.S. forces in 2005 and moved closer to Russia following Western criticism related to the Andijan incident, in which government troops shot and killed hundreds of Islamist protesters. Recently, relations with the United States and the European Union have improved due to cooperation in fighting Islamist terrorism. Uzbekistan left the Russia-dominated Commonwealth Security Treaty Organization in 2012. Rapprochement with Kazakhstan, if pursued, would shore up regional stability. Uzbekistan is a leading cotton producer and heavily dependent on natural gas, oil, gold, and uranium exports. It has secured a $2.54 billion loan from a consortium of private banks to build the Ustyurt gas and chemical complex.

Rule of LawView Methodology

Property Rights 15.0 Create a Graph using this measurement

Freedom From Corruption 13.4 Create a Graph using this measurement

The judiciary is subservient to the president, who appoints all judges and can remove them at any time. Court procedures fall short of international standards, and expropriation by powerful figures able to act with impunity is possible. Corruption is rampant. Property ownership, generally respected by local and central authorities, can be subverted by the government. There is no general system for registration of liens on chattel property.

Limited GovernmentView Methodology

The top individual income tax rate is 22 percent, and the top corporate tax rate is 9 percent. Other taxes include a value-added tax (VAT) and a property tax. The overall tax burden equals 20.2 percent of gross domestic income. Government expenditures amount to 31 percent of GDP. Public debt is below 10 percent of gross domestic income. The central government has reported a rare budget surplus due to expanding revenue collection.

Regulatory EfficiencyView Methodology

Starting a business takes four procedures, and no minimum capital is required. However, completing licensing requirements still takes over 200 days. The labor market remains stagnant. A large portion of the workforce is in the informal sector. The government administers prices of many basic staples, such as petroleum products, natural gas, utilities, and bread.

Open MarketsView Methodology

The average tariff rate is 6.9 percent. It is very costly and time-consuming to import goods. It may be difficult for investors to access foreign currency. The government screens new foreign investment and restricts investment in many industries. Banking is dominated by state-owned banks and lacks competition and transparency. State-controlled banks support government economic priorities through subsidized loans offered in specific sectors.

Country's Score Over Time

Bar Graph of Uzbekistan Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Uzbekistan to other economic country groups

Regional Ranking

rank country overall change
1Hong Kong90.10.8
2Singapore89.41.4
3Australia82-0.6
4New Zealand81.2-0.2
5Taiwan73.91.2
6Japan72.40.6
7Macau71.3-0.4
8South Korea71.20.9
9Malaysia 69.63.5
10Kazakhstan63.70.7
11Thailand 63.3-0.8
12Azerbaijan61.31.6
13Samoa61.14.0
14Kyrgyz Republic 61.11.5
15The Philippines60.11.9
16Sri Lanka60-0.7
17Vanuatu59.52.9
18Mongolia58.9-2.8
19Fiji58.71.5
20Indonesia58.51.6
21Tonga58.22.2
22Cambodia57.4-1.1
23Bhutan56.71.7
24India55.70.5
25Pakistan 55.20.1
26Bangladesh 54.11.5
27Papua New Guinea53.90.3
28China52.50.6
29Tajikistan52-1.4
30Laos51.21.1
31Maldives512.0
32Vietnam50.8-0.2
33Nepal50.1-0.3
34Micronesia49.8-0.3
35Burma46.57.3
36Uzbekistan46.50.5
37Kiribati46.30.4
38Solomon Islands46.21.2
39Timor-Leste43.2-0.5
40Turkmenistan42.2-0.4
41North Korea1-0.5
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