On the trail of the Silk Road in Uzbekistan

Uzbekistan is known for its famous ancient cities Samarkand and Tashkent; the old trade powerhouses along the Silk Road. But it is undergoing a quiet transformation. Spearheaded by its new President, Shavkat Mirziyoyev, the country has begun to open itself up to international investment, and is embarking on a tremendous journey of reform to move from a closed to a free market economy.

While the majority of the western market is facing the threat of negative yield rates and slow growth rates, Uzbekistan’s economy grew by 6% in 2018 according to the IMF and this rise is set to continue.

When the Uzbekistan Capital Markets Development Agency (CMDA) approached us to partner with them to help strengthen their financial markets, we were eager to explore this opportunity.

The UK-Uzbekistan International Financial Centre project will provide initial-stage advice and a structured roadmap for the development of a full-stage feasibility study on the advantages for Uzbekistan in creating an international financial centre in Tashkent. As a world-leading international financial centre, the UK has enormous experience and insight to offer to achieve this aim and TheCityUK already works closely with a number of developing international financial centres to support their growth. The Uzbeks recognise this value proposition and what we can bring to the table in terms of expertise and insight.

Among the issues we are discussing is the increased use of English law to build productive capital and investment markets. We will also explore how to encourage the development of an Islamic finance ecosystem, channelling the UK’s leading role in this area to bring more people in Uzbekistan access to financial services which accord with their values.

Much has been said about the revival of a ‘new’ Silk Road in the form of China’s Belt and Road initiative. Uzbekistan is strategically positioned to benefit from this initiative and the UK's financial and professional services industry can play a leading role in supporting Belt and Road projects and channelling investment so that it delivers the best possible value. As evidenced by London’s continued strong position in the Z-Yen index of global financial centres, London’s sustainable model of maintaining the most international of financial centres is a unique resource that can assist other aspirant centres to develop. By evaluating the best of the existing models, we can develop a unique expression for Uzbekistan to realise its aspirations as it develops its own international financial centre.

Undoubtedly, it will be a blend of global investment and infrastructure, together with transparency and accountability, which will develop these legendary cities into regional powerhouses again. A new kind of International Financial Centre, with our Memorandum of Understanding (MoU) at its heart, could help Uzbekistan open itself to the world again. A country once renowned as a trading centre for silk and spices can resume its traditional role - only, this time, focussing on finance, professional services and new technologies.