Green economy, transparent market, accession to the WTO: the expert summed up the results of the EBRD forum - Denis Sokolov

From May 16 to 18, the 32nd Annual Meeting of the Board of Governors of the European Bank for Reconstruction and Development (EBRD) and a business forum took place in Samarkand.

The theme of this year's event was "Investing in Resilience." Over three days, government representatives, entrepreneurs, economists, and other experts discussed strategies to respond to the current crisis and plans for future sustainable growth.

Denis Sokolov, General Director of Commonwealth Partnership Uzbekistan, attended the annual meeting and business forum of the EBRD and shared his insights and observations:

"Many approach such forums with a degree of skepticism, not without reason believing that the words spoken during sessions bear little relevance to daily life. On the one hand, this is true, but on the other hand, the impact of these statements often becomes evident much later.

Carefully studying the materials and speeches allows one to 'peek into the future.'"

During the forum, Sardor Umurzakov, Chief of Staff of the President's Administration, delivered a keynote speech outlining six main directions for economic development:

1. Public administration – A compact and efficient apparatus.
2. Green economy – Uzbekistan aims to be a pioneer in the green transition in the region.
3. Small and medium-sized enterprises (SMEs) – Support for private entrepreneurship.
4. Investor rights protection – Establishing legal frameworks, including commercial courts.
5. Privatization of state property.
6. Accession to the WTO.

A notable absence in the usual mantra of attracting investments was observed. Officials now recognize that investors are not "mice drawn to the smell of cheese" but individuals who require a clear and transparent environment and adequate returns.

Some Uzbek private businesses still treat investors like bazaar buyers, showing them mythical returns in hopes of "hooking" them. This undermines trust. Market transparency, essential for investors, is built on trust and accurate information.

The green economy and regional leadership in the green transition are, of course, a tribute to the theme of the forum, but this quite claims to be an investment idea for the country. The fact is that the green agenda is “built into” the economic transformation program. That is, unlike other countries, where economic mechanisms have already developed in the old paradigm and green transformations are associated with additional costs, Uzbekistan can immediately build a green economy. Especially considering the active support from international financial organizations. For the real estate market, this means that every new building must, if not have a green certificate, then take into account the decarbonization trend.

Organizers conducted a quick survey among participants on what is most important for building a sustainable green city. The top response was "active participation of all stakeholders," followed by "effective planning," with "access to financing" and "innovative technologies" trailing significantly.

I note that the best representatives of the business community answered the question. And indeed, it is participation at all levels in solving the decarbonization task that is more important than financing. Financing allows you to speed up the process but does not at all guarantee the correct application of effort.

As for entrepreneurship and small business, as I understand, the authorities profess a liberal market approach: rejection of excessive regulation, which is quite consistent with the idea of ​​a compact government. I would also note the high level of entrepreneurship of the country’s residents. Unfortunately, statistics do not reflect the situation, but compared to other countries, even with higher GDP per capita, the craft economy is much more widespread. This may be due to historical restrictions on foreign trade and a greater emphasis on localization. But this feature cannot be underestimated: the craft economy is one of the country’s sustainability resources.

In general, I would describe this strategy as follows: we apply impact where the maximum multiplier effect can be obtained, create a traditional environment for a liberal economy, and ensure free enterprise. This is a very pragmatic approach. Despite the fact that Central Asia shows faster rates of economic growth compared to the global economy, this may not be enough to provide jobs for its young and growing population. This means that it is necessary to develop a post-industrial economy, which allows us to create not only high-paying jobs but also creates effective consumer demand.

As Georgy Paresishvili, head of the Tashkent Stock Exchange, said, listing a company on a local exchange creates demand for legal services, financial consultants, appraisers, etc. In Uzbekistan, the economy is growing at a rapid pace, and maintaining the growth rate requires a developed financial system. Two years ago, the Central Bank switched to an inflation targeting strategy; now the task is to develop lending in the national currency. This requires a reduction in interest rates and inflation.

As for the privatization of state property, I liked the thesis that before privatizing companies, it is necessary to transform management. That is, you need to start managing them as a private business. This is an ambitious task, because countries often try, on the contrary, to throw “off the balance sheet” what they cannot manage effectively. As a result, assets are sold at a lower cost and end up in the hands of speculative investors.

Regarding WTO accession, many mistakenly believe that joining this organization leaves the domestic market unprotected. In reality, the WTO provides regulators with standard and effective tools to protect both the domestic market and exporters. Of course, mastering these tools will take time—it is much easier to impose prohibitive tariffs administratively. Progress toward WTO integration is essential, as every step in this direction is good news for the investment climate.

Many criticize me for paying too much attention to official rhetoric, arguing that actions matter more than words. I believe that when analyzing actions, one should apply the principle of falsifiability rather than confirmation. In other words, the success of a strategy is determined not by isolated facts supporting it (e.g., how many small enterprises were opened) but by minimizing opposing trends (e.g., how many enterprises went bankrupt due to excessive regulation).

This is exactly how the country's development trajectory should be assessed—by observing whether tangible steps are taken in the declared direction. This is what the investment community focuses on, not celebratory declarations.

Source: Spot.uz
Photo: Presidential Press Service