The President of Uzbekistan Shavkat Mirziyoyev has “unique vision” of greater regional “connectivity” and socio-economic integration which is “vital” for achieving peace, stability and harmony. It is an “ideal” combination of innovative, pragmatics foreign policy, commercial diplomacy and innovative mechanism of greater political understanding.
Right from the beginning president Mirziyoyev introduced numerous “structural reforms” in diverse sectors of economy, investments, FDIs, industry, trade, commerce, banking and last but not least, social development. He initiated new “concept” of foreign policy which further strengthened prospects of greater socio-economic prosperity and regional connectivity.
According to Uzbekistan official statistics (January 2021) due to constant structural reforms the average annual investment growth rate was 22 percent during the last four years. The total volume of foreign investment reached $26.6 billion, including direct investments of $17.5 billion.
Critical analysis indicates that the total volume of investments over the past 4 years has increased by more than 2.1 times, including foreign investments by 2.7 times. The share of investment of GDP in 2019 exceeded 38 percent for the first time, which created a solid foundation for ensuring economic growth in the coming years.
At the same time, the GDP of Uzbekistan in 2019 increased by 5.6 percent. Despite the complex and complicated economic conditions and ongoing COVID-19 pandemic the World Bank has predicted the country’s GDP growth in 2021 by 4.8 percent, which is one of the best indicators among developing countries.
Moreover, Uzbekistan’s foreign trade turnover is growing much faster than GDP and in 2019 increased by 26.2 percent, amounting to $42.2 billion. While in just 9 months of 2020, despite the pandemic, the country’s foreign trade reached $27.5 billion.
Economic potential of Uzbekistan is rich. It is the Central Asia’s largest market, comprising almost a half of the population of the region. It is also the geographic pivot and lynchpin of Central Asia, bordering all of the other Central Asian states as well as Afghanistan, and with transit connections in all directions.
Uzbekistan is rich in hydrocarbons and mineral resources and possessing a relatively well-educated and low-cost labor force, Uzbekistan has become a leading, economy. Uzbekistan has the great potential to serve as a manufacturing, transport, and technical hub for Central Asia, South Caucasus and the South East Asia.
Uzbekistan is centrally located in the heart of Eurasian continent, historically as well as in the modern contemporary world has projected and developed itself as an ideal hub to promote regional trade and communication links. So, tide is slowly but surely changing and a vast ocean of possibilities are there to dive into. Central Asia, with a market of more than 70 million people, offers an array of economic opportunities, resources and trade routes.
Uzbekistan has made a rapid breakthrough in the development and successful implementation of a whole range of industry-specific growth, export-oriented policies, investment & business friendly structural reforms, corruption free governance and society, independent judiciary, transparency and development programs, which have actually revolutionized its economic prospects and business outlook. It has outperformed all the regional economies in terms of GDP, GNP, job generation, foreign currency management, tourism, service sector and above all development of human capital.
Geo-economically, Central Asia is defined as to be “sitting at the crossroads of East and West in which Uzbekistan remains the most populous republic in Central Asia and is geographically central states in Central Asia as well.
Uzbekistan has now emerged as central player in the regional development. It is a neighboring country to Afghanistan and accounts for extensive natural resources including cotton, gold, uranium and natural gas.
Among all the Central Asian Republics it remains the most stable state with well-developed capital and social infrastructure. It remains the world’s second largest cotton exporter and fifth largest producer. It also has gas reserves. It also has several operational oil fields.
Since centuries, Uzbekistan has been one of the vital country and trade hubs during the era of ancient “Silk Route” between the Central Asia Region (CAR) and South Asia Region (SAR) especially. Now due to rigorous commercial diplomacy and innovative leadership of President Mirziyoyev the Republic of Uzbekistan and Pakistan the chances of greater regional connectivity have been achieved. Civilizational linkages have now been swayed by commercial diplomacy. Historical connections have been reinvented because of increasing trade & commerce ties.
Political understanding is now at its best and is getting momentum. Economic preferences are being reshaped in terms of strategic economic partnership. Investment prospects are further diversified. Now Tashkent and Islamabad are getting closer and closer and fairies of true friendship, brotherhood and mutual respect are flying high on the connecting mountains. Due to which caravans of economic ties and regional connectivity have been further strengthened between Fergana and Faisalabad, Samarkand and Sialkot, Bukhara and Bhakkar and last but not least, Kiva and Karachi.
No doubt Central Asia has been the main focus of Uzbekistan’s new foreign policy through enhanced political understanding and greater economic cooperation. Shavkat Mirziyoyev took decisive and concrete steps aiming to develop mutually beneficial relations with neighboring states and establishing trustful contacts with all other Central Asian leaders.
Uzbekistan’s foreign policy towards Central Asia Region (CAR) and South Asia Region (SAR) has already been “formalized” into a “holistic” and “integrated” doctrine, with the principal goal of comprehensively deepening relations and increasing interaction with the CAR and SAR.
Uzbekistan’s active regional policy for “rapprochement” with all CAR and SAR, without exception, and intensification of political dialogue at the highest level has already produced significant practical results, particularly by providing new impetus for cooperation in the trade, economic, transport and communication spheres. During his presidency Mirziyoyev has been able to mend the relations with all the neighbors, significantly ramp up the engagement with Afghanistan to help solve the ongoing conflict.
Uzbekistan has planned in the implementation of the Trans-Afghan corridor and joining various international transport corridors “North-South”, “Trans-Caspian corridor” and “China-Kyrgyzstan-Uzbekistan” create favorable prerequisites not only for the country’s exit from the state of transport isolation but also for increasing its importance as a transport and transit hub and providing access to promising markets.
Uzbekistan and Pakistan have been jointly working for promoting trade & commerce ties, business activities, foreign direct investments and joint ventures since 1992.
Economic integration promotes spirits of connectivity and beneficial propositions between the two countries. Now constant trade & commerce activities, signing of meaningful commercial MOUs, prospects of Preferential Trade Agreement (PTA), protocols of trans-regional railways connectivity, easy and smooth access to hot waters (seaports), joint ventures in textiles, pharmaceutical, agriculture, automobile, energy and infrastructure development have given new imputes to Uzbekistan-Pakistan bilateral relations.
Uzbekistan’s economic “transformation” through rigorous “structural reforms” initiated by the leadership of Shavkat Mirziyoyev has now enabled his country to “expand” its trade & commerce relationship beyond the immediate neighborhood. Series of high officials meetings, interactive sessions, exchange of mutually beneficial proposals, economic incentives, trade promotion pledges, and last but not least, constant seaports facilitations has now revolutionized “concept” of regional connectivity between Pakistan and Uzbekistan. Now “caravans” of greater regional connectivity have started their successful “infinite voyages” to one of the important country of ancient “Silk Route”, Uzbekistan.
Most recently, the first shipment under the Convention on International Transport of Goods for traffic-in-transit of goods crossed the border reached Pakistan from Uzbekistan via Afghanistan in 48 hours. It has actually diminished the concept of double landlocked doctrine and enhanced regional connectivity.
Pakistan signed the Convention on International Transport of Goods Under Cover of TIR Carnets in August 2015, which is a multilateral treaty that entails no payment of customs duties and taxes. Pakistan ratified the convention in January 2016.
The Ministry of Commerce termed it a “new milestone” which has been achieved as the result of collaboration between the transport companies of the two sides. It followed the successful shipment of first-ever cargo from Pakistan to Uzbekistan earlier this month. It labeled the beginning of a new era where trucks from both sides will take trade cargo to and from Karachi and Gwadar ports.
On May 11, 2021 a cargo truck with Uzbek license plate safely crossed the Afghan transit route in two days and reached the Torkham checkpoint near Peshawar. After the completion of customs clearance, the truck will reach the importer in Faisalabad. Thus, long awaited dreams of connectivity between Fergana and Faisalabad have now been lit-up.
In this context, the vehicle transports from Uzbekistan processed leather products (wet blue) for Pakistani leather factories. Hopefully, more Uzbek export goods like coal, mineral fertilisers and textiles have been planned for regular direct delivery to Lahore, Karachi, Taxila and Faisalabad.
The Embassy of Uzbekistan in Pakistan under the ambassadorial ship of H.E. Aybek A Usmanov together with Pakistani transport company Best Trans Pvt Ltd and Uzbek freight forwarding company Asad Trans for the first time implemented a pilot trans-Afghan logistics project for direct delivery of Uzbek export goods to Pakistan through the territory of Afghanistan.
It is successfully achieved with the help of the Embassy of Uzbekistan in Islamabad and the Ministry of Commerce of Pakistan and the partners of Asad Trans and Best Trans Pvt Ltd. All main stakeholders have been working since January this year on this project for direct delivery of Uzbek goods to Pakistani cities through Afghanistan according to the “supplier’s warehouse-importer’s warehouse” scheme.
The specified transit transportation of Uzbek goods is the implementation of trans-Afghan transport and logistics project initiated by the president of Uzbekistan.
It reduces cost of transportation of Uzbek goods, including shipping at Uzbek-Afghan border and subsequently at Afghan-Pakistani border, in accordance with TIR Carnet Convention dated 1975, members of which are Uzbekistan, Afghanistan and Pakistan.
Partners of Best Trans Pvt. Ltd and Asad Trans are planning to increase the number of freight vehicles up to 50 units by the end of the year to ensure smooth circulation of goods by Uzbek trucks.
The chairman of Best Trans Pvt Ltd Ramiz Rabbani termed it a historical event, since before that in the Uzbek-Pakistani economic relations, the delivery of Uzbek export goods directly to Pakistan through the freight transport of Uzbekistan was not implemented.
It hopes that the expected signing between Uzbekistan and Pakistan of intergovernmental agreements on preferential and transit trade will further enhance bilateral trade volumes and will give an impetus for development of interregional freight circulation through the trans-Afghan route.
Due to changing geopolitical and geostrategic propositions, Uzbekistan now prefers reconnect with South Asia through Pakistan which offers the cheapest and shortest routes. It has various seaports to connect Uzbekistan not only with South Asia but also with Middle East Region.
In this context, Uzbekistan-Pakistan bilateral relations has been further strengthened during recent times because of the better political understanding, improvement in bilateral trade, phenomenal rise to tourism and last but not least joint efforts to bring peace and harmony in the region especially in Afghanistan.
During his address to Shanghai Cooperation Organization (SCO) Heads of State meeting in November 2020, the Uzbek President Shavkat Mirziyoyev proposed to eliminate trade barriers, simplify customs procedures, and boost investment and thus accelerate socio-economic ties.
On its part, Pakistan ideally provides the natural link between the SCO states/CIS to be connected the Eurasian heartland with the Arabian Sea and South Asia. It offers the safe and compatible overland routes/seaports and essential connectivity for befitting propositions in terms of trade and energy supplies.
In the near past, the government of Pakistan has signed a joint request letter seeking a $4.8 billion loan from international financial institutions for a mega railway project to connect Pakistan with Uzbekistan via Afghanistan and later to other Central Asian states. The said railway joint project has already been approved by the presidents of Uzbekistan and Afghanistan. It estimates that the project will help improve regional trade and connectivity through Afghanistan to the Central Asia Republics.
The signing ceremony was attended by Uzbekistan’s Minister for Transport Makhkamov Ilkham and senior Pakistan government officials. During the meeting, Imran Khan affirmed Pakistan’s eagerness “to establish closer ties with Central Asia in diverse sectors of trade, investments, energy, and people-to-people contacts. Prime Minister Khan upheld Pakistan’s strong commitment to deepen bilateral cooperation.
On his part, Uzbek minister highlighted Uzbekistan’s desire to improve bilateral trade and commercial ties and connectivity with Pakistan. He also discussed rail and road cooperation and explored region direct access to the seaports. Prime Minister Khan emphasized the significance of joint efforts to promote connectivity for regional development and offered Pakistan’s seaports for greater regional connectivity.
The $4.8 billion trans-Afghan railway line “Mazar-e-Sharif-Kabul- Peshawar” project consists of 573-km long railway track, connecting Peshawar to Kabul and Mazar-e-Sharif all the way to Uzbekistan. Pakistan would operate the routes from Peshawar to Torkham beyond which Afghanistan and Uzbekistan will operate it.
Special Assistant to the Railways Minister Ghulam Dastgir highlighted strategic importance of the said project. It would build on the already existing railway infrastructure in the three countries. It has multiplier socio-economic and geopolitical effects. It will further enhance transit trade between Pakistan and Central Asian region.
Pakistan Minister for Railways Azam Khan Swati showcased salient features of the said trilateral project connecting Pakistan Railways with Afghanistan and Uzbekistan and will include both passenger and cargo high-speed trains. He termed the project a huge opportunity to boost trade flows and strengthening regional economy. It hopes that the said project will provide a new impetus to Pakistan Railways after the country’s most expensive $6.8 billion Mainline-1 (ML-1) project to upgrade 2,655km tracks under China-Pakistan Economic Corridor (CPEC). The trilateral rail project opens up “a new window of opportunity for all the CIS.
For the further strengthening of bilateral trade Afghanistan’s Minister for Commerce and Industry visited Pakistan and had a meeting with Federal Minister for Maritime Affairs Syed Ali Haider Zaidi and discussed issues related to bilateral trade and enhancing cooperation through the ports between the two countries.
Federal Minister Ali Zaidi informed Afghan Minister Nisar Ahmad about Prime Minister Imran Khan’s vision of improving relations with Afghanistan. They reaffirmed developing strong ties between the two brotherly countries and discussed enhancing cooperation on maritime issues. On his part, the Afghanistan minister expressed keen interest in utilizing Gwadar Port while Ali Zaidi spoke about Pakistan’s desire to access the Central Asian markets via Afghanistan.
On its part, Uzbekistan’s national rail company, Uzbekistan Temir Yullari (UTY), constructed the 75-kilometer rail link between Hairatan at the border of Uzbekistan and the city of Mazar-e-Sharif in northern Afghanistan which was a vivid reflection of cooperation between two CAREC member countries.
It started from the Hairatan freight terminal on the Afghan bank of the Amu Darya River the 1,520 mm gauge single track line was built through relatively easy terrain to the outskirts of Mazar-e-Sharif. The $170 million project was completed during 2011-2012. The rail project has had a significant economic impact, as almost half of Afghanistan’s imports pass through Hairatan.
The various visits of high official of both the countries have strengthened meaningful deliberations in all areas of bilateral cooperation including political, security & defence cooperation, peace process in Afghanistan as well as trade and investment promotion during which areas of mutual interest for future collaboration were also identified, including agriculture, tourism and cultural cooperation. Pakistan and Uzbekistan have common views on regional security, especially peace and stability in Afghanistan.
In the near past, the Foreign Minister of the Republic of Uzbekistan, Dr. Abdulaziz Kamilov paid various personal visits to Pakistan and met Prime Minister Imran.
Pakistan Prime Minister Khan highly projected the importance of historic and civilizational links between the two countries. He highly valued its close fraternal ties with Uzbekistan and wished to deepen bilateral cooperation in all areas.
By emphasizing importance of economic development and enhanced bilateral trade he termed regional connectivity as the cornerstones of economic growth and development. He underlined Pakistan’s resolve to forge closer ties with Central Asia, covering trade, investments, energy, and people-to-people exchanges.
Moreover, the Prime Minister appreciated the proposed Trans-Afghan railway project between Pakistan, Uzbekistan and Afghanistan. He showed Pakistan’s commitment to support all efforts for the earliest realization of this important connectivity project.
Uzbekistan is one of the important countries of One Belt & One Road Initiative (BRI) and CPEC is the flagship project. Thus commercial convenience and convergence is there to further strengthen the bilateral relations between the two countries through alternative corridors.
Foreign Minister Makhdoom Shah Mahmood Qureshi also held delegation level talks with the Foreign Minister of Uzbekistan, Dr. Abdulaziz Kamilov which were very effective, productive and positive in its multilayered orientations. Views were exchanged on enhancement of economic cooperation, mutual support in international fora, regional connectivity and tourism promotion.
During the meeting, both sides expressed their firm resolve to boost high-level interactions to give impetus to the existing positive momentum in bilateral relations. It was agreed to maximally utilize the existing institutional mechanisms by regularly convening sessions of Bilateral Political Consultations (BPCS) and Joint Ministerial Commission (JMC).
Foreign Minister Qureshi emphasized the importance of direct air connectivity to further trade and tourism. He also stressed facilitation of visas for businessmen and tourists. Here it is worth mentioning that Uzbekistan government is already working upon it. According to reliable resources, PIA is going to start its direct flights to Tashkent which will hopefully play an important role in regional connectivity, speed and scope of bilateral relations in the days to come.
He also underscored the importance of closer agricultural cooperation between the two countries particularly in cotton seed sector. Uzbekistan is blessed with natural colored cotton which may be utilized by initiating a joint venture in public-private partnership between the two sides.
The Foreign Minister highlighted Pakistan’s positive role for the facilitation of Intra-Afghan Negotiations. The Foreign Minister reiterated Pakistan’s support to Afghan-owned and Afghan-led peace and reconciliation process culminating in an inclusive and broad-based political solution. Establishment of lasting peace and stability in Afghanistan would contribute to progress on various connectivity initiatives leading to regional prosperity.
Most recently, during various spells of bilateral meetings Pakistan and Uzbekistan agreed to enhance trade relations, bilateral transit trade agreement, Preferential Trade Agreement (PTA), banking and visa issues, and aviation and customs cooperation. Unfortunately, National Bank of Pakistan has recently closed its banking operations in Tashkent due to which potential investors and businessmen are now facing acute problems. It is suggested that banking operations in all the central Asian countries especially, Tashkent may be reopened immediately.
Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood and Uzbek Deputy Prime Minister Sardor Umurzakov had various meaningful meetings to further strengthen bilateral relations between the two countries. In order to further deepen the trade ties, both sides also agreed to hold a business conference in Tashkent in July this year.
Pakistan offered cooperation to different stakeholders including customs, maritime affairs, railways and aviation sectors. Uzbekistan and Pakistan held the first meeting of the joint working group on trade and economic issues, as well as a railway project to link the two countries.
In this context, APTMA and Governor Punjab Ch. Muhammad Sarwar visited Uzbekistan and projected real potential of Pakistan and the CPEC for further strengthening of bilateral relations. The delegation of the two countries discussed implementation of the previously reached agreements, as well as the prospects for expanding the Uzbek-Pakistani partnership in the field of investment, trade, industrial cooperation, transport and education. Consequently, various meaningful MOUs have so far been signed between Pakistani private companies and Uzbekistan.
Pakistan is a gateway to landlocked Central Asia and has invited all Central Asian Republics (CARs) to benefit from the shortest route to international seas. Pakistan desires to forge closer ties with Uzbekistan and other CARs in areas of trade, investment, energy, and people-to-people exchanges.
Projects in the spheres of education, health care, culture, ziyorat tourism were also discussed. Enhanced interaction between the leading universities of Uzbekistan and Pakistan in the fields of the textile industry, agriculture, tourism, study of the Urdu and Pashto languages were also discussed.
Virtual summit has started a sustainable strategic partnership between the two brotherly countries. It will definitely provide an opportunity for the development and strengthening of bilateral ties between Uzbekistan and Pakistan.
Uzbekistan is also engaging with Pakistan on the development of two options the first is the Trans-Afghan railway project while the second is the road route via China.
In this connection, Uzbekistan showed its keen interest to join the Quadrilateral Traffic in Transit Agreement (QTTA), an agreement between China, Pakistan, Kyrgyzstan and Kazakhstan to facilitate transit traffic and trade. Pakistan has been supporting Uzbekistan in this regard also.
The road project under this agreement would provide an alternative link between Pakistan and Central Asia while bypassing Afghanistan through the Karakoram Highway which connects Gilgit-Baltistan to China’s Xinjiang region and further on to Central Asia.
After the successful virtual summit of President of Uzbekistan H.E. Shavkat Mirziyoyev with Prime Minister of Imran Khan prospects of mutually beneficial cooperation between the two countries are further strengthened and brightened. It has actually opened a new window of opportunity for both the countries to extend cooperation, in diverse sectors of economy, trade & commerce, security and defense cooperation, energy & food cooperation and last but not least, collaboration in textiles, culture, education and tourism.
It reflects Uzbekistan’s President Mirziyoyev strategic foreign policy priority of 2020 based on development, good convergence and mutual beneficial relations with all the Central Asian Countries and South East Asia and especially Pakistan being the easiest and short route for greater regional connectivity. Resultantly, the volume of inter-regional trade among the Central Asian countries has increased by an average of more than 50 percent annually which shows successful of holistic conflict resolution policies of Uzbekistan’s President Mirziyoyev which is now paying its numerous socio-economic-politico dividends.
It is indeed height of commercial diplomacy of Uzbek president Mirziyoyev who has been pursuing comprehensive structural economic reforms to liberalize its macro-economy, develop private sector, seek more and more FDIs, befitting joint ventures, beneficial land reforms, assurance of private ownership, relaxation & incentives of taxes and customs duties and last but not least, pledging of national currency to international currency basket to further strengthen its face value and increase more and more exports in the days to come. It is encouraging that during (2017- 2020), more than 300 agreements contracts were signed between Uzbekistan and the countries of the region which actually has further enhanced Uzbekistan’s FDI ratios.
Both leaders discussed on various issues of mutual interest and showed their satisfaction on the different ongoing projects and results of inter-MFA political consultations and intensification of inter-parliamentary ties. Both leaders emphasized the need to further strengthening interaction within international organizations, interaction in the spheres of defense and security and last but not least, the role of Pakistan in the Afghan settlement process.
During the virtual summit because of ongoing pandemic of COVID-19 both leaders committed to expand cooperation in trade, economic, investment, transport and communication spheres and of course work jointly for the further strengthening regional connectivity.
Commercial diplomacy has fueled the development of regionalism as well as globalization and Uzbekistan is the pioneer of ancient silk route and champion of connectivity. Economic corridor stimulates regional integration and socio-economic prosperity. Trans-railway projects have further enhanced regional connectivity in this regard, proposed trans-rail projects of Uzbekistan, Pakistan and Afghanistan is instrumental for greater regional connectivity.
Being prominent regional expert of Uzbekistan & CIS I suggest that a “Joint Transport Company (JTC)” comprising of interested transport companies of both the countries would be “game changer”. Formation of “Reciprocal Trade Houses (RTHs)” would be a “value-addition” for the further strengthening of bilateral trade. A “Joint Merchandise Shipping Company (JMSC)” may further enhance blue economy or trade through sea especially with Gawdar under the flagship project of the CPEC. A Joint Tourist Company (JTC) would further attract tourists from both sides. Participation of respective private sectors would achieve desire goals of industrialization, joint ventures and special economic zones between the two countries. Formation of “Corridor of Knowledge (CK)” may be an “innovative” idea to stimulate the bilateral trade in the days to come. Revival of banking and financial integration is the need of the hour.
H.E. Shavkat Mirziyoyev the president of Republic of Uzbekistan initiated numerous structural reforms to enhance economic potential of his country in which greater regional connectivity plays very important role. He is actually rebranded Uzbekistan from “isolation” to “integration” through rigorous commercial diplomacy. Prospects are very high after innovative means of connectivity under the Convention on International Transport of Goods for traffic-in-transit of goods crossed the border reached Pakistan from Uzbekistan via Afghanistan in 48 hours.
