Engaging constructively with Uzbekistan is in Britain’s strategic interest

If the UK does not invest and trade with this central Asian success story, our competitors will win out

Uzbekistan is no longer the closed, stagnant economy many in the West remember from two decades ago. Since 2016, under President Shavkat Mirziyoyev, Tashkent has pursued an energetic programme of economic liberalisation, currency reform and privatisation that has attracted foreign investment, lifted growth, and opened the country to global cultural exchange.

One of President Mirziyoyev’s most important social achievements has been dismantling the system of state-imposed forced and child labour in the cotton harvest, a long-running abuse that historically mobilised over a million people each season. Independent monitors and the International Labour Organization now report that systemic forced and child labour in the cotton sector was eliminated in the 2020–2021 cycle – a momentous reform that removed one of the principal obstacles to Uzbekistan’s integration into the global economy.

For years, Uzbekistan was seen as a difficult place to do business: bureaucratic, opaque, and overly dependent on commodities. Such a perception is now outdated. The government has worked to dismantle price controls, ease currency restrictions, and simplify the tax system. And these measures have begun to bear fruit. The World Bank reports average GDP growth of 5.3 per cent since 2017, placing Uzbekistan among Central Asia’s most consistent performers.

For British companies accustomed to saturated or slow-growth markets, this reform story matters. Uzbekistan’s more transparent business environment and expanding private sector now make long-term commercial engagement feasible where it was once prohibitively risky. In short: the door is open, but it will not stay open forever.

Economic reform has been matched by diplomatic energy. In 2022, the European Union concluded negotiations with Uzbekistan on an Enhanced Partnership and Cooperation Agreement, a landmark step towards deeper political and trade relations. At the EU–Central Asia summit held in Samarkand this year, European leaders announced a multi-billion-euro investment package focused on transport, green technology and digital connectivity. It was the clearest signal yet that Europe increasingly views Central Asia as a vital partner in its supply-chain strategy.

Uzbekistan’s location at the crossroads of Eurasia lends it enormous strategic significance. As Europe looks for alternative overland trade routes to Asia, the country’s position between Kazakhstan, Turkmenistan, Afghanistan and China makes it a linchpin in the emerging network of transcontinental corridors connecting the EU to the Indo-Pacific. China’s Belt and Road Initiative, the EU’s Global Gateway, and regional logistics projects all intersect here.

For Britain, Uzbekistan represents an early-mover opportunity. Engagement now could give London influence in a region where China, Russia and the EU are all vying to shape the rules of connectivity and trade.

The opening has a cultural dimension, too. Alongside economic reform, Uzbekistan is experiencing what might be called a cultural renaissance. Museums, foundations and educational institutions are opening their doors to international collaboration. The Art and Culture Development Foundation of Uzbekistan has supported major exhibitions in Paris, Venice and London, bringing Uzbek heritage and contemporary art to global audiences.

This is not soft-focus public relations; it reflects a conscious effort to reposition Uzbekistan as a confident, outward-looking society that regards cultural diplomacy as a complement to economic modernisation. For British institutions, from museums and design schools to universities, the opportunities for effective partnership are substantial.

The British Museum’s interest in Central Asia’s Silk Road heritage, the Victoria and Albert Museum’s design collaborations, and a growing number of UK-Uzbek educational links all point to a wider story: Uzbekistan is seeking credible partners in arts and education, and Britain has the expertise to help.

Perhaps no example better illustrates Uzbekistan’s transformation than International Beverages Tashkent (IBT), the country’s official PepsiCo bottler. Founded in 2011, IBT has invested over US $300m in production and distribution across the country and plans to invest another US $200m in the next five years, including a new bottling plant.

Led by Uzbek businessman Shukhrat Ergashev and Hayk Sarkissian, a London-educated entrepreneur, IBT has become one of Uzbekistan’s flagship international partnerships. The company was recognised as PepsiCo’s European Bottler of the Year in both 2020 and 2022, outperforming peers across 53 markets. Sarkissian notes that Uzbekistan “is one of the most exciting countries” he has worked in, with a populace that is “warm, driven and eager to build opportunities as the nation gains global attention from tourists and investors alike.” He describes a country “poised to become a regional hub for global enterprises”, with regulatory reforms “advancing faster than expected” and a government showing a “clear focus on progress”.

IBT’s innovations include producing 1.5-litre bottles containing 20 per cent recycled PET, a first for the country, as part of its sustainability drive to reduce water, energy and greenhouse gas intensity. The company’s commitment to sustainability and quality has been backed by significant international financing: in 2021, IBT secured a US $100m syndicated loan arranged by Deutsche Bank, marking Uzbekistan’s first-ever institutional corporate debt transaction.

In 2022, Revery, an international investment firm led by Sarkissian, and IBT launched the Baraka grocery retail chain. Its success led them to acquire, earlier this year, the rights to develop the Burger King brand in Kazakhstan. They plan to launch the first Burger King restaurant in Uzbekistan in the coming months. Sarkissian says Revery is “committed” to “this remarkable country”.

PepsiCo’s success story is emblematic of Uzbekistan’s changing role in global supply chains. It shows that the country is no longer viewed solely as a low-cost manufacturing base, but as a viable consumer market with the potential for value-added production and sustainable growth.

For British investors, the implications are significant. Firms in food processing, logistics, retail, and renewable energy will find not only an increasingly skilled workforce but also a government eager to attract responsible, internationally connected partners.

Uzbekistan has a balanced and low tax system, supported by special economic zones that offer land and incentives in exchange for investment. The government’s infrastructure push – new roads, airports and utilities – is improving the environment for business. Ergashev, who sits on the Public Council under the President, says the body “is in constant dialogue with the government” to ensure laws support business growth.

Britain is well placed to build on this momentum. The UK already enjoys strong educational and professional links with Uzbekistan, including English-language training programmes and business education partnerships. But the relationship could go much further.

A deeper engagement need not be grandiose. It could begin with expanded trade missions led by the Department for Business & Trade, targeted support for SMEs entering Central Asia, and closer collaboration between British law firms and Uzbek authorities to strengthen commercial arbitration and corporate governance frameworks.

Culturally, museums and universities could pursue joint exhibitions and research, while the British Council, which is already active in the region, could foster creative-industry collaborations. On the academic front, joint degrees and faculty exchanges in energy transition, water management and digital skills would marry British expertise with Uzbekistan’s development priorities.

Such engagement would not only open a new market for British companies but also advance a strategic objective: maintaining the UK’s influence in a region whose economic importance is growing rapidly.

Uzbekistan’s economy remains smaller than most Western investors are used to, and its reform process is still in motion. But that is precisely what makes engagement attractive. Early entrants can help shape the frameworks and partnerships that will define the next phase of growth.

The pattern is familiar: those who arrive first in emerging markets tend to build the networks and brand loyalty that pay dividends later. For Britain, this is a chance to demonstrate commercial agility and cultural sophistication, qualities that have long defined its global sway.

Uzbekistan’s transformation is one of the more remarkable and under-reported economic success stories of the decade. The question for Britain is whether it will stand aside as others, notably the EU and China, strengthen their presence, or take its place as a constructive partner in shaping the country’s modern future.

The prudent course is to engage now: to trade, teach, exhibit and invest while the opportunities are open and the goodwill is real. Uzbekistan is changing fast. Britain should be part of that story – not as a spectator, but as a partner in its next chapter.

Aditya Anand Kumar

Source: https://www.telegraph.co.uk/news/2025/11/16/engaging-with-uzbekistan-britain-strategic-interest