Silk Road scenes: A new horizon for business

Uzbekistan – a landlocked country nestled at the heart of the Silk Road. Fertile lands of the wise khanates, hard negotiators controlling powerful trade routes, where imperial powers once hustled for influence in the Great Game – and now once more attracting the interest of the world.

For generations, the country has been almost entirely closed. The previous regime was obsessed with control and suspicious of success. International investors were routinely burnt, with giants such as General Motors and BAT clinging on through gritted teeth and constant harassment. In an economy dominated by the state, entrepreneurs had to be creative in order to grow.

Yet since 2016, the picture has been changing and the economy has been opening up. New freedoms of movement allow ordinary Uzbeks to see the wealth of Turkey, the Middle East and Europe. A motivated government seeks to achieve a century’s worth of development in a decade and emulate the best of all possible worlds.

Sprawling state-owned companies are the first targets. If ambitions are realised, shares in a raft of national assets will soon be in private hands. These include a creaking state airline, bloated oil and gas companies and some of the world’s most exciting mining deposits. Consultants are working around the clock to prepare them for the international market. For investors, low-hanging fruit will offer quick returns.

Reforms are also unpicking years of legislation that has been hostile to entrepreneurs. Private sector champions are reorganising to become transparent, efficient and sustainable. Companies such as Artel – possibly the country’s largest corporate – are graduating to international financing, and maybe one day a London listing.

On the streets, business fever is spreading. Corporate buzzwords are in vogue. Farmers plan to IPO their land; taxi drivers are looking for venture capital. Investors are seeing the opportunity, and billions of dollars are flooding in to propel Uzbekistan forward.

Of course, the country is trying to run before it can walk. There has not yet been a successful ‘people’s IPO’. And as the government is unused to many of the issues of capitalism, it’s still struggling to cope with the challenges of the modern world. The cold winter has brought gas shortages. Perhaps adjusting to a free market is not as smooth as it seems.

But as international investors become more involved, so expectations become higher, and accountability grows. Both the government and private business is welcoming the challenge.

Although it is a case of stop-and-start, momentum is heading in the right direction. Uzbek companies are open and eager to meet the highest standards. When they are ready, markets will welcome them.