Uzbekistan President Shavkat Mirziyoyev has initiated a wave of economic reforms in the country since he assumed power at the end of 2016 following the sudden death of predecessor Islam Karimov, who remained in the top post for 27 years.

The reforms aim to introduce more economic freedoms to the Uzbek population and to promote private entrepreneurship as the country prepares to deregulate prices of commodities, including natural gas, while increasing the country’s exposure to the world economy.

The drive has been led by Mirziyoyev, who personally oversees new key projects and initiatives, including exploration and production targets, and issues orders to Uzbekneftegaz and other state-owned companies.

“We have received clear instruction from the President to ensure the presence of large international oil and gas companies in the country,” says Uzbekneftegaz chairman Bakhodirzhon Sidikov.

Progress

When not visiting construction sites across Uzbekistan, Mirziyoyev monitors the progress of important projects via conference calls that sometimes may include thousands of listeners, or direct regional meetings.

A graduate of the Tashkent Institute of Irrigation & Agricultural Mechanisation Engineers in 1981, Mirziyoyev opted to continue his career with the institute until 1992.

After holding several government posts, he was appointed Uzbekistan’s prime minister in 2003, a position that gave him greater insight into the heavily regulated Uzbek economy, which was subject to sudden and frequent fluctuations during Karimov's rule.

One famous example of government intervention was the 2010 dismantling of private sector conglomerate Zeromax, which held a significant stake in the country's oil and gas and mining industries.

Zeromax, which fell under the control of Karimov’s daughter Gulnara following its quick growth, was once Uzbekistan's largest private-sector employer, with over 27,000 employees and more than $1 billion in annual revenues.

Goal

In addition to market liberalisation, Mirziyoyev is also understood to he behind a goal to make landlocked Uzbekistan an energy-independent country, despite the steep price of such an effort.

The country is preparing to start developing its coal reserves, estimated at about three trillion tonnes, with coal being considered a cheaper alternative to gas despite its more harmful environmental footprint.

However, in the view of the president, burning gas for heating of homes and greenhouses is “barbarism”, according to the country’s recently appointed Energy Minister Alisher Sultanov.

Mirziyoyev has clearly indicated that natural gas should be used as feedstock to produce chemicals and polymers, which have significant added value, rather than sent to export destinations, Sultanov says. To make more gas available for conversion into polymers and synthetic fuels, Mirziyoyev has also approved programmes to increase energy efficiency and develop alternative energy sources in the country.

Earlier in May, Sultanov and the executive director of Russian state nuclear operator Rosatom, Alexei Likhachyov, signed a road map to build the first ever nuclear power plant in Uzbekistan.

Construction of the facility is expected to start in 2022 and will take at least seven years to complete, with the project set to be financed by Russian banks.

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Uzbekistan reforms target energy independence