Capital Budgeting, Infrastructure, and Capital Investment in the Republic of Uzbekistan

Capital Budgeting, Infrastructure, and Capital Investment in the Republic of Uzbekistan

Tatyana Guzman (Cleveland State University, USA)
Copyright: © 2019 |Pages: 19
DOI: 10.4018/978-1-5225-7329-6.ch004

Abstract

This chapter offers a macro-level review of the capital budgeting process and practices, capital investment projects, and capital funding in the post-Soviet Republic of Uzbekistan. The chapter discusses some of the major challenges related to capital investment and capital budgeting that Uzbekistan faced after the collapse of the Soviet Union, how the country has overcome some of these challenges in 27 years of independence, and what issues remain unresolved. The chapter additionally describes the most sizeable and impactful recent capital investment projects and the role government played in their financing. Finally, the chapter provides a comparison between capital budgeting practices in Uzbekistan, some post-Soviet republics, and the United States.
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Background

Uzbekistan is a double land-locked country in Central Asia bordering Kazakhstan, Tajikistan, Kirgizstan, Turkmenistan, and Afghanistan. The Republic, geographically slightly larger than California, is home to about thirty million residents, most of whom are ethnical Uzbeks (83.8 percent of total population in 2017, compared to 72.8 percent in 1991, according to the The State Committee of the Republic of Uzbekistan on Statistics. This is the most highly populated country in Central Asia. The major religion is Islam (Sunnis). Administratively, Uzbekistan includes twelve regions and the autonomous Republic of Karakalpakistan. The capital city is Tashkent. The same president, Islam Karimov, led the country from 1989 until his death in 2016. Current president, Shavkat Mirziyoev was previously a prime minister of Uzbekistan (from 2003-2016) and succeeded president Karimov after his death.

The borders of today’s Uzbekistan have historically been situated in a highly developed region lying in the midst of a Silk road, which ascertained trade benefits. The region has been generously endowed with natural resources, such as copper, gold, natural gas, and others. The hot and dry climate has favored growth of cotton, fruits, and vegetables. Prosperity of the region for millennia attracted powerful conquerors from Alexander the Great, to Genghis Khan, and Tamerlane. During the nineteenth century, Central Asia was invaded by Russian empire and after the Revolution of 1917, it became one of fifteen Soviet republics. Abundance of natural resources and seventy years of Soviet presence have undoubtedly affected the path of economic growth in the Republic, impacted the nature of capital budgeting practices, and created a stock of capital assets that Uzbekistan owes to this day.

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