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DOI: https://doi.org/10.37547/history-crjh-02-06-01 
ISSN 2767-472X 
©2021 Master Journals 

   
  Accepted 05th June, 2021 &  Published 10thJune, 2021  

 

 
 

 

CURRENT RESEARCH JOURNAL OF HISTORY                           
ISSN – 2767-472X 

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   https://masterjournals.com/index.php/CRJH 

 

INVESTMENT BASIS AND DEVELOPMENT TRENDS OF SMALL BUSINESS AND  

ENTREPRENEURSHIP IN UZBEKISTAN 
 

Naim Oblomuradov 

Doctor Of Historical Sciences Tashkent Financial Institute Social Sciences 

 

INTRODUCTION 

The socio-economic development of any country, 
the growth of incomes, the improvement of living 
standards depend on the volume and 
composition of foreign investment in various 
sectors of the national economy. If we look at the 
new historical period of Uzbekistan (1991-
2020), we can see that a number of measures 
have been taken to increase the attractiveness of 
the investment climate in the development of 
small business and private entrepreneurship in 
the country. In accordance with the Action 
Strategy for the five priority areas of 
development of the Republic of Uzbekistan for 
2017-2021, significant work has been done in 
recent years to deepen structural changes in the 
state program, increase its competitiveness 
through modernization and diversification of key 

sectors of the national economy. Uzbekistan's 
consistent approach to the denationalization and 
privatization of property, the development of 
entrepreneurship and business is creating real 
conditions for intensifying the process of 
attracting foreign investment to the country's 
economy. 

THE MAIN RESULTS AND FINDINGS 

In the early years of Uzbekistan's independence, 
a number of normative and legal acts were 
adopted on the development of small business 
and private entrepreneurship and attracting 
investment in them. Among them was the 
adoption of the Law "On Foreign Investment in 
the Republic of Uzbekistan" on June 14, 1991, 
which defined the legal, organizational aspects 
and procedures for the introduction of foreign 
investment in the country. This law was adopted 

ABSTRACT  
 
The article describes the investment basis, historical factors and development trends in the development of 
small business and entrepreneurship in the years of independence of Uzbekistan. It describes the state policy 
to increase the attractiveness of the investment climate, important factors, conditions and some problems in 
attracting foreign investment. The article notes that the integration of the industry into the world economic 
system has allowed Uzbekistan to improve the domestic socio-economic environment, ways to actively 
attract investment and use it wisely by further encouraging entrepreneurs. 
 
 
KEYWORDS: - Small business, entrepreneurship, historical factor, investment, investor, credit, enterprise, 
property, privatization, market, bank, capital, industry, import, joint venture. 



CURRENT RESEARCH JOURNAL OF HISTORY 2(6): 01-06, June 2021      
DOI: https://doi.org/10.37547/history-crjh-02-06-01 
ISSN 2767-472X 
©2021 Master Journals 

   
  Accepted 05th June, 2021 &  Published 10thJune, 2021  

 

 
 

 

CURRENT RESEARCH JOURNAL OF HISTORY                           
ISSN – 2767-472X 

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in 1998 on a new basis [1. 1998 №7. p 12]. 

According to historical analysis, before 
independence in 1990 there was almost no 
foreign investment in the investment portfolio of 
the former Soviet Union, in 1994 there were 586 
joint ventures in Uzbekistan, 560 were foreign 
investments, in 1995 1,000 joint ventures which 
were about 1 billion soums. About 10,000 
entrepreneurs, mostly farmers, have been 
supported by money from privatization. 
Researchers note that, for example, in 1997, total 
investment was $271.6 billion soums, of which 
217.6 bln. UZS (78%) national investment, 54 
billion soums (22%) was foreign investment. 
2.3% of investments are directed to production, 
which specializes primarily in the introduction of 
new technologies, the production of marketable 
products [2. 2000, p.64-65]. 

In 1994-1996, the second phase of small 
business and private entrepreneurship and 
foreign investment, the government took 
important measures related to small-scale 
privatization. As a result, in 1995, Uzbekistan 
was one of the first CIS countries to achieve 
positive results in terms of economic growth. 
The favorable business environment created for 
foreign investors, a wide range of legal 
guarantees and benefits, measures to encourage 
enterprises with foreign investment have 
allowed to radically increase the inflow of direct 
investment into the economy of our country. 

If we look at the historical figures, in the first 
years of independence, due to the conditions 
created for foreign investors in the country, there 
have been many positive developments in this 
area. During this period, Uzbekistan has signed 
investment agreements with Germany, Turkey, 
Egypt, Indonesia, Pakistan, Finland, the United 
States and France to finance business. [3. p 17]. 
In recent years, this figure has risen steadily. 
According to the data, in 1997 the share of 
foreign investment in the republic was 19.9%   of 

the total disbursed capital, and in 2000 - 21.7%. 
This confirms the growth of only 2% in three 
years. 

The bulk of foreign capital came from joint 
ventures. For example, as of January 1, 2001, 
there were 1,796 joint ventures with 
entrepreneurs from 70 countries in Uzbekistan. 
In particular, joint ventures with large firms from 
the United States, Germany, South Korea, Russia 
and other countries have been successful, 
Akhmediyeva writes. For example, in 1997, total 
investments amounted to 271.6 billion UZS, of 
which 78% is national investment, 54 billion. 
soums, 22% of which was foreign investment. 
That is, two-thirds of the investment was 
directed to production, which was primarily 
directed to the introduction of new technologies, 
the production of marketable products. 

But at the same time, there were some problems 
in the industry. One of them was to register 
investors and create the necessary opportunities 
for them. In fact, the law provides for the 
registration of investors and the creation of 
opportunities for their activities in the absence of 
violations in the activities of investors. According 
to the law, foreign legal entities have the right to 
own property in the territory of the Republic of 
Uzbekistan, which is not prohibited by the 
legislation of the Republic of Uzbekistan and is 
necessary for economic and other activities. The 
property of foreign legal entities is protected by 
the state. The increase of property and its free 
transfer to other countries is guaranteed by law 
[4. p. 37- 38]. 

Among such problems are the statistics for the 
years of independence, including the fact that 
until 2002, no enterprises with foreign 
investment were established in 31 districts of the 
country. If at the beginning of 2000 there were 
143.5 thousand enterprises, in 2002 there were 
240 thousand small and medium enterprises in 
the country. From these, 85,000 are farms. The 



CURRENT RESEARCH JOURNAL OF HISTORY 2(6): 01-06, June 2021      
DOI: https://doi.org/10.37547/history-crjh-02-06-01 
ISSN 2767-472X 
©2021 Master Journals 

   
  Accepted 05th June, 2021 &  Published 10thJune, 2021  

 

 
 

 

CURRENT RESEARCH JOURNAL OF HISTORY                           
ISSN – 2767-472X 

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private sector employs 30 percent of the 
population. Some researchers estimate that 
private companies account for 35 percent of 
GDP. [5. p 78.]. Thus, due to the conditions 
created for foreign investors in the country, there 
have been many positive developments in this 
area. During this period, Uzbekistan has signed 
investment agreements with Germany, Turkey, 
Egypt, Indonesia, Pakistan, Finland, the United 
States and France to finance business. 

For example, in 2008 $1billion 700million 
Foreign investment was disbursed, which is 46% 
more than in 2007. Most importantly, 74% of 
foreign investment was direct investment. About 
54% of all investments were made by 
enterprises and the population. This once again 
confirms the correctness of the tax policy 
pursued in our country to reduce the tax burden 
and encourage investment activity of businesses. 

Of course, if we take into account the attraction 
of foreign investment in the business sector in 
the regions, the situation becomes even clearer. 
According to research, the situation with their 
involvement in different regions of the country 
varies due to certain disproportions and 
gradations. For example, in Andijan region, the 
share of foreign investment in entrepreneurship 
increased by 3.3% in 2000 compared to previous 
periods, by 23% in 2011 (almost 7%), in 
Bukhara region by 9.0% to 69.9%, respectively, 
in Kashkadarya region it increased from 0.1% to 
22%. These figures remain in Jizzakh, Khorezm 
and Surkhandarya regions at 5.3-6.8%. Even if 
some archival data is analyzed in this regard, it is 
possible to see a closer look at the above facts. In 
other words, most of the joint ventures were in 
Tashkent and Tashkent region, Samarkand and 
Andijan regions. There are two reasons for this: 

First, the differences between business entities 
established in the regions at the expense of 
foreign investment are that these areas are not 
considered a priority in those spheres;  

Second, in some of these regions, the investment 
climate is imperfect and insufficient conditions 
are created for foreign investors [6. p 338]. 

However, it is natural that economic relations 
with the country with which the investment 
cooperation is positive will be at the level of 
demand. Therefore, Uzbekistan has established 
cooperation with countries near and far abroad 
in this area. Historically, the share of CIS 
countries in Uzbekistan's foreign trade has been 
lower than in foreign countries. In particular, in 
2008 the share of CIS countries in Uzbekistan's 
foreign trade amounted to 38.7%. The figure was 
34.7% for export transactions and 42.7% for 
import transactions [7. p 61]. 

Russia (49.5%) and Kazakhstan (11.5%) are the 
leaders in foreign economic relations among the 
CIS member states. At that time, our country's 
foreign economic relations with the rest of the 
CIS were very low. In 2008, the Russian 
Federation led Uzbekistan's import operations 
with the CIS countries, accounting for a quarter 
of total imports and amounted to 1,863 million 
US dollars. The largest share of imports (13.8%) 
fell to China and the Republic of Korea (12.9%). 
Overall, countries with more than 5% of imports 
accounted for Ukraine (8.3%), Kazakhstan 
(6.0%), and Germany (5.3%) [8. p 61]. 

 

In recent historical periods, the conditions 
created for investors have also begun to change 
for the better. For example, in 2015, according to 
the World Bank's Doing Business report, 
Uzbekistan was included in the top ten reformers 
in 2014 and 2015, the country that created the 
most favorable conditions for doing business. 
According to World Bank experts, it takes 
relatively little time to set up a business in 
Uzbekistan. In this regard, for example, 1.5 times 
less than in Japan, 1.6 times less than in 
Germany, twice as much as in Greece and Israel, 
2.2 times less than in Spain, and 4.8 times less 



CURRENT RESEARCH JOURNAL OF HISTORY 2(6): 01-06, June 2021      
DOI: https://doi.org/10.37547/history-crjh-02-06-01 
ISSN 2767-472X 
©2021 Master Journals 

   
  Accepted 05th June, 2021 &  Published 10thJune, 2021  

 

 
 

 

CURRENT RESEARCH JOURNAL OF HISTORY                           
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than in China. In addition, the level of tax burden 
on small business in our country is much lower 
than in the United States, Canada, Germany, 
Austria, France, Italy, Spain, Greece, Japan, China, 
Belarus and a number of other countries [9. p. 2]. 

According to the World Bank's economic rating, 
Uzbekistan ranks 63rd out of 190 countries. 
According to the World Economic Forum, 
Uzbekistan is one of the five fastest growing 
countries in the world in 2014 and 2015 and in 
2016-2017. In 2017, it rose to 74th place in the 
world ranking of ease of doing business, 11th 
place in terms of business registration, 27th 
place in terms of access to electricity, lending 
ranked 55th and 73rd in terms of private 
property registration [10.№1]. High rates of 
economic growth have ensured a relatively 
balanced distribution of income among the 
population. 

One of the important directions in attracting 
foreign investment to the national economy in 
Uzbekistan is the formation of special economic 
zones in the country. Navoi, Jizzakh, Angren, 
Gijduvan, Kokand, Urgut, Hazarasp free economic 
zones have been established in the country and 
are currently operating effectively. As of January-
September 2018, the volume of foreign 
investments and loans in fixed assets amounted 
to 17770.6 billion soums, the share of foreign 
investments and loans in total investments 
amounted to 25.0%, directly The share of foreign 
investments and loans amounted to 7336.6 
billion soums, the share of foreign direct 
investment and loans in the total volume of 
foreign investments and loans amounted to 
41.3%. The above analysis shows that in January-
September 2018, the amount of foreign 
investment increased by almost 2.5 times 
compared to 2010 due to the conditions created 
for foreign investors, in particular, the timely 
formation of the regulatory framework. [11. p 
53]. 

If we turn to the statistics, in 2001-2017, the 
number of small businesses and private 
entrepreneurship in the country increased from 
99 thousand to 229 thousand, in the first half of 
2018 the number of such enterprises amounted 
to 247.7 thousand. Accordingly, as of January 1, 
2016, the number of small businesses with 
foreign capital reached 4,564. Only in 2015, 386 
enterprises based on foreign capital were 
established in the country. As of January 1, 2019, 
the number of enterprises with foreign capital 
operating in the country amounted to 7,560. This 
is explained by the fact that compared to 2018, 
the number of enterprises increased by 2043. 
From the existing enterprises, 4,006 were small 
joint ventures and 3,554 were foreign 
enterprises [12. p 21]. 

In his Address to the Oliy Majlis on the most 
important priorities for 2019, President 
Mirziyoyev focused on investment and said that 
which state has active investment politics, it has 
achieved sustainable growth of its economy. That 
is why investment is the driver of the economy, 
in Uzbek, the heart of the economy. ” In his 
address, the President noted that despite the 
significant work being done to improve the 
business environment in the country, in some 
respects we still rank low among the countries of 
the world. In particular, according to the World 
Bank's Doing Business ranking, our country 
ranks 134th in construction. This indicates that 
there are many problems in the industry. For 
example, there are 17 permit procedures in the 
construction industry, which take an average of 
246 days to obtain, he said. 

 

In terms of regions, the majority of small, 
medium and large enterprises based on private 
entrepreneurship with foreign capital are in 
Tashkent city with 4728 (total share 62.5%), 
Tashkent region 851 (11.3%) and Samarkand 
region 396 body (5.2%). The lowest number of 



CURRENT RESEARCH JOURNAL OF HISTORY 2(6): 01-06, June 2021      
DOI: https://doi.org/10.37547/history-crjh-02-06-01 
ISSN 2767-472X 
©2021 Master Journals 

   
  Accepted 05th June, 2021 &  Published 10thJune, 2021  

 

 
 

 

CURRENT RESEARCH JOURNAL OF HISTORY                           
ISSN – 2767-472X 

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enterprises with foreign capital was in Khorezm 
region (0.9%), Kashkadarya - 85 (1.1%), Navoi 
region - 109 (1.4%) and the Republic of 
Karakalpakstan - 121 (1.6%) [13 . December 29, 
2018]. 

Studies have shown that in some areas with low 
performance, it is necessary to work with foreign 
partners and further develop the work that 
needs to be done to attract investment. If we 
consider small enterprises with foreign capital in 
terms of economic activity, the largest number is 
2995 (39.6%) in industry, 1668 (22.0%) in trade 
and 1225 (16.2%) in other activities. did The 
lowest rates were in health and social services 
(97%), information and communication - 209 
(2.8%), transportation and storage - 214 (2.8%). 
and 339 (4.5 percent) in fisheries, 325 (4.3 
percent) in accommodation and catering 
services, and 488 (6.5 percent) in construction 
[14. 2019. 01. №1. ]. 

CONCLUSION 

In conclusion, it can be said that the measures 
taken in Uzbekistan to attract foreign investment 
in business and entrepreneurship, technical and 
technological modernization of enterprises in the 
business sector, increase the number and quality 
of products and increase competitiveness will 
further develop the country's economy. The 
following factors are important for the active 
attraction of foreign investment in Uzbekistan 
today: 

First, it confirmed that the active domestic and 
foreign policy, favorable conditions for foreign 
investors, the preservation of peace and 
tranquility in the country, the positive 
macroeconomic and microeconomic indicators of 
the country are the main factors in actively 
attracting foreign investment;  

Second, Uzbekistan is establishing equal 
partnerships with foreign investors on the basis 
of economic relations, especially with developed 

countries that have their own prestige in the 
world. Indeed, the investments have shown that 
the country's economy is supported by a wide 
range of opportunities for its development; 

Third, world experience shows that countries 
that are transitioning to a market economy 
cannot successfully integrate into the world 
economic community without creating a 
favorable investment climate and actively 
attracting foreign investment to the national 
economy.  

Fourth, Uzbekistan's consistent path of 
denationalization and privatization, 
entrepreneurship and business development has 
confirmed that it creates real conditions for 
intensifying the process of attracting foreign 
investment to the country's economy. 

REFERENCES 

1. Миренский Б. Новое инвестиционное 
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Узбекистан.// Ўзбекистонда ижтимоий 
фанлар.Т., 1998 №7. С 12.  

2. Olmasov A, Vakhobov A. Restructuring the 
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3. Uz MA Fund-M-20, List 1, Volume 10, Page 
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4. Strategy of Uzbekistan is a socio-analytical 
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5. Zaynutdinov Sh.N, Karmisheva Sh.K. 
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6. Egamberdiyev E, Khojakulov H. Small 
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7. Надырханов У. Региональные аспекты 



CURRENT RESEARCH JOURNAL OF HISTORY 2(6): 01-06, June 2021      
DOI: https://doi.org/10.37547/history-crjh-02-06-01 
ISSN 2767-472X 
©2021 Master Journals 

   
  Accepted 05th June, 2021 &  Published 10thJune, 2021  

 

 
 

 

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привлечеиния иностранных 
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