ECONOMIC DIPLOMACY AS A TOOL FOR ATTRACTING FOREIGN DIRECT INVESTMENT: EXPERIENCE OF UZBEKISTAN (2017–2025)
DOI:
https://doi.org/10.5281/zenodo.21801028Abstract
Economic diplomacy has become an increasingly important instrument for attracting foreign direct
investment (FDI) to Uzbekistan during the period 2017-2025, a decade characterized by an unprecedented level of external
openness following the country’s post-2016 reform agenda. Drawing on institutional data from UNCTAD, the World Bank,
and the Central Bank of Uzbekistan, together with a qualitative assessment of diplomatic instruments—including bilateral
investment agreements, high-level state visits, and the Tashkent International Investment Forum—the analysis evaluates
whether economic diplomacy has evolved into a structural determinant of FDI inflows or remains a largely symbolic policy
instrument. A mixed-method research design combining descriptive trend analysis with comparative and event-based case
evidence is employed to examine the relationship between diplomatic initiatives and investment flows across the principal
recipient sectors. The results demonstrate that macroeconomic liberalization, particularly the 2017-currency reform,
generated the most substantial initial increase in FDI, whereas subsequent diplomatic initiatives, especially investment
forums and sector-specific bilateral agreements, contributed to a delayed but significant acceleration of investment
inflows during 2024-2025, following a temporary decline in 2023. Nevertheless, institutional bottlenecks, uneven investorprotection
mechanisms, and a persistent concentration of investment in the energy and extractive industries continue to
limit Uzbekistan’s investment potential relative to its regional peers. Sustainable growth in FDI therefore depends not only
on effective economic diplomacy but also on continued institutional reforms, stronger investor protection, and a broader
diversification of diplomatic engagement and investment-promotion mechanisms.
Keywords
economic diplomacy; foreign direct investment; Uzbekistan; investment promotion; bilateral investment agreements; Central Asia; institutional reformReferences
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