IMPROVING INVESTMENT ATTRACTION MECHANISMS IN UZBEKISTAN’S SERVICE SECTOR: BARRIERS, OPPORTUNITIES, AND POLICY RECOMMENDATIONS

Abstract

This study aims to examine and evaluate the existing mechanisms for attracting investment into
Uzbekistan’s service sector, identify the principal barriers impeding capital inflows, and propose evidence-based
recommendations for institutional and regulatory improvements. The research specifically investigates how
legislative frameworks, financial instruments, and public-private partnership models affect investor decisionmaking
in the context of a transitioning economy. A mixed-methods research design was employed, integrating
quantitative survey data from 214 domestic and foreign investors operating in Uzbekistan’s service sector with
qualitative insights obtained from 18 semi-structured expert interviews. Statistical analysis, including descriptive
statistics and factor analysis, was applied to the survey responses. Qualitative data were analyzed using thematic
coding. Secondary data from the State Statistics Committee of Uzbekistan, the World Bank, and UNCTAD reports
for the period 2019–2023 were also incorporated. The study identifies digitalization, tourism infrastructure, and
logistics services as the sub-sectors with the highest untapped investment potential. This paper contributes to the
investment climate literature by constructing a context-specific Investment Attraction Framework (IAF) tailored
to the service sectors of lower-middle-income transitioning economies. The framework synthesizes institutional
economics, location theory, and public-private partnership literature in a novel application to Uzbekistan’s postreform
environment.