December 6, 2018- Monthly AmCham Meeting

December’s monthly meeting featured a presentation by Mr. Odilbek Isakov, CFA and the Head of Debt Management Office and the Ministry of Finance Advisor. The event was held in the recently renovated Hotel International Tashkent and had over 70 guests in attendance.
Mr. Isakov joined the Ministry of Finance in September of 2018 after having studied and worked in the UK for over a decade. He held different positions in the financial sector, including over 10 years with HSBC in London, UK.
“I have spent some time on the roadshow selling Uzbekistan, therefore I start the presentation with the selling points for Uzbekistan” – started Mr. Isakov.
Indeed, Uzbekistan has a lot to offer to investors, including the biggest population of Central Asia (32 mln) 14.3 of which are currently is a workforce with high literacy rate close to 100%. The strategic location of Uzbekistan enables access to the 3.3 billion people market. This makes the country a strategic player in several transport corridors connecting China with the European market (the Silk Road Economic Belt) and South, and Southeast Asia. Uzbekistan is rich in diverse natural resources and minerals. Mr. Isakov shared that Uzbekistan’s commitment to reform stands as the strong foundation that has attracted global attention. Thus, Uzbekistan is a top reformer in 2017, climbing from 166th place to 76th place (according to WB guide “Ease of Doing Business”). Mr. Isakov was quoted as stating “The government of Uzbekistan values its cooperation with IFIs, not only because of the access to so-called “cheap money”, compared to the capital market, but also because of the technical expertise in different sectors that these institutions provide along with money.”
Uzbekistan was successful in securing 20-40 loans with low interest rates from China and Russia and Mr. Isakov noted that the external debt of Uzbekistan is relatively low at less than 40% of GNI. In comparison, Kazakhstan’s external debt is at 89% and Kyrgyzstan is over 120% (WB, 2017). At the same time, the issuance of the Eurobond would further contribute to the sustainable development of Uzbekistan. Publication of reliable statistics is required, along with the compliance with corporate governance practices. This is expected to attract FDI’s and contribute to the greater private sector involvement. Ultimately, this is expected to create a benchmark for the country and to source great funds to Uzbekistan.
While the country would be exposed to possible market and currency risks, there are many positive points in support of joining the debt market. Despite the turbulence (i.e. increase of the refinance rate by the United States Federal Reserve, China war, sanctions etc.) the debt market is on the rise. Currently, the global bond market totals over 100 million USD outstanding with emerging markets accounting for the bulk of it.
The event concluded as attendees enjoyed exceptionally prepared appetizers by the new chef of Hotel International Tashkent.