Strategy “Uzbekistan–2030” and Kazakhstan’s Interests: Between Cooperation and Competition

The image is taken from the yuz.uz website.

In September 2023, Uzbekistan approved an ambitious long-term strategic development program — “Uzbekistan–2030”. This document is presented as a continuation of earlier national policy frameworks such as the “Action Strategy 2017–2021” and the “New Uzbekistan” concept. The new strategy covers a broad spectrum of national goals — from public governance and social welfare to international positioning. However, the core focus remains on economic transformation, aiming to accelerate growth, increase investment attractiveness, and expand export potential.

This article offers a detailed analysis of the economic component of the Uzbekistan–2030 strategy. Special attention is given to potential areas of competition with Kazakhstan, and how Astana should respond to the evolving economic dynamics of its southern neighbor.

Chart: Comparative GDP Growth Dynamics of Uzbekistan, Kazakhstan, and Kyrgyzstan (According to EBRD Data)

Economic Goals of the “Uzbekistan–2030” Strategy

Industrialization, Investment, and GDP Growth

The key objective of the strategy is to ensure Uzbekistan's transition into the category of upper-middle-income countries by the end of this decade. The government plans to double the size of the national economy, increasing the country’s GDP to $160 billion by 2030, and raising GDP per capita to $4,000.

To achieve this rapid pace of development, GDP will need to grow at an average rate of 6–6.5% per year. This level of growth is expected to come through large-scale reforms and significant investment inflows — over $250 billion in total, including $110 billion in foreign direct investment (FDI) and $30 billion through public-private partnerships (PPPs). The strategy also envisions increasing the share of the private sector in the economy to 85% of GDP, reducing inflation to 6% per year, and keeping public debt below 50% of GDP.

Table. Comparison of Uzbekistan’s Current Macroeconomic Indicators and 2030 Targets

Industrial Policy as a Core of Uzbekistan’s Economic Strategy

Industrial development is at the heart of Uzbekistan’s economic strategy. The country seeks to expand its manufacturing base using local resources and technologies, with the creation of industrial clusters in chemicals, metallurgy, mechanical engineering, and textiles. The implementation of international standards and development of local supply chains — especially in automotive and home appliance sectors — is expected to double labor productivity and increase the industrial added value to $45 billion annually. The government has also set the goal of creating 2.5 million new jobs.

In the social sphere, the authorities aim to reduce poverty by half by 2026, and to bring it down to 5% by 2030. Unemployment is targeted to remain around 7%, while youth unemployment should decrease from 14% to 6%, by creating 1 million high-income jobs for young people.

Development of Transport and Energy Infrastructure

To support growth, Uzbekistan is committed to large-scale development of both transport and energy infrastructure. The country’s transport network is set for major modernization, with more than 500 projects worth $150 billion planned. The goal is to enhance domestic connectivity and increase the country’s transit potential.

Projects include:

• High-speed highways: Tashkent–Samarkand and Tashkent–Fergana Valley
• Reconstruction of thousands of kilometers of roads, including those in remote villages
• Railway upgrades: increasing electrification to 65%, boosting capacity, and launching new high-speed rail routes (e.g., extending Tashkent–Samarkand to Bukhara)

Uzbekistan aims to become a key logistics hub in the region, promoting international corridors such as the railway through Afghanistan to Pakistani ports, and a route through Kyrgyzstan to China. These projects are intended to give the country direct access to sea routes and South Asian markets, reducing its dependence on traditional routes.

Energy infrastructure is another major priority. The plan includes modernization of thermal power plants, including the upgrade of three TPPs with a total capacity of 3 GW, aiming to improve energy efficiency and save gas. By 2030, Uzbekistan aims to reach 25 GW of renewable energy capacity, covering up to 40% of national electricity consumption. Large investments are being made in solar, wind, and hydroelectric power. The construction of the first nuclear power plant in the Jizzakh region is also underway to diversify the country’s energy mix. At the same time, gas production is expected to reach 62 billion m³ per year.

Overall, investment in transport and energy aims to eliminate economic bottlenecks and build a strong foundation for industrial and export-led growth.

Digitalization of Economy and Governance

One of the strategy’s key priorities of strategy is rapid digitalization. Uzbekistan aims to significantly expand its IT sector, increase the contribution of IT parks to GDP to 2.2%, and create up to 100,000 tech jobs. Plans include developing the infrastructure of the International Digital Technology Center, supporting startups, building regional IT hubs, and attracting venture capital.

Digital public services are also a major focus: by 2030, the country aims to fully implement a "three-click – all-in-one app" system, extending digital services even to mahalla committees.

Programs like “Digital Government” and “E-Government” will ensure that all documents and processes are translated into digital formats. The strategy also includes digital transformation in taxation, customs, goods labeling, and the fintech sector. Special attention is given to digital skills training. The overarching goal of this comprehensive digitalization is to reduce bureaucracy, enhance transparency, and improve convenience for both citizens and businesses.

Export Growth and External Economic Plans

To boost foreign currency inflows and national income, Uzbekistan aims to dramatically expand exports. By 2030, the total volume of goods and services exports is expected to more than double — from $19 billion in 2022 to $45 billion. This will be achieved by increasing the export of value-added goods, rather than raw materials.

Industrial Exports. Uzbekistan aims to strengthen its position in industrial exports, particularly in light industry. The strategy includes building full-cycle cotton processing facilities (from yarn to finished garments). It also proposes establishing a joint Kazakh–Uzbek industrial park near the border, where Uzbek raw materials (e.g., cotton, fruits, vegetables) will be processed. These initiatives are designed to enhance regional cooperation and simplify access to global markets for Uzbek products.

Agriculture and Food Exports. The agriculture sector is also focused on export potential. Uzbekistan plans to create a network of agrologistics centers with a total capacity of 2.5 million tons, aiming to raise fruit and vegetable exports to $1 billion per year. As one of the leading exporters of fruits, vegetables, and dried fruits in the post-Soviet space, Uzbekistan seeks to strengthen its position by improving storage, processing, and logistics. Modern agricultural technologies and subsidies will be used to boost yields, and there are plans to bring 1.2 million hectares of new irrigated land into use.

Foreign Trade Policy. Uzbekistan continues to follow a pro-open economy path, with further currency market liberalization and reduction of trade barriers. The country is actively working towards joining the World Trade Organization (WTO). Strategic partnerships are expanding with the EU, ASEAN, and Central Asian countries. Special focus remains on China and Russia, which are the main export markets. The country also aims to diversify its export structure.

By 2030, Uzbekistan’s economy is expected to become more industrialized, digitalized, and globally integrated. These goals are undeniably ambitious, requiring massive investments, institutional reforms, and a favorable external environment. However, even partial success in implementation could significantly strengthen Uzbekistan’s regional position.

Potential Areas of Interest-Based Competition Between Kazakhstan and Uzbekistan

Uzbekistan’s aspiration for an economic breakthrough is objectively turning it into a more influential player in Central Asia. This naturally draws the attention of Kazakhstan as the region’s leading economy. Below are the potential areas of intersection, competition, and cooperation.

Transit Corridors and Logistics

Transit potential is one of the key areas of implicit competition between the two countries. Both Kazakhstan and Uzbekistan are striving to become the main transit hub of Central Asia. Kazakhstan is prioritizing the development of the Trans-Caspian route to Europe via the Caspian Sea, as well as a transport corridor through Turkmenistan to Herat, Afghanistan. In contrast, Uzbekistan is advancing the Trans-Afghan corridor via Mazar-i-Sharif, and promoting the China–Kyrgyzstan–Uzbekistan railway project.

Each country is competing for international freight flows and foreign investments. However, there is growing awareness of the need for coordination. A more effective approach would be the integration of efforts — the development of a unified Central Asian transport corridor strategy, where routes through Kazakhstan and Uzbekistan are seen not as rivals but as interconnected parts of a common network. The concept of a "Central Asian Transport Corridor" brand is under discussion as a tool for joint market positioning. For both Astana and Tashkent, the national interest lies in collaborating to compete with global alternatives, not with each other.

Agricultural Exports and Food Security

Agriculture is a strategic sector for both countries. While they specialize in different areas, competition is possible in certain export segments. Kazakhstan is traditionally strong in exporting grain (wheat, flour) and oilseeds, branding itself as one of Eurasia’s “breadbaskets.” Uzbekistan, on the other hand, is known for exporting fruits, vegetables, melons, nuts, and cotton fiber.

There is currently little direct competition in major categories: Kazakhstan supplies much of Uzbekistan’s wheat demand, while Uzbekistan exports fruits and vegetables to Kazakhstan during the off-season. However, as both countries expand their production capacities — especially in meat, dairy, and poultry sectors — their interests may increasingly overlap, particularly in markets like the EAEU and China, where they may compete over logistics chains, quotas, and quality standards.

A more productive alternative to price-based rivalry is agricultural cooperation. Emerging value chains, such as Uzbek livestock being supported by Kazakh feed, or joint processing of fruit and cotton, offer mutual benefits. There are already discussions about creating joint ventures near the border, targeting exports to third markets. The idea is to combine Kazakhstan’s fertile land with Uzbekistan’s labor resources and favorable climate to produce competitive agricultural output in both quantity and quality.

In the area of water resources, Kazakhstan and Uzbekistan are also “in the same boat”: both rely heavily on rivers that originate in neighboring countries. This is less a matter of bilateral competition than a shared challenge — persuading upstream countries (Kyrgyzstan, Tajikistan, and Afghanistan) to adopt balanced water discharge regimes that meet the irrigation needs of downstream countries.

If approached strategically, the two countries’ interests in the agricultural sector appear more complementary than conflicting.

Oil, Gas, and Electricity

In the energy sector, Kazakhstan and Uzbekistan differ in resource endowments and strategic objectives, yet there are areas of both potential cooperation and moderate competition.

Kazakhstan remains the region’s largest oil producer (around 90 million tons per year) and a major gas supplier (~60 bcm, part of which is exported). Uzbekistan, with smaller oil reserves, produces around 50 bcm of gas and is working to overcome seasonal energy shortages by raising output to 62 bcm and investing heavily in renewables and nuclear energy.

Should these efforts succeed, Uzbekistan could become a net energy exporter by 2030, potentially competing with Kazakhstan for energy markets and infrastructure investment. However, at the global level, the two countries have minimal overlap: Kazakhstan exports oil mainly to Europe, where Uzbekistan is not present, and both sell relatively small volumes of gas to China. It’s also worth noting that Uzbekistan imports Russian gas via Kazakhstan’s territory, forming a mutually beneficial trilateral trade arrangement.

Overall, the energy sphere shows limited direct contradictions. For Kazakhstan, it is crucial to monitor Uzbekistan’s progress in the gas and electricity sectors: if Uzbekistan successfully expands domestic generation, it will reduce dependence on energy imports, including Kazakh coal, and could emerge as a new energy exporter in the southern direction.

Attracting Investment

Both Kazakhstan and Uzbekistan view economic growth through the lens of investment and are actively competing for the status of the most attractive jurisdiction in Central Asia. Kazakhstan has historically led in terms of accumulated foreign direct investment (FDI), having attracted more than $441 billion since 1991—largely thanks to major oil and gas megaprojects and the early liberalization of its economy. Uzbekistan, in contrast, only opened its doors to investors in the mid-2010s, following decades of isolation. Since then, under President Mirziyoyev, the inflow of foreign capital has accelerated. Today, Astana and Tashkent are in active competition to become the region’s primary hub for multinational corporations.

Kazakhstan and Uzbekistan increasingly find themselves in a competitive position when attracting large-scale investment projects. For example, where will a global corporation decide to open its regional office—in Almaty or Tashkent? Which country will an automobile manufacturer choose to establish its next plant? Uzbekistan, for instance, has succeeded in attracting Volkswagen (with the MAN factory in Samarkand), while Kazakhstan has a stronger track record in developing the fintech sector.

Nonetheless, the competition remains moderate, as both countries benefit from the overall increase in investor interest toward the region and the rising appeal of Central Asia as a whole. Notably, President Tokayev often encourages foreign investors during his international visits to not only invest in Kazakhstan, but also in the broader Central Asian region.

In general, cooperation in the investment sphere is gaining momentum. Kazakhstani companies are already active in Uzbekistan, ranging from textile manufacturing to agricultural projects. Meanwhile, Uzbek firms are engaged in automobile assembly. The creation of a joint direct investment fund worth $1 billion signals the seriousness of both countries’ intentions to establish interconnected industries and cooperative clusters.

Thus, the relationship between Kazakhstan and Uzbekistan can be described as one of “competitive partnership.” This drives both sides to accelerate development, while a shared awareness of regional challenges—such as energy, climate, water, and security—pushes them toward joint actions. The key task is to ensure that healthy competition does not evolve into strategic confrontation.

Constructive competition for investment and reform outcomes can serve as a powerful driver, motivating both countries to progress—ultimately benefiting the entire region.

Conclusion

Uzbekistan’s successful economic breakthrough could become a major factor reshaping the balance of power in Central Asia. If managed wisely, both countries could transform potential friction into a new form of cooperation. The interests of the two states often align, and competition can take on a productive character when embedded within common regional initiatives. Kazakhstan should maintain a pragmatic approach: rather than fearing Uzbekistan’s rise, it should learn from its achievements and engage in them. Joint planning, co-investment, and the exchange of best practices will allow the region’s two largest economies to develop more rapidly, while avoiding conflict and strengthening Central Asia as a whole.

Such an approach aligns with the long-term interests of both Kazakhstan and Uzbekistan—paving the way for prosperity through partnership.