Uzbekistan to Boost Development in Karakalpakstan

Desert ships on the former Aral seabed, Moynaq, Photo: TCA

On January 10th, the President of Uzbekistan, Shavkat Mirziyoyev held a government meeting on the socioeconomic development of the Republic of Karakalpakstan, an impoverished autonomous region in the northwest of the country. In recent years, Karakalpakstan has made headlines as a politically volatile area which saw deadly unrest break out in July 2022. The region has also suffered acutely from the consequences of the Aral Sea ecological disaster.

At the meeting, it was stated that over the past seven years, Karakalpakstan has undergone unprecedented changes. Twelve of the autonomous republic’s fifteen districts were formerly subsidized by the central government, but now they have begun to bring in revenues to the state budget. More than 5,300 projects have been implemented through investment. Forest plantations covering 1.8 million hectares have been sown on the desiccated bed of the former Aral Sea, and living conditions for 51,000 families have been improved.

In Karakalpakstan, there are incentives and opportunities for doing business which are not available in any other parts of Uzbekistan – taxes on profit, turnover, land and property have all been lowered twofold, and social tax has been set at 1%.

Over the past two years, seven decrees and resolutions have been adopted on the development of industry, agriculture, entrepreneurship, and the improvement of the infrastructure in mahallas (local neighborhoods) in Karakalpakstan, with a total of $400 million and 250 billion Uzbek som have been allocated for these purposes.

Today, the population of Karakalpakstan exceeds two million, and every year 50,000 citizens enter the region’s labor market. At the meeting, the President emphasized the need to train them in modern professions, and provide them with gainful employment and decent conditions.

In 2024, the government plans to attract $2.1 billion in foreign investment to the region. This injection of funds will help implement 206 projects in industry, 240 in the services sector, and 34 in agriculture, creating 13,000 jobs.

The head of state pointed out that tourism can become a driver of economic growth in Karakalpakstan, and set the task of developing a program to kick-start tourism in the region, with a focus on environmental, ethnographic, and pilgrimage destinations. The establishment of a tourism cluster and attracting foreign experts to the local tourist industry were also discussed.