ECONOMIC SECURITY OF UZBEKISTAN IN THE CONTEXT OF GEOECONOMIC INSTABILITY: EXTERNAL THREATS AND NATIONAL RESPONSE STRATEGIES

ABSTRACT

This article analyzes the issues of economic security of Uzbekistan in the context of global geoeconomic instability. It examines how the Russia-Ukraine conflict, China-West tensions, global inflation, and energy market shocks are affecting the economy of Uzbekistan. The study assessed the effectiveness of national economic responses to geoeconomic threats based on statistical indicators, legal and regulatory frameworks, and national strategies for 2018–2024. The article concludes with recommendations aimed at strengthening economic security.

АННОТАЦИЯ

В данной статье анализируются вопросы экономической безопасности Узбекистана в контексте глобальной геоэкономической нестабильности. Рассматривается влияние конфликта между Россией и Украиной, напряжённости между Китаем и Западом, глобальной инфляции и шоков на энергетических рынках на экономику Узбекистана. В исследовании оценивается эффективность национальных экономических мер реагирования на геоэкономические угрозы на основе статистических показателей, правовых и нормативных актов, а также национальных стратегий за период 2018–2024 годов. В статье приводятся рекомендации, направленные на укрепление экономической безопасности.

Keywords: geoeconomic risk, economic security, external threats, export diversification, sanctions, currency policy, economic sustainability of Uzbekistan.

Ключевые слова: геоэкономический риск, экономическая безопасность, внешние угрозы, диверсификация экспорта, санкции, валютная политика, экономическая устойчивость Узбекистана.

INTRODUCTION

In recent years, geopolitical tensions in the world economic arena, in particular, the Russia-Ukraine war, China-Taiwan tensions, and the sanctions policies of the United States and the European Union, have created a new stage of instability in the world economy. This situation is seriously affecting the macroeconomic balance of developing countries, especially those with high external economic dependence. The economy of Uzbekistan has transit potential, but uncertainties in the export-import balance, dependence on energy resources, limited foreign exchange reserves, and reliance on external financial flows (in particular, remittances and investments) are factors that weaken national economic security. This article identifies the factors threatening the economy of Uzbekistan in the context of geoeconomic instability, assesses the essence and effectiveness of national response strategies, and proposes promising directions based on a comparative analysis with international experience.

MAIN SECTION

In today's conditions of globalization and geopolitical tensions, the phenomenon of geoeconomic instability is increasingly becoming a strategic threat to many countries. Economic competition between developed countries, the expansion of sanctions policies, disruption of logistics chains and the struggle for control over raw materials - all this has formed new formats of risks in the world economy. In particular, the Russia-Ukraine conflict, China-West economic conflicts, political isolation in Iran and problems in the recovery after the global pandemic have weakened the geoeconomic balance. In such conditions, the sustainable economic development of any country depends, first of all, on its economic security strategy and the level of resilience to external shocks.

DISCUSSION AND ANALYTICAL CONSIDERATIONS

International experience shows that economic security is not only determined by economic indicators, but is also directly linked to a country’s foreign policy stance, technological independence, and political stability. For example, South Korea is withstanding geoeconomic pressures through digital technologies, innovative exports, and high value-added products. Turkey, on the other hand, is striving to ensure national economic security through protectionist policies, domestic production, and energy independence.

Uzbekistan, however, has not yet made significant progress in these areas. In particular:

1. The share of high-tech products in total exports remains very low (less than 2% of total exports);
2. The external debt has exceeded 40% of GDP;
3. The main sources of foreign currency inflows (remittances from labor migrants) depend heavily on external factors.

Nevertheless, it is worth noting that from 2022 to 2024, Uzbekistan adopted a more proactive stance toward geoeconomic risks. Documents such as the “Economic Security Concept,” the “Strategy Against the Shadow Economy,” and the “Energy Independence Program” serve as crucial legal frameworks in this regard. Another important aspect is that the issue of economic security is increasingly intertwined with digital technologies and cybersecurity. Digital sovereignty, control over data flows, and monitoring of cross-border financial transactions are becoming new factors in ensuring Uzbekistan’s economic independence. Thus, for Uzbekistan, an economic security strategy should no longer be limited to macroeconomic parameters but must also encompass geopolitical maneuvering, technological self-reliance, and social stability.

RESULTS AND ANALYSIS

In recent years, processes of geoeconomic instability in the global economy have had a direct impact on Uzbekistan’s macroeconomic equilibrium. Factors such as the Russia–Ukraine conflict, disruptions in global logistics chains, energy price volatility, and the sanctions policies of the United States and the European Union have exerted significant pressure on the country’s export potential, exchange rate, foreign trade relations, and investment flows. In analyzing Uzbekistan’s economic security, key indicators include foreign exchange reserves, the balance of exports and imports, the volume of external debt, the inflation rate, and the exchange rate of the Uzbek soum against the US dollar. While the volume of exports declined in 2020 due to the pandemic and geoeconomic shocks, by 2022 trade relations with Central Asian countries—especially Kazakhstan, Tajikistan, and China—had been restored. Furthermore, export relations with Russia and Turkey have remained stable. However, due to their dependence on sanctions regimes, these relationships pose long-term risks. In 2023–2024, the country intensified its transition toward a freely floating national currency. Although this process led to short-term currency volatility, in the long run it contributed to greater internal adaptability to external shocks.

Figure 1. The statistical table below reflects the dynamics of these indicators in 2018–2024 ^[1]

Although the increase in external debt has supported infrastructure and industrial development on the one hand, on the other hand, it indicates a growing dependency on international loans. From this perspective, the level of economic security appears to be unstable. Regarding national response strategies, the following approaches have played a central role:

Import-substituting industrial policy: Under the “New Uzbekistan – 2026” program, localization levels have been increased in sectors such as food production, pharmaceuticals, automotive manufacturing, and textiles.

Export diversification: To avoid overdependence on a limited number of markets, export channels are being expanded with China, Turkey, India, and South Korea.

Establishment of state reserve funds: Special reserve funds have been created to ensure energy and food security.

Flexible currency policy: The Central Bank has introduced neutral and predictable mechanisms for monetary policy.

In addition, Uzbekistan is striving to ensure geoeconomic security by mitigating the impact of external sanctions through regional and bilateral agreements.

CONCLUSION

In recent years, geoeconomic instability in the global economy has posed a direct threat to Uzbekistan’s economic stability. The Russia–Ukraine war, international sanctions, energy price fluctuations, and the disruption of global logistics chains have negatively impacted the country’s foreign economic relations. The findings of this study indicate that Uzbekistan still faces several vulnerabilities, such as raw material dominance in exports, technological dependence, and reliance on external investment flows. While the growth of foreign exchange reserves and exports, monetary policy aimed at reducing inflation, and the controlled management of external debt are positive developments, they are not sufficient for long-term economic security. Uzbekistan’s response strategies to geoeconomic threats such as export diversification, import-substituting industrialization, flexible currency policies, the establishment of state reserve funds, and the development of digital financial infrastructure represent balanced countermeasures to external shocks. Going forward, ensuring national economic security will require Uzbekistan to develop high-tech industries, create strong protection mechanisms against international sanctions and financial pressures, and implement policies that can adapt to regional and global geoeconomic transformations. In particular, investment in human capital, digital sovereignty, and regional integration must become key pillars of the country’s economic security strategy.

References:

1. World Bank. World Development Indicators. https://databank.worldbank.org
2. IMF. Global Financial Stability Report, 2024. https://www.imf.org
3. UNCTAD. World Investment Report, 2023. https://unctad.org
4. Central Bank of the Republic of Uzbekistan. https://cbu.uz
5. “Concept of National Economic Security of the Republic of Uzbekistan”, 2022.
6. OECD. Economic Outlook, 2023. https://www.oecd.org
7. Asian Development Bank. Asian Economic Integration Report. https://adb.org