UZBEKISTAN'S INTEGRATION INTO GLOBAL VALUE CHAINS AMID ECONOMIC TRANSITION

Journal(of(Academic(Research( and(Trends(in(Educational( Sciences( Journal(home(page:(( http://ijournal.uz/index.php/jartes( UZBEKISTAN’S(INTEGRATION(INTO(GLOBAL(VALUE(CHAINS( AMID(ECONOMIC(TRANSITION( Abdurahmon+Subkhonov1+ + International(Islamic(Academy(of(Uzbekistan( DOI:"10.5281/zenodo.17484705" Article+History+ Abstract+ Received:"10.09.2025" Accepted:"29.10.2025" Uzbekistan’s" ambitious" economic" reforms" have" coincided" with" a" renewed"drive"to"plug"the"country"into"global"value"chains"(GVCs)." A"double-landlocked"geography,"state"dominance"in"key"sectors"and" heavy" reliance" on" raw" materials" have" historically" limited" the" country’s"participation"in"cross-border"production"networks."This" article" analyses" Uzbekistan’s" current" position" in" GVCs," using" real" data" on" trade" composition," foreign" direct" investment" (FDI)," transport"infrastructure,"and"digital"connectivity."It"evaluates"recent" improvements,"such"as"a"dramatic"rise"in"the"Logistics"Performance" Index"(LPI)"ranking,"and"quantifies"the"potential"gains"from"deeper" manufacturing" integration." The" discussion" contrasts" Uzbekistan’s" performance"with"global"and"regional"benchmarks,"highlights"policy" reforms" aimed" at" enhancing" GVC" participation," and" provides" recommendations" to" ensure" that" economic" transition" translates" into"higher"value-added"exports"and"sustained"growth." Keywords:" Global" value" chains" (GVCs)," logistics" performance" index" (LPI)," industrial" goods," foreign"direct"investment"(FDI),"service"trade"reforms." " This is an open access article under the Attribution 4.0 International (CC BY 4.0) license (https://creativecommons.org/licenses/by/4.0/deed.ru) (( ( 1!International!Islamic!Academy!of!Uzbekistan,!Tashkent,!Uzbekistan! JARTES 4;3 IJOURNAL.UZ OCTOBER, 2025 Journal of Academic Research and Trends in Educational Sciences is produced by XALQARO TADQIQOT LLC Group, a division of ijournal.uz platform Downloaded from ijournal.uz. For personal use only. No other uses without permission. Copyright © 2025 XALQARO TADQIQOT LLC. All rights reserved. ! ( 58( ! ( IQTISODIY(O‘TISH(DAVRIDA(O‘ZBEKISTONNING(GLOBAL( QIYMAT(ZANJIRLARIGA(INTEGRATSIYASI( ! KALIT&SO‘ZLAR/( КЛЮЧЕВЫЕ&СЛОВА: ANNOTATSIYA/(АННОТАЦИЯ& & Global&qiymat&zanjirlari& (GQZ),&logistika& samaradorligi&indeksi& (LPI),&sanoat& mahsulotlari,&to‘g‘ridanto‘g‘ri&xorijiy& investitsiyalar&(TXI),& xizmatlar&savdosi& islohotlari& O‘zbekistonning&keng&ko‘lamli&iqtisodiy&islohotlari&mamlakatni& global& qiymat& zanjirlariga& (GQZ)& faol& qo‘shish& bo‘yicha& yangi& bosqichdagi&harakatlar&bilan&uyg‘unlashmoqda.&Ikkita&dengizga& chiqish&yo‘li&bo‘lmagan&geografik&joylashuv,&asosiy&tarmoqlarda& davlat& ustunligi& va& xomashyo& eksportiga& tayanish& O‘zbekistonning& xalqaro& ishlab& chiqarish& tarmoqlaridagi& ishtirokini& tarixan& cheklab& kelgan.& Ushbu& maqolada& savdo& tarkibi,& to‘g‘ridan-to‘g‘ri& xorijiy& investitsiyalar& (TXI),& transport& infratuzilmasi& va& raqamli& aloqadorlik& haqidagi& amaliy& ma’lumotlarga& asoslanib,& O‘zbekistonning& hozirgi& holati& tahlil& qilinadi.&Shuningdek,&maqolada&logistika&samaradorligi&indeksi& (LPI)& bo‘yicha& reytingdagi& keskin& o‘sish& kabi& so‘nggi& yutuqlar& baholanadi& va& ishlab& chiqarishdagi& chuqurroq& integratsiyadan& olinadigan& potentsial& foydalar& miqdoran& tahlil& qilinadi.& Muhokamada& O‘zbekistonning& ko‘rsatkichlari& global& va& mintaqaviy& standartlar& bilan& taqqoslanadi,& GQZda& ishtirokni& kengaytirishga& qaratilgan& siyosiy& islohotlar& yoritiladi& hamda& yuqori& qo‘shimcha& qiymatli& eksport& va& barqaror& o‘sishni& ta’minlash&bo‘yicha&tavsiyalar&beriladi.& ! Analysis(and(discussion(of(results( Global! value! chains! are! built! on! the! flows! of! intermediate! inputs! across! borders.! Central! Asia! historically! participates! at! the! lower! end! of! these! chains,! exporting! raw! materials!and!intermediate!goods!rather!than!moving!into!assembly!and!final!production.! According!to!the!Asian!Development!Bank,!the!share!of!foreign!value!added!embedded!in! exports!across!CAREC!countries!averages!only!15!%,!whereas!the!global!average!is!about! 25!%2.! This! suggests! that! Central! Asia!and! Uzbekistan! in! particular,! capture!a! smaller! portion! of! high-value! stages! in! production.! Enhancing! GVC! participation! requires! improvements!in!logistics,!diversification!of!exports,!and!deeper!integration!with!foreign! investors!and!trading!partners.! As!a!double-landlocked!country,!Uzbekistan!faces!high!transport!costs.!However,!its! performance!has!improved!markedly.!The!World!Bank’s!2023!Logistics!Performance!Index! (LPI)!ranked!Uzbekistan!88th!out!of!160!countries,!signaling!progress!in!customs!efficiency! and!infrastructure.!An!Asian!Transport!Observatory!working!paper!notes!that!the!country’s! ranking!improved!from!129th!in!2014!to!88th!in!2023,!a!jump!of!41!positions,!or!about!4.6! ranking!places!per!year!on!average!(own!calculation).! Despite!progress,!Uzbekistan!still! ( 2!Asian!Development!Bank.!Unlocking)Central)Asia’s)economic)potential)by)integrating)into)global)value)chains.!Manila:! Asian!Development!Bank,!2023.!Available!at:!https://blogs.adb.org/blog/unlocking-central-asia-s-economic-potentialby-integrating-global-value-chains! JARTES 4;3 IJOURNAL.UZ OCTOBER, 2025 Journal of Academic Research and Trends in Educational Sciences is produced by XALQARO TADQIQOT LLC Group, a division of ijournal.uz platform Downloaded from ijournal.uz. For personal use only. No other uses without permission. Copyright © 2025 XALQARO TADQIQOT LLC. All rights reserved. ! ( 59( ! ( trails!behind!major!manufacturing!hubs!and!remains!in!the!bottom!third!of!global!rankings! for!connectivity,!contestability!and!capabilities3.! Official!statistics!reveal!that!Uzbekistan’s!export!basket!remains!heavily!concentrated! in!raw!materials!and!services.!In!2024!total!exports!amounted!to!US$26.95!billion.!Goods! accounted! for! 73.3!%! of! total! exports,! while! services! contributed! 26.7!%.! Within! goods! exports,! industrial! products! (manufactures)! represented! 15.6!%,! while! “other! goods”! (mainly!primary!commodities!and!non-monetary!gold)!made!up!28.0!%,!and!food!products! and! live! animals! 8.1!%.! Textile! products,! once! a! flagship! industrial! export,! generated! US$2.87!billion!in! 2024,! equivalent! to! 10.6!%! of! total! exports.! Service! exports! were! dominated! by! travel! and! tourism! (48.8!%! of! services),! transport! (35.7!%),! telecommunications!and!IT!(8.6!%),!and!other!business!services!(3.5!%)4.! Industrial!goods!currently!account!for!15.6!%!of!total!exports.!Since!goods!make!up! 73.3!%!of!exports,!industrial!goods! represent! roughly!21.3!%!of!goods!exports.!In!value! terms,!industrial!goods!exports!were!about!US$4.20!billion!in!2024!(own!calculation).!If! Uzbekistan!could!increase!the!share!of!industrial!goods!to!30!%!of!goods!exports,!closer!to! the! global! average! for! middle-income! economies,! the! value! would! rise! to! about! US$5.93!billion,!implying!an!incremental!export!gain!of!US$1.72!billion!(about!6.4!%!of!2024! GDP)! (own! calculation).! Achieving! this! would! require! attracting! investment! into! higher-value!manufacturing,!strengthening!supplier!networks,!and!leveraging!preferential! access!to!key!markets!through!trade!agreements5.! Gold! remains! a! dominant! export.! Casual! observers! note! that! gold! exports! have! sometimes!exceeded!service!exports!and!account!for!over!one-quarter!of!total!exports.!This! concentration!underscores!the!need!to!broaden!the!export!base!by!building!capabilities!in! machinery,! automotive! components,! chemicals! and! agro-processing.! A! more! diversified! export!structure!would!reduce!exposure!to!commodity!price!swings!and!support!deeper! GVC!integration.! FDI!is!a!critical!channel!for!transferring!technology!and!embedding!domestic!firms! into! multinational! supply! chains.! Uzbekistan’s! economic! reforms! have! begun! to! attract! sizable! inflows.! The! U.S.! State! Department! reports! that! in! 2023,! Uzbekistan! received! US$7.2!billion!in!foreign!direct!investment,!nearly!double!the!2022!level,!and!achieved!GDP! growth!of!6!%.!This!investment!surge!represents!about!7.1!%!of!GDP!(US$7.2!billion!over!a! GDP! of! US$101.59!billion! in! 2023,! own! calculation! based! on! Macrotrends! data).! The! government!also!reported!that!87!%!of!total!investment!in!2023!came!from!private!and! corporate!sources.! Investment!inflows!are!geographically!concentrated.!In!2023,!the!main!sources!were! China!(25.6!%!of!FDI),!Russia!(13.4!%),!Saudi!Arabia!(7.9!%),!Turkey!(6.4!%),!the!United! ( 3!World!Bank.!Country)Climate)and)Development)Report:)Uzbekistan.!Washington:!World!Bank,!2023.!Available!at:! https://documents1.worldbank.org/curated/en/099111423124532881/pdf/P1790680f452f10ba0a34c06922a1df00 03.pdf! 4!Stat.uz! 5!Stat.uz! JARTES 4;3 IJOURNAL.UZ OCTOBER, 2025 Journal of Academic Research and Trends in Educational Sciences is produced by XALQARO TADQIQOT LLC Group, a division of ijournal.uz platform Downloaded from ijournal.uz. For personal use only. No other uses without permission. Copyright © 2025 XALQARO TADQIQOT LLC. All rights reserved. ! ( 60( ! ( Arab!Emirates!(5.8!%),!and!Germany!(4.3!%).!These!six!countries!accounted!for!almost!64!%! of! FDI,! and! the! top! two! (China! and! Russia)! contributed! 39!%! (own! calculation).! The! Herfindahl-Hirschman!index!for!this!distribution!is!about!990,!indicating!a!moderate!level! of!concentration.!Energy,!mining,!and!export-oriented!manufacturing!dominate!the!project! pipeline,!which!aligns!with!the!government’s!import-substituting!industrialization!strategy! but!may!limit!diversification.! To!address!these!challenges,!the!World!Bank’s!2022!FDI!strategy!study!recommends! modernizing!investment!legislation,!streamlining!incentives,!and!strengthening!investment! promotion!to! attract! high-quality! investors.! It! emphasizes!enhancing! global! value-chain! participation! and! creating! higher-skilled! employment.! Successful! privatization!of! state-owned! enterprises! and! transparent! public–private! partnerships! could! widen! opportunities!for!domestic!firms!to!join!multinational!supply!networks.! Uzbekistan’s!landlocked!position!magnifies!the!importance!of!efficient!transport!and! logistics.!As!noted!above,!the!country’s!LPI!ranking!improved!from!129th!in!2014!to!88th!in! 2023.!The!World!Bank’s!climate!report!highlights!that!railway!efficiency!and!cross-border! operations!need!further!enhancement,!and!that!strategically!located!logistics!centers!could! lower! transport! costs! and! increase! competitiveness.! Sustaining! the! current! pace! of! improvement!(about!4.6!ranking!places!per!year)!could!bring!Uzbekistan!into!the!global!top! 50! within! a! decade.! However,! achieving! this! would! require! substantial! investment! in! multimodal!corridors,!customs!modernization!and!digital!trade!facilitation.! Connectivity!is!not!only!physical.!Digital!infrastructure!and!liberalization!of!services! are!central!to!modern!value!chains.!The!World!Bank’s!services-led!growth!study!reports! that!Uzbekistan!ranks!88th!out!of!139!economies!for!logistics!performance,!but!the!country! lags!in!digital!connectivity.!High-speed!mobile!internet!coverage!remains!limited,!and!only! 40!%! of! individuals! make! or! receive! digital! payments.! Tertiary! education! enrolment! is! 31.5!%,!well!below!the!Europe-and-Central-Asia!average!of!80!%,!and!basic!ICT!skills!are! possessed!by!fewer!than!10!%!of!the!population.!These!human-capital!gaps!hinder!firms’! ability!to!adopt!digital!production!techniques!and!participate!in!services!trade.! Restrictive!regulations!also!limit!contestability.!The!same!World!Bank!study!notes! that!Uzbekistan!is!among!the!bottom!third!of!countries!in!the!Services!Trade!Restrictiveness! Index,!with!state-owned!enterprises!dominating!telecommunications!and!transportation,! and! data-localization!requirements! restricting! cross-border! delivery! of! ICT! services.! Modeling!suggests!that!halving!the!gap!with!the!best!performers!by!reducing!services!trade! barriers!could!raise!real!GDP!by!as!much!as!9!%!and!increase!real!wages!by!8!%.!Accession! to!the!World!Trade!Organization!(WTO)!would!provide!an!anchor!for!these!reforms.! The!leap!in!LPI!rankings!shows!that!targeted!investments!and!policy!reforms!can! yield! rapid! gains.! Improvements! in! customs! processes,! the! opening! of! the! Tashkent! International!Logistics!Center,!and!better!cross-border!cooperation!with!Kazakhstan!and! China!have!reduced!transit!times.!A!rough!calculation!suggests!that!if!Uzbekistan!continues! to! improve! its! LPI! ranking! at! the! 2014–2023! pace,! it! could! reach! the! top! 50! by! 2033.! JARTES 4;3 IJOURNAL.UZ OCTOBER, 2025 Journal of Academic Research and Trends in Educational Sciences is produced by XALQARO TADQIQOT LLC Group, a division of ijournal.uz platform Downloaded from ijournal.uz. For personal use only. No other uses without permission. Copyright © 2025 XALQARO TADQIQOT LLC. All rights reserved. ! ( 61( ! ( Achieving!such!a!ranking!would!help!reduce!trade!costs!by!an!estimated!5!–!10!%,!based!on! comparisons! with! similarly! ranked! countries.! Reduced! costs! would! particularly! benefit! industrial!goods!exporters,!whose!margins!are!thinner!than!commodity!exporters.! Raising!the!share!of!industrial!goods!from!21.3!%!of!goods!exports!to!30!%!could!add! US$1.72!billion!in! annual! export! revenue! (own! calculation).! This! hypothetical! increase! would! represent! around! 6.4!%! of! GDP! and! reduce! dependence! on! gold! and! other! non-renewable! resources.! The! shift! requires! targeted! industrial! policies:! incentivizing! automotive!and!machinery!assembly,!expanding!special!economic!zones,!and!promoting! quality! standards! compliant! with! EU! and! Chinese! markets.! Additionally,! strengthening! linkages!between!services!and!manufacturing,!for!example,!by!providing!digital!logistics! platforms! and! engineering! services,! can! raise! productivity! and! embed! domestic! firms! deeper!into!GVCs.! While!FDI! inflows!have!surged,!they!are! still!concentrated!in!a!few!countries!and! sectors.!To!broaden!the!base,!Uzbekistan!should!prioritize!investors!who!bring!advanced! technologies!and!integrate!local!suppliers!into!their!supply!chains.!An!early!success!is!the! attraction!of!European!renewable-energy!firms!in!the!Navoi!region,!which!could!catalyze!a! green! manufacturing! hub.! The! planned! privatization!of! state-owned! banks! and! manufacturing!enterprises!will!open!opportunities!for!multinational!companies!to!acquire! stakes!and!integrate!domestic!suppliers!into!their!global!networks.!Transparent!incentive! schemes!and!streamlined!regulations,!as!recommended!by!the!World!Bank,!will!be!vital.! Global! production! today! is! increasingly! services-intensive;! cross-border! flows! of! data,!logistics,!finance,!and!design!are!as!important!as!the!movement!of!physical!goods.! Uzbekistan’s!limited!digital!penetration!and!restrictive!services!policies!hinder!its!ability!to! move! up! value! chains.! Expanding! high-speed! internet! to! rural! areas,! liberalizing! telecommunications,!and!simplifying!data-transfer!regulations!could!enable!local!firms!to! offer! IT,! professional! services,! and! digital! logistics! to! foreign! partners.! The! IT! Park! in! Tashkent!demonstrates!the!benefits!of!targeted!liberalization;!replicating!such!models!in! regional!centers!would!widen!the!talent!pool!and!support!employment!in!global!innovator! services.!Joining!the!WTO!would!commit!Uzbekistan!to!transparent!rules!and!open!services! markets.! Uzbekistan’s! efforts! to! integrate! into! global! value! chains! have! yielded! tangible! progress.!The!country!has!improved!its!logistics!ranking!dramatically,!attracted!significant! FDI! inflows,! and! begun! diversifying! its! export! structure.! Yet! the! share! of! high-value! industrial!goods!remains!low,!digital!readiness!lags!behind!regional!peers,!and!the!services! sectors! are! heavily! regulated.! Scenario! analysis! shows! that! deeper! manufacturing! integration!and!services!liberalization!could!deliver!sizable!economic!gains.!Success!will! hinge!on!continuing!structural!reforms,!investing!in!human!capital!and!infrastructure,!and! building!partnerships!with!investors!that!connect!Uzbek!producers!to!global!networks.! Uzbekistan’s!economic!transition!has!created!a!window!of!opportunity!to!integrate! more!deeply!into!global!value!chains.!Improvements!in!transport!and!logistics!have!moved! JARTES 4;3 IJOURNAL.UZ OCTOBER, 2025 Journal of Academic Research and Trends in Educational Sciences is produced by XALQARO TADQIQOT LLC Group, a division of ijournal.uz platform Downloaded from ijournal.uz. For personal use only. No other uses without permission. Copyright © 2025 XALQARO TADQIQOT LLC. All rights reserved. ! ( 62( ! ( the! country! from! near! the! bottom! to! the! middle! of! global! rankings,! reducing! physical! barriers! to! trade.! Rapidly! rising! FDI! inflows! reflect! growing! investor! confidence,! while! policy! initiatives! aim! to! attract! technology-rich! investment! and! improve! the! business! climate.!However,!exports!remain!dominated!by!raw!materials!and!services;!manufacturing! accounts!for!only!about!one-fifth!of!goods!exports,!and!digital!infrastructure!lags!behind.! Closing! these! gaps! will! require! a! multifaceted! strategy:! upgrading! infrastructure,! liberalizing!services,! investing! in! skills! and! technology,! and! expanding! participation! in! international!trade!agreements!such!as!the!WTO.!With!sustained!reforms,!Uzbekistan!can! evolve! from! a! transit! corridor! into! an! active! participant! in! global! production! networks,! capturing!more!value!at!home!and!securing!sustainable!growth.! Bibliography( 1. Asian! Development! Bank.! Unlocking! Central! Asia’s! economic! potential! by! integrating!into!global!value!chains.!! 2. World!Bank.!Country!Climate!and!Development!Report:!Uzbekistan!(2023).!! 3. Asian! Transport! Observatory.!Transport! sector! sustainability! assessment:! Uzbekistan!–!Working!Paper.!! 4. World!Bank.!Gaurav!Nayyar,!Elwyn!Davies,!and!Henry!Aviomoh.!The!promise! of!services-led!growth!in!Uzbekistan.!! 5. United! States! Department! of! State.!2024! Investment! Climate! Statement! –! Uzbekistan.!! 6. World! Bank.! New! World! Bank! Study! Contributes! to! the! Development! of! Uzbekistan’s!Strategy!for!Foreign!Direct!Investment.!! 7. UzDaily.!“Uzbekistan’s! foreign! trade! turnover! reached! US$65.9!billion! in! 2024.”!UzDaily.com,!20!January!2025.!! ! !