Uzbekistan’s New Bilateral Investment Treaty Standpoint: In Case of Uzbekistan-Turkey BIT (2018)

Abstract

Uzbekistan is often seen as an attractive destination for foreign direct investment (FDI), largely thanks to its vast supply of natural resources. However, inward FDI in Uzbekistan remains below expectations due to the lack of transparency and stability of the domestic regulatory environment. Uzbekistan has recently undergone lengthy reforms aiming at economic liberalization. In particular, a review of investment laws suggests an improvement of the investment climate in the country. In the course of these reforms, Uzbekistan concluded a bilateral investment treaty (BIT) with Turkey in 2018, which in essence follows the Turkish Model BIT. By revising its BITs-related policies, Uzbekistan has sent a positive message to foreign investors, suggesting a more favorable investment climate than that of the previous generation of its BITs. The new Uzbekistan-Turkey BIT also clarifies host states regulatory powers, by adding provisions on social and environmental standards as well as public health. That the main concern of foreign investors stands as the lack of transparency and predictability of the host country legislation is widely recognized, rather than high standards of the investors. Therefore, Uzbekistan ultimately aims to create a transparent and predictable investment environment, whilst the same time adhering to social responsibilities.