Uzbekistan Prime Minister Abdulla Aripov concluded his visit to Afghanistan this week, amid a flurry of trade and investment deals signed between the two countries.
The Islamic Emirate of Afghanistan has been courting diplomatic and trade visits of late, most recently with China, Uzbekistan and Kazakhstan.
China and Kazakhstan have ambassadors in Kabul, and Uzbekistan is expected to send a new ambassador too. Earlier this year, Taliban officials stated their intention to dispatch an ambassador to Uzbekistan.
Aripov’s trip coincided with a visit by Uzbek Minister of Investment, Industry, and Trade Laziz Kudratov, underscoring the economic angle to Uzbekistan’s engagement with the Afghani Government.
Alongside Deputy Prime Minister for Economic Affairs Mullah Abdul Ghani Baradar, Aripov oversaw the signing of 35 memorandums of understanding. Baradar’s office, in a statement, said the MoUs included USD 1.4 billion in 12 investment agreements and 23 trade deals worth USD 1.1 billion.
According to Baradar, the visit represented a “very good opportunity to discuss the relations between the two countries and economic issues, especially railways, electricity, trade, transit, and visas,” says Baradar.
One of those agreements is a preferential trade deal which will cancel taxation duty on a number of Afghan products entering Uzbekistan.
Earlier this year, Uzbek President Shavkat Mirziyoyev signed a decision outlining new rules and regulations for the Termez International Trade Center area, a free-trade zone in city of Termez on the Afghan-Uzbek border, including authorisation of payments in U.S. dollars, Russian rubles, euros, Chinese yuan, as well as Uzbek som.
The decision also paved the way for Afghan and Pakistani citizens to lease and own shops and buildings in the area. In addition, the decision allowed foreign citizens to enter the area without a visa for 15 days.
In outlining the outcomes of his trip to Afghanistan, Kudratov says that he hopes to increase mutual trade to USD 3 billion.
By the end of Q2 2024, trade turnover between Afghanistan and Uzbekistan totalled USD 461 million.
According to Kudratov, the customs station at the Ayritom-Hairatan border post – the site of Afghanistan-Uzbekistan Friendship Bridge, now operates 24 hours a day, allowing traffic to flow.
“Afghan entrepreneurs would be exempt from all taxes. Work is also being carried out in regard to the construction of a trans-Afghan railway line and practical work will begin soon,” says Kudratov.
Although Uzbekistan has one of the shorter borders with Afghanistan – just 144-kilometers (89.4 miles) – it is one of the most amendable to deepening trade.
Logically, the Iranian border may also present an easy access point to international markets for Afghanistan too.
Kazakhstan has also emerged as one of Uzbekistan’s top three trading partners too, alongside China and Russia as reported by the State Statistics Agency.
This strong trade relationship is facilitated by the countries’ shared border, trade agreements within the CIS free trade area and the recent liberalization of mutual economic relations.
Uzbekistan now maintains trade relations with 187 countries worldwide, with significant trade shares recorded with Kazakhstan (6.2%).
Uzbekistan’s trade with CIS countries amounted to USD 13.02 billion with exports at USD 4.94 billion and imports at USD 8.08 billion with the highest volumes recorded with Russia (52.2%), Kazakhstan (17.5%) and Turkmenistan (5.7%).
According to a recent discussion between Kudratov and Kazakhstan Minister of Trade Arman Shakkaliev, both countries are aiming to more than double their trade turnover, with plans to increase it to USD 5 billion in the short term and USD 10 billion in the medium term.
Their discussions also highlighted the development of the International Centre for Industrial Cooperation (ICICC) “Central Asia” on the Kazakhstan-Uzbekistan border and Uzbekistan’s planned adoption of the 2009 Rules for Determining the Country of Origin.
In 2023, Uzbekistan was Kazakhstan’s seventh-largest trading partner, contributing over 57% of Kazakhstan’s trade with Central Asia with a total trade turnover of USD 4.4 billion.
