Uzbekistan - Balance of payments



Uzbekistan was extremely reliant on cotton exports as a means of trade throughout its association with the former USSR, but earnings fluctuated widely from year to year depending on the performance of the agricultural sector. Exports of natural gas and petroleum generated much needed hard currency reserves within the next several years. Uzbekistan received substantial financial support from the World Bank, IMF, and other multilateral lending institutions. Proceeds were used to finance the cotton industry and oil and gas development, to provide a social safety net, to maintain the water supply, and to further privatization efforts.

The country lost almost half of its foreign exchange reserves in 1996, after the government imposed strict currency controls. As of the early 2000s, Uzbekistan was able to maintain reserve levels at or close to $1.2 billion, in large measure by restricting imports. Exports dropped as well, and as a result of this decline in trade, Uzbekistan managed to achieve a modest balance of payments surplus of $359 million in 1999. The country's external debt stood at $5.1 billion in 2001. Many creditors reassessed their lending to Uzbekistan due to this high debt burden, and foreign investment declined.

The US Central Intelligence Agency (CIA) reports that in 2001 the purchasing power parity of Uzbekistan's exports was $2.8 billion while imports totaled $2.5 billion resulting in a trade surplus of $300 million.

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