FOREIGN DIRECT INVESTMENT QUALITY VERSUS QUANTITY IN UZBEKISTAN: RETHINKING ATTRACTION POLICY FOR PRODUCTIVE TRANSFORMATION

This thesis challenges the prevailing quantity-focused approach to foreign direct investment (FDI) attraction in Uzbekistan and argues for a quality-oriented investment policy framework grounded in productive transformation objectives. While Uzbekistan recorded FDI inflows of 9.8 billion USD in 2023 -a record high -the majority of capital concentrated in resource extraction and real estate, sectors with limited technology spillover and employment multiplier effects. Drawing on growth diagnostics methodology and cross-country evidence, the thesis identifies three quality dimensions -technology intensity, backward linkage density and export orientation -and proposes a selective FDI screening mechanism aligned with Uzbekistan’s industrial development priorities. Modelling indicates that redirecting 30 percent of current FDI flows toward manufacturing and technology-intensive services would increase TFP growth by 0.8-1.2 percentage points annually.