The mission of Undersecretary Polidori and 20 companies representing the Italian business world to Uzbekistan starts today. The details of this mission are discussed in the attached press release from the Ministry of Economic Development.
At the center of a historically troubled area, Uzbekistan is certainly a difficult country, that is, risky, but it is also interesting for our foreign trade. The country's difficulties are called lack of transparency, high inflation, continuous devaluation of the Sum exchange rate (the Uzbek currency has two exchanges, one for commercial transactions and the other for currency conversions in the country). But in view of these limitations, Uzbekistan has the great advantage, thanks to the sales of gas and oil, cotton and metals, of having a trade balance in surplus, a good level of foreign exchange reserves, a balanced budget, an average growth of GDP between 8 and 9% a year.
The OECD places the country in the 6th risk category (the penultimate riskiest among the 8 considered by the Organization). Sace also places Uzbekistan in a high risk category (H2, in practice the eighth out of nine); however, it provides for the possibility of granting insurance coverage without restrictions, both against sovereign risk, as well as banking and corporate risk.
Trade between Italy and Uzbekistan is growing year by year: we buy more and more hydrocarbons from the Central Asian country, they mainly buy machine tools and industrial machines, but also clothing and other manufactured goods.
The credit risk, we have seen, is quite high in Uzbekistan: therefore it is advisable for our exporters in any case to obtain, for short-term settlements, documentary credits opened by the major banks of the country, while medium-term settlements must in any case be set with secure payment methods (debt securities to be discounted without recourse or included in credit lines set up by Italian banks). As far as forfaiting is concerned, it can be obtained for transactions up to two years, only with credit instruments endorsed by primary banks (National Bank of Uzbekistan, Asaka Bank), on conditions to be established on a case-by-case basis, which are however rather onerous. Nothing is therefore easy, but nothing is impossible, and our exporters are used to difficulties and risks.
Attachments: Polidori CS 061011 Mission in Uzbekistan.pdf
