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U.S.-Uzbekistan: Macro-Advisory's J.P. Natkin on changes in Central Asia


American-Uzbekistan business forum, Washington, October 22, 2019

How do American firms see the current business environment in Uzbekistan? Tashkent claims that systemic reforms are underway, and that the changes in the country are improving the investment climate across Central Asia. VOA's Navbahor Imamova talks to J.P. Natkin, Macro-Advisory, Eurasia Strategic Consulting.

Transcript, October, 22, 2019:

Navbahor Imamova, VOA: We know that you focus on Eurasia... So it's not just Uzbekistan and the neighboring countries.

J.P. Natkin, Macro-Advisory: That's correct.

Navbahor Imamova, VOA: You have a wider geographic focus.

J.P. Natkin, Macro-Advisory: Right.

Navbahor Imamova, VOA: Why Uzbekistan? And also, we constantly hear at these Uzbek-American business forums that, this is the best time to invest, this is the best time to come in.

J.P. Natkin, Macro-Advisory: Right.

Navbahor Imamova, VOA: And now the Uzbek government seems to be talking for the entire Central Asia. They are saying come to Central Asia.

J.P. Natkin, Macro-Advisory: Yeah.

Navbahor Imamova, VOA: Do all these statements carry any weight for you as someone who actually works in the region?

J.P. Natkin, Macro-Advisory: Absolutely, and actually it's funny you raise this issue because I was just thinking while I was in the forum, I think it's terrific that the chamber and Elena's son, who does a great job as the executive director, have brought in ministers of trade in economy from all of central Asia, including Afghanistan. Because our clients, they don't look at it in a very narrow silo, a geographic basis. They don't look at just Uzbekistan or just Kazakhstan or Turkmenistan or... They look at a broader regional, more holistic approach to investment. Case in point, Uzbekistan, they're looking at it as not only an interesting gateway to Central Asia, but with the Belt and Road initiative, the North South axis, it's becoming... It's regaining its old role as a key trade hub in the silk road.

Also, many of our clients are looking at it as a gateway, a backdoor into Afghanistan. People forget Afghanistan has 50 million people and despite security concerns and demographic issues, it's a pretty sizable and significant market in and of itself. So I think it's a great thing that the Uzbekistan government also understands that our clients, who are mostly Fortune 500, Fortune 100 companies, they're looking at more regional approach to their investment.

Navbahor Imamova, VOA: We know that you are very active in [American-Uzbekistan Chamber of Commerce]. You attend all of these important meetings. What is the benefit for you? What has been the benefit for your company so far? And what is your company doing in general?

J.P. Natkin, Macro-Advisory: Sure. In terms of what we do in general, we provide consulting, macroeconomic advisory and forecasting services to strategic investors active throughout the Eurasia region. So when we talk about Eurasia region, our coverage footprint is really all of the CIS, FSU region. So Belarus, Ukraine, Russia, we cover Mongolia, all five of the Central Asian... The Stans, plus the Black Sea Caspian region, Armenia, Azerbaijan, Georgia, and we also cover Iran. We assist Fortune 500 companies in everything from developing localization strategies, understanding the regulatory environment. We provide services doing sectoral and industry studies, competitor assessments, et cetera. So again, we cover the whole region. We focus exclusively on the Eurasia region and we take great pride in the fact that we're a local company. My partner and co-founder of the firm, Chris Weafer is based in the region, all of our consultants and analysts and associates are based in the region.

Navbahor Imamova, VOA: Are they from the region too?

J.P. Natkin, Macro-Advisory: Most of them are from the region. I'm the outlier, I'm based here in Washington. I've got two guys with me here in D.C., and we do... I focus on a mixture of relationship management, business development, as well as what's going on in the US end of the policy side. Our COO, CFO is based in the UK, but the core of our team is based in the region. If you look at our larger global competitors, they cover the region from London, from Geneva, Singapore, Istanbul, and you can't do this job properly if you fly into the country twice a year.

Navbahor Imamova, VOA: So being in the region obviously makes a huge difference.

J.P. Natkin, Macro-Advisory: Absolutely.

Navbahor Imamova, VOA: You know and you should be feeling the change, right?

J.P. Natkin, Macro-Advisory: Oh, yeah. And it's palpable.

Navbahor Imamova, VOA: So when we hear from the Uzbek officials that things have improved, that the radical reforms are happening, as said by Sardor Umurzakov, the minister of foreign trade and investment, is that true as far as you're concerned, since you are studying the environment, you are analyzing the business climate?

J.P. Natkin, Macro-Advisory: Yeah, absolutely. Case in point, Uzbekistan two and a half years ago, we did very little work in Uzbekistan. Uzbekistan is now the second busiest market for us, only behind Russia, which isn't surprising given the size of the Russian market. And that is on the back of significant interest. Again, it's a compelling market. You've got over 30 million people. You have incredible natural resources, incredible agriculture, the logistical and strategic regional aspects I mentioned earlier. The thing that we always warn our clients is, it's never a linear process, it's never simple, but I have to say I'm also very pleased and very impressed with the progress that's been made. It's a work in progress. The good news is that I think the government has a complete commitment to making it an open market. They're committed to attracting foreign strategic and direct investment. Like I said, these things are never a linear process. It never goes exactly according to plan. And I think our clients who are, again, Fortune 500 companies, they've been active investors in developing markets around the world. In Asia, in Eurasia, in Africa, in Latin America. So they understand this, but I think the fact that an event like this, that Uzbekistan is reaching out and not just telling their story but trying to incorporate other regional neighbors into the presentation, I think shows that they have a much better understanding of the challenges, as well as what is expected of them going forward.

Navbahor Imamova, VOA: Based on what you hear from your clients, what is the main interest in Uzbekistan? What are American investors mostly interested in investing?

J.P. Natkin, Macro-Advisory: It's a combination. Uzbekistan... Are you talking about the sectors?

Navbahor Imamova, VOA: Yes, sector by sector.

J.P. Natkin, Macro-Advisory: We are active in all sectors, but when it comes to Uzbekistan, we're most active in, in no particular order, in food and agriculture, in natural resource extraction and development, in logistics and transportation... as well as healthcare. And again, people forget, they think because Uzbekistan has been off the radar screen for many people in the US and Western Europe, they forget it's a large market. It's over 30 million people. You've got about 31-32 million consumers that have pent up demand. And whether we're talking about diapers or processed foods or pharmaceuticals, there's a significant potential in this market. As well, as I said, as a hub for the rest of the broader region, which from a consumer side is a very compelling story.

Navbahor Imamova, VOA: Thank you so much.

J.P. Natkin, Macro-Advisory: My pleasure.

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