ABSTRACT
While most transition countries suffered substantially from the world financial crisis 2008 and to date have to cope with its consequences, Uzbekistan stayed almost untouched and shows constant growth – as it has since 2001. This ‘Uzbek Growth Puzzle’ since the very beginning of transition is challenging conventional wisdom, and studies focusing on macroeconomic settings have produced no convincing explanations. Starting conditions at the beginning of transition have not been favourable for the country, which served as a food and cotton production unit within the Soviet Union. Geographically located far away from promising European markets, with traditional trade infrastructure to the western parts of the former Soviet Union disrupted, close to neighbouring China as a strong competitor, and without substantial natural resources as a source for hard currency-earning, the country had to find its own path in transition – and it obviously did. It was the first transition country of the former Soviet Union (FSU), which succeeded in reaching pre-transition output levels again in 2001.
