Dutch Disease in Uzbekistan? A Computable General Equilibrium Model of Effects of Foreign Investment into Uzbekistan's Gas Sector

Uzbek lawmakers have been working hard to attract foreign investors into exploration and production in Uzbekistan. This paper will describe these laws and use a computable general equilibrium (CGE) model to analyze their macroeconomic effects on Uzbekistan and beyond. This analysis does not attempt to quantify the causal relationship between Uzbek laws and the amount of investment. Instead, the focus of the paper is closer to the following questions: successful or not, is the Uzbek campaign to attract foreign investment a good idea at all? Who wins and who loses? Results of the model suggest that Uzbekistan would be better off overall from foreign investment in its natural gas sector, due mostly to improvements in overall production efficiency and terms of trade. However, the gain in the natural gas sector would come at the expense of production and net exports of non-petroleum related industries.