Continuing state interference and an unfriendly business climate continue to deter potential investors, NBCentral Asia commentators say.
In late January, the state property committee announced a tender to sell shares in two hotels in the capital Tashkent, the Grand Mir and the Dedeman Silk Road Tashkent, valued at 7.8 and 11.3 million US dollars, respectively.
The hotel shares are being sold under privatisation and investment programmes approved by President Islam Karimov.
The Uzbek authorities are determined to attract foreign investment as a way of arresting economic decлline and boost production.
According to independent estimates, more than half of all industrial units in Uzbekistan are in need of refurbishment and capital investment, all of which is feasible only with a major injection of cash from outside the country.
Many foreign-owned businesses closed their doors after sanctions were imposed on Uzbekistan following the events of May 2005, when government troops shot hundreds of demonstrators in the eastern town of Andijan. In response to political pressure to allow an independent investigation into the violence, the authorities hit out at foreign companies, squeezing them out of the country and nationalising assets.
The American gold-mining firm Newmont, for example, found the joint venture it was involved in, Zaravshan-Newmont, taken over by the state-run Navoi mining and metals concern.
The Uzbek economy is currently reliant on sales of primary commodities – natural gas, cotton and gold – rather than manufacturing or services.
Last years, officials said they wanted to bring in 1.5 billion dollars in foreign investment, including by accelerating privatisation. But these hopes did not materialise. In some cases, the same assets were put up for sale again and again.
Analysts say investors are reluctant to buy Uzbek assets because the business climate is illiberal and capital flows are tightly controlled by the state. Although there are laws setting out the right of foreign investors for move funds freely in and out of the country, commentators say that in practice the authorities can intervene at any time, freezing bank accounts or blocking the conversion of Uzbek money into foreign currencies.
"The central bank decides arbitrarily which investors are going to be allowed to convert their currency and which ones aren't," said one economic analyst in the country. "There are no other procedures for currency conversion in Uzbekistan."
The National Bank of Uzbekistan also maintains strict controls over the flow of funds and the state of accounts in local branches of foreign banks, which are required to follow its instructions.
"For instance, British American Tobacco, which had a monopoly in the Uzbek tobacco market, held its account with the local branch of ABN AMRO, but this didn't stop it having problems converting its funds," said the economist.
One expert based in Tashkent thinks this kind of restriction is so harmful to investors that they become increasingly reluctant to do business in Uzbekistan.
"Foreign investors have lost interest in Uzbekistan as a country where they can invest money," he concluded.
(NBCentralAsia is an IWPR-funded project to create a multilingual news analysis and comment service for Central Asia, drawing on the expertise of a broad range of political observers across the region. The project ran from August 2006 to September 2007, covering all five regional states. With new funding, the service has resumed, covering Uzbekistan and Turkmenistan.)