By The Straits Times | Created at 2026-09-01 02:10:10 | Updated at 2026-09-05 11:39:09
4 days ago
TASHKENT – A free trade agreement (FTA) between Singapore and Uzbekistan could help reduce uncertainty in an unfamiliar market for local companies, while opening up opportunities in services, investment and selected goods, Senior Minister Lee Hsien Loong said on Aug 31.
While trade and investment between the two countries remain relatively low, there is potential for growth in areas such as infrastructure projects, consultancy, IT and education, Lee told Singapore reporters in the Uzbek capital as he wrapped up his first official visit to Central Asia.
“For many Singapore companies, Uzbekistan is not a familiar market. They don’t know how it works. They are not sure, so they think that the uncertainty is high,” he said. “So they think there is risk, and if you have an FTA, it will help to de-risk.”
More broadly, Singapore’s economic links with Central Asia could grow four or five times over the next decade, Lee said, pointing to Changi Airport Group’s interest in an airport project in Astana, the capital of neighbouring Kazakhstan, as one potential opportunity.
He also touched on nuclear energy, saying what he saw on the trip confirmed Singapore’s assessment that nuclear may have to be part of the energy mix as countries shift from planet-warming fossil fuels to renewable energy.
On Aug 28, Singapore and Uzbekistan took the first formal step towards beginning negotiations for an FTA, signing a joint statement to formalise their intention.
Uzbekistan is the most populous country in Central Asia, with more than 38 million people, and has sought to attract more foreign investment as it opens up its economy.
Asked what such an agreement could achieve, Lee said there was some potential despite the relatively low volume of trade and investment between Singapore and Uzbekistan.
Trade in goods would be more challenging because the geographical connections between the two countries are not direct, he said, though there could be opportunities for high-quality Uzbek fruit and fresh vegetables to be exported to Singapore if flight connections were developed.
Uzbekistan exported about US$2.1 billion (S$2.7 billion) worth of fruit and vegetables in 2025, including grapes, raisins, peaches, cherries, onions and cabbage.
Trade in services offers additional possibilities, such as infrastructure projects, consultancy, IT, and education, as companies explore investment opportunities in Uzbekistan.
As an example, Lee cited an agreement signed during his visit between an Indorama-Wilmar joint venture and the Uzbek government for a major agrotech project in Tashkent.
An FTA usually includes some element of investment guarantee, Lee said. If these guarantees could go beyond World Trade Organisation norms, they would provide extra reassurance to Singapore companies looking to do business in Uzbekistan.
Lee noted that FTAs have become more important at a time when the WTO is not functioning as it should as an international rules-based system.
“All the more you need FTAs bilaterally and regionally to give people some protection, which the WTO is not able to do,” he said.
He added: “It always takes effort to negotiate an FTA, but there’s market potential. Then we will put the effort in and try and reach an agreement.”
High regard for Singapore
Prior to Uzbekistan, Lee visited Kazakhstan, the first stop of his two-country trip to Central Asia.
He said his “most vivid impression” was the high regard both countries had for Singapore and founding prime minister Lee Kuan Yew.
In Kazakhstan, this was partly because the late Lee had visited the country in 1991 and several more times afterwards. In Uzbekistan, he was well regarded for his reputation and books.
Both countries were interested in learning from Singapore’s experience and having Singapore companies involved in projects there.
One example was Kazakhstan’s plans for an airport in Astana. Changi Airport Group is interested in the project, Lee said, adding that the Kazakh side had made it clear it was keen to have the Singapore company involved.
A Changi Airport Group spokesman told The Straits Times on Aug 31 that Changi Airports International is in discussions with the Kazakhstan authorities to explore how it could contribute its airport development and management expertise.
Lee said that Singapore companies have already found opportunities in the region in areas including education, agriculture, venture capital and legal services.
Interest also flows in the other direction, with Central Asian companies using Singapore for wealth management and fundraising, as well as a base from which to do business in South-east Asia.
“If we can make it grow over 10 years by four or five times, I think that will be something which will make a contribution to diversifying our economies,” Lee said.
“It won’t totally supplant the major trading partners we have, but it will be a valuable supplement.”
Stronger trade and investment ties could lead to closer people-to-people links, human resource cooperation and youth exchanges, as well as give Singapore more partners to work with at international forums such as the WTO and United Nations.
“That’s very valuable to us as a small country because we look for partners, we look for friends, and we support one another,” Lee said.
Nuclear power
Lee said the trip confirmed Singapore’s assessment that nuclear energy may need to be part of the energy mix for countries seeking to decarbonise.
Singapore has been studying its potential, including newer technologies such as small modular reactors, as it explores ways to cut emissions while meeting its growing energy needs. No decision has yet been made on deploying nuclear power.
He noted that Kazakhstan and Uzbekistan are both oil and gas producers, yet see a need to develop nuclear power as one component of their energy resilience.
Singapore, in contrast, does not have oil and gas and has limited renewable energy options. Even if every rooftop and reservoir were covered with solar panels, these would produce only about 10 to 15 per cent of the energy the country needs, Lee said.
“If you want something which is reliable and not intermittent, it’s hard to run away from thinking about nuclear energy,” he said.
Singapore has to look at nuclear energy “very, very seriously”, although it is not ready to make a decision, Lee said.
New generations of nuclear power plants that are smaller, safer and require smaller safety distances could potentially be more suitable to Singapore’s circumstances, although it is still too early to say how successful these technologies will be.
Singapore will embark in 2027 on the Integrated Nuclear Infrastructure Review (INIR), a process to assess whether the country is ready to make a decision on nuclear power.
“In other words, we would like to get ourselves ready to make a decision. Let’s assess whether we’ve got there yet,” Lee said.
“It is not something which you can rush, but neither is it something where you want to just kick the ball down the road,” he added.
