Harnessing foreign direct investment for sustainable economic growth in Central Asia: policy challenges and opportunities

Abstract

This study examines the influence of Foreign Direct Investment (FDI) on economic growth and sustainable
development within Central Asian nations, particularly emphasizing Kazakhstan, Uzbekistan, and Turkmenistan. Based
on an examination of contemporary empirical literature, the study underscores the beneficial impacts of foreign direct
investment on capital formation, technology transfer, and employment generation. The research further delineates
the obstacles that constrain foreign direct investment inflows within the region, which encompass political instability,
deficiencies in infrastructure, and a dependence on extractive industries. This paper advocates for the advancement of
Green Foreign Direct Investment (FDI), highlighting its significance in fostering long-term sustainable development and
safeguarding environmental integrity. The principal policy recommendations encompass the enhancement of governance
frameworks, the improvement of financial markets, the diversification of foreign direct investment across various sectors,
and the implementation of tax reforms designed to incentivize green investments. The results indicate that by tackling
these challenges, Central Asian nations can more effectively utilize foreign direct investment as a mechanism for
sustainable economic development.