To What Extent Do Remittance Flows Enable or Constrain Diaspora Entrepreneurship in Uzbekistan’s Emerging Economy?

The following study is seeking to investigate the relationship between remittances and diaspora entrepreneurship in Uzbekistan’s emerging economy using a literature review method with a total of 20 sources. It is established that while the flow of remittances into Uzbekistan in the year 2024 stood at 14.8 billion, making up 13% of the country’s GDP, there is no statistical evidence of a reduction in poverty in Uzbekistan compared to the rest of the Commonwealth of Independent States (CIS) where remittances have been seen as reducing poverty. This paper will therefore argue that remittance capital in Uzbekistan is not conforming to the standard path of the CIS in terms of the consumption-poverty reduction pathway but is instead being channeled into informal small-scale entrepreneurial activities that have not been captured in the country’s economic statistics. Using the theories of diaspora entrepreneurship, development economics, and behavioral economics as justification, it is established that there is a limiting system of institutional barriers and behavioral factors that are limiting small-scale entrepreneurial activities in Uzbekistan from scaling up into larger businesses. It is also seen that remittances are concentrated in non-poor households, business income growth rather than consumption of remittances is a factor in poverty reduction, and that there is no evidence of diaspora engagement strategies in Uzbekistan. It is also established that institutional reforms are of necessity in order for the Uzbek government’s objective of converting diaspora financial flows into productive investment to be achieved.