In December 2025 Hungary and Uzbekistan agreed to launch a ‘Smart Village’ project in the Khavash district of the country. In this framework, a new Hungarian Technopark will be established in the region, and a digital system will be implemented for inhabitants to access information and communicate with the government. ‘Under this programme, transparency in fund allocation support for needy families, availability of jobs, and opportunities for entrepreneurs will be publicly displayed for residents through a unified open system,’ reported the Uzbekistan Daily back in December 2025.
But why is it distinctive that Hungary, this small country of ten million people, wants to send experts and invest in smart technologies in Uzbekistan? Obviously, the country is tied to the world economy and trade with myriad ties. We are building water systems in Laos. We are cooperating with the US in workforce development. From afar, we may be seen as China’s gate to Europe, or an appendix of the Germany-centred economy. You can focus on any region, and you will find some Hungarian angle due to the high global economic integration of the country. But the new programme in Khavash is not just a typical opportunity to sell Hungarian technology. It is more like a cooperation in Central Asian state-building.
Khavash is a good example of the challenges. The eponymous city centre of the district in its modern form originally developed around the railway junction built by the Russian colonizers in the 1890s, where the railway from the north would go to Samarkand in the West and the Fergana valley in the east. A couple of decades later, the new Soviet regime would launch the enormous monocultural cotton industry, and Khavash became just one of the other small urban centres in this endless landscape of the cotton plantations, feeding the Soviet Union’s textile industry.
The independence of the country from the USSR and thus Russian domination in 1991 did not bring a turning point initially for the town. As the President of Uzbekistan, Shavkat Mirziyoyev highlighted in 2019, ‘over the past 50 years, not a single multi-storey building has been built in Khavash’, which points to the fact that the revenues of the cotton industry failed to trickle down to urban development in the region. President Mirziyoyev’s 2019 visit, however, marked the start of the development of the city as well. The newly reformed Uzbekistan began investing heavily in infrastructure development, which it had ample room to do given diligent budget policies that kept national debt low as a percentage of GDP. The development of Khavash and the broader Syrdarya region progressed in two directions. One was the construction of essential infrastructure, such as housing and water infrastructure. For this, the Asian Development Bank chipped in, pledging $59 million for building infrastructure in various cities of the Syrdarya district, including a state park and community centre in Khavash.
The other was productive economic investment. For this, one obvious source of foreign direct investment was China, which brought more than $500 million to the Syrdarya district since 2019, building new industrial facilities across the former cotton plains.
International investment in infrastructure and productive businesses is a reasonable step for an emerging economy. But how could precious resources and new facilities be used efficiently? One of the biggest failures of the Soviets (aside from the original problem of their planned economy) was pouring investment all across the national economy with inadequate plans, without really planning for sensible returns and management of the new infrastructure. New Central Asian economies need to escape this inefficiency trap.
One of the answers to the problem that Uzbekistan quite quickly realized was digital transformation. This is making the state more ‘legible’, that is, more bureaucratically comprehensible and manageable with the resources for data collection and management, without any bottlenecks in collection, storage, and dissemination.
This is where the Hungarians can come in. Helping the Uzbeks with their technology to be more efficient. Hungarian citizens would not necessarily agree that bureaucracy is the most enjoyable and successful branch of the country, but on the international level, Hungary has ample experience in building a streamlined bureaucratic state, with the Government Window system as a one-stop shop for a wide range of services, and the recent Digital Citizenship App (DÁP) rolled out in 2024. This is a typical process in EU countries, where the eIDAS 2.0 legislation is prescribing a unified super-app for streamlining government services.
‘Hungary has ample experience in building a streamlined bureaucratic state’
The Uzbeks have been strategically planning to roll out such services for years. The Uzbekistan Digital Economy Overview and Vision 2030 government white paper, released in 2024, pledged that the state’s goal is to ‘integrate all kinds of government service platforms, realize “one-time login, full-network communication” so that the masses and enterprises can handle various government affairs online.’ Uzbekistan has a ‘government superapp’ for this end, the MyGov, where more than 770 government services are available, and around a third of the population already uses it. Still, apparently, there is more room for expansion. In the December 2025 negotiations, both in Uzbekistan and Hungary, it was clear that the Uzbeks want to receive Hungarian technology and bureaucratic expertise to reach their goals, and this will mean launching the Smart District/Village project in Khavash in the future.
Signs are abundant that it will not be just the Uzbeks buying off-the-shelf technology. It is not installing the DÁP for Uzbek citizens in a select region. The relatively sporadic information points to the Hungarians preparing to build the digital backbone of the regional economy in the Syrdarya region. It is more like building a core system or a family of software on the earlier Hungarian public and private sector experience. To return to the available information, it will be much more of a system to disseminate information about government programmes, to orient the citizens regarding the available opportunities, than ‘just’ a digital interface for the interaction of the state and its citizens. As in the MyGov app, possibly a payment system will be included.
The programme will, by all indications, include software to directly control production processes as well. This is indicated by the fact that the Hungarians want to include technology from the ‘ZalaZONE’ company, which operates a testing range for a variety of autonomous systems. These land and aerial systems—drones, simply put—can be applied in agriculture in the district. The mechanization is a priority of the government as well, so in the end, this will yield a blueprint for future-proof agricultural modernization and overall state development.
Following the example of Smart Village projects of the FAO in the Fergana valley, an integrated system of sensors could be paired with agricultural machinery, further adding to effectiveness. This would mean a lot in experimenting with the optimal methods of agricultural production in the water-scarce region. The agricultural landscape is changing quickly, and the Uzbeks are ramping up the production of more work-intensive crops like cherries, melons, and grapes.
The programme offers ample room for complementarity with other regional programmes already in place, including at the strategic level. In economic terms, the Hungarians are preparing to deploy their technology in an area where the ADB and the Uzbek state are already building physical infrastructure. In this sense, their services will complement other international development efforts and present an example of how Hungarian expertise can amend the work of other, more traditional development actors. Moreover, they themselves are planning to pair the investment with the opening of the second ‘Hungarian–Uzbek technopark’ in the region, which is due to open before the middle of 2026, and they are already nearing the completion of a large poultry facility. The Hungarians can implement their digital programme as a direct infrastructural support to all of the quickly developing economic hubs.
‘The programme offers ample room for complementarity with other regional programmes already in place, including at the strategic level’
Complementarity at the strategic level, on the other hand, means technological integration at the OTS level, thereby strengthening the bloc’s digital technologies globally. This is not a one-way street where the Hungarians build digital infrastructure for Central Asia. Uzbekistan offers the Hungarians an opportunity to experiment in state and private sector cooperation in a complex, vertically integrated project, while potentially sharing expertise from their experience of building the digital machinery of administration. This can help the Hungarians integrate these new experiences into their public systems, and for the private actors, an opportunity to innovate and develop new marketable products and programmes, both for the EU and other developing markets. These will be primarily in Central Asia and the CIS region, but potentially in other continents as well.
A core question is how such a project will be funded. It is less likely that the Hungarians will directly market the project or its elements to Uzbekistan for upfront budget-level payment. The Hungarian Eximbank has export credit lines, so that is one option. Another would be the Turkic Investment Fund, given that it aligns with several goals of the fund. It fosters economic integration across the Organization of Turkic States, supports micro-, small, and medium enterprises through a complex programme, while also helping green transition and, of course, the development of the digital economy and ecosystem of member states of the OTS. The final arrangement will depend on the scope of the programme, and, looking at it from the other side, the potential funding offered can influence the roadmap of the project.
The Hungarian economic involvement in Central Asia is ramping up, and this programme is far from the larger ones. However, given its diverse and innovative nature, it will be worth keeping an eye out for it, as it can point to how small states can still leave their mark on emerging high-technology industries in the future through close cooperation, while strengthening their state capabilities.
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