The Republic of Karakalpakstan is a sovereign state within the Republic of Uzbekistan. Its territory is 166,600 sq. km (37% of the total area) and the population is 1.6 mln. people (approximately 5.6% of the total population), however, its GDP is only 2.4% of that of Uzbekistan. It is populated mainly by Karakalpaks in the North and Uzbeks in the South. Karakalpakstan consists of 14 districts.

Karakalpakstan has its own Constitution, which is in line with that of Uzbekistan. The state system of the Republic is based upon the constitutional division of powers between legislative, executive and judiciary branches. The Jokargi Kenes (parliament) is the legislative body of the Republic, while the Council of Ministers is the highest executive body.

Geographically, the territory of Karakalpakstan consists of the north-western part of the Kyzyl Kum Desert, the south-eastern part of the Usturt Plateau and the Amu Darya River delta, as well as the southern part of the Aral Sea. The Amu Darya is the only river that flows through the given area. There are a variety of natural resources such as gold, uranium, gas, iron, phosphorus, bentonite and kaolin clay, salt, marble, and granite. Climate is typically continental with dry and hot summers and cold winters. The traditional occupation of the Karakalpaks is livestock farming, agriculture and fishing.

Karakalpakstan has its own peculiarities which define the character of its economy and infrastructure. Low density of the population and vast areas of land significantly increase the cost of investments into its industrial, physical and social infrastructure. Remoteness of settlements, factories and SME enterprises also increases the cost of manufactured production due to additional expenses for delivery of raw materials, energy resources, water, electricity, and export of this production. All this accounts to a great extent for the ’closeness’ of the Karakalpak economy from neighbouring regions and countries.
The main sectors of the economy are agriculture (cotton, rice, melons, watermelons, vegetables, karakul sheep, and cattle) and industry (electricity and energy production, textile and food industry). The cotton reprocessing is the leading branch of industry.