The Republic of Karakalpakstan is a sovereign state within the Republic of Uzbekistan.Karakalpakstan has its own peculiarities which define the characterof 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.
Karakalpakstan is divided into 14 districts. 2 towns come under the regional government, and 10 towns under local district government. There are 14 urban settlements, 124 village communities, and 1183 rural settlements.
The main sectors of the economy are agriculture - cotton, rice, karakul sheep, and cattle - and energy production, textile and food industry. Karakalpakstan is rich in mineral, rough and labor resources for the accelerated industrial development. The republic is rich in various natural resources, such as gold, uranium, natural gas, iron, phosphor, bentonite, kaolin, salts, marble and granite. They are practically not processed or in the beginning stage of utilization.
The impact of the Aral Sea disaster continues to be one of the major development challenges in the region and in the country, with governance becoming a key issue within the context of environmental management. The economic consequences of the ecological disaster in the Aral Sea region, along with increasing lack of water resources and soil salinization, have led to an increase in migration from Karakalpakstan.