On the Decree of President of the Republic of Uzbekistan “On the Action Program to support companies of real sector of economy, ensure their stable work and raise export potential”

On November 28, 2008 the President of the Republic of Uzbekistan Islam Karimov signed Decree No.UP-4058 “On the Action Program to support companies of real sector of economy, ensure their stable work and raise export potential”. The provisions of the Decree are aimed at addressing the tasks on overcoming negatives impacts of the world financial and economic crisis, providing for sustainable an economic growth rate and macro-economic balance, stable work of the main branches of real sector of economy and assisting population’s employment, rendering support to exporters, enterprises of leading branches of industry and small businesses.

The document envisages approval of the Action Program to support enterprises of the main branches of real sector of economy, provide for their stable work and raise export potential. The Decree clearly defines the key factors by way of which the negative impacts of the world financial crisis on the real sector of economy of the country can be overcome and the bases can be established for subsequent sustainable growth, expansion of production volumes and assimilation of new markets.

Firstly, it is about modernization, technical and technological re-equipment of enterprises. Above all, it concerns the main branches of economy, export-oriented and import-bound products. The attention of heads of enterprises, associations and economic entities is drawn to a need of accelerating the implementation of adopted program of modernization, technical and technological re-equipment of production, attracting the latest technologies, transferring into international quality standards that allow to provide for stable positions both in domestic and foreign markets.

According to the assessments of foreign experts, those countries which took the timely measures to re-equip production and introduce new technologies and thanks to it, - ensure production of quality competitive goods with the least expenses, will find a way out from the world financial and economic crisis with the least losses. With these goals the Decree envisages additional measures on speeding up modernization in the basic branches, accelerated withdrawal of old equipment and basic funds of industrial enterprises, accomplishing advanced orders for procurement of equipment on technical re-equipment projects, speeding-up the start and terms of implementation of important projects in industry and transport infrastructure.

Holding such measures are grounded by real sources of means – these are own funds of enterprises, credit banks, including by way of significant expansion of their capital, as well as the credits of the Reconstruction and Development Fund and international financial institutes. By now, one of the main issues is a sharp worsening of current state of affairs concerning the world goods markets on various assortments of products which are being exported by companies of Uzbekistan.

With an aim to overcome the indicated hardships, the Decree envisions taking by the Government of concrete measures to support exporter companies in terms of providing for their competitiveness in foreign markets and creating additional stimuli for exports. For this purpose Uzbekistan plans to allot soft loans to exporter companies for replenishing the working capital, rendering exporters temporary tax privileges and opportunities to restructure existent bills payable.

The strict control over production expenses and introducing tough saving regime are profoundly important for exporter companies, especially, in the main branches of industry, in terms of providing for competitiveness of production. Therefore, the Program envisages special measures on not allowing groundless growth of prices for electricity and main public utilities, decreasing the prime cost at the companies by no less than 20 percent by way of rationalizing technological processes, decreasing consumption of materials, power intensity, and other expenses.

Holding tangible modernization of power industry, system of production, transmission and use of electricity, cutting down consumption of energy and introducing the system of energy savings as envisaged in the Action Program are also directed to raising competitiveness of the Uzbek economy.

Alongside with this the attention in the Program is paid to further developing and stimulating activities of small businesses and private entrepreneurship. For this purpose the Program envisions allotting loans of commercial banks, including those from the Fund for privileged crediting, to small and private businesses, opening credit lines to procure modern imported equipment and mini-technologies, as well as rendering various additional tax privileges.

Establishing interrelated system of measures on constructing housing, and particularly overhauling, restoring and reconstructing of existing housing, including individual accommodation, are the main stimulus for developing economy and assisting population’s employment. The Decree envisages stimulation of establishing organizations that are specialized in this direction, rendering them assistance in making and forming necessary modern production repair basis.

Additional measures envisioned in the Program approved by the Decree on expanding production of own food products allow to create reliable reserves that ensure food security of the country at the expense of domestic sources which is particularly significant given the growth of prices for main foodstuff at the world market.

Taking into account the important role of commercial banks in implementing the measures on modernization of enterprises, supporting exporter companies and small businesses, a particular attention in the Decree is paid to raising responsibility of banks over on-time rendering of financial support for real sector enterprises.

Implementation of measures envisaged in the Decree of President of the Republic of Uzbekistan, yet given the world financial and economic crisis, will allow to ensure stability of activities of companies of real sector, dynamic and balanced growth of economy, and on this basis, provide for a systemic, gradual implementation of tasks on further sustainable social and economic development of the country and raising the living standards of people.

Information Agency “Jahon” based on the materials of local press