On the outcomes of social and economic development of the Republic of Uzbekistan

in the first half of 2008

August 13, 2008

As a result of implementation by the government and bodies of state power at the local levels of the policy measures to carry out the most important priorities of the program of the country’s social and economic development set by President Islam Karimov for 2008, accomplish the policy programs of development, technical and technological renewal of strategic sectors of economy during the first half of 2008 Uzbekistan secured the sustainable dynamics of indicators of social and economic development.

In the sphere of ensuring the macroeconomic stability, sustainable and balanced economic growth rates in the second quarter of this year compare to the first quarter of this year the economic growth rates speeded up in Uzbekistan. This has allowed the GDP growth in the first half as a whole by 9.3% against the same period of last year. The active investment policy and favorable investment climate, which have provided for a growth of assimilated investments by 19.8%, promoted the high economic growth rates. The measures, which are accomplished on technical and technological modernization of leading branches of industry, promoted permanent high industrial production growth rates at 12.2%. The active foreign trade policy has led to growth of exports by 48.2%.

The economic growth has been maintained by the growth of domestic demand, including in the consumer market brought about by the increase of real money incomes of population by 23.4%. This stimulated the growth of consumer goods by 16.6%, retail trade – by 14.4% and paid services to population – by 18.9%.

Thus, the high GDP growth rates have been achieved in the conditions of preserving the macroeconomic stability which is characterized by:

- balanced State budget the incomes of which have made up 101.1% of forecast parameters of the first half of 2008 and the surplus – 1.9% towards GDP. The measures on curbing the tax burden on businesses allowed enhancing the industrial activity of private enterprises. As a result, the income tax inflows to the budget grew by 42.6% against the same period of last year, single tax payment for micro-firms and small enterprises – by 36.0%;

- balanced money market and sustainable national currency. The inflation processes were tempered with active anti-inflation policies and increase of consumer market supplies with necessary goods and services. The money supply and exchange rate fluctuations did not exceed the set parameters. The people’s deposits with banks grew by 19.3%;

- country’s sustainable balance of payments, high positive balance of foreign trade as a consequence of high economic growth rates including at the expense of energy resources and oil products (to 1.6 times), machines and equipment (116.2%), chemical produce (148.0%), and services (125.8%).

During the first half of 2008 Uzbekistan continued the structural reforms, modernization and renewal of leading branches of economy. The implementation of Investment program during the first half-year promoted further deepening of structural reforms and was aimed at creating the favorable conditions for domestic and foreign investors. The volume of assimilated capital inputs on all sources of financing accounted for 3713.1 billion soums, or 119.8% towards first half of 2007.

During the first half of 2008 185 large and small industries were commissioned.

In the course of implementing the programs of modernization and renewal of leading sectors of economy it was accomplished the financing of equipment supply and construction works worth 341.2 million dollars. 29 investment projects were completed, including 9 – in automobile industry, 7 – in the light and textile sector, 5 – in pharmaceutical industry, 5 – in the sphere of production of construction materials, 2 – in chemical, and one – in metallurgical industry.

With a view of creating the favorable conditions for development of new industries as a part of measures to develop and reconstruct the industrial infrastructure during the said period Uzbekistan constructed and reconstructed the motorways, developed electrical power lines and electrified the railroads, as well as water – and gas-supply systems.

In 2006-2008 Uzbekistan established 103 new enterprises, including 19 during the first half-year of 2008, on the basis of the non-used power capacities of enterprises that are being restructured. 87 of them started their operations. More than 4 thousand workers have been employed.

The implementation of programs of development and technical modernization promoted the industrial production growth at 12.2%. The highest growth rates have been ensured in machinery and metal processing (120.3%), fuel industry (119.5%), food (130.2%), wood processing and pulp and paper industry (129.8%).

In the first half-year Uzbekistan continued to deepen reforms and further liberalize economy. Thus, in the first half of 2008 in the course of implementing the Privatization program Uzbekistan realized 174 state assets. During the same period 237 state enterprises changed the form of their ownership of which 97.9% have been bought off in full by private owners.

Thanks to implementation of the Financial and banking system reforming program, measures on stimulating activity of insurance, audit, leasing and appraisal firms, credit unions and commercial banks, as well as introduction of market mechanisms of implementing the material resources the market infrastructure saw its further development in the first half of 2008. In comparison with the same period of last year the authorized fund of banks grew almost two-fold, as well as the total capital and credit inputs into economy – by 40.7% and 28.4%, respectively. The people’s deposits with commercial banks rose by 51.5%. The volume of credits allocated by banks for financial support of small businesses and private entrepreneurship grew by 46.2%.

As a whole, the volume of financial services, including the allocation of micro-credits grew by 39.6%. The list of financial and banking services, particularly in the rural area, also expanded.

In the framework of supporting and stimulating development of small business and private entrepreneurship, sphere of services and home labor during the first half of 2008 the number of registered companies of small entrepreneurship rose by 2.9% in comparison to the beginning of this year and made up 434.500. The number of companies of small business operating now in Uzbekistan in production rose by 4.1%, in construction – by 6.7%, in the sphere of transport and communication – by 14.2%, in other production areas – by 6.7 %. The share of small business in GDP rose from 38.1% in the first half of 2007 up to 40.2%.

In the first half of 2008 the volume of rendered services as a whole rose by 19% and the net share of the sphere of services in GDP made up 44.7% against 42.8% of the same period of last year. The modern types of services based on using the information technologies, reinforcing the concentration of financial capital and development of credit and payment system as well as consumer services are rapidly developing.

In the first half of 2008 about 372.100 new jobs were created, including in the sphere of small business and private entrepreneurship – 203.800 jobs, or 54.8% of their total number, in the sphere of services – 130.200 jobs.

As a result of active work on expanding cooperation between companies and production of services based on the development of home labor 66.700 jobs were created, including in cooperation with large production companies – 16.200, large companies of other areas – 26.200, and 24.300 jobs were created at the small production companies specialized in production of finished goods. In all, during the said period 132.600 people have been engaged in home labor taking into account the jobs on labor contracts and family businesses. The active policy in the labor market promoted the growth of people’s employment by 2.9% and number of the employed rose to 305.900 people making up 10.8 million people.

In the framework of implementation of works on land-improvement at the expense of means of Land-improvement fund during the first half of 2008 Uzbekistan implemented 469 projects on constructing, reconstructing and repairing works of 8070.1 km of main, inter-district and other manifolds. For over the first half of 2008 the growth of GDP of agriculture made up 105.5% against the same period of last year.

Uzbekistan continues an active work on implementing the Program of stimulating the development of cattle at private subsidiary, dekhkan (peasant) entities and farms. During the said period in all 10.406 pure-bred cattle was realized at the 166 auctions nationwide. 13.600 families were provided with cows on gratuitous basis.

As a result of measures undertaken by the government on increasing payment for labor, expanding employment, growth of production volume and strengthening financial state of enterprises the real money incomes of population in comparison with the same period of 2007 rose by 23.4%, average nominal salary – by 51%, average rate of pensions – by 76.1%.

At the first half of this year Uzbekistan continued the work on bettering the access of population to facilities of education, healthcare, children’s sports and social infrastructure. 18 professional colleges and academic lyceums for 13.265 students, 19 general educational schools for 3784 pupils, 6 rural medical stations, 1023.5 km water and 451.8 gas pipeline networks were commissioned.

As a part of programs effective in the system of education the policy measures were elaborated and approved that provide for 100% coverage of children with a general secondary education, and the graduates of 9-year-study schools - to continue their education at professional colleges and academic lyceums.

During implementation of Year of Youth State program Uzbekistan accomplished a number of measures aimed at ensuring well-being of young men and women by way of material support of youth, creating new jobs for them, bettering living and household conditions of young families, raising the quality of education of young generation.

For over the past period of 2008 taking into account the market needs 5.300 unemployed youth were retrained, 9.700 young people that were discharged from the Armed Forces of the Republic of Uzbekistan have been employed. With an aim to support graduates of colleges in launching their private businesses the Employment Assistance Fund allotted micro-credits worth 1480.9 million soums. The Fund allotted consumer loans to procure household goods worth 16.3 billion soums, as well as soft mortgage loans for young families to construct, reconstruct and procure accommodation worth 17.1 billion soums. 241 young families of teachers received land plots to build individual houses at rural areas. 

Maintaining the highest economic growth rates, continuing positive structural reforms and quality changes in economy, in many respects, were achieved thanks to implementation of main priorities of social and economic development program of the country defined by President Islam Karimov for 2008, and they promote acceleration of market reforms of economy, raising people’s well-being and creating maximum guarantees for each citizen of Uzbekistan.

Information Agency “Jahon” based on the data of the Ministry of Economy of Uzbekistan and State Committee of Statistics