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OUR KEY TASK IS TO FURTHER DEVELOP
THE
COUNTRY AND INCREASE THE WELL BEING
OF THE
PEOPLE
Address
by the President of the Republic of Uzbekistan
Islam
Karimov at the session of the Cabinet of Ministers
dedicated to the outcomes of social and economic development of the
country in 2009 and most important priorities of the economic program
for 2010
Distinguished participants of the meeting!
Today
our most important task is to critically assess the outcomes of 2009 in
the conditions of deepening the global financial and economic crisis and
on this basis to define the most important priorities of the social and
economic development of the country for 2010.
It is
principally important to objectively assess the efficiency of the
Anti-crisis program for 2009-2012 so that if it needs to introduce the
relevant corrections into the course of its implementation in 2010 and
the forthcoming years.
I
think that today there is no need to speak about the fact that the year
2009 turned out to be truly very difficult for us.
In
fact, we have all grounds to state that the year 2009 became a genuine
trial, firstly, of the “Uzbek model” that we chose of transition from
the old command and administrative, distribution system to the market
system of governance built on the five renowned principles and strategy
of consistent and step-by-step reforms and evolutionary development of
state and economy.
The
fact that the complex of anti-crisis measures adopted by the government
has been well thought-out and timely was considerably significant in
terms of mitigating and neutralizing the impact of the crisis. Those
measures are set for 2009-2012 and ensure the sustainable and continuous
work of our financial-economic, budget, banking and credit system, as
well as the measures on rendering assistance to enterprises, real
sectors of economy and social support of the country’s population.
The
complex of the anti-crisis decisions adopted by the government has been
well thought and timely.
Allow me to briefly dwell on what has been accomplished to consolidate
the financial and banking system.
The measures that have been and are being adopted allowed for over the
last two years to increase the total capital of commercial banks. Last
year alone over 500 billion UZS of state funds have been additionally
allocated to replenish the charter capitals of leading banks.
Today
the banking system of Uzbekistan not only remains as one of the most
stable ones that meet the strict international requirements, but also
enjoys the sustainable positions on a number of established standards.
The volume of capital sufficiency of our banks exceeds 23 percent, i.e.
it is almost as high as three times the international standards set by
the Basel Committee.
Fourteen commercial banks of the republic, whose assets in total make up
more than 90 percent of the banking system, have received the high
rating point “stable” from the leading international rating companies
such as “Fitch Ratings”, “Moody’s” and “Standard and Poors”.
By
now the total assets of banks as more as twofold exceed the amount of
funds in the accounts of population and legal entities, while ensuring
their full protection and guaranteeing the timeliness of payments. The
aggregate current liquidity of the banking system is ten times more the
current obligations of banks on foreign payments. In other words, we
have established the solid “safety cushion” of the entire banking
system.
The
liquidity and sustainability of national banks serves as a powerful
factor of growth of confidence towards the banking system, mobilization
of spare funds of enterprises and population to saving accounts. The
volume of deposits of population for over the last year alone grew for
1,7 times. In the whole, for over the last ten years the domestic
sources being channeled to crediting the real sectors of economy
increased for more than 25 times.
As a
result, the structure of credit portfolio of banks has cardinally
changed. If in 2000 the credit portfolio formed almost 54 percent at the
expense of foreign borrowings, then in 2009 84 percent of all credit
portfolios of our banks were established at the expense of internal
sources. In the conditions of limited foreign sources of borrowings due
to renowned reasons it is of an utmost significance vis-à-vis the
development of our economy.
In
this, the foreign borrowings are attracted primarily in the long-term
basis exclusively to financing the investment projects in terms of
modernization of strategic branches of economy, support of small
businesses and private entrepreneurship.
The
total amount of credit resources being channeled to the real sector of
economy grew in 2009 as compared to the year 2000 for 14 times. In this,
the share of credits of banks aimed to finance the investment projects
made up in the total credit portfolio about 70 percent.
The measures in terms of ensuring the financial sustainability and
supporting the enterprises of real sector of economy in the conditions
of global financial and economic crisis, firstly, at the expense of
modernization of production, expanding cooperative, establishing the
sustainable partnership relations, stimulating the domestic demand for
the products manufactured by domestic manufacturers were profoundly
significant.
Thanks to the adopted program we have taken the measures in terms of
reducing the non-production expenses, decreasing the net cost of a
product, as well as replenishing the circulation funds of enterprises
with an aim of ensuring their stable work.
As a
state support we have restructured the delayed and current credit debts
on payments to budget and non-budget funds on 50 enterprises, which has
much supported their production activity, while leaving at their
disposal over 350 billion UZS.
In
the whole, the net cost of the products manufactured on the branches of
industry decreased by 18 percent, and in a number of branches and
enterprises such as the Almalyk Mining and Smelting Enterprise,
“Uzmetkombinat” Joint-Stock Production Association, the enterprises of
the “Uzeltekhsanoat” Association and “Uzstroymaterialy” Company, and
others – by 20-25 percent.
The
work being accomplished to liquidate the low-profit, economically
unsound enterprises and involving to this process of commercial banks is
substantially important in terms of raising the financial sustainability
of enterprises.
In
all, 240 bankrupt enterprises have been revealed in the country,
including the large enterprises, of which at the moment 154 have already
been realized to new owners. 86 bankrupt enterprises have been
transferred to the balance of commercial banks.
Today
the production has been fully reestablished at the 70 economically
unsound enterprises, which were transferred to the balance of commercial
banks, and they have been realized to perspective investors. Yet in
terms of others – the work on their financial recovery is being
accomplished.
The
measures that we took have allowed to free the economy of our country
from the needless ballast, repay the credit debts to the budget and
appears on wages worth total sum 1 trillion UZS, as well as establish on
the basis of bankrupt enterprises over 100 new types of productions and
additionally create more than 17,000 jobs.
In
the framework of the large-scale localization program more than 840
projects was implemented last year, which has permitted to increase the
volume of manufacturing of products being localized as compared to the
year 2008 to 2,3 times. We have established the production of over 120
new types of goods, from amongst which there are the oil and gas
equipment, produce of chemical industry, component parts for the
carmaking industry and many others. About 2,000 new jobs have been
created.
In
the conditions of sharp worsening of the state of world markets for the
most important types of products being exported due to the global crisis
it was considerably significant to take the efficient measures to
support and stimulate the domestic exporter enterprises, consolidate the
export potential, preserve and further expand the volumes of domestic
products in the world markets.
In
order to provide for sustainable work of exporter enterprises, increase
their competitiveness in the foreign markets we have taken the
unprecedented measures to support them, i.e. in terms of not allowing
the groundless growth of prices for the energy resources and public
utilities, decreasing the prime cost in the enterprises by way of
optimizing the technological processes, applying the new mechanisms in
shaping the export prices, extending terms on banking guarantees,
reducing terms of returning the vale added tax and taking other measures
of support.
The
assistance on the part of the country’s banks played not less important
role in ensuring the stable operation of exporter enterprises. Last year
alone, as a part of efforts to replenish their circulation funds the
exporter enterprises received soft loans worth in total 233 billion UZS,
which has paved way to prevent shrinking of production due to temporary
difficulties in terms of exporting their products.
Thanks to the adopted measures on supporting the exporter enterprises we
have been able to provide for their stable operation and increase in
2009 the volume of product supplies for export by 2,4 percent. This has
allowed completing the foreign trade circulation in 2009 with big
positive balance, which in its turn serves as the most important
indicator of a reliability of balance of payment and sustainability as a
whole of our economy.
The additional measures in terms of stimulating and relieving the tax
burden, simplifying and unifying the taxation system served as the most
important direction of supporting the economic entities.
Last
year the economic entities of the country enjoyed a broad spectrum of
additional tax and customs benefits.
We
have allotted benefits on the income tax and single tax payment for the
enterprises of the light and food industries specialized in the output
of consumer products, as well as the enterprises that participate in the
production localization program.
The
newly established specialized contract organizations on construction and
reconstruction of the housing stock are freed of all types of taxes for
the term of five years. The dividends of founders of enterprises being
channeled to capitalization and investing have also been freed from
taxation for the same period.
In
the whole, in the framework of implementation of the Anti-crisis
program, thanks to offering the tax benefits and preferences the
economic entities saved funds worth more than 500 billion UZS, which
were channeled to replenishing the circulation funds, technical
re-equipment of production, assimilating the new types of products and
materially stimulating the workers.
A
special attention was paid to reinforcing support and stimulating the
accelerated development of small business and private entrepreneurship,
which plays an ever more significant role in ensuring economic growth,
creating jobs and addressing the employment problems, growth of incomes
and well being of population. At the moment, the small businesses
produce about 50 percent of the gross domestic product against 30
percent in 2000. This is, above all, the result of a particular support,
which is being constantly rendered to a small business and private
entrepreneurship on the part of state.
In
2009 the single tax payment for the small industrial enterprises was
reduced from 8 to 7 percent; the amount of fixed tax for individual
entrepreneurs was also reduced on the average for 1,3 times.
The
expenses the entrepreneurs bear on establishing their business have been
significantly reduced. Thus, the cost of receiving the architectural and
planning tasks was reduced fourfold, of the design estimates – for
2,5-fold, and the cost of filling in the cadastral documentation –
twofold.
About
2,000 spare premises, which were revealed as a result of stock-taking,
have been allotted to small businesses for rent. In this, the renting
tariffs for premises depending on their location and type of activity
are reduced from 3 to 10 times.
The
total amount of credit resources allocated to this sector exceeded 1,8
trillion UZS.
A
key priority of implementing the Anti-crisis program became the
attraction of investments, above all, thanks to mobilizing the inner
sources in order to undertake the accelerated modernization, technical
and technological re-equipment of the most important branches of
economy, advanced development of transport communications and
construction of facilities of the social infrastructure.
During 2009 in the framework of the Investment program and sector
programs of technical modernization we implemented 690 investment
projects, of which 303 projects were successfully completed. In the
whole, 22 large production facilities were commissioned in the country,
of which 8 facilities – in the oil and gas, chemical and metallurgical
industry, 9 – in the machine building and 5 – in the construction
industry.
Last
year we completed the implementation of such strategic projects as the
reconstruction of aggregates of ammonia at the “Ferghanaazot” and
“Maksam-Chirchik” enterprises, construction of the plant in Namangan on
producing headlights and lights for automobiles, as well as of the
“Daewoo Textile” textile complex in Bukhara. The booster compressor
station “Gazli” and gas dewatering installation at the “Kungrad”
compressor station with a productivity of 35 million cubic meters of gas
per day have been commissioned. The construction of gas pipeline, which
goes through the territory of Uzbekistan from Turkmenistan to China, was
completed. It expands the transit potential capacities of our country.
Besides, more than 480 new productions have been established in the
provinces, above all, in the sphere of small business, as well as in
such branches as the industry of construction materials, food and light
industries, as much as other branches of economy.
I
would like to especially note that thanks to implementation of the
strategic investment projects on construction of the
“Novoangren-Uzbekistan” Power Transmission Line-500 with substation,
165-km-long “Ahangaran-Pungan” trunk gas pipeline through the Kamchik
mountain pass, as well as of the “Guzar-Surhan” high voltage power
transmission line we have in fact completed creation of the single power
and gas systems in the scope of entire country.
This
permits to reliably provide the population of Ferghana Valley and south
of Uzbekistan with natural gas and electricity, as well as significantly
increase the export of electricity.
We
have kept on the focus of our attention the implementation of the
large-scale program on construction and reconstruction of the Uzbek
national automobile highway that meets the high international standards,
which reliably links all provinces of the country and ensures access to
regional and world markets.
During last year we commissioned 217 kilometers and undertook a complete
overhaul of 538 kilometers of automobile roads as well as 19 bridges.
More than 280 billion UZS at the expense of the country’s Road Fund were
channeled to accomplishment of such works. We have attracted the soft
loans of the ADB worth in total 56 million dollars to procure the road
construction techniques.
We
have continued the works on developing and modernizing the railroad
transport system of the country. Five bridges were commissioned with
participation of Japanese capital on the new railroad line
Toshguzar-Boysun-Kumkurgan. Six new double track sections of the
Navoi-Uchkuduk-Sultanuzdag-Nukus railroad line have been commissioned.
We have started the work on the projects of electrification of
railroads, renewing the stock of railroad locomotives and rolling stock.
The
substantial works were accomplished in 2009 on construction of the
inter-modal center of international transportation on the basis of the
“Navoi” Airport as one of the key facilities of the free industrial and
economic zone being established in Navoi Province. During last year the
national air company, exploiting the modern transport aircraft rented
from the “Korean Air”, undertook more than 330 flights on international
destinations and transported about 8,500 tons of cargo, which paved way
to integrate the Navoi Airport into the global logistical network.
The
international logistical center in the town of Angren has also been
constructed and commissioned. It will provide the year-round transport
link between the regions of the country and the provinces of Ferghana
Valley.
Speaking of the development of communication systems, one should
emphasize that the development of high technological telecommunication
sphere is strategically important for us. Today it is difficult to
imagine the life without computer equipment, information technologies,
Internet, and mobile phone connection.
Twelve investment projects were launched in this direction in 2009.
Tashkent-Bukhara communication backbone was expanded on the basis of
modern technologies, which has allowed to increase the throughput
60-fold and thus provided for opportunities of rendering broadband
services such as video-telephone connection, Internet and so on. The
international lines of communication Andijan-Osh, Kungrad-Beyneu,
Denau-Tursunzade, Termez-Khayraton have been commissioned.
In
the year 2009 in the framework of the program on improvement of
reclamation condition of lands 840 kilometers of collector and drainage
networks have been commissioned along with 250 drainage wells, 15 units
of reclamation pumping stations and constructions. In total 130 billion
UZS have been channeled for implementation of projects on improving the
reclamation state of lands.
As a
result the reclamation condition of over 240,000 hectares of irrigated
land has been improved, which allows to raise the level of crop yield
and increase the incomes of farmers.
In
2009 along with implementation of large investment projects and
development of production and communication facilities, development of
agriculture and reclamation construction the issues of enhancing the
social sphere have remained in the focus of our attention.
In
total 2,5 billion dollars-worth of funds, which make up 27,8 percent of
total amount of assimilated capital investments in 2009, were channeled
to aforementioned purposes.
The
implementation of the two most important social programs – National
program of cadres training and State program for development of school
education has been practically completed. The integrated system of
continuous education has been established, which encompasses 9 years of
school education and 3 years of secondary specialized vocational
education, i.e. transition to 12 years education, which grants our
children the opportunity to master a concrete profession along with
general secondary education is about to be completed.
Speaking of the effectiveness and efficiency of measures taken in the
framework of the Anti-crisis Action Program in 2009, one should
emphasize that they targeted two key tasks – creation of new jobs and
further raising the living standards of our people.
Thanks to the measures being taken in the country, over 940,000 new jobs
were created in 2009, of them around 500,000 in rural areas. More than
390,000 new jobs were created in the sphere of small business, including
270,000 in the services sector.
Still
one of the most important directions of employment is giving incentives
to home-based labor in cooperation with industrial enterprises and
carrying out the work at home on contractor basis. Thanks to such
practice, more than 130,000 new jobs were created.
Summing up the results of 2009, today we have all grounds to note with
pleasure that thanks to correctly chosen strategy of development,
renewal and modernization of the country, mobilization of all our
strength and capacities with a view to implement the Anti-crisis Action
Plan we have not only withstood the challenges and threats of global
crisis, but we are among few countries who have been ensuring the
sustainable rates of economic and social development, well-being and
prosperity of our people.
In
2009 the GDP of Uzbekistan grew by 8,1 percent, volumes of industrial
production – by 9 percent, agricultural production – by 5,7 percent,
retail trade – by 16,6 percent, paid services to the people – by 12,9
percent. It is worth noting that despite complex weather conditions of
last year, for the first time the country harvested 7,3 million tons of
grain, of them 6,6 million tons of wheat; while the cotton crop made up
3,4 million tons.
In
2009 the volumes of investments in the economy touched in USD equivalent
8,2 billion, which is 24,8 percent more than in 2008. By 68 percent grew
the volumes of attracted foreign investments and what is of a special
importance is that direct investments, which grew by 1,8-fold, make up
their major share.
The
inflation did not go beyond prescribed limits in 2009 and made up 7,4
percent. Last year Uzbekistan was one of the few countries in the world
where the State budget was executed at 0,2 percent surplus against GDP.
With
a special pleasure I would like to note that for over the last year the
real incomes of people increased by 26,5 percent, while the growth of
average monthly salary, pensions and allowances made up on average 40
percent.
The
successes achieved by Uzbekistan in implementation of anti-crisis
measures have been recognized by competent international financial and
economic institutions such as the IMF, WB, ADB and several other leading
financial institutions of the world.
Thus,
in a statement by IMF executive directors, who visited Uzbekistan in
October 2009, it is noted that “Uzbekistan has demonstrated significant
sustainability against the influence of the global economic crisis as a
result of a discreet policy, which has allowed the government to
accumulate significant resources needed to ensure growth in this period
and withstand the crisis as well as thanks to a reasonable policy of
participation in the world financial markets”.
Dear
friends!
Before dwelling upon the most important priorities of social and
economic development of the country in 2010, I believe it is necessary
to shortly comment on summarized assessments of competent international
experts and economists, their forecast of trends of development in the
world economy in 2010.
First, in line with their analysis and assessments, the acuteness
and peak manifestations of the global financial crisis will gradually
descent, and in 2010 the gradual slow growth of the world economy is
expected.
Following slowdown in the global economy in 2009 approximately to 1
percent, the economic growth this year may touch around 3 percent, which
is much lower than the rates of pre-crisis period.
At
the same time, as analysts note, it is expected that unemployment will
grow which naturally will impact the people’s living standards.
Second, the unstable growth of an international market and
continuing fall of domestic demand, which can be witnessed in many
countries, does not contribute to forming a basis for consistent
increase of growth rates in the real sector of economy.
The
situation is aggravated by the fact that the broad-scale and extensive
state interference in the peak phase of crisis was aimed, above all, at
maintaining solvency of bank and financial system and eradicating the
loopholes in mortgage lending and just slightly touched the sphere and
productions of the real sector of economy, small business and
entrepreneurship.
In
this regard, this year the real sector of economy will face the problems
related to weakness of financial condition of enterprises and companies,
their inability to pay off their loans and credits.
In
2010 and forthcoming years the banking system can face the danger of a
new wave of insolvency due to the growth of bad debts in mortgage and
consumer lending.
Along
with it, the fall and contraction of production volumes, growing
unemployment and limitation of real incomes of people lead to
significant reduction of tax proceeds and growth of budget deficiency,
which can evolve into chronic in some countries.
Third, despite continuing slowdown in consumer demand checks price
rise and in some places even deflation can be witnessed, enormous
emission of money and pumping of bank and financial sector to support
their liquidity create dangerous risk of hike in inflation processes in
a number of countries.
Containing the growing wave of inflation will be an extremely difficult
task.
Fourth, one cannot but note still continuing large speculative games
and danger of inflating the new “bubbles” on stock, raw and financial
markets, which can cause a new financial collapse and diversion of finds
from renewal and modernization of a real economy.
Fifth, the biggest problems for making and developing economies,
above all, of the developing countries are caused by a continuing policy
of protectionism in the world practice.
Despite numerous statements on unacceptability of such practice at the
meetings of G20 there is an impression that eradication of protectionism
as a vivid obstacle for a free economy is hardly possible in the
near-terms prospect.
Sixth, the priority task for 2010 and forthcoming years, according
to the IMF experts, is preparation to curtailing extremely high level of
state interference in economy.
The
extensive continuation of support measures in financial and economic
sphere can entail the risk of disproportions in balancing the economy
and serious restrictions on the way of free entrepreneurship.
The
conclusion, which arise out of these assessments and forecast of further
development of the world economy in the conditions of continuing crisis
testify for the fact that despite that the peak phase of the crisis has
passed, the entire cycle of financial and economic crisis is still to be
overcome.
The
process of leaving the crisis and post-crisis rehabilitation of economy
can have quite long, complex and uneven character.
Dear
participants of the session!
The
most important task and the main priority of social and economic
development for 2010 is continuation and deepening of reforms,
renewal and modernization of the country, unconditional implementation
of Anti-crisis action plan for 2009-2012 and on its basis ensuring the
high and sustainable rates of economic growth, its effectiveness and
macroeconomic balance.
The
growing potential, new and modern production capacities, which have been
commissioned for over the last years, development of production and
social infrastructure, systemic reforms and liberalization of economy,
exclusively favorable investment climate allow us to envision in 2010
the following:
The
growth of the GDP and industrial production at 108,3 percent,
agriculture – at 105 percent, achieve growth of investments in the
economy to 30 percent against GDP.
The
target task is to ensure growth of production exports to 8,5 percent,
qualitatively change its structure at the expense of increasing the
share of finished products with high added value.
It is
envisioned to tighten the budget and financial fiscal and credit policy,
saving regime in comparison to 2009, above all, by introducing modern
resource and energy efficient technologies.
The
inflation is expected to be within 7-9 percent.
The
achievement of the set goals will depend, firstly, on to what extent in
full we shall be able to mobilize all our capacities and resources,
ensure the unconditional implementation of the measures envisioned by
the Antic-crisis action plan in terms of neutralizing the still
remaining big risks and consequences of the crisis.
This
will require the Cabinet of Ministers undertaking the strict and
system-based control over the implementation by each and every executor
of the tasks laid on him vis-à-vis sector complexes and sphere of
economy, as well as territories.
Taking into consideration the ongoing global financial and economic
crisis and its impact on the country’s economy, ensuring the
financial and banking sustainability remains to be the most important
priority task.
The
point is about further capitalization and enhancement of the investment
activity of banks, increasing the volumes of crediting directed to
resuming and expanding the priority directions of structural
transformations in the economy, modernization, technical and
technological renewal of production.
All
of us must realize one single truth – we can have nor modernization or
renewal without investments! And here we mean not only acceleration of
implementation by enterprises of the investment projects, but also that
to what extent actively the commercial banks are directly interested in
implementing the investment processes with their credit resources.
For
this the commercial banks must have a sufficient capital, be financially
stable, and in a word, they must turn into large investment
institutions.
Thanks to the measures taken in terms of stimulating the rise of share
of long-term of credits of commercial banks, the proportion of credits
allocated with a term of over 3 years, has now made up 69 percent in the
total sum of the credit portfolio of banks, while having increased for
over the last 10 years for 28 times.
Along
with that, taking into account the dynamics and scale of growth of
economy, structural transformations, implementation of investment
projects, the need to increase the credit potential of the banking
system requires further attention and support.
The
Central Bank, Ministry of Finance jointly with commercial banks need to
elaborate the program of further increasing the total capital of banks,
including its growth in 2010 no less than by 20 percent, with taking its
share in the nearest two years to no less than 10 percent towards GDP.
One
should additional elaborate the issues on introducing the new types of
banking services, attracting the spare funds of population and economic
entities for long-term deposits of banks with growth of no less than by
30 percent, creating the firm basis to increase the share of long-term
credit investments into the country’s economy at the expense of domestic
sources.
There
is a need to change the criteria of assessing the activity of commercial
banks – today their work must be assessed through the prism of growth in
the long-term credit investments and attraction of domestic sources for
this purpose.
In
this regard, I would like to note the work of the National Bank of
Foreign Economic Activity and Uzpromstroybank, which have respectively
over 85 and 71 percent of long-term credits in their credit portfolio.
This must be a benchmark for other banks, as well.
The
practice of involving commercial banks in the process of financial
rehabilitation of unprofitable and economically insolvent enterprises
has fully proven its correctness. I think it is not necessary to once
again repeat the unacceptability of keeping such enterprises with
obsolete equipment and technologies and with no economic prospects. They
must be mopped up and new modern productions must be established on
their basis.
The
work in terms of enhancing the role of commercial banks in financing
small business, private entrepreneurship and farmers needs to be
continued. In 2009 the volumes of bank crediting of small business
increased for 1,5 times as compared to 2008, while the volume of
allocated micro-credits grew twofold.
In
2010 the target is to allocate not less than 2,5 trillion UZS-worth of
credit resources to enterprises of small business and private
entrepreneurship, which will be 1,4 times more against 2009, the volumes
of micro-credits is to be increased up to 420 billion UZS or 1,3 times
of last year.
The most important priority of implementation of economic program for
2010 must be continuation of the policy of deepening the structural
reforms in the economy with a view of enhancing the competitiveness of
the country.
One
should objectively admit that in this direction a lot has been
accomplished and significant results have been secured.
As a
result of implementation of consistent program, the share of industrial
production in the country’s GDP in 2009 increased from 14 to 24 percent
against 2000, the transport and communication – from 7,7 to 12 percent,
while the share of agriculture fell from 30 to 18 percent.
Along
with that, we realize that there is much yet to do on structural reforms
and diversification of our economy so that in the following years it
becomes ever more sustainable, self-sufficient, less dependent on
external factors, and above all, competitive on the world and regional
markets.
Given
the specific conditions of our country and the region the point is about
advanced development of modern industries such as gas processing,
petrochemical, chemical industry, energy, motor-car construction,
electrical engineering, pharmacy, machine-building and, certainly, the
industry of modern information technologies and telecommunications
systems, transition in the near future to digital and broad-format
television.
In
addition, a special attention should be paid to the further development
of production, first of all, in the light, textile and food industries,
on deeper processing cotton, other agricultural products and raw
materials, industry of construction materials, organization of
production of the finished high-quality products, which are in
sustainable demand.
The
Cabinet of Ministers must once more critically review the sector
programs and take additional steps on their adjustment and accelerated
implementation.
At
that, it is necessary:
First, to continue the work on expanding and establishing the stable
cooperation relations between enterprises and ensure active involvement
of small businesses and private entrepreneurship into the process. The
work of the Republican Industrial Fair and Cooperative Exchange must be
raised to a qualitatively new level. It should be kept in mind that the
development of cooperative relations in current terms is a powerful
factor of sustainable work of enterprises and industries of the economy,
the most important direction in development of new types of products,
and most importantly – creation of new jobs, ensuring employment and
income growth of population.
Last
year the government took decisions to improve the mechanism of formation
and implementation of programs on localization of production,
established the entire system, clearly defined the roles and delimited
authority of bodies responsible for elaboration of localization programs
– the Ministry of Economy and Ministry of Foreign Economic Relations,
Investments and Trade.
It is
necessary to bring this work to its logical end and, taking into account
the worked-out approaches and criteria, critically review the projects
included into the current localization program, as well as to prepare
within a month a localization program for 2010.
The
volume of localized products should rise in 2010 comparing with that of
last year by 40 percent, while the proportion of localized products
exported to foreign markets – by 12 percent.
Second,
for over the last years the total and real incomes of population has
significantly increased, as well as the consumer demand has grown
steadily, and all these were possible due to the measures taken to
increase wages, pensions, stipends and allowances, reduction of
individual income tax rates and decrease the inflation level. Thus,
compared with 2000 last year the average wage increased for 28,5 times,
average pension - almost for 18 times, cash income per capita - 12
times. It
is planned to
increase wages this year not less than by 30 percent, the real incomes –
by 23 percent.
The expenditures of the population on purchasing the non-food industrial
durable goods
considerably
increased.
In these circumstances, the issues of ensuring balance in the domestic
market of growing solvent demand of the population with volumes of
production by domestic companies of consumer goods, increasing their
range and list of products, reliable saturation by them of the domestic
consumer market are gaining a special importance.
The Cabinet of Ministers at its meetings should critically assess the
progress of adopted programs and to take additional measures for their
rapid implementation and stable saturation of the internal market with
domestic products, which are superior by quality and pricing as compared
to imported goods, and full satisfaction of growing demands of our
people.
Third,
it is extremely important to expand the scope of services provided to
the population. These
sectors do not depend neither on external conditions nor weather
conditions, i.e. are resistant to change of external factors. At
the same time, they create internal demand for many types of domestic
products, as well as play an important role in balancing the consumer
market. The
share of services in GDP should grow from 47 percent in 2009 to 49
percent in 2010.
Fourth,
the resolution
of the task of active development of small businesses, more sustainable
and flexible to changes of market conditions and creating new jobs
remains crucial in our conditions.
Therefore indeed, we have decided to reduce the single tax payment to 7
percent for all small enterprises in 2010. The
government,
local state authorities are obliged to strengthen measures in terms of
supporting the development of small enterprises and entrepreneurship
through a substantial expansion of crediting, prevent cases of illegal
interference in their activities by public bodies and creation of any
barriers to their activities. The
goal is to bring the share of small businesses in GDP to 52,5 percent in
2010 against 50 percent last year.
Fifth, further
diversification of the export structure of our products and foreign
trade turnover in general remains a pressing task.
We need to go away as quickly as possible from the continuing export of
raw materials, prices of which have recently plummeted down on the world
market, and intensively increase export of finished and competitive
products, while expanding the geography of their supplies.
We must look
for new markets, new transport corridors, in a word, to conduct an
active marketing in foreign economic policy.
In 2010 we
must come to grips with issues of improving the system of transportation
of export cargos through the optimization of tariffs with member
countries of international transport corridors and flexible system of
tariff preferences.
In this
regard, the Ministry of Foreign Economic Relations, Investments and
Trade, Ministry of Economy and Ministry of Finance shall be instructed
to develop special programs for 2010-2012 to each industry, which
produces finished products, on promoting finished products to new
foreign markets, providing with all necessary measures, including
marketing, financial and institutional support.
The next
our important priority, which is a long-term and crucial for the growth
of potential, power and competitiveness of the country’s economy, is to
conduct the active investment policy for implementation of strategically
important projects aimed at modernization, technical and technological
renewal of the leading basic industries, development of a powerful
modern network of transport and infrastructural communications.
We have always given priority to implementation of an active investment
policy as an important factor of structural transformation of the
economy. Suffice
it to say that each year the funds from all sources of financing are
directed to investing into the economy
in excess of a quarter of gross domestic
product,
and in 2010, in accordance with the Investment program, the capital
expenditures will compose more than 30 percent of increase against last
year’s level of 22,1 percent. Thus, more than 75 percent of all capital
investments are spent for implementation of investment projects for
production purposes.
The
distinctive feature of our investment strategy is that the priority is
given to those investment projects, which are aimed at creating the new
high-tech industries with advanced technology and provides the
downstream processing of our raw materials, increasing the country's
export potential and creating new jobs.
Thus, in 2010
over 3 billion dollars-worth foreign investments will be attracted to
implementation of strategically important projects, or with growth
against last year making up more than 30 percent. Also, the foreign
direct investments will increase by 46 percent.
Establishment
of the Reconstruction and Development Fund of Uzbekistan in 2007, which
has so far accumulated more than 3,7 billion dollars, was of a great
importance in terms of involving the domestic resources to implementing
the long-term strategically important projects, primarily to building
infrastructure, reconstructing and modernizing the production.
Our major
partners in implementing the investment projects on production of
high-tech products with high added value are the largest and the
world-renowned companies, as well as such major international financial
institutions as the Asian Development Bank, World Bank, Islamic Bank,
the investment banks of South Korea and Japan, as well as of a number of
Arab States, and others.
A great perspective significance to bring our economy to the leading
positions has the implementation of such strategically important
projects as the construction of combined-cycle plants in Tashkent, Navoi
and Talimarjan thermal power plants, construction of Ustyurt
gas-chemical complex at the base of the Surgil field on production of
polyethylene and propylene, creation of a new production complex PVC
and caustic soda, the construction of installations of propane-butane
mixture at the Muborak Gas Processing Plant and Shurtanneftegaz to
increase production of liquefied natural gas, conversion of units Novo-Angren
Thermal Power Plant to coal fuel, organization of production of
automotive power-trains and number of other important projects.
All of these
projects, despite the global financial and economic crisis, were
included into the Program of measures for implementation of important
projects on modernization, technical and technological re-equipment of
production for 2009-2014, which was adopted in 2009. This
program includes over 327 projects at a total cost of more than 42,5
billion dollars. The
funding sources have been specifically identified for most of them with
consortium of investors to have been formed.
The Ministry
of Foreign Economic Relations, Investments and Trade jointly with the
Ministry of Economy, Ministry of Finance and concerned ministries and
departments must intensify the work on harmonization the terms and
conditions for implementation of strategic investment projects included
in the list of the Investment program, as well as new projects being
developed in the context of long-term technical policy
of strategic industries and major enterprises.
I would like
to especially mention that important and key place in our long-term
projects is reserved to establishing modern communication and
transportation system, including all types of transport: road, rail and
air.
In 2010 it is
envisaged to allocate 540 billion UZS at the expense of the Republican
Road Fund for the development of automobile roads, or almost 2 times
higher than the last year. Today,
it is being worked out a new project on the construction of parts of the
Uzbek national highway at the expense of the funds allocated by the ADB.
The ultimate
goal of implementing the envisaged program is to increase the volume of
transport and transit services by way of reorienting the substantial
part of trade flows between Europe and Asia onto domestic transit
routes, establish the logistics centers based on existing
infrastructure, as well as provide thousands of people with jobs.
The Cabinet of
Ministers must take under its special control the implementation of the
adopted program of development of roadside infrastructure and services
along the Uzbek national highway for the period 2010-2015.
A special
attention should be paid to the further development of the railway
communication, for modernization of which it is scheduled to channel
more than 105 million dollars in 2010. It
is necessary
to ensure the completion of construction of the
Tashguzar-Baysun-Kumkurgan railway line, including its infrastructure
and continue construction of electrified railway lines along
destinations Yangiyer-Jizzakh and Yangiyer-Farhad.
Along with
this, it is necessary to accelerate implementation of projects on
updating the fleet of passenger locomotives, modernization and
rehabilitation of cargo locomotives and wagons. The
implementation of the project on
procurement and commissioning of the two Spanish high-speed trains for
use on the route Tashkent-Samarkand
must be started this year with fulfillment of all procedures.
The pressing direction in the sphere of investments is to further
increase the volume of foreign investments being attracted to the Free
Industrial-Economic Zone “Navoi”.
First of all, it is necessary to implement 17 projects, which have
already been launched, and continue to focus on attracting to FIEZ
“Navoi” the investments from the high-tech level countries such as
Republic of Korea, Japan, Germany, the United States, Great Britain,
France, Italy and others.
Dear friends!
I think it will be absolutely fair, if we shall place the Program on
accelerated development and construction of housing and social
infrastructure in rural areas as one of the top priorities in 2010.
Announcement of 2009 as the “Year of development and improvement of the
countryside” and implementation of the adopted State program in this
regard became the beginning of a long-term focused work in terms of
radical reorganization and renewal of the countryside’s appearance upon
modern architectural and industrial basis, construction of housing,
social and community facilities and communications. All
these measures were intended to radically improve the living standards
in rural areas and bring them closer to the urban conditions.
In 2009 alone at the expense of all sources of funding over 2 trillion
600 billion UZS were allocated for these purposes.
Most importantly, in 2009 we practically created a powerful planning,
industrial-construction and engineering-technical potential with a
long-term perspective for the construction in rural areas.
The sources of financing and mechanism of allocation of funds are
identified; a specialized “Qishloq Qurilish Bank” (Rural Construction
Bank) and “Qishlokqurilishloyiha” Design and Research Institute were
established; 22 models of housing projects and 16 projects of social
construction, and model plans for complex house construction were
developed and approved after an extensive discussion on the outcomes of
the national and regional exhibitions; a specialized company-customer –
“Qishloq Qurilish Invest” (Rural Construction Invest) was established;
new housing construction has been started at 42 sites of the country.
And most importantly, this comprehensive project – unique both in its
nature and substance – enjoys a powerful support throughout the rural
population and the public of the country in general.
It is envisaged to allocate over 250 billion UZS for housing
construction alone in the framework of the 2010 Investment Program as
the soft loans to residents issued through a specially established for
this purpose “Qishloq Qurilish Bank”, which is more than 4 times as much
as it was allocated in 2009. Thus, the own funds of developers will make
up yet about 70 billion UZS.
In 2010 it is planned to build 7630 homes with an estimated value of
over 470 billion UZS in all 159 rural areas of the country.
It is envisaged not only to build modern and comfortable cottages, but
also to create modern systems of residential areas, including
kindergartens, secondary schools and schools of music and the arts,
sports and medical facilities, service facilities, improved roads, in
short, everything you need for a comfortable and decent living for the
rural population.
In fact, a dynamically growing strong housing
market with all the necessary social and communication infrastructure is
practically being formed in the country.
It is necessary for the State Architectural Construction Agency to carry
out a strong systematic control over the strict implementation of
development plans, requirements of sanitary and construction norms. We
need to improve the system of development of documentation related to
the settlement patterns, regional planning, general plans of cities,
continue the work on improving the projects of individual houses, of
facilities for social-cultural and sanitary-household purposes in rural
areas using modern building materials and technologies, taking into
consideration the climatic conditions and terrain, as well as
socio-demographic characteristics of the regions of the country.
We
must not forget that this program provides huge scale of work, allows to
create tens of thousands new jobs and promote an active involvement of
the whole population of the country in its implementation.
Setting forth the goal to implement the long-term program on the
intensified development and building of housing and social
infrastructure, we greatly contribute to solving the most acute problem
of our country in terms of job creation and interrelated problems of
income growth and improvement of living standards.
In
2010 in total over 950,000 new jobs are envisioned to be created in the
country. About half of them will be created by developing small
enterprises, micro-firms, private entrepreneurship, sphere of services,
expansion of volumes of subcontracts on construction work, including
repair and housing reconstruction.
The
major direction in the sphere of employment, that proved itself in
practice, in 2010 remains involving population in various forms of
home-based labor, expansion of workmanship and national crafts,
stimulation of family business which is supposed to employ more than
208,000 people, mainly women with many children, disabled, and other
socially vulnerable categories of the population.
The
special working commissions at the level of a province, city and
district have been established to control the implementation of all
provided measures on creating the new jobs. All these measures have been
stipulated in the Republican program “On creation of jobs and employment
for 2010 on all territorial levels of Uzbekistan” which was worked out
in collaboration with all the ministries, departments, economic entities
and the enterprises and have been adopted by Oliy Majlis.
Preliminarily, on the level of territories of the Republic of
Karakalpakstan, provinces and city of Tashkent all parameters of this
program have been thoroughly worked out and taken under control by the
local Kengashes (Councils).
The
Ministry of Labor and Social Protection, the Ministry of Economics, the
State Committee on Statistics must create the accurate system of
statistics on the exact number of actually created jobs in each province
and a city, as well as the monitoring system over implementation of the
program. If necessary, those agencies must put forward concrete
proposals to the Cabinet of Ministers to prevent lagging behind in the
implementation parameters stipulated in the program.
Dear
participants of the meeting!
We
declared 2010 as the “Year of harmoniously developed generation”.
We
aim to create necessary opportunities and conditions to ensure that our
children grow healthy not only physically and spiritually, but also grow
into harmoniously developed people having obtained contemporary
intellectual know-how as well as meeting the requirements of the 21st
century in which they will live and work.
The
State program on this issue that has been adopted recently by the
government provides for mobilization of all our resources and
capabilities to achieve the set goals given all – both state and
non-state sources.
Using
all the sources of financing 8 trillion UZS, including 1,8 trillion UZS
from the state budget, 3,3 trillion UZS – credits by commercial banks
and over 2,7 trillion UZS – the financial assets of responsible
agencies, are planned to be channeled to accomplishing a comprehensive
set of measures stipulated in the Program in 2010.
I
believe I will express our overall opinion, the opinion of people living
in this blessed land of Uzbekistan, if I say that the implementation of
this program is a cause of each and everyone of us. The main thing is to
approach to its implementation not just formally, but sincerely and
comprehension of the fact that through this Program we are building the
great future of our country.
Dear
compatriots!
The
tasks we set before us, the priorities of socio-economic development we
put forward in 2010 are well-grounded and we are fully capable of
implementing them.
The basis for it is the experience we have obtained and the powerful
potential created by the tireless efforts of our people for over the
past years and our confidence in the future.
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