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Address by the President of the Republic of Uzbekistan H.E. Mr. Islam
Karimov at the Opening Session of the 43rd Annual Meeting of the Board
of Governors of the
Asian Development Bank
May 03, 2010
Dear President Kuroda,
Esteemed Governors,
Distinguished representatives of foreign states
and the guests,
Ladies and Gentlemen,
First of all, allow me to cordially welcome the
participants of the 43rd Annual Meeting of the ADB Board of Governors,
the representatives of the high-profile international organizations and
all guests who have arrived in Tashkent.
It is a great honor for us that the capital of our
country is the first among the states of Central Asia and Caucasus that
was chosen as a venue to hold this important event, and we would like to
express the sincerest gratitude to the governments of the ADB
member-countries that took this decision.
In my speech I would like to briefly touch upon
some issues which have an immediate relation to the today’s agenda.
The past 2009 became truly the year of serious
stress test for the world economy, and practically there was not a
single country which avoided the negative consequences of the global
financial and economic crisis.
And today, despite the assessments of the respected
international analysts and experts that the most acute and rather
hurting phase of the crisis is overcome, nevertheless we are facing very
complex, quite painful and lasting process of economic recovery.
While analyzing the problems that emerge in the
course of addressing the crisis of the world economy, we ought to pay
our attention, above all, to unstable and low growth rates, outstanding
high unemployment, notable deterioration of financial state of the real
sector of economy and decreasing of the population’s real incomes.
The large fiscal deficits taking in some countries
threatening scales and growth of a public debt may lead to a serious
tension with regard to paying off these debts and possible defaults.
The low level and in some cases decline of domestic
demand are being observed, and this, in its turn, hinders return to
stable and sustainable output growth rates.
We believe that we should agree with the opinion of
many leading world experts that the excess liquidity and further pumping
banking and financial sector with financial resources create conditions
for an outburst of speculative capital, inflating the so-called bubbles
on the stock and commodities markets and these factors may well lead to
a new collapse on the financial and foreign exchange markets with all
related consequences in the future.
It goes without saying that growing emission and
increase of money supply bring about a potentially dangerous situation
of inflation processes.
We have to speak time and again that many,
especially the developed countries, are carried away by protectionist
measures, which first and foremost trigger significant problems for the
developing countries and in general for recovery and development of the
world economy.
I am not mistaken, if I say that the most debated
topic on the regional and global levels by experts and officials is a
state regulation of the banking and financial sector, mechanisms and
instruments to ensure a systemic control over banking capital, as well
as the role of the international financial institutions in this.
In the course of discussions on this topic it is of
interest some suggestions, in particular, related to establishing an
international financial institution which could control the operations
of financial and banking sector on the global scale. There are proposals
to entrust this institution the control over speculative banking
operations on the world market, including the sphere of derivatives and
other similar securities, which can imbalance the international trade
and international financial market as a whole.
In this respect, in our opinion, the reforms
proposed by the U.S. President Barack Obama arouse a big interest and
deserve support in terms of establishing a special agency to control the
operations of the U.S. financial institutions and limit the risky deals
with derivatives at the expense of taxpayers.
It is believed that if the ongoing and long-lasting
discussions and debates on this topic result in a reasonable solution
acceptable to all parties, then, undoubtedly, this will become one of
the biggest achievements in resolving the crisis.
Dear participants of the meeting!
It is obvious that there is no need to prove that
the degree and depth of susceptibility of each particular country to the
impact of the world crisis, above all, depends on the model of reforms
being implemented, sustainability and reliability of the
financial-economic and banking systems and to what extent the protective
mechanisms put in them are strong.
In this respect, I would like to briefly touch upon
the Uzbek model of development and reforming the economy adopted in the
early years of our independence in 1992. This model is built on the five
principles, the essence of which is as follows:
First - deideologization of the state system
and priority of economy over politics.
Second - in the transition period from a
planned and distributive system to the market system the state must take
on the role of a principal reformer.
Third – to ensure the rule of law, i.e. the
law is equal for everyone.
Fourth – step-by-step and gradual
implementation of reforms. We say: “Don’t destroy the old house, until
you build a new one”.
Fifth – implementation of a strong social
policy during the transition period from one system to another.
Today we have all grounds to state that during the
past period, in particular, during the period of extreme impact of the
crisis processes, this model has completely justified itself.
The sufficient resources and a reliable margin of
safety of the financial and banking system created during the past
period, prudent and balanced economic policy, the measures to protect
the economy against the influence of a speculative capital, unmanageable
turmoil and lack of control on the world financial and stock markets, as
well as the strict control over the macro-economic balance of the
economy, - have had a profound importance in mitigating the destructive
impact of the crisis.
The timely, adequate and targeted nature of the
Anti-crisis program for 2009-2012 adopted in Uzbekistan have played an
enormous role in countering the crisis and neutralizing its negative
consequences.
Along with rendering the needed assistance to the
banking sector, the support, firstly, of the financial stability of the
real economy, easing the tax burden and providing this sector,
especially the export-oriented enterprises with necessary privileges and
preferences, as well as the measures to reduce costs and raise
profitability through modernization, technical and technological
re-equipment and diversification of production, - stood as the most
important priorities in implementing the Anti-crisis program.
The exclusive attention being paid in the country
to developing the services sector, small businesses and private
entrepreneurship played a vital role in tackling the crisis and ensuring
sustainability of the economy’s development.
The implementation of the large-scale social,
infrastructure, transport and communication projects, through which we
have addressed the tasks of creating new jobs and raising the
population’s incomes were rather important in achieving the objectives
of the Anti-crisis program.
I would like to emphasize that the measures taken
in the framework of the Anti-crisis program pursue the prospective
targets that go far beyond simply countering the crisis and neutralizing
its consequences.
We do realize that those countries which have by
now already started laying the foundations and launching the long-term
innovative projects aimed at deep structural changes and diversification
of production will definitely benefit in the post-crisis period.
In 2009 Uzbekistan adopted the Program on
implementing the most important projects of modernization, technical and
technological re-equipment for 2009-2014. It envisages more than 300
priority investment projects worth in total over 42,5 billion dollars to
renew the leading core branches of the economy, implement extensive
transport and communication projects, create new modern production
facilities and introduce resource-saving technologies.
Certainly, we well understand that it will be quite
difficult to reach the set objectives without attracting foreign
investments and providing them with necessary conditions and
preferences.
Along with this, in financing the investment
programs we attach an enormous significance to mobilizing the domestic
resources. In 2009, in the total volume of capital investments channeled
to the economy of Uzbekistan the share of domestic sources made up 68
percent and in 2010 this indicator will make up not less than 70
percent.
In implementing the long-term and large-scale
projects we accord a big importance to further consolidating the
potential and capacities of the Fund for Reconstruction and Development
of the Republic of Uzbekistan set up in 2007. The capital of the Fund
now makes up about 5 billion dollars. The main purpose of the Fund is to
finance primarily the infrastructure projects and participate together
with foreign partners in implementing the prospective projects to
modernize and reconstruct the facilities in the core branches of
economy.
For example, in 2009 the assets of the Fund were
channeled to launch the construction of the state-of-the-art
combined-cycle plant worth 470 million dollars at the Heat and Power
Plant in the city of Navoi where we are now establishing the Free
Industrial and Economic Zone and the international multimodal logistics
center on the basis of the Navoi Airport.
I would like to say a few words about the enormous
importance that we attach in Uzbekistan to the reform of the education
system and training the qualified personnel.
Back in 1997 we started to implement the State
program that envisaged full denial of the old system and transition to a
12-year free education, the integral parts of which are the 9-year
general secondary school and 3-year professional-technical colleges and
lyceums.
For over the last years more than 1 million 500
thousand young people have already obtained the secondary-technical and
humanitarian education at more than 1,5 thousand newly built colleges
and lyceums. The graduates have 2-3 majors and speak a foreign language,
as a rule, English.
If we take into account the aforesaid and consider
that for over the last years the education expenditures exceed 37
percent and along with healthcare expenditures make up more than 50
percent of the country’s State budget, then it becomes clear what an
enormous potential of qualified cadres and human capital Uzbekistan
possesses.
Summarizing the aforementioned, I would like to
note with satisfaction that the implementation of the development
strategy and the Anti-crisis program have allowed Uzbekistan among a few
countries in the world to ensure in 2009 8,1 percent GDP growth rate and
the growth of industrial output by 9 percent. The growth of investments
in the economy exceeded 26 percent and direct foreign investments grew
1,8 times.
In 2009 we created more than 940 thousand jobs.
The export of goods grew by 2,4 percent having
ensured the considerable foreign trade surplus and stable growth of
official reserves.
We have secured sustainable surplus of the state
budget and by January 1, 2010 the external debt did not exceed 10
percent.
According to the projections of leading rating
agencies and international institutions, the economic growth of the
Republic of Uzbekistan in 2010 is expected at 8,5 percent.
Dear friends!
Esteemed guests!
Uzbekistan highly values the growing cooperation
with the Asian Development Bank and considers it as the most important
strategic partner which for over the last years has become for us a
leading international financial institution both by the size of credit
portfolio and in the framework of regional cooperation in Central Asia.
Since 1996 we have completed 11 projects worth over
520 million dollars out of allocated 1 billion 200 million dollars of
credit resources. We are continuing to implement other 15 projects worth
over 650 million dollars.
We note with a great appreciation that nowadays our
cooperation is considerably expanding and reaching a new level. During
the ADB Annual meeting in Tashkent we have signed additional four loan
agreements worth in total more than 1 billion 150 million dollars, i.e.
the ADB in fact has doubled its credit portfolio in our country.
Today we are fully convinced that such significant
components of our cooperation as reliability and commitment to
partnership, and certainly, a purposeful utilization by Uzbekistan of
the provided funds shall be ensured furthermore.
Now, allow me briefly touch upon our vision of the
priorities of our cooperation with the Asian Development Bank.
First, we believe that the ADB could become
for us a key partner in implementing the programs of structural reforms
and diversification of the economy that are extremely important for
Uzbekistan. They are aimed at the deep processing of rich natural
resources, mineral, hydrocarbon and agricultural raw materials to change
the quality and increase the share of the high-technological and
competitive goods in the export structure.
We mean implementation of the projects of
modernization, technical and technological re-equipment of the leading
branches of Uzbekistan’s economy, including mining, oil and gas,
chemical and textile industries.
The most important priorities of our modernization
strategy include development of modern transport communications system,
implementation of such projects as construction of the Uzbek national
highway, establishment of the inter-modal logistics center at the Navoi
Airport, extensive renewal of the rolling-stock and extension of the
railway network.
We highly appreciate the fact that during the ADB
Annual Meeting we have signed the agreement on allocating the loan worth
600 million dollars for the purposes of construction and modernization
of the Uzbek national highway.
Second, this is a support and further
development of the private businesses and non-state sector of the
economy.
If in 1991 the non-state sector made up just less
than 3 percent of our economy, then today its share in the GDP is over
80 percent, and in the certain leading branches of economy, i.e.
agriculture, construction, telecommunications, retail and services, the
private form of ownership equals to about 100 percent.
Along with this, we see a large prospect in further
expanding and enhancing the positions of the private sector of economy,
in particular, in such sectors as electric energy, chemical, light,
food, electro-technical and machine-building industry, in the banking
and financial services, and other leading branches of the economy.
Third, to develop cooperation to further
reform and strengthen material resources of agriculture and related
branches.
One should not forget that in the Republic of
Uzbekistan more than 95 percent of agricultural products are cultivated
on irrigated lands, therefore introduction of the latest water-saving
technologies is vitally significant given growing shortage of water
resources in the region.
In such conditions we will have to accomplish the
large-scale works to radically improve and reclaim irrigated lands that
suffer from massive salinization and here we see a prospective direction
of cooperation with the ADB.
Fourth, to support social sector
development, strengthen the modern basis of the education and healthcare
systems.
The support of the country’s potential of
secondary, professional-technical and higher education, the sphere of
healthcare, motherhood and childhood, providing them with cutting-edge
equipment, computer and information-communications technology,
implementation of the advanced methods of diagnostics and treatment in
healthcare, - all these aspects stand as very important directions of
cooperation, where we feel a huge need.
Fifth, we appreciate that the ADB takes an
active part in developing financial and banking system of Uzbekistan,
including projects of improvement of public finances, allocation of
credit lines for commercial banks and non-banking credit institutions,
and participating in the capital of the rapidly developing private Uzbek
banks.
We are convinced that in this sphere of cooperation
we have good prospects, too.
Uzbekistan fully supports the ADB projects aimed at
the economic rehabilitation of Afghanistan. For instance, the
construction of the power line Surkhan-Naibabad-Kabul allowed in 2009 to
increase the volume of electric power supplies from Uzbekistan for 6
times and ensure the round-the-clock supply of electricity to Kabul. In
2010 the volume of electricity supplies will additionally increase
twofold, including the supplies to other regions of Afghanistan.
We have supported the ADB in implementation of the
project on construction of the railway Khairaton-Mazari-Sharif, and
consider it necessary yet to further develop the railway infrastructure
in Afghanistan. This will permit to implement the project of
construction of the Trans-Afghan corridor and open the shortest route
for a railway transit of cargoes from Central Asia to the nearest ports
of the Indian Ocean and will promote economic development of
Afghanistan.
Dear participants and guests of the Annual
Meeting!
During the uneasy period of the global financial
and economic crisis the Asian Development Bank, its Board of Governors
and the ADB President Mr. Kuroda demonstrated effective and
well-coordinated work, which provided a timely reaction to challenges
caused by the crisis, were able to elaborate and introduce the new
instruments and non-trivial approaches to mitigate the consequences of
the crisis.
Nowadays, the countries of Asia – the most
dynamically developing region of the world, which managed better than
others the destructive impact of the crisis, are facing the new
challenges both in the sphere of economic development, ensuring balanced
economic growth and in the matters related to regional stability and
security. The solution of these issues requires concerted and
well-coordinated work of international organizations, financial
institutions and governments.
Allow me once again to express support to the Asian
Development Bank and its President Haruhiko Kuroda in accomplishing
their tasks and wish the participants of the Annual Meeting a successful
and fruitful work.
Thank you.
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