June 11, 2014
Press-service of MFA of the Republic of Uzbekistan
Uzbekistan has over 1300 storehouses with 630 thousand ton total capacity
June 6, Uzbek President Islam Karimov in a speech at the opening of the International Conference “On the most important reserves of implementing the Food Program in Uzbekistan”, noted that a significant portion of fruit and vegetable products are consumed not fresh but as canned, processed or dried, when products lose nutritional value, taste and useful properties.
“Despite the significant progress in this area, we do not have all the necessary infrastructure, resources and capacities, the modern technology, such as shock freezing, storage in neutral gas environment, in order to keep products fresh, maintain stability and predictability of prices, reduce dependence seasonal factors, and much more.
Currently large scale works are underway in Uzbekistan in this area. To date, construction and reconstruction of 274 modern refrigeration rooms and storerooms are completed with total capacity of over 190,000 tons.
In 2010, in Navoi free industrial economic zone was launched the modern facilities for neutral gas environment storage of over 3 million tons of fresh fruits and vegetables, which is then shipped by air to international markets in Europe and Asia.
To do this, we use the capacities of logistics center, which includes Navoi International Airport, which is under the control of one of the world’s largest freight carriers – Korean Air.
In total there are currently over 1300 storehouses in the country capacity of over 630,000 tons, in which annually are stored main types of fruit and vegetable products, which ensures stable prices in the domestic market and guaranteed exports in the winter-spring season.
In the near future Uzbek companies will open a transport and logistics center in the Baltic port of Liepaja with daily storage capacity of 1.5 thousand tons, through which fresh fruits and vegetables will be delivered directly to customers in Northern and Western Europe”, – said the Head of our State.
The most propitious climate for investors
As President Islam Karimov accentuated at a sitting of the Uzbek government convened in January of the current year, much has been accomplished in the Republic to create all the prerequisites and an auspicious environment for the development of private entrepreneurship and all sorts of business, as well as for the attraction of domestic and foreign capital to the national economy. In the Uzbek leader’s words, neither modernization nor renovation of the economy is possible without hefty investments and, in turn, without these processes Uzbekistan could hardly be in a position to join the club of the world’s industrialized states.
Viewed as a resource base for economic growth, investments form a powerful source of structural shifts and systemic transformations in the economy and social life alike. Without investments, without modernization of the economy and, above all, manufacturing, it is impossible to build a renewed society, to improve the appearance of urban and rural areas, to rehabilitate the ecology and to create modern industrial and social infrastructure. Put differently, investments are a kind of resource engine of the economy and wealth “multiplier” in society.
In modern theory and economic practice, the processes of pouring capital and other resources into the development of economy are termed “investment”. In the Republic of Uzbekistan, the investment activity is carried out on national scale in accordance with the state investment policy and investment programs, which are worked out and approved by the government on an annual basis. Closely linked with the national investment system are sectoral, regional and local investment programs, designed to bring about considerable changes in the reproduction, technological, industrial and territorial structure and proportions of capital investments, in a move to apply them to the solution of strategic economic tasks. At the same time, expanding the scope of possibilities for the attraction to the national economy of overseas capital, and above all foreign direct investments, is a vital component of the investment policy pursued in the country, irrespective of a sector, area or locality of its realization.
Analysis shows that almost all the states across the globe need foreign investments. Even the US, which provides investment backing to other economies at some stages of their development, makes its best to lure capital from abroad, where necessary, in keeping with an established procedure and under the agreements signed. Such a process, no matter where it takes place – in America, Uzbekistan, India, Japan or elsewhere, is usually called “Investment cooperation”. It not only fetches certain advantages to its members, but also facilitates the development and improvement of interstate, economic and other linkages. It is in the course of investment cooperation that the economic interests of different countries drew nearer, the international division of labour intensifies, new jobs are created and a level of employment tends to grow.
At the same time, the processes of investment cooperation, including the attraction of foreign capital, is not as simple as it may seem at first sight. Being, without doubt, an essential process, it is multifaceted and complicated in many respects. The attraction of foreign investments requires the availability of appropriate conditions that would encourage investors, entrepreneurs and business people to show interest for investing and doing business in a certain country. It is doubtful whether any investors are ready to pour their capital into a country, if they are unaware of its investment environment and profitability of investment. World experience suggests that overseas investors are frequently interested in such questions as the social and political situation, macroeconomic stability and solvency of a country, in whose economy they wish to invest their capital, the state and efficiency of its normative-legislative framework, the availability and level of development of mineral and raw-material reserves, the quantitative and qualitative characteristics of its manpower resources, including their intellectual potential, and other more specific indicators.
The mere availability of the whole complex of these characteristics, of course, cannot ensure that all countries or at least the majority of them receive equal investment flows. Each state has its own level and pace of economic development, as well as a number of other factors that make its investment climate more or less attractive.
There is a complex of certain criteria in the world, which is used to assess the investment environment in one or another country. The BERI index, as it is known in international practice, comprises 15 points, or conditions of attractiveness that are measured in grades. The entire complex is estimated at 100 grades, which are differentiated depending on their significance. For the time being, it is widely exploited by analytical services of Germany, Switzerland and some other developed countries.
At this stage it is worth pointing out that today, the attractiveness of a country as an investment destination, including its economic growth rate, is analyzed and assessed by a number of international financial institutions and agencies. For instance, according to the World Bank’s reports, investigating the problems of doing business worldwide, the Republic of Uzbekistan leapfrogged 14 places up two years ago. In 2013 alone, the country has jumped 66 positions and is now ranked 21st among the 189 states included in the analysis. The world renowned Legatum Institute (the UK) ranks Uzbekistan 64th by its Wellbeing & Prosperity Index. Project Finance International, a competent periodical in the field of finances published by the Thompson-Reuter Agency for Business Information, has recognized the construction of a gas-chemical complex in the Ustyurt desert as the best project in the oil-and-gas industry. By the International Monetary Fund’s estimate, Uzbekistan has reached a dynamic pace of economic growth and coped with the global financial crisis and its consequences. Additionally, the country runs a surplus budget, enjoys a high level of official currency reserves and a low state debt, and its borrowing behavior in the international financial markets is characterized as very cautious.
There is no denying the truth. Uzbekistan is regarded not only as a solvent state, but the one that carries out all its undertaken investment and other obligations. The Republic boasts a favourable investment climate, a broad system of privileges, preferences and guarantees intended to protect the rights and vested interests of foreign investors. Thus, amenably to the Constitution of the Republic of Uzbekistan (Article 23), foreign citizens and non-citizens, who are present on the country’s territory, are guaranteed all rights and freedoms in keeping with the norms of international law. Besides, according to Article 53 of the Constitution, various types of ownership form the basis of the national economy.
These provisions of the national legislation have been further developed in the Civil and Tax Codes of the Republic of Uzbekistan, the Laws “On property”, “On foreign investments”, “On investment activity”, “On guarantees and measures to protect the rights of foreign investors”, Presidential Decrees and Resolutions of the Uzbek government. Foreign investors may pour their capital into different areas and lines of activity, on condition they are not at variance with the country’s effective legislation. In particular, they may independently or on the basis of cooperation, set up joint venture enterprises, production facilities, as well as commercial, banking and other kinds of institutions, buy property, shares and other securities, participate in the formation of charter capital in joint-stock companies and other types of economic establishments, acquire rights of ownership, land user and intellectual property etc.
The state always seeks to improve the investment climate and to expand the scope of investment cooperation. And the April 10th 2012 Presidential Decree, “On additional measures to stimulate the attraction of foreign direct investments” testifies to this fact. As well as intensifying the ongoing economic reform, a given document is a powerful spur to an increase in investment activity in the Republic. In keeping with the Decree, a joint venture set up with a portion of foreign investments, to the tune of no less than US $5 million, is entitled to remain subject to the legislation in force at the time they set shop, within 10 years after the introduction of any amendments into the tax legislation of the Republic of Uzbekistan. This concerns obligations such as taxes on: profit made by legal entities, value added (sales turnover of goods, works and services), property, improvement and development of social infrastructure, a single social payment, a single tax payment and obligatory deductions to the Republican Road Fund and the Fund for Reconstruction, Major Repairs and Supply with Modern Equipment of Educational and Medical Establishments.
Besides, there is a provision, according to which the installation of construction and engineering communications outside the production area under the investment projects, whose value exceeds US $50 million and an investor’s share is no less than 50 per cent, is financed out of the budget or other domestic sources of funding. The earlier established List of industries covered by these privileges is extended from 8 to 20.
Apart from the tax breaks, the Presidential Decree mentioned above also envisages the introduction of a number of customs privileges for foreign investors. Exempt from customs duties is the property imported to Uzbekistan by enterprises, with a share of foreign investments in their authorized capital of no less than 33 per cent, to meet their own production needs. This privilege is applicable within 2 years from the date of their official registration.
Uzbekistan is characterized not only by an auspicious investment climate, but also by rich reserves of mineral resources. By existing estimates, their total monetary equivalent comes to some US $3.5 – 4.0 trillion. About 50 per cent of them is under development these days. The rest constitutes the country’s potential national wealth. The Republic accounts for approximately 74 per cent of the total reserves of gas condensate available in the Central Asian region, 31 per cent of oil, 55 per cent of coal, and 40 per cent of natural gas. Besides, the country has huge reserves of precious metals, including gold and silver, and non-ferrous metals such as copper, zinc, lead, molybdenum, tungsten, lithium etc. Most deposits are unique natural objects and regarded as the biggest in Eurasia.
These and many other reserves of minerals and raw materials, combined with the highly favorable investment climate created in the country, considerably augment its attractiveness in terms of investment, multiplying an influx of foreign capital into the national economy. The volume of investments poured into the Republic from abroad over the years of independence has already exceeded US $100 billion. In June 2013 alone, more than US $3 billion worth of foreign investments has been implemented, of which US $2.2 billion (or 72 per cent) are foreign direct investments. And the total volume of capital investments, implemented within the framework of the State Investment Program, has come to US $12.0 billion, 11.3 per cent higher than the 2012 level.
It can be said in conclusion that Uzbekistan confidently and consistently takes the road of world civilization, democratization of social order and creation of a socially-oriented market economy. Over the last few years, the national economy has been growing at an annualized rate of 8 per cent.
In the current year, the growth rate of the nation’s GDP is forecast to be no less than 8.1 per cent. It is planned to implement US $14.3 billion worth of capital investments from all sources of funding, 10.1 per cent above the 2013 figure. To achieve this prognosticated parameter, all conditions and prerequisites are in place in the Republic, including the propitious investment climate, which is sure to become even better thanks to the measures specified in the Presidential Resolution, “On additional measures to further improve the investment climate and business environment in the Republic of Uzbekistan” dated April 7th, 2014.
(Source: “Business partner” newspaper)