Experts warn that 2016 may come with big challenges for the global economy. Plunging oil prices, economic downturn in China, uncertainty in global commodity markets and other factors are capable of slowing down the development of many countries. Being a part of the global market, Uzbekistan will also have to overcome the impact of these challenges. Uzbekistan Today reporters have made an attempt to find out how we are going to handle them.
2015 was a time of serious reconsideration for many industries. The time of unrestrained growth, lending and irrepressible consumption is over. Today, new trends like efficient performance, energy efficiency and moderation in demands come to the fore. Previously, investors were ready to invest and absorb resources to just stake a claim for a niche in the market, while today everybody realizes that it is time for targeted and well-thought-out projects.
In this regard, Uzbekistan, it appears, is riding high. The country has always selected specific investors for its projects, who would not just purchase existing facilities or build new ones, but would also ensure the introduction of modern technologies, have a specific program of development for the future, and create new jobs. The government provided strategic partners with a serious package of privileges and preferences, and built the entire engineering and communication infrastructure they needed at its own expense. As a result, dozens of modern manufactures have sprung up in all regions of the country in a short span of time. Today, they are actively making a presence in the national and foreign markets.
In 2016, Uzbekistan is planning to sink more than $17.3 billion in the development of its economy, including 23.5% of foreign investment. In addition, there are plans afoot to put into operation 164 big production facilities worth $5.5 billion. As a result, the economy is projected to grow by 7.8%, real income per capita – by 9.5%, wages, pensions, stipends and allowances from all sources – by 15% by the end of the current year, despite the raging global financial and economic crisis. One has to admit these are good objectives.
The national automotive industry appears most clearly in this context. Despite the challening situation in the major export market of Russia, GM Uzbekistan has rebranded itself into Ravon to promote the brand, and is currently getting prepared for several premieres.
Ravon in Uzbek means ‘easy way, open road’. Perhaps, the company’s objectives for the current year can be described this very way, as suggested by the company’s new slogan in export markets – ‘Tested by time, created from scratch’. That is, the domestic auto manufacturer is ready to grow and increase its presence in foreign markets despite the crisis, focusing on quality and low prices through the introduction of effective equipment, reducing costs and streamlining the marketing component.
There is a good reason behing the strategy. GM experts have been studying the leading export markets and consumer preferences over the last two years, coming to the conclusion that Uzbek cars are appreciated for proven quality and affordability.
The launch of a new car Chevrolet Aveo (Nexia R3) this year is expected to be a symbolic present for the 20th anniversary of the domestic automotive industry. The total cost of the project on the development of its production exceeded 264 billion soums. Secured by new designs, the company is planning to win at least 5% of the Russian market by 2020. Debuted last year under the Ravon brand, Matiz and Gentra will be added with Ravon R2 (a new model of the compact A-class Chevrolet Spark – 2010), Ravon Nexia R3 (B-class bestseller Chevrolet Aveo), Ravon R4 (a new model of B/C intermediate class Chevrolet Cobalt) in 2016. In the future, the company is planning to develop a few more C-Class vehicles (so-called ‘European middle class’) and a compact SUV (crossover or SUV). (currency rates of CB RU from 11.01.2016, 1$= 2821,43 soums)
The launch of the manufacture of MAN-branded buses running on compressed natural gas in Samarkand is another interesting novelty. Assembled in Uzbekistan for the first time, the new models will roll-off the production line of the Uzbek-German JV MAN Auto-Uzbekistan in February 2016.
At the initial stage, the project envisages an SKD assembly on the finished chassis. A prototype has been already produced at MAN facilities in Malaysia, and the gas-cylinder equipment was installed on it in Uzbekistan. It is currently undergoing operational testing in Tashkent. The first batch of locally assembled buses will amount to about 50 items.
Designed for 90 people, the bus is equipped with a 310-liter engine in line with Euro 5 standards. The company has developed a phased program of localization of its components. It is planned to develop the production of fiberglass parts, windscreen and side windows, seats, stretchers and brackets by the end of 2018. The production of headlights, electrical harnesses, mirrors, flooring and external cladding, doors, locks, handrails and fixtures will be developed by 2020, and aluminum profiles – by 2022.
Two big infrastructure projects will be implemented by the National rail carrier Uzbekistan Railways. The launch of the working motion on the Angren-Pap electrified railway line is scheduled for the second quarter of 2016. Exceptionally freight trains will run on the line in the beginning, and the passenger train traffic will be commissioned in September 2016.
The construction of the 123.1 km line was started in mid-2013. It is unique for passing through a pass Kamchik in mountains at the height of more than 2,200 meters. In order to overcome the barrier, the China Railway Tunnel Group is currently completing the construction of a 19-kilometer tunnel totaling over $455 million. Meanwhile, 285 support facilities, 22 bridges, six railway stations and two depots have been already built.
The launch of the new line will complete the international transit railway corridor China – Central Asia – Europe. Experts have estimated that in the first year of operation the new line will transport about 600,000 passengers and 4.6 million tons of cargo.
The total cost of the project exceeded $1.6 billion, more than $1.08 billion of which was invested by Uzbekistan Railways, the Fund for Reconstruction and Development of Uzbekistan and the national budget. Another $350 million was allocated by the Chinese Eximbank and $195 million – by the World Bank in loans.
The country’s second high-speed railway line Tashkent-Bukhara will be commissioned in September. Its construction is estimated at more than $400 million. It will reduce the time for delivery of passengers and cargo by almost two hours, and cut operating costs by 30%. As part of maintenance of the new road, the national rail carrier of Uzbekistan signed a contract with the Spanish company Talgo for the purchase of two high-speed trains during the International Investment Forum in Tashkent.
“Unlike previous trains, the new ones will have two more passenger cars”, says the head of the Uzbekistan Railways Department for Traffic and Operation of High-Speed Passenger Trains Olim Kurbonov. “Comprising two locomotives, 10 cars and a dining car, the new train will carry 287 passengers. Expansion of railway electrification and number of high-speed trains will allow organizing the high-level passenger traffic not only in Tashkent, Samarkand and Karshi, but also in other regions.
Small business and private entrepreneurship will be undoubtedly attached special importance in 2016 as a basis of the domestic economy. For instance, it is planned to create dozens of new small industrial zones.
Today, there are 63 small industrial zones in the country, established in August 2014. Over 500 small businesses have started operation over the past years. They have not just handled the production of goods for the domestic market, but have been actively entering the neighboring markets.
The performance has been noticed, so it was decided to create new similar zones. They will be established on the basis of unfinished and idle industrial enterprises. There are more than 100 facilities of this kind throughout the country. There is a need to carefully study them and analyze the logistics and infrastructure. A special working group of representatives of the State Committee for Privatization, Demonopolization and Development of the Competition, State Committee for Architecture and Construction, State Committee for Land Resources, Geodesy, Cartography and State Cadastre, the Ministry of Economy and other institutions, who have been studying these objects, generates and summarizes the proposals on the creation of new industrial zones on their basis.
Upon selection of the most promising objects, district and urban administrations will build all the utilities and infrastructure at their own expense and with the support of Uzbekenergo and Uztransgas.
In order to get a territory in a new zone, entrepreneurs will need to submit their business plans to the commissions under the administrations. During the competitive selection, experts will identify the best projects, and their initiators will be allocated 0.2-0.3 hectares. Besides, entrepreneurs will have to assume investment obligations on the creation of new jobs.
Areas in industrial zones will be leased by entrepreneurs for 10 years. In the future, the term may be extended in case of the timely and full implementation of the obligations under previously signed leases. Once a lease contract is concluded, the administration will assist entrepreneurs with design documentation processing, and with preparation of documents for concessional lending, if necessary.
The national air carrier of Uzbekistan is intending to put new planes Boeing-787 Dreamliner into operation this year. The liner is the first passenger aircraft of this size, and its fuselage is made entirely of composite materials.
The purchase of the Dreamliner was conditioned by Uzbekistan Airways’ strategy to rank among the most competitive and popular airlines. After all, in addition to fuel efficiency, which is marked by almost 20 percent reduction of fuel consumption compared to its competiors, Boeing-787 differs with drastically new characteristics of passenger comfort.
A range of continuous flight of 16 hours ranks among the key features of Boeing-787. Humidity is another important aspect of a comfortable flight. A person can not fly in the thin and dry air for a long time, as it leads to discomfort. The Dreamliner provides an opportunity of increasing the humidity by 20%, unlike the traditional aluminum aircraft. In fact, Boeing-787 fuselage is made of composite materials, which suggest that it is not subject to corrosion like other aircrafts, so high humidity would not damage it.
Domestic aviators are currently constructing a special hangar for the new aircrafts, and are planning to commission the CIS only center for the repair of structural elements of the aircrafts that consist of composite materials. In the future, the center will provide maintenance of new generation aircrafts of the national air carrier and foreign airlines.
One of the real sector flagships – the Almalyk Mining and Smelting Plant – is going to commission a new melting furnace at the smelter in September. The $92 million project is funded through loans of the Fund for Reconstruction and Development of Uzbekistan and domestic banks, as well as AMSP own funds.
The new furnace is convenient and efficient, consumes less energy, flue gases are recycled, thus improving the environment. Besides, it provides a higher copper recovery.
This all is just a small part of hundreds of ongoing projects in all regions of the country. Most importantly, each of them implies a modern and competitive manufacture, new roads, transport infrastructure, new jobs, welfare, which empower the country to further move towards its strategic goal of joining the ranks of developed countries.
(Source: «Uzbekistan Today» newspaper)
The growth of gross domestic product (GDP) of Uzbekistan in 2016 will make up 7.5%, the World Bank’s Global Economic Prospects, published on 6 January, said.
The bank’s experts forecast that economy of Uzbekistan will grow by 7.7% in 2017 and 2018.
In June 2015, the World Bank forecasted that the GDP of Uzbekistan will grow by 7.8% in 2016 and 8% in 2017.
Uzbek President Islam Karimov said that the growth of Uzbekistan’s GDP exceeded 8% in 2015. The Government of Uzbekistan forecasted that the economy of the country will expand by 7.8% in 2016.
According to the experts of the bank, economic problems in Russia negatively impact Uzbekistan. The report noted that Uzbekistan was able to keep stable export figures, but low commodity prices and reduction of remittances impact economic growth in the country.
These days, the Republic of Uzbekistan has a universal reputation as an active player in the international market for light-industry finished output. At the same time, the country retains its position in the list of the world’s top five exporters of cotton fiber.
It won’t be an overestimation to call the light industry of Uzbekistan one of the structure-forming sectors in the national industrial complex. Today, one-third of all indigenous manufacturing workers is concentrated there. The light industry accounts for 26.2 per cent of the total volume of industrial production and for 44 per cent of the volume of non-food consumer goods.
At the dawn of independence, a majority of the country’s textile enterprises were obsolete and badly needed modernization. With this fact in mind, it is hard to imagine that in 2015, the share of cotton fiber processed by domestic customers has reached 50 per cent of its overall production volume.
The items of such resounding success include: the attraction of national and foreign investments and the creation on their basis of new export-oriented production facilities, outfitted with brand-new equipment and machinery. Over the past 24 years, more than US $2 billion worth of foreign investments was lured to the sector. As many as 180 factories were set up with the participation of overseas investors from Germany, Switzerland, South Korea, Japan, Singapore, Turkey, the US, India and other countries. Upwards of 150 projects were realized in the light industry to manufacture finished produce (sports clothes, clothes for adults, children’s garments, underclothes and suchlike).
To create the best possible investment environment for foreign investors that make direct investments in the development of high-tech enterprises in the light industry, a proper legal framework has been put in place. All the laws and regulations, which form the backbone of the national investment legislation, are designed to protect overseas investments as well as to provide an efficient system of privileges and preferences that, in the long run, are believed to underpin fruitful cooperation on terms of mutual benefit.
The Joint-Stock Company, Uzbekengilsanoat incorporates enterprises of the cotton, knitted-wear, clothing and silk sectors. At present, there are approximately 300 production facilities, with the annual total capacity of 448,000 tons of yarn, 296 million sq. m. of cotton fabrics, 90,800 tons of stockinet, 255 million units of garments and knitted wear, 53.1 million pairs of hosiery and 2,400 tons of raw-silk thread. So, the Republic’s light industry is represented by a wide range of export-oriented goods – from yarn to finished clothes and knitted wear. Domestic light-industry enterprises started exporting their produce in 1994. At that time, the exports volume didn’t exceed US $8 million. In 2015, a given indicator is expected to exceed US $1.0 billion.
The task prioritized at the current stage of development of export-oriented joint ventures and modernized enterprises in Uzbekistan remains to bring their exports volumes to 60 per cent of their total production volume. Great hopes on this front are set on the establishment in the Republic of an Uzbek-Korean training research textile techno-park. Its creation is believed to more efficiently exploit the scientific and technological resources available in the country in order to increase the competitiveness of national textile production, to work out new-generation product lines, to train personnel and to raise the level of their professional skill on a continued basis.
The light industry of Uzbekistan is becoming more science-intensive with each passing year. In the first place, it can be explained by its specificity (production of light-industry output is, per se, a very science-intensive and high-tech process) and the availability of highly qualified personnel and a solid experimental-testing base at most enterprises. Innovative developments can now be met across the entire light industry. In particular, many new types of innovative textile goods for use in various spheres of life have been mastered, including textile semi-finished produce with novel consumer characteristics (yarn made of bamboo fiber, combined yarn), organic children’s clothes etc. As well as that, production of so-called wellness output has been launched. Such produce is characterized by the presence of additional components built in the structure of textile fiber, such as silver-plated threads, threads of raw silk spun by transgenic silkworms and others.
Particular attention is devoted to the production of adaptive articles with some set qualities, including therapeutic-hygienic ones (for example, hosiery with the anti-bacterial covering, dressing, hygienic washrags and sanitary napkins etc.) These are but a few examples of industrial innovations, which will undoubtedly become topical for the consumer market, where demand is growing continually.
Thanks to the measures under way in the light industry, its output is now exported to 55 countries. And their number tends to increase year after year. The Republic’s textile, clothing and knitted-wear factories deliver their produce to the CIS member states, the EU, China, Canada and several Arab states. Direct business links have been forged with textile associations and leading companies of Belgium, Great Britain, Germany, India, Italy, Malaysia, Singapore, the US, Switzerland, South Korea and many others.
It should be observed that the export volumes of textile, clothes and knitted wear are growing every year. In 2014, Uzbekistan has exported 157,100 tons of cotton fiber, 33 million sq. m. of cotton fabrics, 4,900 tons of stockinet, 148.1 million garments and knitted wear, and 9.1 million pairs of hosiery. At the same time, the geography of Uzbek textile exports tends to expand, with many new markets being in the pipeline.
The light industry of Uzbekistan enjoys bright prospects. They will be boosted even further with the implementation of the Presidential Decree, “On the program of measures to ensure structural reforms, modernization and diversification of production in the period 2015-2019” as of 4th March 2015. In compliance with this document, AO Uzbekengilsanoat plans to realize, jointly with some leading foreign partners, 58 projects to create new production facilities and to upgrade, both technically and technologically, the existing factories. Another 21 promising projects will be realized with the attraction of foreign investments.
Until the end of the current year, AO Uzbekengilsanoat is planning to implement, within the framework of the Investment Program, 33 investment projects, to the tune of over US $230 million. When brought to completion, they will swell the light industry’s exports volumes, satiate the home market with quality textile produce and create 2,800 new jobs.
In the foreseeable future, the light industry is expected to retain a key role in the development of the industrial complex in Uzbekistan. At the same time, the sector’s financial and intellectual resources will be concentrated on the priority directions of scientific-technical activity and research, which prove vital for the nation’s rapid socio-economic development, on the elaboration of modern technologies needed for the production of science-intensive competitive goods as well as on the formation of breakthrough innovative directions.
(Source: «Business partner.uz» newspaper)
The first album of the nation’s only band that plays Uzbek ethnic jazz was released in 2013. The musicians have been studying this area for the past years, collecting material, and are willing to release a second collection.
“To be pioneers is not easy, for sure, but we have people to emulate. We are encouraged by Azerbaijani and Indian musicians who developed this type of music in the 1970s,” says one of the founders of the group, Saidmurat Muratov. “Jazz attracts musicians with its freedom of expression, when they can express their individuality in improvisations. And there are so many directions in it that, having studied them, you can create new things, and that’s what we’re set to do. The principal goal sought by our band, Jazzirama, is to establish and develop Uzbek jazz.”
The band’s first album contained remade well-known folk songs like Lazgi, Urik Gullaganda as well as original compositions written by saxophonist Saidmurat Muratov and pianist Sanjar Nafikov. Guitar, bass melodies give a special flavor, and Shavkat Matyakubov, a traditional singing teacher at the State Conservatory, brings in national notes by playing the rare instrument – koshnai, and vocals. The team experiments all the time, adding new motives, for instance, the Khorezm surnai or seeking similarities in the sound of drums with doira.
The main issue in the evolution of ethnic jazz is that few musicians have an equally good command of traditional melodies and the ‘music of the fat’. That was the challenge faced by predecessors of Jazzirama, eventually producing a good arrangement of Uzbek melodies rather than a harmonious combination of two styles.
The team regularly participates in festivals in Almaty, Bishkek and Dushanbe, where musicians share their experience with colleagues from Central Asia, Germany, Japan, America, Turkey, France, Latvia and other countries. Communication continues beyond the festival – the young jazzmen consult with each other, evaluate new compositions. Traditionally, festivals used to close with a concert of the Central Asian lab of ethnic jazz. Representatives of the countries in the region used to come up with joint compositions, which sometimes lasted more than an hour and a half. Traditional motifs of Kazakhs, Tajiks, Uzbeks and Kyrgyz used to ‘flash’ in a kaleidoscope of jazz improvisation.
“For two months I was an intern in the school of music, theater and dance at Michigan State University in New York, where the stars of American jazz used to teach. Our music was fancied both professors and students from different countries. They gave a lot of advice on how to improve the field and bring it to an international sound. All this experience will certainly reflect in the quality of the new album,” Saidmurat Muratov concludes.
(Source: «Uzbekistan Today» newspaper)
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