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June 22, 2015


June 22, 2015


finance.. 2

International Acknowledgement of the Stability of Uzbekistan’s Banking System.. 2

small business. 2

Craftsmen Defy Crisis. 2

International cooperation.. 4

Growing Interest in Partnership. 4


Transport-transit infrastructure of the Republic of Uzbekistan: immediate and medium-term development priorities. 5





International Acknowledgement of the Stability of Uzbekistan’s Banking System

The consistent measures spearheaded under the leadership of President Islam Karimov to reform the banking system serve as a robust backbone for uplifting the economic might of our country, consolidating the financial stability of commercial banks, perfecting their activities at the level of international standards. Uzbekistan’s achievements in this sphere have been receiving recognition of prominent international financial institutions.

That was the topic of discussion at the conference organized by the Central Bank of the Republic of Uzbekistan in cooperation with the international rating agency Standard & Poor’s. The event aimed at deliberating on issues related to granting international ratings to the commercial banks of Uzbekistan. The occasion was attended by heads of Central and commercial banks, representatives of international and local companies specializing in auditing credit organizations.

During the conference, Standard & Poor’s experts organized a presentation outlining the analysis of the criteria in grating the rating, the assessment of creditworthiness, experience, recommendations for the introduction of standards of the Basel Committee on banking oversight, Basel III, and their influence on the rating of banks.

“President Islam Karimov’s Resolution on Measures to Further Elevate the Financial Sustainability of Commercial Banks and the Promote Their Resource Base, signed 6 May 2015, plays an important role in the introduction of Basel III standards,” says Anastasia Turdieva, deputy director for financial institutions of the international rating agency Standard & Poor’s. “We have always evaluated the capitalization of Uzbekistan’s banking system as stable, because the growth in assets that boost the incomes of commercial banks has been rather high. In addition, major investment projects undertaken by the state with the participation of banks have a positive impact on the capitalization.”

In conditions when notable decline in economic growth rates are evident in some countries, and the reduction of ratings of some advanced nations and major financial institutions, the banking system of Uzbekistan is estimated as “stable”. This is another result of the reforms carried out in the field.

The constant support displayed in our country to the banking system, the expertise garnered by the Central Bank of Uzbekistan in the exchange of credit information and the conduct of transactions in collaterals promote growth in rating assessments. In particular, specific practical measures aimed at bolstering the financial stability of the system have ensured the growth in the banks’ capital more than twofold in the last five years and by 25 percent over the last year. Today, the capital adequacy ratio is 24 percent, three times the international standards.

The event served to exchange views on issues such as consistent reforms conducted by the Central Bank and maintenance of effective banking supervision, asset quality, diversification of the credit portfolio, ongoing monitoring of indicators of capital adequacy and liquidity.

(Source: UzA)

small business

Craftsmen Defy Crisis

An awards ceremony for the winners of Tashabbus-2015 review contest has taken place in Tashkent. UT reporters have witnessed the emergence of new trends. In the current conditions of market instability and volatile demand, the so-called ‘small ones’ have been successfully competing with established giants, often surpassing them. They are now turning into the drivers of industrial growth, triggering new products and services in the market.

Tashabbus has long ceased to be a conventional competition among small businesses, turning into a kind of litmus test of economic development. The old truth of ‘a ship will sail the way you name it’ has paved the way for the event with the symbolic name of the ‘Initiative’ to strive to new heights. This year it has involved more than 6,200 entrepreneurs, farmers and artisans. The best of them presented their products at regional stages, and 41 winners of regional stages passed on to the national finals, where they presented their achievements at the two-day traditional exhibition.

For the second year the selection tendency has been shifting towards the greater transparency and most deserving applicants. Previously, the winners were selected by the results of the two-day exhibition, while in the last competition an expert commission carefully studied the achievements of the contestants within two weeks, and then made their choice.

The winners competed in three main categories – ‘Top Entrepreneur of the Year’, ‘Top Farmer of the Year’ and ‘Top Artisan of the Year’. Winners in additional categories were also unveiled: ‘The Youngest Entrepreneur of the Year’, ‘Top Business Woman of the Year’, ‘Top Innovative Project of the Year’, ‘The Leading Employer of Young People’, ‘Top Exporter’, and ‘The Most Responsible Social Partner’, among others.

Head of Takro Osiyo Company Kamoliddin Giyosov of Tashkent region won in the category ‘Top Entrepreneur 2015’. His team specializes in the production of knitted fabrics and finished articles. The success story of the businessman is simple: he had been dreaming of his own business, but never dared to take this serious step because of the lack of seed fund. Having attended one of numerous workshops for aspiring entrepreneurs, he realized that the initiative and the enterprising have a great chance to help themselves and the people around, given unique opportunities provided by the state.

The Takro Osiyo Company was founded in 2009. Those days, it employed a few dozen people, while today there are 140 employees, producing more than 300 kinds of high-quality knitwear articles for internal and external markets.

“Maintaining market demand for certain products requires observing the following principle: if one wants to meet customer demand, he needs to constantly increase production volumes and improve product quality, while maintaining its purchasing cost,” says Kamoliddin Giyosov. “We have been accurately following this principle. We have increased production capacity and improved product quality on our own funds and bank loans. The policy has resulted in increased production volumes, productivity, motivated employees, increased revenues and new jobs.”

The entrepreneur does not stop there – he has recently opened a trading house in Russia. The results have exceeded expectations: exports and sales geography have significantly expanded.

Ilyosjon Botirov of Namangan region was announced the best farmer. His diversified farm Rais-Sang grows cotton, wheat, breeds livestock, and maintains greenhouses and processing facilities.

“If you want to be successful, you need to diversify sources of income,” Ilyosjon Botirov says. “We started out with cotton, and proceeded with wheat, livestock breeding, and built modern greenhouses. Recently we have launched refining facilities, produce meat and dairy products, and plan beekeeping and fish farming. We are also engaged in business that is “out of character” for us – we run sewing and furniture shops, which have shown their viability in a short time.”

Allazar Sadullayev of Khorezm region won in the category ‘Top Craftsman 2015’. The artisan is known for his works on the restoration of historical monuments. The master in the ninth generation of the Kattabogh village believes that a true craftsman has to know a lot, to be a poet, a musician, and a philosopher to a small extent.

“In 2006, we hosted a representative from the American University of Arizona to study the ceramics of our family. She said she studied the history of ceramics in 67 countries, but was most impressed by Khorezm ceramics, which we have preserved in its traditional form. Today it is still followed by more than 70 apprentices,” said Sadullayev.

In addition, Allazar Sadullaev tutors a club for students of academic lyceums and vocational colleges, where young people learn to work with clay. Potters have mastered the technique of majolica. It decorates the airport and railway station in Urgench. It was widely used in the restoration of the Pahlawan Mahmud mausoleum in Khiva, and other sites.

Winners of first prizes of Tashabbus-2015 were awarded President Prizes – keys to Spark cars, second and third awardees received cash prizes.

(Source: «Uzbekistan Today» newspaper)

International cooperation

Growing Interest in Partnership

During the two-day visit to Uzbekistan, the Movement of French Enterprises MEDEF International has identified the areas of mutually beneficial cooperation with a long term perspective.

During the visit, the mission of MEDEF has held talks at the Ministry of Foreign Economic Relations, Investments and Trade, and met with the representatives of the Ministry of Agriculture, Chamber of Commerce and Industry of Uzbekistan, large companies and the international financial institutions operating in the country.

The delegation featured French businessmen and industrialists representing the infrastructure, energy, aviation industry, banking, defense and security, environment, health, telecommunications and transport.

Speaking about the visit, Philip Gauthier, deputy Director General of the Association of French entrepreneurs MEDEF International expressed the hope that bilateral relations will continue to expand and strengthen, “Uzbekistan has great economic and human potential, and Uzbek business community is interested in developing cooperation with France, as do we.”

“We are satisfied with the results of negotiations and with the opportunity to establish mutually beneficial contacts with the Uzbek side. France has a great potential in high-tech, which can be an important factor of cooperation with Uzbekistan. French export of know-how can be useful in different areas of economy. We will be happy to use it in your country in our joint projects in the manufacturing sector and IT,” noted Philip Gauthier.

During the business forum, the Uzbek side noted that both countries attach great importance to the enhancement and expansion of mutually beneficial partnership. In January-March 2015, the trade between the two countries increased by 7.1%. There are 14 firms and companies with French capital operating in Uzbekistan. This number, according to members of MEDEF, should grow, as Uzbek economy is demonstrating a steady growth, and Tashkent is a modern metropolis showing a high business activity.” Marek Stech, head of Alstom in Central Asia, also noted that “Transport infrastructure, trade, industry and other sectors are developing rapidly. For example, our company has been successfully operating in the Uzbek market for several years, focusing on such areas as energy and transport. But we are interested in expanding our presence, so we will take part in tenders for the implementation of new joint projects. The negotiations are a good opportunity to discuss the prospects of our cooperation.”

David Geyling, Commercial Director of one of the communication satellite companies proposed cooperation to Uzbek counterparts, “We help leading broadcasters and media operators deliver more than 6,000 TV channels including 600 channels in HD. Previously, we covered only the countries of the European Union. Now we have expanded our network and have recently launched a satellite that also covers the territory of Uzbekistan. To establish cooperation, we need to find points of mutual interest and discuss potential areas of cooperation.”

New contracts, treaties and agreements are coming in the near future as the sides inked the memorandum of understanding in Tashkent.

(Source: «Uzbekistan Today» newspaper)


Transport-transit infrastructure of the Republic of Uzbekistan: immediate and medium-term development priorities

The important geostrategic position occupied by the Republic of Uzbekistan in the Central Asian region allows the country to actively develop its national transport –transit system, effectively integrating the latter with new international transit corridors and routes created in great numbers these days.

The dynamic development of industrial, investment and foreign economic linkages largely depends on how much a country’s transport communications are ramified, as well as on the available possibilities of organizing the transportation of goods, providing complex cargo-handling services and applying effective logistics schemes.

The formation in Uzbekistan of a transport-communication complex and its subsequent integration with the international transport system are based on the principle of its outrunning development. Another significant peculiarity of the way the national transport-communication system is being developed is the creation of multi-vector schemes for conveying the Republic’s foreign-trade goods, which can ensure a high level of economic and transport security to date.

Presented below is a list of priority development directions for the transport sector of the Uzbek economy. These include: a rise in capacity of domestic transport communications; implementation of high-tech projects to develop and upgrade transport arterial roads and adjacent infrastructural facilities; creation of new transport junctions and multimodal logistics centers; expansion and modernization of the fleet of rail, air and motor-road means of transport.

The broad network of railways, motor roads for both international and domestic use and airlines that is available in the Republic makes it possible to transport goods hither and yon virtually nationwide, delivering them to industrial clusters, manufacturing and agricultural enterprises and the majority of indigenous economic establishments.

Today, Uzbekistan is taking all sorts of measures to further develop its transport-communication complex, to create an auspicious environment for cargo owners, domestic and international carriers, as well as to improve control over the handling and registration of goods. At the same time, particular attention is given to providing proper conditions for the efficient industrial and investment activities   carried out by local entrepreneurs. At present, a lot of steps are being taken to build and reconstruct motor roads for domestic and international use, to renovate and upgrade the fleet of motor vehicles and the rolling-stock in operation, to create integrated logistics centers and improve the sector’s regulatory-legal base, to introduce a flexible system of tariffs on cargo transportation, to simplify customs procedures and reduce the time needed to pass through customs passage points and to undergo the electronic exchange of documents.

  1. For the time being, the Republic is realizing, on a step-by-step basis, a project to create a national arterial road, encompassing more than 2,700 kilometers of motor roads, with high-class cement-concrete roads making up 50 per cent of them. In addition, a number of other projects are under way to build and reconstruct roads for home use, including rural ones.

The Presidential Resolution No ПП-2313, “On the Program of development and modernization of engineering-communication and road-transport infrastructure in the period 2015-2019” has been issued on March 6th, 2015.

The document approves an address list of the sections of motor roads that form the Uzbek national arterial road and motor roads for general use that should be built or reconstructed.

The Program also outlines measures to accomplish the technical re-equipment of production bases belonging to road organizations in the period 2015-2019.

In particular, in the indicated period it is planned to build and reconstruct, using the money resources from the Republican Road Fund, several sections of motor roads, bridges, overpasses and road junctions, whose total length reaches 1227.8 kilometers.

In the same period, a number of international financial institutions will provide the necessary funding towards the cost of similar projects, with the total length of newly-built and reconstructed roads coming to 1172.5 kilometers.

The wherewithal from the Republican Road Fund and the World Bank will go to the construction and reconstruction of 299.5 km-long sections of motor roads for general use, bridges, overpasses and road junctions between 2015 and 2019.

As well as that, there are plans to purchase, in the next 5 years, 993 units of up-and-coming road-repair equipment needed to maintain and carry out routine repairs of motor roads.

It is also envisaged to buy as many as 38 bituminous concrete and cement-concrete works, concrete-mixing plants, crushing-sorting plants, crushing-sorting lines and other machinery. Over 150 projects, to the tune of more than US $4 billion, will be implemented for these purposes.

The period under discussion will also see the building and reconstruction of 1.800 km-long sections of the Uzbek National Highway and new roundabout ways for the towns of Karshi, Kokand, Tashkent, Bukhara and Gulistan, as well as modernization of roads for local use. In 2016-2017, the following reconstruction projects will be realized: a 100-km section of the M-39 motor road Almaty-Bishkek-Tashkent-Shakhrisabz-Termez, a 85-km section of the A380 motor road in Bukhara province, and the F373 motor road in the Kamchik Pass and Fergana Ring regions.

  1. Inland and international transportation of goods by rail on the country’s territory is carried out by the State Joint-Stock Railway Company Uzbekiston Temir Yullary set up in November 1994.

The Company’s main lines of activity include: organization of railway service and management of transit by rail; forwarding and delivery of goods by rail; repairs and technical maintenance of freight cars; transportation of passengers and tourists; as well as renovation of the fleet of locomotives and rolling-stock. Each year, the Republic’s railroads convey over 40 million tons of domestic goods and 20 million tons of foreign-trade loads.

Uzbekiston Temir Yullary accounts for over 90 per cent of international transit operations. Thanks to the consistent steps taken in the country to diversify transport routes, rail freight is transported in many directions, such as the Black Sea ports (Iljichevsk, Poti/Batumi), the Iranian port of Bandar-Abbas, the Baltic Sea ports (Riga, Klaipeda, Tallinn, Ventspils and Liepaya) and the Far East ports (Vladivostok/Nakhodka), as well as via the following frontier railway passages: Brest (Belarus), Chop (Ukraine), Dostyk/Alashankou and Khorgoz/Korgoz (Kazakhstan-China) and Termez/Khairaton (Uzbekistan-Afghanistan).

In a move to intensify its transit potential, Uzbekistan has launched a special program designed to boost the development and rehabilitation of a network of railways and roadside infrastructural facilities.

Pursuant to the Presidential Resolution No ПП-2313, “On the Program of development and modernization of engineering-communication and road-transport infrastructure in the period 2015-2019”, 16 projects will be implemented to develop and electrify railway communications, including the following directions: Marokand-Karshi, Karshi-Termez, Bukhara-Urgench and Angren-Pap.

Today, the realization of the projects to electrify the railway sections Marokand-Karshi and Karshi-Termez is in full swing.

In June 2013, with a view to creating a new trans-Asian corridor, Uzbekistan started implementing a project to build a new 125-km electrified railroad in the Angren-Pap direction. Running through the mountain Kamchik Pass, the new line will connect the central part of Uzbekistan with the eastern districts of the Fergana Valley. It is planned to complete its construction and commission it in 2016. The project also stipulates the construction of a 19.1-km mountain tunnel.

Putting a given railroad into service, followed by the perspective construction of a branch line from the People’s Republic of China to Uzbekistan via the territory of Kyrgyzstan, will make it possible to form a new trans-continental rail corridor stretching from the Chinese eastern sea ports, through Uzbekistan, to other countries of the Central Asian region, the Near East and South Europe. What’s more, with this grandiose project being realized, Uzbekistan may contribute to an increase in the volume of goods traffic from China to a transport-transit corridor Uzbekistan – Turkmenistan – sea ports of Iran – sea ports of the Gulf countries due to be created in keeping with the Ashgabat Agreement signed in April 2010.

III.       International air freight transportation is performed by the National Air Company “Uzbekiston Khavo Yullary” , the Air Company “Korean Air” and a number of other foreign firms that operate cargo and passenger flights to and from Uzbekistan.

Founded in 1992, Uzbekiston Khavo Yullary is a dynamically developing air company of the Republic of Uzbekistan.

The company has flights to more than 40 cities of the world, located in Europe, Asia and America. The cargo flights are mainly performed through Tashkent International Airport, “Navoi” International Intermodal Logistics Center and several other international airports.

Nowadays, the flying stock of Uzbekiston Khavo Yullary consists of 33 planes made in the West. Within the framework of the Air Transport Modernization Program approved by the Presidential Resolution No ПП-1446 as of December 21st, 2010, the company should renovate, up to the end of 2015, its Boeing and Airbus aircraft and reconstruct surface infrastructure in the regions.

Besides, under a project to develop civil aviation in the Republic of Uzbekistan, approved by the Presidential Resolution No ПП-2313 as of March 6th, 2015, two Boeing-787-800 Dreamliner aircraft will be added to the country’s flying stock in 2016.

  1. In order to shape a system of multimodal cargo transportation, complex types of conveyance are carried out in the Republic with the use of several means of overland transport, which connect the existing air destinations with the main regional centers of Uzbekistan and Central Asia.

The “Navoi” International Intermodal Logistics Center (IILC) was set up on the basis of Navoi Airport in 2009, amenably to a special Presidential Resolution. Its vicinity to and integration with the Special Industrial-Economic Zone “Navoi” allow the IILC to transport the output of the pharmaceutical, electro-technical, car-building and other industries of the national economy.

In conformity with the Agreement on Management of Navoi Airport, the Air Company “Korean Air”, boasting a high international rating and rich experience, was chosen in 2008 as the main partner of Uzbekiston Khavo Yullari in the field of development and management of the International Intermodal Logistics Center. The indicated document stipulates the transfer to Korean Air of the right to manage Navoi Airport between January 1st, 2009 and December 31st, 2013, with the possibility of extending the Agreement’s term for the next five years. In December 2013, following an appropriate application from Korean Air, the validity of a given document was prolonged for the next five-year period, i.e. till the year 2019, with all the earlier granted privileges remaining in force.

To date, Navoi International Airport fully meets all the requirements for guaranteeing safe international transit and transportation. As a result of the consistent and targeted efforts taken the country’s authorities, the “Navoi” International Intermodal Logistics Center completely meets the strict standards imposed in the world on a full-fledged international logistics hub with capacities to serve, handle and store up to 300 tons of goods a day at a cargo terminal as well as to serve some 20 flights a day.

Now, Navoi International Airport operates flights to more than 20 destinations, such as Aktyubinsk, Bishkek, Brussels, Vienne, Dacca, Delhi, Dubai, Moscow, Milano, Seoul, Istanbul, Tbilisi, Tyantsyn, Hanoi etc.

At the same time, in the 2015 navigation season (from March 29th), the National Air Company Uzbekiston Khavo Yullary operates two regular flights a week to the Chinese city of Shanghai.

Additionally, to give a quantum boost to the development of international cargo transportation and to expand the geography of flights, Uzbekiston Khavo Yullary, in conjunction with Korean Air, is studying the question of commencing freight flights to the towns of Guanjou (China) and Mumbai (India) two times a week.

Apart from the “Navoi” International Intermodal Logistics Center, there are two more operational centers of the type, with another two similar establishments being prepared for commissioning.

In 2010, the “Angren” Logistics Center was put into service on the basis of the Ablyk railway station. Today, it is one of the biggest logistics centers serving the operations of road haulage and transit by rail freightage in Uzbekistan.

The chief aim of this logistics center is to accept and handle goods, as well as to ensure their guaranteed all-the-year-round delivery by road to Andijan, Namangan and Fergana provinces, through the mountain passes of Kamchik and Rezak, by providing a dependable channel of transportation between the Fergana Valley and other regions of Uzbekistan.

The “Angren” Logistics Center disposes of warehouses, a combined terminal, access roads, spur-tracks and shunting platforms, a hotel and safeguarding structures. The total area of the transit-cargo terminal is about 8.5 hectares. There are railway lines on its territory needed to load and unload goods on/from freight cars.

The ALC’s fleet of motor vehicles exceeds 340 units, including container-carriers, car transporter trucks, roll-carriers, coalers, timber trucks, oil trucks, cement carriers and dump trucks.

Among the main goods they transport are “GM Uzbekistan”-made automobiles, spare parts and components for motor vehicles, oil products from the Fergana Oil Refinery, chemicals, farm produce etc.

In 2014, one more multimodal logistics centre, “Pap” ILC, has been established at the State Joint-Stock Railway Company Uzbekiston Temir Yullary to secure the following purposes: to improve the transport logistics infrastructural facilities in the Fergana Valley in conformity with up-to-date requirements, to augment the volume of goods traffic, to create a propitious environment for the opportune and steady delivery of goods, and to exploit Namangan province’s railway infrastructure as efficiently as possible.

Located near the settlement of Khanabad and covering an area of 60 hectares, the “Pap” International Logistics Center encompasses a container ground, a specialized open ground, several sheltered warehouses, an administrative building, a 25-km spur-track from the Pap railway station to the “Pap” ILC, a number of artificial structures (such as bridges, level crossings and viaducts) and other installations of engineering-communication infrastructure.

Projected to handle up to 4 million tons of cargo a year, this Logistics Center ensures the smooth interlinked conveyance of goods by various means of transport, including the efficient exploitation of the fleet of motor vehicles operated by the “Angren” Logistics Center, to transport cargo through the Kamchik Pass. Additionally, the Center uses the warehouses, belonging to the Fergana regional railway junction, which can store up to 92.000 tons of goods simultaneously.

The “Pap” Logistics Center is also designed to shape an effective logistics network to meet the demand of entrepreneurs for transport-logistics and transport-forwarding services, as well as to develop optimum cargo-conveyance schemes.

With the “Pap” LC coming on stream, the potentialities of transport infrastructure available in the Fergana Valley have been expanded substantially. This, in turn, has led to an increase in the economic efficacy of such transport operations as multimodal road haulage and transit by rail freightage.

The current year and next year will see the introduction of two new international logistics centers: “Termez” ILC in Surkhandarya province and “Tashkent” ILC in the Uzbek capital city. These “dry ports” are intended to render a whole spectrum of services, including the handling, storage, customs clearance and transportation of goods. Under a number of investment projects to be implemented there, the following structures will be erected on their territories: multi-purpose warehouses, container grounds, railway tracks and spur-lines for large-capacity trunk-road motor vehicles and many other installations of transport infrastructure. Both the “Termez” ILC and “Tashkent” ILC will also serve the Republic’s foreign-trade goods as well as goods delivered to Uzbekistan from neighbouring countries.

In an effort to further develop the transport sector of the national economy, to attract investments and additional volumes of goods for handling and transportation and to create favourable conditions for indigenous entrepreneurs, small businesses and transport-logistics centers, the current market situation is continually studied and the all the measures taken in the sector are scrupulously monitored.

With a view to raising the level of competitiveness of national output, several authorized organizations and departments are doing their best to bring down tariffs on the main exports transported by rail within the Republic; besides, some additional conditions are provided to improve exports transportation by domestic enterprises, small businesses included.

Moreover, work is under way to form new inland and international routes of transportation, to organize multimodal cargo conveyance schemes, to modernize the existing roadside infrastructural facilities, to purchase up-to-date equipment and machinery, to introduce modern methods in the way the country’s international logistics centers function, and to support the national motor transport operators.

(Source: «Business» newspaper)

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