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July 17, 2015


July 17, 2015

economy.. 2

Uzbek economy grows by 8.1% in the first half. 2


Moody’s: Forecast of development of Uzbek banking system remains stable. 4


Ustyurt Gas and Chemical Complex to start operation in 2016. 5












Uzbek economy grows by 8.1% in the first half

On July 16, the Cabinet of Ministers of the Republic of Uzbekistan held a session, which summed up the socio-economic development of the Republic for the first half of the current year and developed additional measures for the organization of systematic work on the implementation of the adopted programs for further reform, structural changes and economic diversification for 2015-2019.

The participants extensively discussed and analyzed in detail the main macroeconomic indicators of the country’s development and the results of the work to ensure the unconditional implementation of the major directions and priorities of economic program for 2015, defined by the President of the Republic of Uzbekistan Islam Karimov at the session of the Government of the Republic on January 16, 2015.They include increasing the production and export potential of industries and territories of the Republic, the implementation of active investment policy, attraction of foreign investment to the implementation of strategic investment projects, the deepening of production localization and the expansion of inter-sectoral industrial cooperation, as well as increasing employment, the level and quality of life of the population.

As was noted, due to systematic and consistent implementation of the adopted in the country development strategy and modernization of the economy, ensuring its diversification and competitiveness, despite ongoing global economy crisis and the slowdown in its development, Uzbekistan has achieved high rates of economic growth and the strengthening of macroeconomic balance. It was stressed that the achievements and prospects of development of the economy are highly appreciated by international financial institutions. In particular, the statement of the head of the IMF mission that visited the country in April-May of 2015 notes that “…the Uzbek economy is showing stability on the background of an increasingly challenging external environment… In 2015 economic growth is expected to remain high due to the recently adopted programme of modernization of industry and infrastructure, as well as programs on privatization and corporate governance”.

In the first half of this year the growth of the gross domestic product amounted to 8.1 percent, the volume of industrial production also grew by 8.1 percent. Growth of exports grew by 7.4% and a positive foreign trade balance was provided. The state budget was executed with a surplus. The inflation rate did not exceed the forecast parameters.

Targeted measures to radically increase production of consumer goods, accelerated development of service sphere, a balanced stimulation of domestic demand provided the growth of the production of consumer goods by 13.5%, retail turnover – by 14.8% and services – by 13.1%.

Thanks to the implemented system measures on employment of the population, 441,8 thousands of new jobs, of which 274,9 thousand, or 62.2 per cent in rural areas were created In the reporting period.

The continued implementation of active investment policy and measures on modernization, technical and technological upgrading of industries and sectors of the economy, infrastructure development facilitated the growth of volumes of investments by 9.8%, including foreign direct investment and loans by 10.9 percent. The implementation of 63 investment projects under the Investment program for 2015 was completed. 1866 production facilities were commissioned. Commercial production of 585 new types of localized products was mastered. Increased investment has contributed to growth in the volume of contract construction works by 18 percent.

During the discussion, the heads of ministries, departments, economic associations, large enterprises, Council of Ministers of the Republic of Karakalpakstan, khokimiyats of regions and Tashkent city were reminded about their personal responsibility for ensuring timely implementation of major strategic investment projects for the commissioning of a modern high-tech production facilities and objects. They were entrusted concrete targets for the implementation of additional measures to address the admitted backlog of individual projects and the acceleration of attracting investments in the implementation of promising investment projects.

The Ministry for foreign economic relations, investments and trade, the Ministry of economy, economic associations, large enterprises, khokimiyats of the regions, cities and districts entrusted to develop and implement a set of additional measures to ensure the mobilization of the export potential of industries and territories of the Republic, to increase the volume and expand the range of export products, to strengthen the position of domestic exporters in traditional markets and develop new export markets.

Special attention at the meeting was paid to the critical analysis of the results of harvesting campaign and development of emergency measures to prevent the negative impact of weather conditions on yield of cotton and timely implementation of a complex of agrotechnical measures for its cultivation. As was noted that due to taken measures for further development and modernization of the agricultural sector, the full support of agricultural producers, the production volume of agriculture increased by 6.5 percent.

Taking into mention the extreme weather conditions of the current year, the participants ‘ attention was drawn to the need to adopt a complex of urgent measures to reduce the negative impact of weather conditions on agricultural production, especially cotton, to ensure the smooth operation of branches of economy and social sphere.

The heads of the Ministry of agriculture and water resources, relevant business associations, the Council of Ministers of the Republic of Karakalpakstan, khokimiyats of regions and districts were given specific instructions to ensure timely irrigation of crops, the organization of efficient integrated protection of cotton crops from pests, as well as supplies of fuel and lubricants for conducting agronomic and irrigation and reclamation activities.

In the centre of attention of participants of the meeting were the issues of ensuring systematic implementation of the approved by the President of the Republic of Uzbekistan Islam Karimov the major programs of reform, structural reforms, modernization and diversification of the economy for 2015-2019. Special attention was paid to the issues of effective coordination and the system of organization of work on implementation of program of measures to radically reduce government presence in the economy, increasing the role and share of private ownership, strengthen the protection and guarantees of entrepreneurship, enhancement of corporatization and corporate governance, modernization and diversification of industrial production, development of utilities and road infrastructure.

It was underlined, that successful implementation of these policy documents constituting the main content of the strategy for further reform and modernization of the economy over the medium term, will ensure the continued high growth of the economy in the coming years, to build a more modern and diversified economic structure, enhancing its competitiveness. In this regard, the attention of heads of complexes of the Cabinet of Ministers, ministries, departments, economic associations, the Council of Ministers of the Republic of Karakalpakstan, khokimiyats of regions, cities and districts was once again drawn to their personal responsibility for ensuring timely and quality implementation of activities included in the adopted program for the next five years, reaching all target parameters and indicators.

During the meeting it was decided to establish a strict system of coordination and control for the unconditional and full implementation of all points of the adopted structural adjustment programme for 2015-2019.

Hereby, it was decided to ensure the development and implementation in the shortest possible terms of automated computer software for sequential monitoring of all stages of activities of the programme, starting from the preparatory stage to their full implementation.

The meeting also identified specific ministries and agencies, responsible for the implementation of approved programs and, accordingly, interagency councils and commissions under the Government, which should ensure the coordination and systematic monitoring of progress on a monthly basis.

It was decided that the reports of the members of the Government and other responsible persons on the implementation of the approved structural adjustment programme for 2015-2019 will be heard on quarterly meetings of the Cabinet of Ministers on continuing basis.

Special attention at the meeting was paid to a comprehensive analysis of the effectiveness and efficiency of the work undertaken to ensure the reliable protection of private property, small business and private entrepreneurship, providing them with greater freedom and removal of all obstacles and barriers to their rapid development. It was noted that taken measures helped to create in the first half of the year more than 15.2 thousands of new small businesses, or 6.3 percent more than in the same period of 2014. The amount of bank loans allocated to small businesses reached 6.4 trillion soums, or 1.3 times more compared to the same period last year. (currency rates of CB RU from 17.07.2015   1$= 2565.29    soums )

The heads of administrations of all levels, relevant ministries, agencies and business associations mandated to implement a set of concrete measures to stimulate and provide full support to small businesses and private entrepreneurship in the expansion of existing and establishment of new industries and network infrastructure services and ensuring on this basis employment, especially the employment of graduates of professional colleges in accordance with their specialties.

It was emphasized that the practical implementation of the Programme of measures to ensure reliable protection of private property, small business and private entrepreneurship, removal of barriers to their rapid development, approved by the decree of the President of the Republic of Uzbekistan on May 15, 2015, including measures to increase the responsibility of officials for obstruction or unlawful interference in the activities of business organizations, liberalization of criminal and administrative legislation regulating entrepreneurial activity, further simplification of registration, permits and licensing procedures, will contribute to the further development of private property as the dominant form of ownership and small business in the country.

In this regard, the heads of the specially established working committee, ministries, departments, economic associations mandated to accelerate the development of measures stipulated in the program of a number of draft laws and other normative legal acts aimed at strengthening of the protection of private property and the strengthening of its priority, creating the most favorable business environment and investment climate.

Following the discussion made at the meeting of the Government, relevant decisions, which identified specific measures to ensure the unconditional implementation of the major directions and priorities of the program of socio-economic development of the country for 2015 were adopted.



Moody’s: Forecast of development of Uzbek banking system remains stable

International rating agency Moody’s published a report “Forecast of development of the banking system of Uzbekistan.” The forecast reflects the assessment of the creditworthiness of the banking system of Uzbekistan to the next 12-18 months. In its review, the agency Moody’s sixth year in a row confirms the forecast as “stable.”

According to Moody’s, the macroeconomic situation in Uzbekistan is stable. Uzbekistan has shown a high rate of economic growth through a diversified export structure and direction of export revenues to finance public investments.

Sustainable and diversified economy of the country, strong capital investment provides a stable operating environment for banks.

Moody’s notes stable dynamics of asset quality of Uzbek banks and expects that asset quality will remain at a good level.

According to Moody’s over the forecast period, the profitability of the Uzbek banks will remain stable, as in previous years. Operating profit of Uzbek banks is one of the highest among the CIS countries. The agency notes that the high returns of Uzbek banks provide resources for the growth of the credit.

According to the baseline scenario of Moody’s, credit growth in the rated banks will be 20% per year. To maintain the current level of capital adequacy ratio in high credit growth in the forecast period, measures to increase the total capital of banks will be necessary.

Along with this, in 2015, an increase in the total capital of commercial banks by 25% envisages.

Moody’s expects that the liquidity of Uzbek banks during the forecast period will remain at a stable level due to bank deposits.

In 2014, the total assets of banks of Uzbekistan increased by 28.2%, the total loan portfolio – by 31.2%, the aggregate bank capital – by 24.8%.

By the results of 2014, the capital adequacy ratio made 23.8%, which is three times greater than the generally accepted international standards and the current liquidity of the banking system amounted to 64.6%, which is twice more than the prescribed requirements.

In addition, according to a recent IMF study, Uzbekistan on the number of banking institutions on 100 thousand people is leading among the CIS countries. The level of access of banking services is 49.8 banking institutions per 100 thousand of the adult population, and the number of bank accounts opened by individuals is 1102 units per 1000 adult population.

It should be noted that, according to the agency Moody’s, by the results of 2014 the banking system of Uzbekistan is the only CIS country, which has a forecast as “stable”.



Ustyurt Gas and Chemical Complex to start operation in 2016

Uzbekistan during the years of independence, on the basis of deeper processing of natural gas have mastered the production of many kinds of popular products with high added value.

The essential task, as determined by the government to ensure annual growth of the gross domestic product of at least 8 percent, requires the appropriate development, modernization, technical and technological renewal of all branches of the national economy. Hereby a specific role here plays the oil and gas industry, which over the years of independence implemented numerous projects aimed primarily at further expansion of the resource base and the development of its own production, including natural gas processing and the production of competitive in both domestic and foreign markets products with high added value.

Prospects of development of gas processing facilities associated with the expansion of production of liquefied natural gas, condensate, sulphur, and advanced utilization of natural gas for chemical synthesis with obtaining marketable products.

For example, one of the priorities in the industry is to sustain the growth of production of liquefied natural gas as an alternative fuel for the future sustainable gas supply of the Republic and increase exports. Mubarek gas processing plant, Shurtan gas chemical complex and “Shurtanneftegaz”, which operate within the structure of the National Holding Company “Uzbekneftegaz” are specialized in processing of natural gas. The capacities of “Shurtanneftegaz” on the production of liquefied gas as of today reached 250 thousand tons per year. Three strands for the production of liquefied petroleum gas with the processing capacity of 4 billion cubic meters of gas per year had been commissioned here in 2012-2013.

The most important direction in the work of the NHC “Uzbekneftegaz” remains a deeper extraction of valuable components from natural gas. It all started with the commission in 2001 of the Shurtan gas and chemical complex, which was first applied cryogenic technology of processing of natural gas, ensuring the separation of ethane, propane, butane and condensate. Currently, the complex includes the production of ethylene evolved on the basis of ethane and polyethylene production. A project for the modernization of Shurtan gas pipeline facilities is being implemented today. It will ensure the stable raw material supply for Shurtan gas-chemical complex. All these measures will allow to increase production of ethylene to 152 thousand tons, and polyethylene to 138 thousand tons.

A major step in the development of industry and national economy as a whole will become the large-scale project on construction of Ustyurt gas chemical complex at Surgil Deposit with the arrangement of this field. This project is among the top ten global investment projects of the world by the results of 2012. With the completion of construction works of the object, which are scheduled for the end of this year, and starting the commissioning in 2016, the annual processing of 4.5 billion cubic meters of gas and production of up to 387 thousand tons of polyethylene and 83 thousand tons of polypropylene will be provided. From a technological point of view, this project is one of the best in the world.

The implementation of new technologies should ensure the extraction of natural gas up to 97 percent of ethane, propane and other valuable components and the creation of modern production of multi-component plastic compounds, various kinds of plastic products industrial and consumer goods, the production of which is mainly involved in small businesses. So Ustyurt gas-chemical complex will allow to increase volumes of production of competitive import-substituting and export-oriented products, as well as will become a good basis for the creation of many new industries and, consequently, jobs.

Another project that gives a significant effect will be the production of synthetic liquid fuels based on the purified methane produced at the Shurtan gas chemical complex. This technology will allow to extend the possibilities of fuel, the growing needs of the country and significantly reduce the environmental impact of harmful emissions, as manufactured products do not contain aromatic hydrocarbons, sulphur and nitrogen. The production of clean petroleum products that meet the requirements of Euro-4, including more than 860 thousand tons of diesel fuel, over 300 thousand tons of kerosene, about 400 thousand tons of naphtha, 11.2 thousand tons of liquefied gas per year will be carried out as part of this project.

At the present stage of development of the industry, the establishment of joint ventures for deep processing of hydrocarbons is of great importance. Large projects on deep processing of hydrocarbon raw materials, in accordance with the presidential decree of March 4, 2015 are included in the program of measures on structural reforms, modernization and diversification of production for 2015-2019. Among them, we can note the projects on organization of production of aromatic hydrocarbons (benzene, toluene, xylene) from pyrolysis distillate, production of olefins from natural gas to produce polymers (polyethylene, polypropylene), etc.

In general, the implementation of all projects under the programme of measures on structural reforms, modernization and diversification of production for 2015-2019, has to bring the oil and gas industry of the Republic to a new level.

According to forecasts, new capacities on the production of up to 8.55 billion cubic meters of natural gas, 83 thousand tons of gas condensate will be created. Conditions will be provided for the transportation of natural gas in the volume of 20 billion cubic meters, and also on production of 361.2 thousand tons of liquefied gas, 210 thousand tons of polyethylene, 280 thousand tons of polypropylene and significant volumes of other products derived from in-depth processing of gas and widely used both in the Republic and in demand in foreign markets.

Needless to say, the goals are high. Achieving them will require effort. Today the staff of NHC “Uzbekneftegaz”, effectively using the existing potential and accumulated over the years of independence experience in solving important problems in the development of the industry is doing everything to ensure that the set targets will become a reality.


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