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July 28, 2015


July 28, 2015

POLItiCs. 2

Islam Karimov Meets with Chief of the U.S. Central Command. 2

economy.. 2

Paving Its Own Way. 2


The volume of deposits in the banks of Uzbekistan for the first six months increased. 5


Uzbekistan to complete construction of national highway by 2020. 6


List of documents, submitted to customs bodies, at export-import operations approved. 6




Islam Karimov Meets with Chief of the U.S. Central Command

President of the Republic of Uzbekistan Islam Karimov received Lloyd Austin, Commander of the United States Central Command, at the Oqsaroy July 27.

Greeting the guest, the head of our state underlined the constructive nature of the current Uzbek-American relations built on mutual interest.

As it was stressed, the regular dialogue at various levels and dimensions allows Uzbekistan and the United States to steady advance the multifaceted and mutually advantageous cooperation.

A range of international issues, including the interaction aimed at providing for security and stability in the region, have been discussed during the meeting. The talks served to exchange views on the processes of peaceful resolution of the situation in Afghanistan.

General Austin extended sincere gratitude to President Islam Karimov for a warm welcome and the opportunity for an in-depth deliberation on issues pertaining to the current state and prospects of the Uzbek-American relations.

(Source: Press-service of the President of the Republic of Uzbekistan)


Paving Its Own Way

The traditional monetary policy of central banks in many leading world powers has exhausted itself and leads the global economy to collapse. This view has been increasingly expressed by many famous international experts. The situation is exacerbated by the Greek crisis, the forecast of a sharp drop in oil prices due to entering Iran the world market. What is to be done? Build an economic model primarily with an eye to its own advantages and opportunities. Uzbekistan has been pursuing this policy for 24 years.

The last week’s government session on the results of the first half of 2015 in Tashkent showed a clear understanding of the challenges the domestic economy was going to face as a result of the storm on the global market. Unstable conditions in the major export markets of Russia and other CIS countries is forcing the Uzbek enterprises to seek for partners in new regions, and use local advantages of cheaper electricity and well-built supply chain to optimize production, reduce costs, and consequently supply the customers with the products at lower prices. This year’s program of further reformation, structural transformation and diversification of the economy for 2015-2019 is called upon to become a guide for the measures to be taken. So it stands to reason that the session attached so big importance to the development and adoption of additional measures to ensure the effective implementation of the program.

The development vector of the national economic policy is quite understandable and logical: it comes to increasing the production and export capacity of industries by using the advantages available. In addition to cheap energy, there is skilled manpower and engineering staff, good communications infrastructure, a favorable location in the heart of major transit routes from Europe to Asia and the Middle East, as well as the proximity of the world’s major markets – China, India, and Russia. It stands to reason that in the first half of 2015 the gross domestic product of Uzbekistan and industrial production have grown by 8.1%, reaching 72.2 trillion soums and 40.8 trillion soums respectively (currency rates of CB RU from 28.07.2015   1$= 2575.18 soums). The other drivers of the economy have contributed as well – the agricultural production has exceeded 17.6 trillion soums (6.5%), construction – 11.8 trillion soums (18%), retail trade turnover – 31.7 trillion soums (14.8%), and market services – 40.2 trillion soums (13.1%).

It is worth noting that all the government’s efforts are primarily aimed at raising the level of employment and quality of life through the integrated and advanced development of the regions, which are seen as major indicators of well-being in any nation. This fact is particularly relevant when it comes to the country, where over 50% of the population or 16 million people live in rural areas. The provision with modern housing, social, transport and communication infrastructure ranks among the key missions of the government.

The ongoing measures on drastic increase of production volumes of consumer goods nationwide, accelerated development of the service sector, and balanced stimulation of domestic demand have ensured the growth in production of consumer goods by 13.5%, retail trade – by 14.8% and services – by 13, 1%. They have resulted in the creation of 441,800 new jobs, of which 274,900 or 62.2% have been created in rural areas.

An active investment policy and channeling foreign capitals to the implementation of promising strategic projects are seen as equally important. Since the beginning of the year the republic has disbursed 18.1 trillion soums of investments with a 9.8 percent growth YOY. Uzbekistan ranks among the region’s leaders in this respect. The examples are not far to seek. The construction of Ustyurt Gas Chemical Complex in cooperation with Korean companies has entered the world’s top ten global investment projects with the volume of investment exceeding $3.9 billion. By the end of 2015 it is planned to complete all construction and installation works at the site and commission it in 2016. The Complex is estimated to annually process 4.5 billion cubic meters of gas, produce up to 387,000 tons of polyethylene and 83,000 tons of polypropylene. According to experts, the Complex will apply the world’s latest technologies that will bring the level of extraction of natural gas of ethane, propane, and other valuable components to 97%, which would lay the foundation for the construction of new facilities for the production of plastics and other polymers.

Another interesting project might redraw the economic map of the region. It envisages the construction of an electrified railway line Angren-Pop together with Chinese partners. Today, experts call this steel line a new ‘silk road’ that will connect the countries of the region and will contribute to the growth of the whole of the Asian economy. Among other things, it is also a strategically important project for Uzbekistan, for it gives an opportunity to provide stable and independent of the weather freight and passenger transportation in three densely populated regions of the Ferghana Valley.

So far, the road through the Kamchik pass is the only way to this region, promising for industry and investment. In fall and winter, it sometimes becomes non-serviceable for transport, depending on the weather. The new road would tackle these problems and pave the way to a new stage of development of the region.

Being a mechanism of channeling foreign investments, creation of new jobs and competitive industries, free economic zones have been proving their success. The launch and progressive development of Navoi, Angren and Jizzakh zones in Uzbekistan is a good example of how investors and the government can collaborate effectively in addressing serious problems. For instance, the government has already allocated more than $100 million for the establishment of the appropriate transport and communication infrastructure in Navoi Free Industrial Economic Zone (FIEZ), more than $60 million in Angren SIZ, and about $50 million – in Jizzakh SIZ.

Overall, 63 investment projects have been completed in the first half of 2015 in the country, and 1,866 manufacturing facilities were put into operation. The growth of direct foreign investments and loans reached 10.9%.

The intensified localization of production and expansion of inter-sectoral industrial cooperation has been a key focus for the real economy. Each of the national localization projects can be considered as the epitome of innovative design ideas that are being implemented with an eye to the peculiarities of the location, and demands of the market. They are primarily strict requirements for quality, reliability, durability, and low maintenance costs. High technical characteristics allow the import-substituting and localized products securely entering the domestic market, and actively winning the external markets.

There is a simple example – not so long ago one could hardly imagine that Uzbekistan would manufacture a broad range of home appliances and technological devices. Today, the domestic manufacturers offer mobile phones, modems, tablets, communication equipment, and all sorts of household appliances. Artel, the leader of the domestic electrical industry, has already entered the markets of Russia and the Middle East with its mobile phones. In the next three years the company is planning to expand to the regional and Russian markets with air conditioners, TVs, monitors and other devices, produced in cooperation with the South Korea’s Samsung Electronics.

All this can be achieved solely through the creation of a favorable business climate. Uzbekistan ranks among the regional leaders in this regard as well. The World Bank and the International Finance Corporation in their annual report on ‘Doing Business 2015: Going Beyond Efficiency’ noted the unprecedented performance of Uzbekistan in enhancing the efficiency of the tax system. Uzbekistan has scaled up by 61 positions in this indicator against the last year’s rating.

Being a priority in ensuring high rates of economic growth, the gradual reduction of tax rates has significantly contributed to this process. Over the years of independence, the tax burden has decreased almost twice against 1991, when it was 41.2% in relation to gross domestic product. In many countries, the tax rate on income of companies and organizations is 12,5-39,5%, while in Uzbekistan the rate decreased from 38 to 7.5% in 1995-2014, reflecting quality changes in the economy.

Besides, the country has embarked on shaping a new class of public administration executives who are capable to communicate with businesses on an equal footing, and understand their needs. Uzbek experts have been exchanging the best practices of public administration with their colleagues from the leading foreign countries. The government session emphasized the need for coordination of the measures on radical reduction of the state presence in the economy, enhancement of the role and the share of private property, strengthening the protection and guarantee of business, intensification of corporatization and streamlining of corporate governance, modernization and diversification of industrial production, as well as development of engineering, communication and road transport infrastructure.

Being the pillar of the strategy of further reformation and modernization of the country’s economy in the medium term, these measures would maintain high economic growth rates for the coming years, contribute to the formation of an advanced diversified structure and increase the competitiveness.

In order to enhance control over the implementation of various programs, experts came up with an interesting initiative of developing and accelerated introduction of an automated computerized program of monitoring all stages of implementation and each item or event of the programs approved, ranging from the preparatory phase to full completion.

Being the main engine of the national economy, small business was in the spotlight of the discussions as well. This sector is seen by experts as the basis of any economic system if its strategic development is focused on the long term. This factor has been gaining relevance in the current tough conditions in the global economy. Therefore, Uzbekistan has been actively implementing programs on the support of small business and private entrepreneurship.

The participants comprehensively analyzed the effectiveness and productivity of ongoing work on ensuring a reliable protection of private property, small businesses and private enterprises, providing them with more freedom, and eliminating all obstacles and barriers to their rapid development.

The ongoing system-based measures have contributed to the establishment of nearly 15,200 new small businesses in the first half of 2015, which is 6.3% more YOY. Banks have allocated 6.4 trillion soums of loans for small businesses, or 1.3 times more YOY.

The progress was empowered by a clearly designed development strategy, with additional benefits and preferences for business and tax reduction as key points. Approved by the state’s leader this May, the program of measures on ensuring secure protection of private property, small business and private entrepreneurship, the removal of barriers to their rapid development was called to catalyze this work. It envisages specific measures to enhance the accountability of officials for obstructing or unlawful interference with business structures, liberalize the administrative and criminal legislation that regulates the entrepreneurial activity, further simplify the registration, permitting and licensing procedures that will facilitate the further development of private property as the dominant form in the republic.

Heads of administrations at all levels, concerned ministries, agencies and business associations were entrusted with implementation of specific measures on promoting and assisting small businesses and private enterprises in expanding the existing facilities and creation of new industries, networks of service facilities, and maintaining employment with the focus on graduates of vocational colleges given the specialties they get.

Members of the Government also entrusted the heads of the newly-created working committee to accelerate the development of draft laws and other legal acts, as envisaged by the program, in order to strengthen the safeguards for the protection of private property and enhance its priorities, as well as create the most favorable business environment and investment climate.

They noted that the volume of agricultural production has increased by 6.5% as a result of ongoing system-based measures on the further development and modernization of the agricultural sector, and the overall support of agricultural producers. The participants critically analyzed the outcomes of the harvesting campaign. Given the extreme weather conditions of the year, they pointed out to the need for integrated and urgent measures to mitigate the negative impact of weather on agricultural production, especially cotton, and ensure the smooth operation of economic sectors and social infrastructure.

(Source: «Uzbekistan Today» newspaper)


The volume of deposits in the banks of Uzbekistan for the first six months increased

A stable state of domestic banks, the growing confidence to them, as well as the growth of real incomes of the population have become a solid basis for the attraction of free funds of population and economic entities on deposits. In the reporting period, total deposits increased by 30.2%, and as on July 1, 2015 amounted to more than 31.5 trillion soums (currency rates of CB RU from 28.07.2015   1$= 2575.18 soums). This was stated at the enlarged meeting of the Board of the Central Bank of the Republic of Uzbekistan.

It was noted that in the reporting period in the structure of the financial services of banks the share was 87%, and this figure compared with the same period in 2014 increased by 1.3 times. It is a practical proof of the implementation of targeted measures to expand and improve the quality of banking services rendered to business entities and households, the reform of the banking sector as a whole.

It should be noted that special attention is paid to the further development of non-cash payments, which demonstrates the rapid growth of the number of issued plastic cards in circulation. More than 14.5 million cards are actively used in the Republic currently, and the number of installed terminals reached 166.1 thousand units.



Uzbekistan to complete construction of national highway by 2020

Uzbekistan will complete construction of national highway with total length of over 2,750 km by the end of 2019, according to the deputy chairperson of the Board of state joint stock company Uzavtoyol Shukhrat Nazarov.

He said that all roads in the result of modernization and construction of new areas from Andijan to Kungrad (from east to north) and from Samarkand to Termez (from center to south) will fully meet international standards. He said that travel time from north to east will decrease by 15-20% and will take 10-12 hours.

National highway of Uzbekistan has four directions to enter to neighboring states – via Beinau in north-west to Kazakhstan to Russia, Alat – in sourth-west to Iran, Termez –in south to Afghanistan and Andijan – in east in China, Nazarov said.

According to the plans Uzavtoyol, new highway with easy and short access to Russia and Eastern European countries in east via Osh-Kashgar road will be connected with high-speed highway, currently constructed in China along the Silk Road route.

In May 2009, the President of Uzbekistan approved a programme of construction of national highway of I category with the cost of US$3.44 billion. Within the programme, it is planned to construct four areas of automobile roads with the length of 2,306 km. The project is financed due to resources of the Government of Uzbekistan at the size of US$2.07 billion and foreign loans for US$1.37 billion.



List of documents, submitted to customs bodies, at export-import operations approved

Cabinet of Ministers of Uzbekistan with its resolution approved a list of documents, submitted to the state customs services, at export-import operations.

According to the resolution, the businesses should submit contract (agreement), registered at authorized bodies, customs cargo declaration, transport and goods (invoice) documentation at customs registration of exported goods.

At import operations, the importers should provide customs cargo declaration, export customs cargo declaration or other document, replacing it, which will allow to determine customs cost of the imported goods.

The importers should also provide transport and goods (invoice) documentation, as well as certificates of origin to the customs bodies.

The Government said that the customs bodies cannot demand additional documents from businesses at conducting foreign trade operations.


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