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August 27, 2014


August 27, 2014

free industrial economic zoneS. 2

Justified Risk. 2

ecology.. 3

Samarkand will host an international conference. 3


Maysky Discovery: Link to Byzantium.. 4





free industrial economic zoneS

Justified Risk

Each and every country in the world tries to create an attractive environment for doing business. There are various mechanisms ranging from the single value privileges and preferences for certain businesses, to large-scale tax exemption of entire industries. Experts say that in the present conditions, when the struggle for investments has turned global, developing countries have to use nonstandard approaches to stay ahead of their developed competitors. The vital thing is not to slip up, since the new does not always imply the successful. Uzbekistan has a good experience by creating the region’s first effective model of a free economic zone.

Six years after the launch of the first free economic zone in Uzbekistan, experts agree that the venture has been extremely successful. However, in 2008, when the project was under elaboration, views varied. Several foreign experts expressed doubts about the haste of this idea. It is fair, as it was the second year of raging global economic crisis, and 2009 was predicted to be a period of previously unexpected global recession.

In conditions when dozens of multinational companies went bankrupt, let alone smaller regional companies, it was difficult to expect a significant inflow of foreign investment. But the goal was just like that – it did not make sense to invest much money in building the infrastructure of a new economic zone for only a couple of enterprises. In order to make this model a success, it was necessary to attract a large inflow of foreign funds. Uzbekistan took a justified risk and gave a start to this unique project. This was the first initiative of this kind on the territory of the Central Asian region.

Late in 2008, the President signed a decree on the establishment of a free industrial and economic zone (FIEZ) in Navoi, which was a pilot ground for Uzbekistan to gain experience in attracting foreign investment and building partnerships with foreign companies. Domestic experts realized that in order to attract business, especially in such difficult economic conditions, it would require truly unprecedented favorable terms. So the enterprises in FIEZ were exempted from land tax, property tax, profit, improvement and development of social infrastructure taxes, single tax, mandatory contributions to the Republican Road Fund and Republican School Fund.

There was only one condition: an investor was required to invest a certain amount of funds in the development of production. For instance, investing from three to ten million euros a company is granted tax exemption for seven years, from ten to thirty million euros – an exemption for ten years, and those who invested more than thirty million euros were exempt from taxes for fifteen years. The state has assumed all costs for establishing transport and communication infrastructure, gas, power and water supply systems, which were considerable. Favorable conditions have attracted dozens of companies from Asian countries that have been less affected by the global economic crisis. FIEZ has turned into a stimulating factor for domestic businesses as well. Many local companies could not realize their interesting initiatives due to lack of experience and funds. However, the FIEZ has become a chance for them to attract strategic foreign partners and work together on promoting projects and developing new niches in the domestic and foreign markets.

To promptly address all the problems and issues it was decided to establish a Board of Directors in charge of registration of future members of economic activities in the zone and conclusion of land rental contracts and investment agreements with investors. The government of Uzbekistan is its major founder.

The territory for FIEZ was not a random choice. In addition to the advantageous geographical position in the heart of the country with its noticeable transportation advantages, the area had the necessary power capacity. An uninterrupted power supply to modern manufactures, as well as convenient and well-arranged transport and logistics system for the export of goods are the two most important factors for any investor. Therefore, Uzbekistan embarked on an integrated development of the territory. In the same 2008 the government signed an agreement with the Korean Air on the establishment of an international logistics hub on the basis of the Navoi Airport, as well as a special transportation company specializing in the carriage of goods by tractor and trailer. Their establishment has allowed the manufacturing companies in FIEZ easily transporting goods both domestically and to neighboring states.

Nowadays the hub is gaining momentum. It is connected by air bridges with many junctions and logistics centers in Eurasia, including Frankfurt, Incheon, Milan, Brussels, Dubai, New Delhi, Tianjin, Vienna, Hanoi and Zaragoza. For the six months of 2014 the volume of cargo through it has made up 14.2 thousand tons. With regard to electricity, the first combined-cycle power plant with capacity of 478 megawatts was put into operation at the Navoi Heat Power Plant in 2012. It is has enabled the increase of the power output by almost a half. A project on expanding the HPP capacity through the construction of the second CCP for 450 MW is currently under elaboration. Its launch is scheduled for the fourth quarter of 2017. The project will be financed through a soft loan of $332.6 million of Japan International Cooperation Agency, as well as $150 million loan of the Fund for Reconstruction and Development of Uzbekistan. Uzbekenergo SJC will allocate $45.8 million of its own funds. The total project cost will exceed $547,200,000.

The success of Navoi FIEZ has conditioned the establishment of another two similar free industrial zones: Angren and Jizzakh. In April 2012, President Islam Karimov signed a decree on the establishment of the Angren SIZ in the Tashkent region. It was established taking into account the requests of foreign investors urging for lower the threshold for companies wishing to build the capacities. As a result, investing from $300,000 to $3 million in Angren SIZ investors are exempt from tax payments for three years, from $3 million to $10 million – for five years, and more than $10 million – for seven years. By the end of 2015 under a special program the Uzbek government will allocate more than $59 million for the development of transport, industrial and engineering infrastructure in the zone.

Jizzakh SIZ, another industrial zone, was initiated in 2013. Preferential conditions there were the same as in the Angren special industrial zone. However, there were certain specific differences. Originally this area was created in close cooperation with our Chinese partners, who were ready to carry out dozens of technological projects there yet at the stage of its planning. Uzbek-Chinese investment forums were held in Beijing, Hangzhou, Suzhou and Shenyang in April 2013. They resulted in signing more than 50 documents on joint high-tech projects. The zone has a branch in the Sirdaryo Region. The country’s first production of cell phones under the brand UzTE was launched there. To ensure its effective development the government approved a special program on construction and reconstruction of sections of road and rail infrastructure, development of water supply systems, irrigation and drainage, as well as the upgrade of electricity and gas networks worth more than $48.3 million.

(Source: «Uzbekistan Today» newspaper)


Samarkand will host an international conference

In the period of September 9-13, Samarkand will host the II international conference on arid lands, the official website of the State Committee of the Republic of Uzbekistan for Nature Protection reported.

The main theme of the forum is innovation for sustainability and food security in arid and semi-arid areas.

The agenda included a number of issues such as climate, biodiversity, environmental services, technology, land and water management to combat desertification, agriculture on saline lands, the economic benefits of using dry areas and others.

The forum will present innovations in the field of natural, agricultural and social sciences, aimed at overcoming the problems of desertification and threats to food security in a changing climate.

One of the objectives of the event is the valuation of ecosystem services in arid areas, identifying opportunities for livestock development and improving people’s lives.



Maysky Discovery: Link to Byzantium

The land of Uzbekistan hides endless evidence of its ages-long and amazingly rich history. In early May 2013, the workers running excavations at the Maysky township in Tashkent province found a couple of gold items. These included fragments of a belt set, gold badges and plaques for clothes and harness as well as other fragments of gold items. The findings were transferred to the State Museum of the History of Uzbekistan under the Academy of Science of the Republic of Uzbekistan.

Apparently, the Maysky findings belong to the burial of a Byzantine noble or warrior. The gold elements of his belt set give out his origins as, according to multiple manuscripts, gold belts could belong only to wealthy individuals who occupied a prominent place in the state hierarchy or were among top rank commanders. Evidently, in the early Middle Age, belt sets also served as indicators of rank, origins, achievements and position of their owners. Procopius Caesarensis (circa 490-560), a Greek historian and writer, also wrote about the meaning of such belts and maintained that a common form of punishment for serious misconduct at the time was ‘the removal of belt and rank’.

The ancient Turkic people also used belts as an obligatory component of their outer clothes. Ordinary people used to wear the simplest belts, while only more affluent classes could afford more expensive leather belts with bronze

rivets. The high rank of a person could be seen not only in their choice of gold but also in the shape of gold elements of the set and in its overall composition. People who had belts with gold

rivets, buckles and plates played a special role in the society. Apparently, the number of plates was an indicator of the owner’s special accomplishment on the battlefield: the number of battles he fought, the number of enemy soldiers he killed and so on. At the same time there were special plates showing the rank which had a special shape and ornamentation indicating a particular position occupied by the owner.

A Byzantine gold coin, tremissis, was also among the Maysky finds. It can be dated back to the 6th century when there were three types of gold coin minted in Byzantium, namely solidus, semissis (a half of a solidus) and tremissis (a third of a solidus). On the front of the tremissis found at Maysky there is a bust of a beardless emperor in tiara, the royal headwear. The upper part of the body armour and a fragment of a shield with a figure of a rider can also be seen. There is a figure of Victoria, the goddess of victory, typical for the early Byzantine coins of the 5th-6th centuries, on the reverse.

Figures of beardless emperors were characteristic of the early Byzantine coins until the reign of Emperor Phocas (602-610). As early as in 602 the emperors of Byzantium were depicted with a beard. On front of the coin from Maysky we can see the emperor shown at a three quarter view to the right and without a beard. This detail dates the whole complex at the 6th century AD. discovery1

Local finds from Byzantium are extremely rare; last time they were added to the museum’s collection seventy years ago. Nevertheless, over the last three years the collections of the State Museum of History have received a range of unique items. A copper coin minted during the reign of first Emperor of Byzantium, Arcadius (395–408) was found at the Kanka settlement and transferred to the museum. In 2012 we received a gold bracteate of Emperor Anastasius’ reign (491–518) which was found at one of the private households in Surkhandarya province during excavations. Finally, there is this unique and invaluable treasure from Maysky. All these finds testify to cultural and historic links that were established between Central Asia and the Byzantine Empire in the 5th-6th centuries.

We know that beginning from the 6th-7th centuries the iconography of the Byzantine coins significantly changes and the traditional figure of Victoria on the avers of the solid is replaced with a figure of an angel. It is believed that starting from that time imperial victories were ascribed to the influence of one the seven archangels, Michael, the commander of the divine forces, the patron and the angel protector of the people. A figure of such an angel identical to the angels from the early Byzantine coins can be seen on the belt buckles form the Maysky treasure which also confirms the date inferred from the coin, i.e. the 6th century. Both the belt itself and the figures of angels were believed to protect their owner from danger. Interestingly, this has been the first example of such items found not only in Uzbekistan, but in the whole of Central Asia.

There is huge amount of work lying ahead to date other items and to identify their function. It is a long process involving cleaning and restoration of the materials as most of the items were damaged in the course of their unprofessional extraction from the ground. These include a range of astonishingly delicate partly gilded silver items, barbarically extracted from the earth fragments of a coating with the figures of birds (possibly peacock) and a lavish floral ornamentation. Other gold items have been found at Maysky, too, including a piece of twisted wire, probably used to make a torc (kind of a necklace). Coins from Byzantium, Chach, Khoresm and Sogd always showed their rulers wearing a torc, the invariable attribute of royal power.


The items from the Mayaky treasure are mostly of Byzantine make; however there are some details that are similar to the finds from different Altay barrows. Scholars date them back to the time of the First Turkic Kaganate (5th-6th centuries). According to historic sources, that was the time when audacious merchants from Byzantium and Sogd were looking for different ways of trading and bargaining for deals within the framework of the Turkic Kaganate.

Judging by the dating of the Maysky treasure, the 6th century was a significant period, a dark and dangerous time. Who was the owner of the Byzantine belt with angels and tremisses with a Byzantine emperor and how he died will forever remain a mystery to us as there were no archaeologists at the excavation. He could have been one Byzantium’s envoys but it is also possible that the gold belt, the clothes with gold badges, the harness decorated with gold rivets and other gold items are just a part of robbers’ booty that has mysteriously survived to our days…

(Source: «Uzbekistan airways» magazine)

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