Development trends in the fruit-and-vegetable sector of Uzbekistan: cultivation and export 3
uzbekistan: Job Creation and Employment Program… 6
Major, Constructive, Effective Measures to Create Jobs. 6
Uzbek Market Welcomes Investors. 10
economy
In the next few years, the light industry of Uzbekistan will carry out more than 100 new projects that would bring it into new export markets
The new initiatives will be built on the cooperation with foreign companies and launch of vertically integrated full cycle complexes.
The domestic light industry represents a vivid example of dynamic development over the years of independence. Its companies have made significant progress and entered a new stage of development owing to favorable conditions and preferences, and strong legislative basis.
There is a simple example: in 1991, the volume of domestic processing of cotton fiber was only 7%, while in 2014 it exceeded 35%. To date, the share of the industry in GDP has reached 3.8%, industrial production – 26.2%, production of non-food consumer goods – over 44%.
The effective policy of attracting foreign investment and technologies, modernization, technical and technological extension of production, development of small business and entrepreneurship on the basis of domestic and international experience is the key to such a high production performance. As a result, over $2.2 billion have been invested in the industry over the last 20 years, and more than 180 big investment projects were implemented. Light industry enterprises employ more than 70,000 people.
The establishment of a new joint venture of Indorama Kokand Textile on the basis of Kokand Textile Mill ranks among the most remarkable recent initiatives. The project cost exceeded $110 million and production capacity – 29,000 tons of yarn per year. The foundation of a manufacture of 12,000 tons of cotton yarn per year in the Khorezm region by Uzteks group of companies and Swiss Capital Company (Switzerland), worth more than $ 50 million, is seen as an equally ambitious project.
To date, the production capacity of Uzbekengilsanoat enterprises has reached 450,000 tons in spinning, 296 million square meters of fabric in weaving, 90,000 tons of knitted fabric, and 270.2 million knitwear articles in sewing and knitting.
The introduction of high-performance advanced technologies in the industry has contributed in the increase of exports. Over the years of independence, the rate has grown by 120 times, and reached $1 billion in 2014, against $7 million in 1991. The products are exported to 50 countries.
On the threshold of the 24th anniversary of independence O’zbekyengilsanoat has commissioned 18 new industrial plants worth $99 million with the export capacity of $43.1 million. They have provided more than a thousand jobs.
Until 2020, O’zbekyengilsanoat is planning to increase the industrial production: cotton yarn – by 2.5 times, finished fabric – 2.8 times, silk fabrics – by 2.7 times, non-woven fabrics – 1.5 times , knitted fabric – 2.7 times. The manufacture of finished articles with high added value has been growing, including garments by 3.2 times, knitwear – by 2.1 times, the production of raw silk – by 2.1 times.
The volume of textile production was 85.63 million square meters in 2011, while in 2020 the rate is estimated to reach 459.2 million square meters.
The other priorities of the company come to the establishment new manufacture of artificial and synthetic fiber and yarn jointly with O’zkimyosanoat as part of the development of the clothing, garment and knitwear industry.
(Source: «Uzbekistan Today» newspaper)
Development trends in the fruit-and-vegetable sector of Uzbekistan: cultivation and export
The cultivation of fruit and vegetables occupies an important place in the Republic’s agriculture. Uzbek fruit and vegetables are renowned for their excellent taste and the abundance of vitamins. Uzbekistan has very favourable natural conditions for cultivation of the most valuable varieties of thermophilic grapes and fruits, including apricots, peaches, pomegranates, figs, cherries, apples, pears, almonds, quinces, plums etc. The exclusive environmental conditions, plus a highly fertile soil and plenty of warmth and sunshine, allow domestic peasants to cultivate high quality and ecologically clean farm produce. Since a great number of orchards and vineyards are situated in Uzbekistan, the country can rightfully be named “the garden of Central Asia”.
Uzbekistan has been famed for excellent varieties of fruit from the time out of mind. In the oases of Samarkand, Fergana, Shakhrisabz, Khorezm, Bukhara and Tashkent, which startled those travelling along the Great Silk Road by a high level of agriculture and land-tenure culture, an impressive diversity of fruit variables was created by indigenous selectionists in the space of many centuries. All of them differ in form, size, colour of fruits, tinges of aroma and early ripening rates.
In 2015, Uzbekistan plans to grow more than 18 million tons of fruit and vegetables, including vegetables – 53 per cent of the total volume of farm produce, fruit – 15 per cent, potato – 14 per cent, melons, water-melons and gourds – 10 per cent and grapes – 8 per cent.
At the same time, some 80 per cent of the total volume of fruit and vegetables cultivated in the country is enough to satiate its population’s demand for this sort of produce. The remaining portion of locally-grown farm produce is subject to industrial processing (14 per cent), exported (30 per cent) and used for seed-growing purposes.
Thanks to overall support and assistance given to indigenous farmers and exporters of fruit and vegetables on the part of the state, export volumes of fresh and processed farm produce tend to grow from year to year.
Exports of fruit and vegetables from Uzbekistan are estimated at US $1.3-1.5 billion. The Uzbek farm produce is exported to 40-plus countries.
What’s more, in 2014, the geography of fruit-and-vegetables exports has been expanded thanks to the fact that Uzbek exporters managed to penetrate into additional markets, such as Italy (apricot stones), the Czech Republic (dried apricots, peanuts), Malaysia (mung bean), Singapore (sweet cherries and fresh apricots) and Lebanon (walnuts).
It should be accentuated at this point that small and private businesses are taking active part in the cultivation of fruit and vegetables in Uzbekistan. Accounting for more than 9 per cent of the Republic’s overall fruit-and-vegetables exports and some 50 per cent of their own total export volumes, they play a significant role not only in the agrarian sector, but in the national economy as a whole.
Over the past few years, the country’s farming has been developing at a rapid pace, owing to such essential factors as the structural reforms carried out across all industries, an increase in the number of local farms and dekhkan establishments and the intensity of their production activity, provision of credit lines on favorable terms, timely financial backing, inculcation of advanced high-tech technologies as well as to the increased efficiency, with which material-technical resources are utilized nationwide.
Let it be observed that Uzbekistan boasts a stupendous resource potential in the fruit-and-vegetables -growing sector, which enables it to annually cultivate far larger volumes of farm produce than those we witness to date. This is clearly illustrated by the dynamics of production changes in the sector between 2010 and 2014.
Source: data from the State Statistics Committee of the Republic of Uzbekistan.
In 2014, the gross yield of fruit and vegetables rose by 9.2 per cent, compared with the similar indicator a year ago. The increase can be attributed to the powerful backing the Uzbek farmers receive from the state, which exerts every effort to encourage them to introduce advanced cultivation methods aimed at raising the crop capacity and utilizing water resources in the most rational way.
Taking into consideration the country’s geographical position and climatic conditions, fruit and vegetables are mainly grown in the following provinces: Samarkand province (16.8 per cent of the total volume of farm produce cultivated in the Republic), Tashkent province (15.5 per cent), Andijan province (12.9 per cent), Fergana province (8.7 per cent), Surkhandarya province (8.1 per cent), Namangan province (7.1. per cent) and Bukhara province (6.8 per cent).
Along with an increase in production volumes of fruit and vegetables, the last few years have seen a tangible expansion of industrial facilities specializing in their processing (drying, preserving etc.). In addition, indigenous farmers have succeeded in augmenting export volumes of fruit and vegetables, proceeding from production volumes and home consumption rates.
Source: data from the State Statistics Committee of the Republic of Uzbekistan.
In 2010, the exportation of 690.5 thou tons of fresh and dried fruits, vegetables and legumes fetched US $1.2 billion in profits. In 2014, the country exported 611.9 thou tons of fresh and dried fruits, vegetables and legumes and received US $1.5 billion in profits, a 25 per cent rise.
Such an increase in the amount of exchange receipts from farm-produce exports can be explained by higher demand for Uzbek fruit and vegetables in foreign markets, as well as by an increase in prices for such produce in the international marketplace.
In 2014, over 74 per cent (or 452.6 thou tons) in the structure of fruit-and-vegetables exports was accounted for by fresh farm produce, legumes – 13.4 per cent (82.3 thou tons) and dried fruits – 12.6 per cent (77.0 thou tons).
The following varieties of farm produce represent the largest volumes of exports: grapes, melons, tomatoes, pomegranates, greens, cabbage, apricots, kidney beans, peaches, sweet cherries, cucumbers, mung beans, raisins, walnuts and others.
The export of the afore-cited varieties of farm produce generates US $1.3 billion worth of profit, or 85 per cent of the total value of such exports in 2014.
One can observe an upward trend in the expansion of geography of farm-produce exports from Uzbekistan. In 2013, domestically-grown fruit and vegetables were exported to 39 foreign countries, last year this figure increased to 43.
As far as the farm produce is concerned, the Republic’s main trading partners include the Russian Federation, Kazakhstan, Afghanistan, Iran, China, Turkey, the UAE, Azerbaijan, India, Iraq etc.
The large-scale reforms carried out in the Republic, the further development of farming and the creation in the countryside of appropriate infrastructure make it possible to substantially augment production volumes of agricultural output, which are sufficient enough not only to satiate the home market, but also to accomplish export deliveries to international markets.
At the same time, while increasing the production of fruit and vegetables, small businesses, private entrepreneurs, farms and agro-firms are taking active steps in a move to further intensify the processing of farm produce on the basis of modern mini-technologies and compact equipment.
A pre-eminent role on this front is played by the International Specialized Exhibition-Fair of Mini-Technologies and Compact Equipment, Uzbekistan Agrominitech Expo, an event held in the country on an annual basis.
Taking part in this event, the indigenous entrepreneurs are given the opportunity to learn much about the latest mini-technologies and compact equipment for cultivation and processing of farm produce from the world’s leading manufacturers.
Another engine that powers the industry’s intensification endeavors is the Program of measures to develop and strengthen the material-technical base of storage facilities for fruit and vegetables in the period 2011-2015. A given document was in keeping with the April 7th, 2011 Resolution of the Cabinet of Ministers of the Republic of Uzbekistan (No 105).
The Program stipulates the construction of new refrigerator chambers for the storage of fruit and vegetables and reconstruction of existing similar facilities, whose total capacity reaches 120.8 thou tons.
It should be noted that in accordance with the governmental Resolution mentioned above, refrigerator and warehouse equipment, components and materials, as well as loading-unloading machines, which are not produced domestically and that’s why imported from abroad, are exempt from customs duties (save for payments charged for customs registration) till January 1st, 2016.
Organizations participating in the Program’s realization are also granted exemption from property tax on capital assets intended for the storage of fruit and vegetables in refrigerator chambers. This privilege is valid within three years starting from the date the storage facilities are put into operation.
It goes without saying that the reforms taking place across all sectors of the national economy, including agriculture, will be conducive to a further rise in the export potential of Uzbekistan.
(Source: «Business partner.uz» newspaper)
uzbekistan: Job Creation and Employment Program
Major, Constructive, Effective Measures to Create Jobs
Providing jobs ranks among the key priorities of Uzbekistan’s socio-economic development and is a pivotal condition for improving the quality of people’s life. Every year Uzbekistan reports on thousands of new jobs created through the establishment of new facilities, upgrade, modernization and efficient use of existing production facilities, accelerated development of small business, housing construction, capacity building of home-based forms of work, as well as rehabilitation of inactive enterprises.
In recent years, the Cabinet of Ministers has been annually developing a Job Creation and Employment Program, which is afterwards approved by parliament. MPs have taken its implementation under special control. Every year it is streamlined taking into consideration the proposals of political party factions, experts and specialists of various fields. Thus, the document reflects the interests of various segments of the population and the general public.
The program aims at the implementation of integrated and interrelated measures on employment through the involvement of capacity of areas and sectors of the economy, rational use of human resources, taking into account demographic factors and structural changes in the economy.
HOW IT WORKS
Job Creation and Employment Program for 2015 has envisaged employment of 987,500 people. The document attaches importance to the employment of graduates, women, people with disabilities and other categories of people in need of social support.
748,000 new jobs have been created in the first nine months of 2015, including over 451,000 (60.3%) jobs in rural areas. The estimated rates will most likely be met by the end of the year.
Over 163,000 jobs have been provided through the implementation of targeted programs in industry, services, agriculture (livestock, poultry farming, horticulture, fish farming, beekeeping, horticulture, sericulture, viticulture).
The operation of special industrial zones in Navoi, Tashkent and Jizzakh regions is seen as a remarkable factor for employment, as they ensure the commissioning of new facilities and creation of additional jobs in existing industries, as well as establishment of conjugated jobs in the chain of interbranch relations like transport, construction, social infrastructure.
O’zbekyengilsanoat, O’zkimyosanoat, Uzbekneftegaz, Uzbektourism, O’zpharmsanoat, O’zavtosanoat companies, the Association of Food Industry Companies and others have been successfully creating jobs through the commissioning of new facilities, and at existing enterprises.
For example, being the driving force for the entire industry of Uzbekistan, the automotive industry gives a new impetus to the development of related industries and sustainable employment growth. The sector is represented by a range of enterprises and organizations within the framework of O’zavtosanoat joint-stock company, providing more than 27,000 jobs. The company merges automotive enterprises and manufacturers of consumer goods, operated by advanced equipment at the highest world standards, which can be flexibly and quickly reset into the production of new kinds of products.
585,000 people have been employed by small businesses, farms and small economies, home-based enterprises. The sector has been dominating in terms of job creation in all regions, particularly in the capital, where the share of micro and small enterprises makes up 74% of the total population provided with employment, as well as in Tashkent, Surkhandarya, Bukhara regions and Karakalpakstan.
Strong loan support for small businesses has been underway in the current year as well. Commercial banks have allocated 8.5 trillion soums for this purpose (currency rates of CB RU from 10.11.2015 1$= 2706.59 soums). Preferential loans are mainly allocated for the projects that envisage creation of jobs in remote rural areas.
A relatively low fixed single tax rate for small businesses and micro-firms, which comes to 5% in industry and 10% in trade and public catering companies, ranks among significant motivations for creation of jobs in the sector.
Powered by the National Bank, the Fund for Support of Exports of Small and Private Businesses and its regional branches in regions are seen as another important factor. They are exempt from payment of all taxes, levies, duties and compulsory contributions to state funds, except for single social payment, by January 1, 2019.
Development of all forms of home-based work, including cooperation with companies on labor contracts, craftsmanship and family entrepreneurship has contributed to the employment of more than 200,000 unemployed, predominantly women, people with disabilities and other socially vulnerable categories of the population.
The law on the family business has played an important role in this process, for it has provided a legal foundation for the development of family business as the key form of small business and private entrepreneurship, and creation of jobs. It is worth noting that family enterprises are subject to all the privileges, preferences and guarantees provided for small businesses by the legislation. Flexible working schedule and divided labor appears quite real in this case unlike other forms of activities. This allows partial involvement in the production process of commonly unemployed categories of the population like women with little children.
A significant part of home-based jobs has been organized in the regions that are traditionally considered as centers of national craftsmanship: Namangan, Ferghana, Kashkadarya, Samarkand, Khorezm, Bukhara regions.
Job fairs have become an effective way of promoting employment, as they aim at introducing job seekers to vacancies, providing them with detailed information on the labor market, the companies that seek for workers, employment opportunities, and retraining based on the vacancies available. Over 900 job fairs in the current year have been attended by 44,000 organizations and enterprises. Dozens thousands of people have been provided with job placement.
COLLEGE FOLLOWED BY JOB
Employment of graduates of vocational colleges and higher educational institutions has been a priority of all employment related activities. The compulsory continuous 12-year education allows students acquiring professional skills in the most promising sectors of the economy.
The implementation of targeted measures on the employment of graduates of educational institutions with the focus on vocational colleges, including attachment of students of graduate courses in specific enterprises, tracking the observance of tripartite agreements between employers, vocational colleges, graduates and their parents, ranks among the main thrusts of the Job Creation and Employment Program for 2015.
The list of specialties is corrected every year on the basis of the Program with an eye to applications of certain enterprises, allowing training specialists in demand, and ensuring employment of graduates in line with their specialty. Selection of employment places is carried out during the school year. Many students, who demonstrate their best qualities in the course of practical training at the enterprises, are invited by employers after graduation. The job fairs that were organized specifically for young specialists have been assigned a special part.
College graduates have been increasingly practicing open days for starting their own business as a new way of employment. The initiative of the Ministry of Labor and Social Protection involves commercial banks, district administrations, local community committees, branches of the Women’s Committee and the Chamber of Trade and Industry of Uzbekistan.
There are stands with samples of equipment for mini-bakeries, sewing and weaving manufactures, sets for opening photo salons, cafes and beauty salons, mobile car washes, tools for provision of construction and repair services, and others in courtyards of each college. Having seen and touched the samples with their own hands, young people could choose equipment and tools suitable for doing business in a certain field. The coordinated interaction of state and public organizations that are responsible for the issue of registration, licensing and approving documents is another reason why the initiative is popular. Having decided about the area of activity, a graduate had an opportunity to undergo all the registration and licensing procedures and obtain the documents he needed on the spot. Commercial banks offered loans for the purchase of equipment and tools at preferential interest rates from 3% to 9%, depending on the business area and amount of the loan.
Recent years have shown an increasing demand for IT and computer technology specialists, hotel management and service, construction and other specialists.
“This year, we have graduated more than 350 specialists in information and communications systems, repair of computers and computer systems, accounting,” said the Deputy Director of Mirobod Vocational College of Computer Technologies Shohruh Bozorboyev. “Nearly 80% of them already work in Sharq Publishing Company, within the system of O’zbekiston Pochtasi, Photon, O’zLITIneftgaz, Toshkentdonmahsulotlari, and many others. Tripartite agreements were concluded yet during the practical training. More than 20% of the graduates decided to continue their study in universities.”
Many graduates of vocational colleges of the country have been successfully running farming and small economy management, powered by knowledge and skills they had acquired during their study.
For example, supported by regional administrations of secondary special and vocational education, labor and social protection of the population, the Kamolot Youth Movement has developed a specialized program on the involvement of college graduates in the establishment of small economies in Syrdarya region. Young farmers will be provided with plots of land with ready irrigation systems as well as with concessional loans.
Representatives of the municipality and all stakeholders conducted meetings and interviews with students and their parents in educational institutions. As a result, 1,400 graduates expressed a desire to open a small business, and many of them applied for land. Based on a resolution of local authorities, they were granted over 270 hectares of fertile lands, and assisted in primary agronomic works. This has become a reference point in the working experience for many enthusiastic entrepreneurs. They received their first employment records. Now the young farmers grow corn, melons, vegetables, sunflower and sesame seeds, fruit tree saplings on the allocated lands.
“I have planted cucumbers at the advice of my father,” says a graduate of Gulbahor Vocational College of Agriculture in Khavast district of Syrdarya region, Zuhriddin Karimov. “The harvest was excellent; we gathered it with our whole family.”
Given the demand for skilled manpower in the agricultural sector, another program on practical training was developed for the students of vocational colleges in local tractor fleets with the further employment of successful graduates. The program clearly defines the rights and responsibilities, the mission of educational institutions, local Agrotehservis companies and other parties that are interested in building machine operating skills in students. Young people are attached to production foremen and experienced machine operators.
The measures taken contributed to the employment of over 600,000 graduates of educational institutions last year alone.
WITH THE SUPPORT OF PUBLIC ORGANIZATIONS
Public organizations and civil society institutions have been actively involved in the employment of the population along with government agencies.
MPs have taken the implementation of Job Creation and Employment Program under special control. They regularly hold related meetings, and study the state of affairs in regions.
For example, during a parliamentary hearing on September 30, 2015, they scrutinized detailed information on the state of job creation and employment due to the introduction of new facilities in 2015, upgrade, modernization and efficient use of existing production facilities, mainly in industry, service sector, expansion of infrastructure, communications and housing construction, accelerated development of small businesses, including individual and family businesses, farming enterprises, capacity building of home-based work, and rehabilitation of inactive enterprises.
As noted by MPs, the number of employees in the field of individual entrepreneurship has increased significantly owing to the incentives that had been introduced in accordance with the Presidential Decree on ensuring a reliable protection of private property, small business and private entrepreneurship, and elimination of barriers to their rapid development of May 15, 2015. Meanwhile, there is still a need to intensify efforts in creating jobs and employment in certain regions.
As proposed by some factions, the local authorities, administrations and their working commissions will monthly analyze the course of implementation of regional employment programs and take respective measures based on the approved target lists and network diagrams. It is envisaged to provide jobs to the unemployed, as well as free advice on labor law, and help with choosing jobs for self-employment. It is expected that this will make the monitoring of program’s implementation more effective in online mode, and take additional measures to ensure its unconditional implementation.
The role of citizens’ assemblies in this context is remarkable. Employment of the population with the focus on women and young people, and their involvement in entrepreneurship and family business rank among the directions of their activity.
Labor inspectors organize conversations and legal advice in citizens’ assemblies together with community activists, as well as vacancy fairs. Such an activity has contributed to employment of 230,000 residents of citizens’ assemblies.
… Large-scale and effective work on the employment of the population has been under way. In order to fulfill the mission, it is envisaged to further enhance the role of small business, engage young people in entrepreneurial activity in accordance with the legislative acts on the creation of optimal business environment, and expand the entrepreneurs’ access to loan and raw material resources.
(Source: «Uzbekistan Today» newspaper)
investments
Uzbek Market Welcomes Investors
Two leading Russian companies are intending to significantly increase their presence in the Uzbek market in the next few years. Asking to the UT reporter’s question of why now, their representatives said they have become convinced in the effectiveness of the economic model of Uzbekistan, and its favorable climate for investors.
Russia’s largest manufacturer of mining equipment Volgaburmash is intending to double its presence in the Uzbek market. The company supplies products worth $4-5 million to Uzbekistan annually. Next year the rate is expected to grow to $10-15 million.
The company supplies Uzbekistan with drill bits for blast holes, ore and hydrocarbon mining. Last year, it delivered more than 3,500 drill bits of varied sizes.
“We have an interest in the Uzbek market for its impressive potential. Previously, we worked through intermediaries, while now we intend to establish direct contacts. We are planning to hold direct talks with the major companies of the sector like Navoi and Almalyk Mining and Smelting Plants. Our equipment has a number of advantages against its Chinese counterparts, so I believe, it will be interesting for the Uzbek side,” commented the company’s representative for UT.
The Russian automotive GAZ Group is the second company. It is currently negotiating on the establishment of its assembly facilities in Uzbekistan. The sides have exchanged information on this issue. However, they have not yet reached the point of signing documents.
At the same time, the Russian side has expressed its expectations from the cooperation. They come to assembly of light commercial vehicles and localization of production of bus carcass.
Today, the company takes one of the leading positions in the segment of suburban transport in Uzbekistan, as well as fixed-run taxi carriages in Tashkent. In 2014, the company delivered more than 1,000 items of equipment of various kinds, dominated by passenger transportation means. They are in high demand in rural areas and small towns with small passenger flow, having less capacity and more dynamics.
(Source: «Uzbekistan Today» newspaper)
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