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May 7, 2015


May 7, 2015

uzbek_digesteconomy.. 2

Share of small business in GDP of Uzbekistan grows to 41.7%.. 2

Uzbekistan renounces government corporations. 3


UZEX registers deals for 2 trln. soums in 1Q.. 4

Society.. 5

Civil Society: Current Stage and Prospects of Development 5







Share of small business in GDP of Uzbekistan grows to 41.7%

Share of small businesses in GDP of Uzbekistan grew from 41% in the first quarter of 2014 to 41.7% in January-March 2015.

Over 8,000 new small businesses were created in Uzbekistan in the first quarter of 2015, which grew by 10.2% more compared to the same period of 2014, the Ministry of Economy and State Statistics Committee of Uzbekistan said.

Largest number of enterprises was created in industry and other production spheres (37.7% from total number), construction (11.5%), as well as trade and catering (29.3%).

Within the privatization programme for 2015-2016, the private owners bought 55 state assets for 28.3 billion soums, including 13 objects on zero redemption price with investment obligation of 9.7 billion soums. At the same time, private businesses bought 80 unused areas and objects in the reporting period (currency rates of CB RU from 07.05.2015   1$= 2517.80 soums).

In the first quarter, small businesses received loans for 2.8 trillion soums, including over 590 billion soums of microloans in the first quarter of 2015, which rose 1.3 times compared to 2014. The small businesses used credit lines of international financial institutions, allocated to development of small businesses, at the size of US$38.3 million.

At the same time, Fund for financing preparation of project documentations on investment projects under the Uzbekistan Banking Association financed 14 projects for over 10 billion soums.

Over 34,200 small businesses or 98.3% of all participants of public procurement participated in the public procurement in the reporting period. The small businesses increased supply of products by over 4 times within the public procurement.

The volume of public procurement from small businesses made up 77.9 billion soums or 99.6% of total procurement. Introduction of electronic trades on public procurement saved budget resources at the size of 22 billion soums or 21.9% of budget resources, allocated for this goal.

Simplification of mechanisms of access to goods and resources helped small businesses to increase realization of products of small businesses via exchange trades by 1.5 times. The volume of purchased goods from small businesses via exchange rose by 1.3 times.

Bureau for assisting of export products provided consulting services to 318 enterprises on promotion of their goods to external markets. At the same time, 29 international agreements in standardization, metrology, certification, accreditation, export of products and introduction of international and country requirements.

Besides, Fund for supporting of exports of small businesses and private entrepreneurship provided assistance to 315 businesses in export of their products for US$220.4 million. The fund provided assistance to 36 enterprises in search of foreign buyers and signing of export contracts for US$2.5 million.

In the first quarter of 2015, small and private businesses exported products for over US$560 million to abroad, of which US$217.3 million – via specialized foreign trade company Uztadbirkorexport.

Share of small and private businesses in GDP reached 41.7% in the first quarter of 2015 (41% in 1Q 2014), in industry – 29.8% (26.8%), paid services – 48.4% (42.7%) and employment – 76.8% (76.4%).

(Source: )


Uzbekistan renounces government corporations

No business, even having most advanced equipment and skilled staff, is capable to operate effectively without a well-built system based on international standards. In the near future Uzbekistan intends to dramatically change the existing approaches to corporate governance, focusing on the efficient use of production, investment, logistical, financial and human resources.

A range of measures adopted last week by President of Uzbekistan is to become a key to open the door for companies into the future. Experts predict that some of them will be extremely unpopular in some ‘stagnant’ managers of domestic enterprises who are not ready to streamline with the realities of the time. Meanwhile, the real sector of the economy of Uzbekistan might be short of a significant part of foreign investment and lose its share both in external and domestic markets in the near future if the measures are not taken now.

It is true that the level of corporate governance in Uzbek companies is still far behind their competitors in developed countries; however, there is a positive trend. Some 10-15 years ago, the term ‘corporate governance’ sounded outlandish for the domestic economy. It was a tough challenge for the young republic to immediately shift to a freely regulated market after it had completely changed its economic structure. Therefore, the government designed a special program of phased transition, with large-scale privatization of state assets, establishment of joint-stock companies and private enterprises in the first stage.

Today, the domestic companies are shifting to a new stage: economic growth motivates them for accessing foreign markets, and therefore, scaling up their output by channeling investments in the upgrade and technological extension. These objectives seem unfeasible without building a competent system of distribution of rights and duties among staff, without regulations and procedures of decision-making, in a word, without a system of corporate governance.

A monitoring showed that the country’s 364 joint stock companies are not able to meet the challenges of the time, and are subject to elimination or reorganization by October 1, 2015. To radically change the situation in the rest of the companies, experts have developed a standard organizational scheme of a joint stock company guided by the thorough study of the governance system in the biggest international companies. All domestic joint stock companies should bring their structure in line with the scheme by the end of July.

Heads of companies with the state share will have to be certified on the knowledge of modern technologies and principles of corporate governance, management and marketing, information and communication technologies, and their application in the production management system. Upon the results of assessment, the vacant post will be offered to progressive, highly qualified executives meeting modern requirements, as well as foreign managers. As of June, the decision on the appointment of the head of a company’s executive body will be made on a competitive basis.

In order to attract the progressive foreign specialists to domestic enterprises it is planned to provide them with certain tax exemptions. For example, joint stock companies are exempt from paying the single social payment from the payroll of foreign workers involved in managerial staff, and revenues of foreign experts are exempt from income and profit tax at the source, as well as mandatory insurance payments of citizens in the off-budget Pension Fund under the Ministry of Finance.

A Research and Education Center of Corporate Governance, which should replace the abolished High School of Business, is seen to become a pillar of the new system. It will be established with the involvement of the leading German educational institutions.

The new center will provide a methodical platform for the introduction of modern organizational forms and practices of corporate governance, as well as deal with training and advanced training of related managerial staff in accordance with international requirements and standards. President Islam Karimov entrusted the government with the adoption of a special document by the end of May 2015 on the organization of the center’s activities, and assignment of specific tasks, functions, structure, and admission quota for students, as well as the measures that would ensure the effective operation of the center.

By August 1, 2015 it is planned to develop and approve the Corporate Governance Code. The document will be developed by the Commission on Ensuring Effective Operation of Joint Stock Companies and Streamlining the Corporate Governance System in conjunction with related ministries and agencies. It should envisage recommendations on implementation of best practices in corporate governance, build a development strategy and set long-term objectives, establish internal control system and mechanisms for effective interaction of the executive body with shareholders and investors. The document will define the standard organizational structure of joint-stock companies taking into account their scale, industry specifics and development thrusts, as well as require from them publishing information in line with international audit and financial reporting standards.

As of July 1, 2015, Uzbekistan will ban using the word ‘state’ in the names of joint-stock and other business entities, regardless of the share of the state in their charter capital. Besides, the decision on the appointment of the head of the executive body of a company will be naturally made on a competitive basis with the involvement of foreign managers. In case if shareholders, including minority shareholders, claim to the Economic Court of the violation of their legitimate rights and interests, they will be granted with deferral of payment of the state duty, with subsequent recovery from the guilty party.

The new measures are expected to simplify access to international markets and foreign investment. They imply the increase in the investment attractiveness of the business, simplified access to loan capital, as well as acquiring the status of credible investor. With this purpose, within 2015-2018, the Uzbek joint-stock companies will take on the annual publishing of financial statements and conduct of external audit in accordance with International Standards on Auditing and International Financial Reporting Standards. By July 1, 2015, the Commission on Ensuring Effective Operation of Joint Stock Companies and Streamlining the Corporate Governance System should approve the schedule of publication of annual financial statements of joint stock companies.

(Source: «Uzbekistan Today» newspaper)



UZEX registers deals for 2 trln. soums in 1Q

All trade platforms of the Uzbekistan Commodity Exchange (UZEX) recorded deals for 2.01 trillion soums in the first quarter of 2015. It was underlined at expanded session of the board of the UZEX.

According to the press service of the UZEX, goods for 1.6 trillion soums were realized via exchange trades and their share in trade turnover fell from 84.5% to 80.6%, which is connected with the growth of figures at other platforms (currency rates of CB RU from 07.05.2015   1$= 2517.80 soums).

In particular, the growth was registered at fair trades, public and corporate procurement platforms. The fair trade recorded highest growth rate – 32.2% or to 231.1 billion soums.

Expansion of access to private businesses to raw materials allowed to increase their activities in exchange, fair and auction trades. In the first quarter of 2015, the businesses purchased goods for 1.1 trillion soums, which rose by 25.5% year-on-year.

They also realized own products for 401.4 billion soums in the reporting period, which rose by 46.9% year-on-year. Share of the volume of recorded deals with businesses in total volume exchange turnover made up 75.2% in January-March 2015 compared to 58.2% in the same period of 2014. The growth of deals with participation of private entrepreneurs registered in all regions of Uzbekistan.

The volume of deals at public procurement platform D-xarid grew up to 78.3 billion soums or by 18.6% year-on-year, while the saved budget resources made up 22 billion soums, which rose by 22.5% year-on-year. Share of small businesses in supply of goods (works, services) on public procurement via electronic auction trades reached over 99% from number of total deals and total sum of recorded deals.

The volume of deals at corporate procurement E-xarid rose by 20.1% to 80.7 billion soums. At the same time, it helped to save financial resources of companies for 18.4 billion soums in the first quarter of 2015 against 15.6 billion soums in the first quarter of 2014. Share of small businesses in supply of goods (work, services) on corporate procurement reached 97%.

(Source: )



Civil Society: Current Stage and Prospects of Development

The capital hosted the annual conference of the Independent Institute for Monitoring the Formation of Civil Society (IIMFCS) devoted to the quantitative and qualitative changes in the development of civil society in Uzbekistan.

The conference was attended by members of the Parliament, representatives of public and government organizations, research and educational institutions, experts from foreign and international organizations (UNDP, the EU delegation, OSCE, USAID missions, the NDI, the NGO ‘Regional Dialogue’, the fund named after F. Ebert and others), as well as the media (total about 150 people).

The Independent Institute for monitoring the formation of civil society plays an important role in the development of further measures to stimulate the activity of public organizations and their participation in the implementation of the most important components of government programs, development of social partnerships in the country. The deep studies carried out by its staff in identifying the real problems of the development of civil society, analysis of the structural and qualitative changes in the society, the legal framework in this area, the study of foreign experience are becoming the basis for the development of further measures to build a strong civil society.

The results of the annual monitoring of the state of civil society in Uzbekistan in 2014 were presented to the participants of the conference. Specialists of IIMFCS carefully examined the trends and dynamics of non-profit organizations, public foundations, and trade unions in the system of democratic institutions, the media, political parties, and local authorities.

“During the years of independence, the country implemented comprehensive measures aimed at establishing the organizational and legal conditions for the formation of civil society,” said director of the Independent Institute for monitoring the formation of civil society G. Abdukarimov. “Today they are an important factor in protecting the rights and interests of the people, and enhance their social activity and legal culture, providing a balance of interests in the society. The present stage of social development is characterized by the increasing role of democratic institutions in all spheres of life: economics, politics, spirituality, etc.”

The democratic reform is aimed at building a legal state and civil society. Strong organizational, legal and institutional mechanisms have been formed for the development of civil institutions.

The participants praised the measures implemented for further deepening democratic reforms and formation of civil society. The importance of passing the laws ‘On social partnership’, ‘On transparency of the activity of bodies of state power and governance’ aimed at strengthening the role of NGOs in the development and implementation of socio-economic programs, public and media access to information of the state bodies of power and control, openness and transparency in the past year have been emphasized.

The participants highlighted the increased level of political and legal culture, and civic engagement during their presentations. Thus, the elections to the Oliy Majlis and local councils of people’s deputies, which showed an increased socio-political activism of citizens, the role and maturity of political parties and civil institutions, has been marked as an important event in 2014.

The growing role of civil society in the implementation of democratic reforms in the country has been also discussed at the conference. In particular, last year over 1.5 thousand representatives of the third sector attended the central and local public places of discussion of the bills, while more than 400 NGO’s took part in the implementation of the State program ‘Year of healthy child’.

Every year, the Public Fund for the Support of NGOs and other civil society institutions under the Oliy Majlis, the Fund for support of NGOs in the NANGOUz and other organizations sent substantial funds for the implementation of future projects to address critical social and economic problems.

The result of this great work was an increase in the number of civil institutions, in particular NGOs, to over 8,100 by January 1, 2015.

In 2014, the number of NGOs participating in scholarship competitions held by the Public Fund for Support of NGOs and other civil society institutions in the country’s parliament made up 421, of which 176 were the winners.

In 2014, the leaders and activists of non-governmental organizations continued to work as members of more than 40 permanent national inter-ministerial committees. The status of NGOs has increased, and the efforts of civil society keep gaining the recognition of the public. In 2014, representatives of 46 NGOs received state awards. At the same time last year, according to the results of parliamentary elections, 20 representatives of NGOs were elected to the Legislative Chamber of Oliy Majlis.

It was noted likewise that the country is experiencing a dynamic growth in the number of mass media, in comparison with 1991 their number increased overall 3.5 times over, the newspapers – by 2.5 times, magazines – by 3.5 times. As of January 1, 2015 the Uzbek Agency for Press and Information registered about 1,400 media and more than 60% of them were privately owned. The number of Internet resources registered as the media has more than doubled in the past five years, and last year amounted to 304.

The analysis of the monitoring data shows a significant increase in the role of the media in identifying and highlighting current issues of concern for people in the field, the implementation of public control over the activity of the state power and administration. They also highlighted the strengthening of the autonomy and independence of the media and their role in identifying and highlighting current issues of concern of the population on the ground. Thus, in 2014, the printing media published 2452 significant critical and analytical materials (while in 2013 only 2159). The speakers noted the growth of readers’ trust in the media as an effective means of expression regarding some socially relevant issues, and as a tool of public control over the activity of state bodies in solving the acute problems.

The event has also analyzed the results of monitoring in strengthening the role of political parties in the political life of the country, the authority and impact of self-government in addressing local territorial problems, the implementation of targeted social protection of the population. Other issues of civil society in Uzbekistan were also reviewed. The importance of improving the legal culture of the population, and the citizens’ sense of justice in this process was strongly emphasized.

“Uzbekistan has made a big step forward in the formation of the foundations of a strong civil society,” said regional director of the international NGO ‘Regional Dialogue’ Mjusa Sever (Slovenia). “A thorough platform has been created for the activities of NGOs and other civil society institutions, which enjoy the support and authority among the population. Based on the analysis conducted by IIMFCS, assessment of civil society in Uzbekistan and its institutions is highly positive.”

“We have established a close cooperation with the IIMFCS. Given the increased number and quality of the activities of non-profit organizations in your country, legislative consolidation mechanism of social partnership, we are interested in continuing this work and want to contribute to the realization of certain priorities,” said representative of the National Democratic Institute (USA) Eric Brett. “And here special attention is deserved by NGOs that are currently working to solve specific problems in the regions.”

“This conference is interesting in terms of defining future priorities,” said the OSCE Project Coordinator in Uzbekistan, Ambassador Gyorgy Szabo. “Uzbekistan has established a solid base for the development of civil society institutions. Indicators of development, in turn, help to improve the organizational and legal mechanisms of their activities.”

The annual report of the IIMFCS, presented at the conference, covered the main directions of shaping the civil society. In this regard it should be noted that an important aspect of the research activities of the Institute is to organize public hearings on topical issues, including the improvement of legislation. It has become a practice to hold large national and international forums. The information and analytical work received a new impetus. One of its results was another brochure ‘Development of civil society institutions in Uzbekistan: Facts and Figures 2014’ issued by the IIMFCS.

Following the conference several recommendations have been made on the subject of further improvement the activity of IIMFCS, strengthening the role of civil society institutions in democratic renewal and modernization of the country. In particular, it will focus on such areas as creation and organization of effective functioning of public commissions for social partnership created at the local Councils of deputies within the framework of implementation of the Law ‘On social partnership’.

And taking into account the provisions of the Law ‘On the openness of public authorities and administration’ work will be focused on the organization of further effective cooperation with the media, active members of the bodies of self-government, creating public awareness on the implementation of socio-economic development programs. However, taking into account the results of the elections of 2014, the activities of the institute will focus on the issues of further raising the level of legal awareness of members of party groups in local councils of people’s deputies, and developing their parliamentary activity skills.

(Source: «Uzbekistan Today» newspaper)

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