Rustam Azimov: Uzbekistan is not ready to consider proposals to establish a free trade zone within the framework of the SCO

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December 16, 2015

Rustam Azimov: Uzbekistan is not ready to consider proposals to establish a free trade zone within the framework of the SCO

rustamToday the city of Zhengzhou (China) hosted a regular meeting of Council of Heads of Government of Shanghai Cooperation Organization. We are presenting you the main part of the speech of the First Deputy Prime Minister of Uzbekistan Rustam Azimov at a meeting in an expanded format. The representative of our country, supporting the assessment of SCO’s activity, which in a relatively short period has become authoritative and influential international organization, stated the following:

Together, member states of the Organization continue their work to maintain stability in the region, ensuring sustainable economic development, the expansion of cooperation in trade, investment, humanitarian, transport and communications spheres.

The Republic of Uzbekistan, which currently is chairing the SCO, intends to strictly adhere to and abide by the principles of continuity and consistent development of multifaceted collaboration that meets the interests of all Member States of the Organization.

In this regard, the Uzbek side attaches great importance to strict observance of the principle of consensus in the Shanghai Cooperation Organization, which has been enshrined by the wise decision of the heads of our states in the creation of the SCO.

Dear participants of the meeting,

Today the world has faced with the next phase of the global financial and economic crisis that began in 2008. We all have seen a sharp fall in prices for the majority of world commodity and raw materials markets, demand reduction and decline in economic growth in all regions of the world. As a result of reduced volumes of trade and investment, capital outflow has increased, protectionist attempts of some countries and regional organizations have intensified.

The crisis in varying degrees affects all countries, therefore, it is particularly important to develop well thought-out national agenda to counter its effects, and most importantly – to conduct large-scale structural reforms, modernization, diversification and competitiveness of the economy in the long term.

In these difficult conditions, based on the Uzbek model of reforms developed by President Islam Karimov, Uzbekistan’s economy shows stability and sustainable growth.

GDP growth rates for the past 11 years total more than 8 percent annually. The country has achieved sound macroeconomic position, which is characterized by low inflation level, stably functioning banking and financial system, stable triple surplus of state budget, balance of trade and balance of payments, increasing foreign exchange reserves, low external debt at level of 18% of GDP and zero internal state debt.

The policy of structural reforms is the fundamental basis for ongoing reforms in Uzbekistan. First of all, this is a radical reform of the education system, which has created the preconditions for sustainable growth and full potential of our country on the basis of large-scale modernization of all sectors of the economy, infrastructure and social sector.

It has made possible to create new, high-tech industries and complexes that have become real engines of economic growth. They produce globally competitive products with high added value on the basis of deep processing of rich natural resources of our country.

At the same time we realize that this is only the initial stages of our progress. We still have a very large and long way to build a modern, competitive economy, which occupies a worthy place among developed countries.

This year, the President of Uzbekistan Islam Karimov approved the “Program of further reform, structural transformation and diversification of the economy in 2015-2019”, consisting of seven strategic programs, which lay a solid foundation for sustainable economic development of Uzbekistan in the coming years.

These programs are aimed at radical improvement of the business environment, large-scale privatization of state property, expansion of the private sector and reducing government’s share in the economy to the strategically and economically reasonable size, reform of the corporate governance system based on international standards, further modernization and diversification of the industrial and agricultural production, as well as development of modern infrastructure.

As part of the reform program, Uzbekistan over the next five years provides for the implementation of more than 900 investment projects on creation of new high-tech industries and a radical modernization of existing enterprises of petrochemical, chemical, electric power, engineering, automotive, electrical, textile, pharmaceutical and other industries, as well as more than 300 projects for the construction and reconstruction of engineering communications and road infrastructure, totaling more than 60 billion US dollars.

Dear participants of the meeting!

In the difficult situation that has emerged today in the global economy, the task of further cooperation on the implementation of coherent and mutually beneficial projects in the fields of economy, investment and transport communications is especially relevant for the sustainable socio-economic development of the SCO member states, achievement of practical results.

We stand for further development of trade-economic ties, expanding mutual deliveries of industrial products, which is demanded in the SCO markets, forming a favourable environment to promote mutual trade and other activities in this area.

In this regard, we attach great importance to the effective implementation of the “Program of cooperation between the customs services of the SCO member states for 2016-2021” that is being adopted today.

However, in the context of the previously statements made, I would like to emphasize once again that the Republic of Uzbekistan is not ready to consider proposals on the elaboration of issue of creation of free trade zone within the Organization. Moreover, this cooperation trend is not provided by the SCO Development Strategy until 2025, which was approved by the Heads of State at the Ufa summit in July 2015.

We look forward to a radical development of investment cooperation between our countries, the implementation of mutually beneficial projects and programs in priority sectors and areas of cooperation, especially in the high-tech sector. We believe that we have a huge potential in this area that is mastered to a small extent.

In this context, importance is given to the use of the full capacity of the Business Council and the SCO Interbank Association. We support the general view that it is important to present understandings on connecting these structures to the implementation of specific investment projects within the organization.

We consider development of transport communications, radical expansion of the huge transit potential of the countries of our region as strategic direction of our cooperation.

It is, above all, the development projects of efficient transport and transit corridors, creation of favorable conditions for increasing the volume of freight traffic, expansion of the network of railways and roads, air links, as well as the establishment of a modern level of appropriate infrastructure that will transform our region into an important global transit transport and logistics center.

I would like to emphasize that the implementation of concrete projects in the field of ??improving and upgrading efficient transport communications and infrastructure should be based on the principles of economic feasibility and reasonableness, taking into account the overall interests of states of the region.

In order to achieve real results for all the abovementioned directions, we consider important to develop and to adopt specific activities and “road maps” on ensuring the implementation of the “Strategy of development of the SCO until 2025”, as well as in the framework of processed new List of measures for the further development of project activities of SCO until 2021.

Speaking about the prospects of expanding the format of cooperation within our organization, Uzbekistan reaffirms support for accession of India and Pakistan to the SCO as full members.

We also support more active economic, investment, cultural and humanitarian cooperation with observer countries and partners, consolidation of cooperation and involvement of their huge economic potential in the sphere of joint activity within the SCO framework.

Dear participants of the meeting,

Delegation of the Republic of Uzbekistan is confident that the results of today’s meeting will be important for the further development and strengthening of mutually beneficial and multifaceted cooperation across the whole economic agenda of our Organization.