INFORMATION DIGEST OF PRESS OF UZBEKISTAN # 62 March 29, 2016

posted 4 Apr 2016, 08:26 by Webmaster Ambasciata
POLITICS
German Foreign Minister to pay official visit to Uzbekistan

LOCALIZATION
Vital factors of economic growth in Uzbekistan

INFRASTRUCTURE
Uzbekistan holds 17th place in Global High-Speed Train Ranking

BUSINESS CLIMATE
Uzbekistan: Food Manufacturing

V PLENARY SESSION OF THE SENATE OF THE REPUBLIC OF UZBEKISTAN
On the opening of the fifth plenary session of the Senate of the Republic of Uzbekistan

CINEMA
Uzbek cinema: Fates of Millions in Prototypes

POLItiCs

German Foreign Minister to pay official visit to Uzbekistan

On 30 March, the Minister of Foreign Affairs of the Federal Republic of Germany, the current Chairman of the Organization for Security and Cooperation in Europe Frank-Walter Steinmeier will arrive in Uzbekistan on an official visit, according to the press service of the Foreign Ministry of Uzbekistan.

The visit program includes a meeting with the President of the Republic of Uzbekistan I.A. Karimov, the negotiations in the Government, in the course of which the state and prospects of development of Uzbek-German bilateral cooperation, pressing regional and international problems will be discussed.

(Source: UzReport.uz)

Localization

Vital factors of economic growth in Uzbekistan

Among a number of essential factors behind a rapid pace of economic development in the Republic of Uzbekistan, many experts point to diversification and increased competitiveness of the national economy as a result of modernization and large-scale introduction of modern technologies and equipment. A given strategy was worked out and launched immediately after the proclamation of the country’s independence.

And localization of production and expansion of inter-sector industrial co-operation were singled out as the highest priorities on this front.

At a recent press conference held at the Ministry of Economy of the Republic of Uzbekistan, it was emphasized that localization of production constitutes one of the most important directions of exploiting domestic reserves and potentialities in order to further strengthen the national industrial potential. This implies a deeper processing of local raw materials and resources and an increase, on a given basis, in both the volumes and the range of goods with high value added made in Uzbekistan. At the same time, it should be observed that thanks to intensification of localization processes, one more task is addressed, which has taken on special topicality in several countries of late. The point is, such things as the maximum utilization of a nation’s domestic resources and potentialities for the balanced development of the real sector of its economy and the introduction of import-substituting and export-oriented goods reduce its dependence on external factors, including, in particular, global crises and an unfavorable situation in foreign markets.

And the wide experience gained by Uzbekistan in the course of its independent development once again confirms this phenomenon, because its economy tends to grow at a stable rapid clip even amid the ongoing world economic and financial crisis.

More than 15 years ago, the Uzbek leaders have initiated the National Localization Program, thanks to which the production volumes of import-substituting goods have leapfrogged 220-fold, compared with the 2000 level.

Judging by the results for the year 2015, the implementation of 696 projects has generated 4 trillion Soum (currency rates of CB RU from 29.03.2016, 1$= 2876.72 soums) worth of localized produce, with its volume swelling 1.3-fold and the rated effect of import substitution exceeding US $1.5 billion.

Last year, 820-plus new categories of industrial goods were mastered and put into production. These include complex petro-chemical and mine machinery, transformer sub-stations, spare parts and units for compressor equipment, liquid for hydraulic equipment, light-diode lamps, composite materials, sports kit and simulators, and many other types of produce, which is currently in popular demand both domestically and abroad.

At the same time, great significance is attached to the price of localized goods made by indigenous manufacturers. Their price should become far more reasonable than that for their foreign analogues. Only in this case, localized produce will be able to stimulate domestic demand and to satiate the home market with quality goods of home production. As practices show, today home-made localized commodities have appreciably pressed or completely supplanted many categories of imports.

The official figures presented at the press conference at the Ministry of Economy of the Republic of Uzbekistan demonstrate that over the past two years, the importation of 97 product groups has been ceased completely owing to localization projects. Among them are mine cars, vacuum pumps, forged pieces, lifting cranes, welding electrodes, several types of refractory and acid-resisting materials, wall materials, sandwich panels, carpet flooring, synthetic lawns, audio systems for automobiles, glass jars and bottles, starch, baking yeast etc. The import volumes of another 306 product groups have been more than halved, including TV sets, air-conditioners, refrigerators and freezers, dry-cleaners, consumer lamps, automobile filters and radiators, all-metal cylinders,  spiral-seam and strait-seam steel pipes, copper pipes, ceramic tiles, linoleum, several types of synthetic fabrics, medical ampoules, printing paints, children’s toys, sports kit and many others.

Let it also be mentioned that all projects implemented under the National Localization Program imply a consistent intensification of localization processes. In 2014, to cite an example, the production of liquid-crystal TV sets took the form of large-block assembly, with the level of localization approaching 35 per cent. The domestic production of integral printed circuit boards, frames and completing units, wires, distance control panels and other components launched a year ago has made it possible to move up a given indicator to 40 per cent. This process is going on, and in 2016, it is expected to reach 50 per cent thanks to the production of liquid-crystal panels at local enterprises.

The fact that the leading industries of the national economy tend to swell the percentage of their local purchases from year to year is viewed as an important outcome of localization of production and development of industrial co-operation. In 2015 alone, the localization projects have reduced imports volumes by 9.5 per cent, or US $444.6 million.

The attraction of foreign investors and creation of joint ventures with the world’s leading technological companies play a sizable role in the successful realization of the National Localization Program. The most promising joint ventures operating in Uzbekistan to date are as follows: an enterprise set up together with MAN to produce large-capacity vehicles, which is based in Samarkand province; enterprises established together with CLAAS and Lemken, which specialize in the production of agricultural equipment; enterprises producing consumer electronics, set up together with Toshiba, Candy, LG, Samsung and ZTE.

Another factor, appreciably stimulating both home demand and development of intra- and inter-sector industrial co-operation is the introduction of a preferential regime in the contract system, when it comes to the placement of orders to purchase indigenous produce within the framework of the International Industrial Fair and Co-operative Exchange held annually on the initiative of the Uzbek leader. In the course of the IIFCE-2015, more than 13,300 contracts have been concluded for the supply in 2016 of 11.9 trillion Soum worth of goods, 38 per cent above the previous event’s figure. Over 2.1 trillion Soum of the indicated amount was accounted for by contracts to purchase goods once imported to the Republic, which, according to calculations, ensures a further reduction in 2016 of imports by manufacturing enterprises for their main production operations by US $637.5 million.

Additionally, those participating in the press conference paid attention to the fact that, along with the satiation of the home market with quality domestic goods, lately there has emerged a tendency for expanding both the volumes and assortment of localized commodity exports. In particular, the year 2015 has seen the exportation of 52 new product groups to the tune of US $25.1 million. These include two-chamber washing machines, industrial energy-saving light-diode lamps, tubes made of medical glass, shaped profiles made of vulcanized rubber, cosmetics etc.

Speaking about such processes as localization of production and development of industrial co-operation, the press conference’s organizers informed those in attendance that the Ministry of Economy of the Republic of Uzbekistan, joining hands with other interested ministries and departments, is now busy elaborating a list of goods, which are in stable popular demand within the Republic and abroad. Indigenous enterprises, wishing to invest in production projects, are advised to study this list in the first place, whereupon they are encouraged to launch the production of the most sought-after import-substituting commodities. At the same time, it was stressed that enterprises mastering the production of localized goods are granted exemptions from customs payments, uniform tax, income (profit) tax and property tax.

As far as the medium- and long-term prospects are concerned, it should be said that the National Program of Localization of Production and Expansion of Inter-Sector Co-operation will remain the most essential tool for realizing the country’s industrial policy designed to exploit the available economic potentialities in the most efficient way, in order to organize the processing of raw materials and subsequent production of goods that are in great request in the world marketplace, in keeping with the following 3-4- stage scheme: basic raw material – primary processing (semi-finished goods) – finished materials for industrial production – finished goods for final use. 

(Source: «Business partner.uz» newspaper)

INFRASTRUCTURE

Uzbekistan holds 17th place in Global High-Speed Train Ranking

Uzbekistan took the 17th place among 20 countries of the world in Global High-Speed Train Ranking, published by GoEuro.

The ranking is based on such figures as record speed, operation speed, line coverage and population coverage, as well as expense of population to 1 km railway.

According to ranking, the record speed of high-speed train in Uzbekistan makes up 255 km/h (17th place in ranking on this figure) and operation speed – 250 km/h (13th place).

Share of high-speed line in total railway infrastructure of Uzbekistan is 8.21% (6th place). According to GoEuro, about 90.1% of Uzbek population has access to high speed train (16th place).

GoEuro underlined that population spends 0.18 euros for each 1 km of travel at high speed train (11th place).

Japan, South Korea and China hold first top three places in the ranking. The United States is on 19th place ad Finland – 20th place.

High-speed train Afrosiyob started regular trips between Tashkent and Samarkand from 8 October 2011. From 2015, Afrosiyob started to run on route Tashkent-Samarkand-Qarshi.

(Source: UzDaily.com)

BUSINESS CLIMATE

Uzbekistan: Food Manufacturing

International experts draw a fairly bleak picture of the global food market’s future. The World Wild Fund for Nature warns that humanity may face an acute lack of food by 2050. Only countries that are building a complete industrial chain, namely, from garden beds to processing, are capable of avoiding the forecasts. Uzbekistan has been moving along this path for more than 20 years and has achieved certain progress.

Despite experts’ predictions, Uzbekistan is most likely to avoid serious problems with food provision. Over the past few years, the country has ranked among regional leaders in the production of fruit and vegetables, grains, meat, dairy and food products. There are still imports in certain positions, but import substitution has been in obvious progress.

Paradoxically, the global crisis has become a positive factor for the domestic food industry. The volatility in currency markets and difference in exchange rate have made Uzbek products more competitive both domestically and internationally. Now, it is much cheaper for local wholesale companies to buy domestic products instead of importing same products for foreign currency. Meanwhile, the domestic food industry has grown significantly in terms of quality over the past decade, outstripping many CIS countries.

UT has repeatedly reported about the well-built and efficiently operating system ‘State-tax preferences-farmer-processor-exporter’, which allowed creating a reliable shield for food security in Uzbekistan. However, time does not stand still. In order to maintain the leadership, the country needs to implement new initiatives, innovative projects, attract strategic investors. In this context, Uzbekistan has something to be proud of.

In the years since independence, Uzbekistan has carried out large-scale reforms in the food industry. In 1990, the republic imported more than 82% of the total consumption of grain, 50% of meat and meat products, about 60% of dairy products, 100% of sugar, powdered milk and baby food. Today, Uzbekistan fully provides the population with all major types of products by means of domestic production. Moreover, during the years of independence, meat consumption per capita has increased 1.3 times, milk and dairy products - 1.6 times, and processed fruit and vegetables – almost 4 times.

At the same time, Uzbekistan has always sought to rely on long-term development. The food industry is no exception: there are plans afoot to implement an unprecedented number of business initiatives in the next five years.

This February, the President of Uzbekistan signed a landmark document to define the development of Uzbekistan's food industry for the years ahead. It is envisaged to establish a new holding company, O’zbekoziqovqatholding, which would incorporate 176 food, oil and fat, meat and dairy enterprises. The establishment of a specialized Fund for Development, Reconstruction, and Modernization of Food Industry is another noteworthy fact. The financial issue is in the spotlight, as always: the document clearly defines how the fund will be financed. Firstly, the state will allocate 50% of the dividends received from the state shares of enterprises under the holding. In addition, the Fund was entitled to get 0.5% of net profit of enterprises and companies of O’zbekozikovkatholding.

The establishment of the new structure is largely aimed at the formation of the industry's export-oriented vector. As a result of reforms on agricultural diversification and provision of the population with food products, Uzbekistan annually exports foods, fruits and vegetables worth more than $5 billion. The volume of exports of agricultural products has tripled in the past three years. Our country delivers more than 180 kinds of fresh and processed fruit and vegetable products to 80 countries.

Uzbekistan ranks among the ten leading suppliers in exports of apricots, plums, grapes, nuts, cabbage and other fruits and vegetables. In 2015, Uzbekistan was awarded among 14 countries for the achievement of the Millennium Development Goals in food security by member states of the Food and Agriculture Organization.

There are more than 10,000 economic entities in the republic, which are engaged in the production of food products. The system is generally completed, so the main goal now is to help it grow through access to foreign markets. The O’zulgurjisavdoinvest Association is intending to implement one of the initiatives by means of a new exposition and business platform for leading foreign procurers.

The Uzbek side is currently working on the country's first exhibition and business forum with the working title ‘Fruits and Vegetables of Uzbekistan’, which will bring together the leading international traders, representatives of major transport companies, processing enterprises, the agricultural sector and manufacturers of profile equipment. The main purpose of the event is to create all the conditions for foreigners to buy fruits, vegetables and other ‘Made in Uzbekistan’ branded food products.

This practice has proved its value in other directions. For example, Uzbekistan has been holding the International Cotton Fair for over a decade, contracting the bulk of cotton produced in the country. The forum is scheduled for late May - early June 2016. It will be convenient for everyone. The guests will come to Tashkent and negotiate on the whole range of issues on product delivery in just a couple of days, meeting with farmers, transporters, tax authorities, customs officials and representatives of other state institutions on the same site. It promises to become a good promotion of Uzbek fruit and vegetables in the world.

The event will be partnered by the country's largest Uzbek-British exhibition company ITE Uzbekistan. It will be organized in the halls of the republican center of exhibition and fair trade of consumer goods O’zko’rgazmasavdo.

Uzvinprom-Holding is planning to increase external supplies of fresh products, particularly grapes, worth more than $100 million, by implementing new measures on increase of exports. Forty-two agricultural companies engaged in the production and marketing of fresh vegetables and grapes were established under the Holding in various regions of the country. Today, they are working closely with roughly 12,000 farms.

Agricultural firms are mainly focused on the rehabilitation, reconstruction and establishment of vineyards. The policy is promising for higher yields and, therefore, increased exports. 19.600 hectares of young vineyards have been laid this year. The farmers were supported in procuring the seedlings and supply of special equipment. The total area of plantations has expanded to 99,600 hectares.

It is planned to plant other fruits and vegetables between the rows of vineyards on the area of 32,000 hectares this year, which should increase the volume of fruit and vegetable production. To date, such works have been carried out on 22,000 hectares.

Storage infrastructure ranks among the most important elements in ensuring a unified and uninterrupted supply chain of fruit and vegetable products to foreign markets. There is a system-based mechanism of its further development, supply of up-to-date equipment for reception, processing, sorting, grading, packaging and labeling of products for further exports.

Traditionally, a weighty share of fruit and vegetable products are consumed canned, processed or dried, when products lose their consumer appeal, taste and useful properties from a medical point of view. In recent years, Uzbekistan has been implementing a program on modernization of existing and construction of new cold storage facilities. Storage facilities of a total capacity of 200,000 tons have been built in the country in the last few years alone.

The emphasis is placed on the construction of modern cold storages for fruits and vegetables with a total capacity of 325,000 tons. The current country’s capacity makes up 832,000 tons. The construction of facilities will be financed through loans of Uzbek banks and capital funds of the companies that are engaged in exports. It is planned to allocate a total of 125 billion soums (currency rates of CB RU from 29.03.2016, 1$= 2876.72 soums) for these purposes.

Works will be carried out in stages in specific regions of the country to ensure a  complete coverage of the CIS countries and the European Union with exports. It is envisaged to commission cooling storage capacities of 60-65,000 tons each year. Such volumes are specifically tied to the projected demand and logistical capabilities of Uzbek transport companies.

A new logistics system for exports of fruits and vegetables will be created concurrently with the construction of refrigerators. 17 specialized centers of processing, storage and transportation of fruits and vegetables will be commissioned in key export-oriented regions within five years, or 3-4 objects annually. Their construction will be funded by 119 billion soums.

Big industrial projects will not stay aside. Coca-Cola Company is planning to invest over $35 million in the development of three its plants in Uzbekistan in the coming years, producing six kinds of drinks.

In particular, Coca-Cola intends to upgrade plants in Urgench and Namangan, and establish a new line at the head manufacture in Tashkent. It is expected that it will produce up to 48,000 bottles per hour, which is twice higher than the current capacity. The equipment will be provided by one of the segment’s leaders - the German Krones. There is no similar line of this kind in Central Asia.

The decision on the increase of production capacity was entailed by the growing demand in the domestic market and good export prospects. Products totaling over $2.5 million were exported to the neighboring countries last year alone. The company is working towards the increase in production volumes, and development of new kinds of products. For example, experts are currently estimating the feasibility of producing juices and soft fizzy drinks in aluminum cans.

Another presidential initiative aims to support the beef and sausage production: farms and other agricultural enterprises, which are engaged in livestock breeding, are released from all taxes and mandatory contributions to the state specialized funds by January 1, 2021. Meanwhile, the development of the sector in the next five years will not be limited only by provision of tax breaks for its entities. The head of state has also approved several initiatives with specific sources of funding, which are aimed at the intensification of livestock breeding in the country.

For example, since 2016, Uzbekistan will annually purchase 50 bred bulls from the best foreign farms and institutions within five years. The project cost makes up $1.8 million. At the same time, it is planned to triple the number of breeding farms. Today, there are 470 of them across the country, and are expected to increase to 1,530 by the end of 2021. It is expected that these measures will ensure the supply of more than 80,000 heads of bred heifers to farms over the next five years.

As estimated by the Ministry of Agriculture and Water Resources, the number of cattle in the country will increase by more than 3,1 million animals - from 11.6 million in 2015 to 4.8 million in 2021, and meat production - from 1.9 million tons to 2.5 million, respectively.

(Source: «Uzbekistan Today» newspaper)

V PLENARY SESSION OF the SENATE of the republic of Uzbekistan

On the opening of the fifth plenary session of the Senate of the Republic of Uzbekistan

The fifth plenary session of the Senate of the Republic of Uzbekistan will open at 10 am on 31 March 2016 in the meetings hall of the Senate of the Republic of Uzbekistan in Tashkent.

(Source: UzA)

CINEMA

Uzbek cinema: Fates of Millions in Prototypes

A motion picture by the popular film director, the Honored Artist of Uzbekistan, Zulfikar Musakov, has premiered in Tashkent. “Khazonrezgi” (Details of the Autumn) is a film depicting the destinies of millions of people. The script is written literally from our realities.

“I shoot films the way I feel about life. The soul is the one who tells me to create such works. Perhaps because I come from the people as the thousands and millions do,” Zulfikar Musakov has commented. “I am always keen on learning about fates of common people, as well as their aspirations, fantasies, plans for the future.

“It seems that I have had to listen to this story many times,” Alisher Hamdamov says. “My father is a participant of war and he used to tell us a lot about the lives of those who were in the war and about how they ended up in the aftermath of the service.”

“This is a depiction of the fates of grannies and grandpas, of those who endured tough times,” shares the student Aziza Tursunova. “In particular, my family went through a very similar story.”

The motion picture is about those who were 18-20 in the 1980s. It is a memory picture, where the main character develops thoughts – during a travel on the metro and tram – and ‘scrolls’ around in the memory the episodes of his life.

Watching this movie is a rendezvous with our favorite actors Shahzoda Matchanova and Bobur Yuldashev. But the film industry stars do not play major roles. The director opted for others for the protagonists. Thus, the character named Kurban is performed by the lawyer and businessman Bakhritdin Abdullaev, while Lola is played by the young actress Husnora Khojmuratova, previously a supporting-role artist.

“The first meeting with the director Zulfikar Musakov took place practically in the street, and he invited me to audition. As a result, I was approved for the role of Kurban,” says Bakhritdin Abdullaev. “In my view, that was a very interesting story.”

A central plot in the film is the fate of the two main characters – Kurban and Lola. He is a bus driver, has seen a lot in the war, and lost a friend. She is a common girl, and because of family troubles she leaves the parental home.

The characters get to know each other after the last shift, when Kurban sees a sleeping girl in an empty bus. After listening to her story, he offers his help – a shelter in the house of his parents. That is the beginning of their joint life, which they will live together, relying on each other, and create a happy family...

(Source: «Uzbekistan Today» newspaper) 

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