INFORMATION DIGEST OF PRESS OF UZBEKISTAN # 66 April 4, 2016

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POLITICS
President Islam Karimov receives Germany’s foreign minister
Delegation of Germany attends meetings in Tashkent

INVESTMENTS
Uzbekistan to invest US$600m to development of food industry

BUSINESS CLIMATE
Small Economy Goes Global


POLItiCs

President Islam Karimov receives Germany’s foreign minister

President of the Republic of Uzbekistan Islam Karimov received Frank-Walter Steinmeier, Federal Foreign Minister of the Federal Republic of Germany, the Chairperson-in-Office of the Organization for Security and Co-operation in Europe at the Oqsaroy on 30 March.

Warmly greeting the guest, the head of our state underlined that this meeting affords a good opportunity to share views on the issues of bilateral cooperation and is a constituent part of the multifaceted and regular Uzbek-German dialogue.

In our country Germany is traditionally regarded as one of the leading countries in Europe, possessing a significant intellectual, economic, technical and technological potential, asserting deserved authority on the international stage and contributing its substantial input in solving global and regional problems.

During the years of Uzbekistan’s independence, reasonably steady and multifaceted relations in political, economic, cultural, humanitarian and other spheres have been established between our countries. A solid contractual-legal base of over 130 documents has been formed and reliable institutional mechanisms for cooperation on all levels have been created to this day.

For the last 15 years direct German investments and loans for over 784 million US dollars have been attracted to the Uzbek economy. 113 enterprises with participation of German investors, including 27 enterprises fully owned by German capital, operate in Uzbekistan.

World-known German companies currently retain firm positions in the Uzbek market and significantly contribute to the economic growth in our country. Jointly with MAN Group a modern plant has been built in Samarkand region, in which different models of trucks, which are in high demand outside Uzbekistan as well, are produced. Wide set of modern agricultural machinery is produced at the joint venture with another German industrial giant- CLAAS.

The growth of interest in developing cooperation in trade and economic spheres is also demonstrated by the fact that Uzbek-German business council, established a year ago, has held two meetings, during which documents on implementing projects on attracting technologies and loans from Germany for 2,85 billion US dollars have been signed.

Other issues on extensive Uzbek-German agenda, including prospects of consistent development of cultural-humanitarian ties, implementation of joint educational projects, as well as some regional and international issues have been discussed at the meeting.

Frank-Walter Steinmeier sincerely thanked the President of Uzbekistan for a warm reception and acknowledged the readiness of the leadership pf Germany to further reinforce and expand cooperation on a mutually beneficial basis.

(Source: Press-service of the President of the Republic of Uzbekistan)

Delegation of Germany attends meetings in Tashkent

On March 30, 2016 a meeting with the Federal Foreign Minister of the Federal Republic of Germany and the Chairperson-in-Office of the Organization for Security and Co-operation in Europe Frank-Walter Steinmeier was held at the Ministry of Foreign Affairs of the Republic of Uzbekistan.

Various aspects of bilateral relations were discussed, the parties exchanged views on the issues of regional and international politics at the meeting.

Frank-Walter Steinmeier also met with teachers and students of the University of World Economy and Diplomacy. He was briefed about the activity, educational process and system of the university.

During the meeting with the mass media representatives, the federal foreign minister of Germany noted effectiveness of negotiations within the framework of his visit to Uzbekistan.

Representatives of German Bundestaf held negotiations on developing bilateral cooperation at the Legislative Chamber and the Senate of the Oliy Majlis on the same day.

(Source: UzA)

investments

Uzbekistan to invest US$600m to development of food industry

Uzbekistan is planning to direct US$595.9m to development of food industry in 2016-2020, the Ministry of Economy of Uzbekistan said.

The Government approved a programme on developing the industry, which includes 180 investment projects with the cost of US$595.9 million.

The projects are directed at construction of new, reconstruction and modernization of existing enterpries on processing agriculture products and production of semi-finished goods, ready goods, packaging materials.

The programme will be financed due to own resources of the enterprises, loans of Uzbek banks and foreign direct investments.

The programme will allow to increase export of fresh and processed vegetable and fruits by 2.7 times and start production of 200 new types of products.

It is also planned to launch 15 trade-logistic centers with total capacity of 60,000 tonnes in five years, which will process, store and transport fresh and processed fruits and vegetable products.

(Source: UzDaily.com)

BUSINESS CLIMATE

Small Economy Goes Global

Many international expert institutions predict that encouragement of small business development will become a major trend in rebooting global economy and reversing the crisis this year. There is a universal understanding that there is hardly any more effective driver of economic growth left in the world. Uzbekistan has not just built a well-considered strategic program for the development of ‘small economy’, but also created certain effective mechanisms to increase its share in GDP and export flows.

Current realities require new approaches in support of small business and private entrepreneurship. There is no need to prove the success of the model, which is based on enterprise and initiative of the citizens, as they push forward the locomotive of economic development. There are examples of leading European countries such as - Germany, Britain and France , that bid on the ‘small economy’ some 40 years ago, which has paid off: it now employs the bulk of the population.

The trend is certainly new to Uzbekistan. In the past, the administrative and command government style was based on a different policy – on the construction of mega manufactures, single-industry towns, with the prevalence of one direction of production. In the early 90s, the policy led to serious problems: having found themselves in the market conditions, the inflexible industrial giants had to cut production and lay off workers, thus rapidly losing their niches.

Uzbekistan managed to avoid turmoil as, at the dawn of independence, the government adopted a program of economic diversification, launched a process of privatization and transfer of industrial facilities to private ownership, and transferred lands to farmers. In the early years, 400,000 hectares of irrigated lands were allocated to 2.5 million households. These decisions were aimed at building a strong foundation for effective development of the country’s economy in the future.

Despite the acute shortage of foreign currency, the bulk of it was invested in the support of small businesses, which, as known by many, was key to the development of the state, the production of import-substituting, export-oriented and competitive products in line with international standards.

In hindsight, there is every reason to say that the courage at the dawn of independence has fully justified itself. The sector has taken the lead in a short time: in 2015, it employed 77.9% of all the employed in the economy, or more than 10.1 million people, produced 38.9% of total country’s industrial production (35.6 trillion soums) (currency rates of CB RU from 04.04.2016, 1$= 2876.72  soums), channeled 36 3% of the country’s total investment (14.7 trillion soums). 26,900 new small businesses were established last year alone, which is 3.3% more YOY.

As a result of reforms, the share of small business and private entrepreneurship in the gross domestic product rose from 31% in 2000 to 56.7% last year, or 1.8 times. The numbers indicate of daily work on improvement of the business climate and conditions for entrepreneurs. The process has been underway, empowered by more effective technological innovations. For example, 42,800 businesses entities were registered online in 2015 through the Single Portal of Interactive Government Services as a result of introduction of direct electronic formats of interaction between government and business entities. Now they can use 260 kinds of interactive services. In 2013-2014, businessmen and citizens used 102,000 services, against 420,000 in 2015. With the Internet, tax and statistical reporting is now submitted completely in electronic format.

The consistent strengthening of the role and importance of small business and private entrepreneurship evidences of the positive changes in the structure of the economy. Privileges and concessions, support of the government, but above all, successful examples of establishment of private businesses and the use of the opportunities available, are vital in this process. This is the reason behind the success of the 20th republican stage of the Tashabbus-2016 competition in Tashkent. Dozens of successful farmers, artisans and entrepreneurs presented their products to the audience and the jury, charging the initiative and the enterprising by their example.

Initiated in 1995, the unique competition has not lost its novelty over the years, but grew into a kind of a cross-section, showing the current state and trends in the development of small business and private entrepreneurship in Uzbekistan. This year’s month-long rally has brought together over 7,000 farmers, artisans and entrepreneurs, demonstrating the increasing popularity of the competition in the business community, and its intensity.

The number of participating entrepreneurs in the competition has been growing year by year. Farmers were leading in the early years of the competition, while presently they yield to businessmen – 7,000 contenders for victory included 3,132 entrepreneurs, 2,149 farmers and 2,410 artisans. This implies that currently the representatives of the domestic industry stand at the forefront of the competition, producing goods and providing services in line with international standards, and successfully promoting them to foreign markets. Last year, for instance, representatives of small businesses exported goods and services at $3.4 billion, accounting for 26.9% of total volume of exports.

The competition’s formula is simple. District and city stages were held in late February, 544 winners of which passed to the regional stage. 41 most deserving and successful participants of the regional stage, including six women that deserve a special mention –passed to the republican stage, which finished last week in the capital. The organizers will announce the winners on April 6 to have enough time to fully appreciate the achievements of finalists, and select the truly best and successful.

In addition to traditional categories of the best farmer, artisan and entrepreneur, the awards will be handed to the best young entrepreneur, a woman entrepreneur, an exporter, owner of a family business, a responsible social partner, a businessman who has created the biggest number of jobs for the youth, and the year’s top entrepreneur in the food industry. The jury will also select the best innovative project, a product, and a winner in the category ‘My Country is My Pride’.

Finalists of this year’s expositions have vividly reflected the way the domestic small businesses and private enterprises diversify their production. In the early years of the contest, it mainly involved the entrepreneurs engaged in industrial production and construction, the advanced farmers growing agricultural products, and ceramists. To date, the range has much expanded. Today, the competition involves the entrepreneurs engaged in the production of export-oriented products, pharmaceutical and textile products under their own known brands, and in other sectors of the economy.

“Our company was founded in 2007. Initially, we were engaged in canning fruits and vegetables. Having studied the conditions in the export markets, we have established a manufacture of canned pilaf. Today, we are actively exporting it. We are planning to produce a range of other canned foods on the basis of national meals. We are also going to increase the production capacity by purchasing modern technological lines,” said the director of the private manufacture Inter Plast Tashkent, Hikmat Abdullayev.

“Supported by the banking sector, we equipped the company with modern machinery. Now, our products fully meet the needs of domestic and foreign customers. Therefore, we are working on expansion of export geography. Our specialists develop their own designs of clothes for men and women, many of the brands are already recognizable and popular in the country and abroad,” said Head of Nargiza Teks, Ikrom Shomirzayev.

Farmers keep apace with businesses. The participating farms this year are prevailed by diversified farms that are involved not just in the cultivation and processing of agricultural products, but also in the establishment their own trading companies across the country. This has a significantly impact on the decrease in cost of goods, as it excludes intermediaries from the chain.

Deep processing of agricultural feedstock and development of storage infrastructure has been of special focus. 230 enterprises specializing in agricultural processing, as well as 114 new cold stores with a capacity of 77,800 tons were built and upgraded last year. The total storage capacity of fruit and vegetable products has grown to 832,000 tons. This helps to prevent a sharp rise in seasonal prices throughout a year, ensure an uninterrupted provision with basic kinds of agricultural production, and expand exports.

“The importance Uzbekistan has been attaching to the reformation of agriculture, and particularly to the development of farmers' movement, is producing its yields. Our farm grows cotton and grain on 120 hectares. In addition, we have established livestock and horticulture. The farm employs more than 40 workers, keeps 65 head of cattle, 35 horses, and three camels. Having introduced new agricultural technologies, we started growing melons and vegetables. Last year, we procured 16.5 tons of milk, 8 tons of fruits, 12 tons of melons, 23 tons of mung bean, 20 tons of vegetables. In the future, we intend to increase production volumes and start processing. We are also building a network of our brand stores in the region,” said the head of the diversified farm Barlos Alijon Khaydarov.

Odinahon Otakhonova of Andijan has her own formula for success. In 2003, she founded a small farm Inomjon Fayz. Today, it ranks among the region’s best farms. It employs over 100 people, runs the production and processing of agricultural and horticultural products.

“We diversified our activities by opening a milk and meat processing shop, cattle breeding and beekeeping. The establishment of private textile production is our latest initiative: we have started with the manufacture of bed linen and underwear, to proceed with the increase of production volumes in the future. We have some good news about exports: we have signed a contract for the supply of textiles to Russia and neighboring countries,” said Otakhonova.

There is a recent tendency of growing number of masters in the handicraft industry, with many young talents, who are enthusiastic about exporting their products. This year is distinguished by the artisans creating artworks of wood, miniatures, molding, gold embroidery and pottery. The exposition of the young master of Navoi Jahongir Tashpulatov was particularly remarkable. He specializes in the diversity of patterns and decorative articles of concrete and plaster.

“I opened my own workshop five years ago. It currently employs more than 50 people, producing more than 80 kinds of products for internal and external decoration of buildings. In 2015, we produced products totaling over 90 million soums. We invest all funds available in the development and expansion of business. We have students from neighboring countries, who intend to open similar workshops,” said Tashpulatov.

(Source: Uzbekistan Today» newspaper)

 

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