26 YEARS OF INDEPENDENCE
May 18, 2016
MOTIVE POWERS OF ECONOMIC PROGRESS
Progress is an onward march, an improvement in the process of development. It is thanks to progress that mankind evolved from the primitive state to civilized society. Caves and huts gave way to skyscrapers, in the same way as stone tools – to modern machinery and equipment. Progress is in opposition to regress, which implies stagnation and recession. And the last but not least, progress is a road to the future, which is better than the past and the present alike.
Progress is characteristic of all industries, spheres of life and kinds of human activity. Progress is based on science, scientific research, inventions and discoveries, which lead to the creation of new implements of production and subjects of labour. A given direction is called the scientific-technical progress. These days, the fate of one or another economic system completely depends on how quickly its achievements are introduced in practical activity. Much also depends on whether the achievements of scientific-technical progress are used evolutionary or revolutionary. The evolutionary form of scientific-technical progress suggests the improvement of equipment and technological processes based on similar scientific-technical principles, including their distribution in production. As concerns the revolutionary form of scientific-technical progress, it means the transition to the application in production of qualitatively novel scientific-technical principles. For instance, the mechanical metal-working by means of cutting is pushed aside by such modern state-of-the-art methods as precise casting, pressure, powder, plasma and laser technologies. Other examples of the revolutionary form of scientific-technical progress include the transition from the Martin process of steel smelting to the convertor one; the use of atomic energy, production of artificial diamonds and the like. Such technical changes require the cardinal replacement of materials and production personnel, as well as the transition to new technologies and forms of production arrangement.
Under the influence of discoveries and accomplishments achieved in various industries and sectors, the main content of scientific-technical progress was interpreted differently. It was identified with the beginning of an atomic century, a century of computer and information science, an age of chemistry, biology and bio-technology, an electronic and space exploration age etc. All of these definitions correctly reflected the vital characteristics of scientific-technical progress, but each of them was one-sided and sometimes even limited. The decisive peculiarity of scientific-technical progress lies in its universality. To be more precise, it is necessary to mention here such features of scientific-technical progress as its systemic character and complexity, manifesting themselves in the fact that they change the entire process of production of one or another commodity – from the start up to the completion, embracing a range of auxiliary operations too. Moreover, scientific-technical progress influences man as a major productive force of society.
Historical experience testifies to the fact that thanks to scientific-technical progress, England, France, the US, Germany and some other western nations became highly industrialized countries, taking a leading position not only in the field of engineering and technology, but also in the economic domain. China and Japan reached an astounding economic power in the same way. The same path has been followed by South Korea, Singapore, Hong Kong and Taiwan, which are known in the world as the “Asian dragons”.
The Republic of Uzbekistan doesn’t stand off the global trend. President Karimov stressed in his works: “We don’t exclude the possibility of adopting the positive experience amassed by other states in the course of their development, provided it is applicable to the Republic’s conditions. Our fundamental position is the selection of our own road of socio-economic development, while drawing the most useful things from the bottomless well of world experience and national practices”.
The road chosen by Uzbekistan is aimed not only at building a socially-oriented market economy, but also at creating the living standards that the Uzbek citizens really deserve, reviving national customs, traditions and culture and ensuring the spiritual-moral development of man as a personality. The Republic of Uzbekistan has been proceeding along this path for 25 years already. The number of remarkable achievements notched up by the country over the indicated period has already exceeded the number of successes scored during its membership of the former Soviet Union. In the past 15 years, the rates of economic growth in Uzbekistan never fell below 8 per cent. By the results of economic development in 2014-2015 and growth forecasts for 2016-2017, the World Economic Forum has rated the Republic one of the top 5 nations with the fastest developing economy.
Naturally, such an enviable accomplishment emerged neither immediately nor in itself. The creation of an innovative, self-sufficient and competitive economy was initially used as a foundation-stone of the national economic policy, where the stake was made on the maximum and efficient exploitation of the achievements of science and engineering, deideologization of economy, solidification of private-property status and the development of a non-state sector. The broad application of achievements of scientific-technical progress, combined with a scrupulously verified economic course, allowed the country to eliminate the former one-sided raw-material orientation of its economy, to reach the grain and fuel independence, to improve the distribution and exploitation of available productive forces, to carry out structural changes and to create new industries and production facilities.
Simultaneously, some traditional old schemes and mechanisms in the economy that failed to prove their value were broken down and removed. Many elements were renovated. The dynamism of public production and its output tended to go up. In the current year, the manufacturing industry’s share of GDP is expected to come to 40 per cent, up from 33.5 per cent in 2015, with the share of agriculture reducing from 16.6 per cent to 8-10 per cent. Emphasis is laid on the creation of industries and sectors that ensure scientific-technical progress and higher growth rates in the national economy. Economic progress and improvement of the people’s wellbeing are to be fuelled by the industrialization of farming, the efficient exploitation of soil and water resources and a further development of small business and private entrepreneurship.
A lot of structural changes and a new program-based approach to the development of manufacturing stipulate that extracting and processing industries should be brought into proper correlation, to ensure the thorough processing of raw materials and production, on their basis, of larger volumes of quality finished goods. It is considered to be expedient for those domestic enterprises, which enjoy all required production conditions, to introduce 3-4-stage cycles of raw-stuff processing according to the following scheme: basic raw materials – primary processing of raw materials for industrial production purposes – finished goods ready for consumption. The country’s economic development strategy assigns a special part to an increase in the manufacturing industry’s share of total exports volumes.
All sectors of the national economy stick to a single invariable rule – the cost-effective use of resources, which becomes possible by inculcating up-to-date resource-economy technologies in production. The year 2016 is expected to see a two-fold reduction in power intensity of GDP thanks to the wide application of such technologies. What’s more, there are plans to swell production volumes of industrial output with high value added, to reduce production costs as well as to ensure the prompt recoupment of production expenditure.
It is necessary to accentuate the fact that it is not only the manufacturing industry and its basic sectors that are evolving at a fast clip. The services industry is developing dynamically too. Last year, the sector accounted for more than a half of GDP growth. For the time being, its share of the nation’s GDP approximates 55 per cent, compared with 49 per cent in 2010. More than half the population employed in the economy now work in the services sector, whose growth rates tend to increase year in, year out.
In all successes already scored by the Republic of Uzbekistan and future achievements to be yet notched up, a special part is played by the investment policy pursued by the Uzbek leaders, including its vital component – the National Investment Policy, which is worked out by the country’s government. The point is, investments represent a resource “engine” of economy and scientific-technical progress that catapults the Republic to a qualitatively new stage of development. Last year, to cite an example, the equivalent of US $15.8 billion worth of capital invested from all sources of financing has been implemented in the national economy. To compare, in the current year Uzbekistan plans to implement the equivalent of US $17.3 billion, of which foreign investments account for over US $4 billion. As many as 164 big investment projects, whose total cost is in excess of US $5 billion, will be realized in 2016. These encompass such projects as the construction of 13,000 dwelling houses in the countryside, with the total square exceeding 1.8 million sq. m.; the laying of some 900 kilometers of water, gas and electricity supply networks; the building of more than 500 kilometers of motor roads and the creation of about 990,000 new jobs.
Together with scientific-technical progress and the structural and investment policy, another factor regulating the development of public production and economic growth rates is law. It streamlines and organizes economic activities of all market participants. The classics of economic theory pointed out, in particular, that “regularity and order should constitute an indispensable feature of any mode of production, if the latter has to acquire the social stability and independence of a simple accident or arbitrary rule”.
Law, as any other element of social order, can be in time for changes that are already ripe in the economy or lag behind them. Correspondingly, law can accelerate or slacken the pace of economic progress. All depends on whether law, policy and democratic principles really get the upper hand.
The successes achieved by the Republic of Uzbekistan are indisputable, in the same way as its sovereignty and independence. In today’s environment, it is important, according to President Karimov, not to rest on the laurels, no matter however deserved they are. The country should move forward and augment the scope of its accomplishments. This will not only speed up the pace of Uzbekistan’s economic growth, but permits the country to join the club of developed and highly industrialized states of the world.
(Source: «Business partner.uz» newspaper)