Uzbekistan tends to rank among the leading countries in doing business



Today the majority of the states all over the world are concerned about raising their investment image in the global market. In the current reality, when the economy’s competitiveness is the country’s major factor in terms of its capacity to end its interests in the international arena, the quality of the conditions for business are the foremost priority. An investor is an ideal party to impartially evaluate the potential of the economy as he risks his money. UT reporters found out what Uzbekistan is ready to present to investors.

Development program For the years of independence Uzbekistan made a lot to improve all segments of the domestic business environment. Of course, the process of development has not always gone as quickly as we would like, as it was necessary to reform a cumbersome apparatus, created by decades of Soviet times. The market system was new to the country with no experience of its introduction, so many of the reforms were carried out in manual mode, perfected in the course of its development. And the global financial and economic crisis, with fallen export markets had some hindering effect. But more importantly here is that Uzbekistan, despite the difficulties faced by a young country, continues the path of building a market economy. Of course, not everything goes well at once, but step by step, the economy and business environment, following a precisely built course, tend to be among the best states in terms of doing business, responsive to the findings and advice of international experts.

The key point for the development of the scope was last July, when the country launched a massive range of measures to improve the business environment.

The President of Uzbekistan would say about major issues that must be addressed in the first place, designating them in their last year\'s documents on the development of the business. For example, the current state of the business environment, business conditions have been named yet not fully complying with the requirements and principles of the free market economy, international norms and standards. Also, there is still excessive regulation of business, as well as bulky, costly and non-transparent administrative procedures, bureaucratic barriers and obstacles have has not been fully eliminated. The current system of statistical, tax and financial reporting has been called cumbersome and in need of radical reform and simplification. A large number of licensing requirements and licensing procedures do not correspond to existing policies of liberalization of the economy and the principles of market economy, often duplicates the other instruments of state regulation. Among the objectives for the near future are further simplification and reduction of regulatory procedures, introduction of contact-free electronic forms of relationships, as is used in the current international practice.

As a result of this set of measures, in the past year the country re-registered 30.5 thousand enterprises and organizations. The volume of gross domestic product exceeded 96.5 trillion. soums (Currency rates of CB from 01.07.2013 1$=2101.48 soums), with an 8.2% gain.

A note for investors The fewer barriers and bigger benefits, the more investment: this simple and yet extremely effective truth is applied by more and more countries around the world. Investors are always the major assessment of the business environment. They act as a kind of litmus test of the economic situation in the world, in certain regions and countries. Experts point out that for the past few years, the investment flow has rapidly changed its course, leaving the European markets and reorienting towards Asia. China and the so-called Asian dragons is the major driver. Big European, Middle Eastern and Asian investment funds get accustomed to the markets, seeking for opportunities for further growth. In these conditions Uzbekistan has a great chance to attract the investors that are ready to invest in technology and implementation of big projects.

It is no accident that in 2008 Uzbekistan made a truly historic decision to create the first free economic zone. The Navoi region was chosen not by chance. In addition to the advantageous geographical position, this area had the necessary transport and communication infrastructure, and energy resources for establishment of industrial enterprises. An intermodal hub was established concurrently close to Navoi FIEZ. It was to provide new capacities with logistics facilities. Today, five years later, the effectiveness of this decision can be estimated even not by the number of projects and the volume of output, but by the intention to create similar zones in other parts of the country. This intention is based primarily on the desire of foreign investors who come up with their initiatives and projects and seek to create modern technological manufactures. In Jizzakh and Angren, the two other zones, the agreements on implementation of big projects jointly with foreign partners were concluded at the stage of their formation.

The growing tendency of attracting investment among the regions is getting noticeable. It\'s no secret that previously many domestic and foreign experts noted the extreme unevenness in attracted investments in different regions of the country. Tashkent and Tashkent region were always in the lead. Now the situation is gradually changing. 258 different investment projects are underway in the regions. Of these, 217 projects drew $109.9 million of direct foreign investment and loans. More than four million new jobs were created. In four first months of 2013 alone 72 new enterprises were commissioned in the country with the share of foreign capital. About 50 projects on building new facilities and upgrade of the existing ones were implemented. Light industry, food processing and furniture industry, production of building materials, services, and manufacture of consumer goods lead in the drawn investment.

The composition of the companies investing in Uzbekistan is another interesting point. For example, in January-April 2013 the market registered investors from 28 countries, including the traditional players: Russia, South Korea, Turkey, China, and relative newcomers: Scotland, the Netherlands, Singapore, Switzerland, UAE and others.

Active process of drawing capital to the regions is contributed by a new initiative of holding international investment forums in the regions. For example, a unique event took place in early April in the Farghona Valley that turned into a platform for investors, domestic and foreign companies, international financial institutions and government agencies to discuss the ways to expand and diversify the flow of foreign investment in three areas of the valley. It is planned that similar events will be held on a regular basis in different formats in other regions of Uzbekistan as well.

Food and light industries might serve an example of drawing foreign investors. Currently, the Food Industry Association of Uzbekistan merges 17 joint ventures. In 2012, the volume of foreign investment reached $48.8 million. Equipping of enterprises with new facilities and technologies by means of abovementioned funds helped to increase the processing milk capacities by 12,600 tons, meat - by 4,600 tons, fruits and vegetables – 30,000 tons and develop the production of 126 new kinds of products. In general it is projected to build and reconstruct another 312 enterprises on processing fruits and vegetables, meat and dairy products by 2016. As for the light industry, over the years of independence it drew $1.8 billion of foreign investments and carried out more than 150 different projects. By late 2016 it is planned to implement some 100 projects more with a total value of more than $1.6 billion

In general, it is planned to draw more than 27.1 trillion soums of capital investments throughout the country this year as part of the investment program, of which 6.69 trillion soums is centralized investment, and 20.4 trillion soums is decentralized. In 2013 Uzbekistan expects to draw more than $4.5 trillion soums of foreign direct investment and loans, as well as 1.7 trillion soums of foreign investment and loans in equivalent as guaranteed by the government. Projects not included in the major Investment Program will be a part of regional investment programs. Last year under the Program 1,226 projects attracted $841.2 million of investment and thereby provided 22,100 jobs. (Source: “Uzbekistan Today” newspaper)