NEWS AND EVENTS
June 8, 2010
Creation of logistics centers in Uzbekistan
The large-scale economic reforms undergoing in Uzbekistan upon the initiative of President Islam Karimov prove their effectiveness - Uzbekistan despite the world economic crisis has been maintaining a macroeconomic stability and sustainable economic growth.
The policy of comprehensive reforms whose core is a broad modernization of production, transition of the national economy to innovative path, further deepening of economic reforms have ensured a sustainable trends of growth of the main indicators of the country\\\'s development.
The structure of exports has also changed with increased share of finished products with high added value. Thereby the main items of exports from Uzbekistan are fuel and oil products (34,2 %), services (8,8 %), machines and equipment (2,9 %), chemical products (5 %) consumer goods (6 %).
Implementation of the Anti-Crisis Action Program elaborated by the President has allowed not only significantly mitigate the negative influence of the world crisis upon the economy of Uzbekistan but also carry out an efficient financial and economic activity.
Within the framework of the Program the companies are encouraged to lower the prime cost of their products and consequently its export cost which would allow the national manufacturers increase their competitiveness in the world markets as well as strengthen their positions.
Achieving this objective mainly depends on lowering the costs to delivering the products from the place of manufacture to the place consuming. Considering that in the process of shipment the product undergoes variety of shipping operations including transferring from one type of transport to another, temporary warehousing, it essential to ensure operability of all stages involved in the process of shipment.
Logistics centers directly addressing all these issues. Logistics is a process of planning, managing and controlling the efficient flow of stocks, raw, finished products, services and relevant information (including exports, domestic and external movements) with full satisfying the consumers\\\' requirements.
So far, the logistics centers have proven their effectiveness in many countries.
One of the peculiarities of logistics parks is that they can provide a variety of logistic services to large and medium companies. These parks are usually established at the knots of transport network with large volumes of freight turnover and located in the territory of 100 and more hectares, in the area where the different types of transport intersect such as automobile, railway, aviation and sometimes river or sea transport. The warehouses, combines terminals, access ways and maneuvering sites, customs checkpoints, fleet of motor vehicles, expert and financial organizations (banks and insurance companies), post offices, hotels, and security companies shall be located in this area. The companies may enjoy a wide spectrum of services while outsourcing all the operations.
The main objective of this business is to optimize the expenses which today in the conditions of market stagnation is a significant advantage in terms of competitiveness. As foreign best practices show lowering transport costs to 1 percent equals 10% increase in sales volumes.
Taking into account the efficiency of logistical approach to delivering the goods to a consumer, Uzbekistan attaches a strategic role to logistics in developing its economy. Establishing and developing production, trade, transport and information systems shall allow expedite integration of the country in the world economic and information space.
Logistics centers allow organize a faster and more effective movement of goods, improve the quality of processing and lowering the cost of transport component in their price. Emergence of centers will streamline the entire process of goods movement in the country and it will become more predictable and stable. Besides, the availability of goods distribution channels within the country will allow increase the available flows of goods manifold at the expense of entering of trade networks to the regional markets.
In this regard the President has numerously emphasized on necessity and special importance of creating such centers, elaborating of the most efficient routes and transport corridors for shipping the Uzbek goods to the international markets.
This work has already begun and it is giving its positive results. Thus, on December 02, 2008 the President\\\'s decree \\\"On establishing a Free Industrial-Economic Zone (FIEZ) in Navoi Province\\\" was issued. It envisages granting a special customs, currency and tax treatments, simplified procedure of entry, residing and departure from the FIEZ, as well as obtaining work permit on its territory. Entire territory on which the FIEZ was established shall be granted for use and management to the Administrative Council for the whole period of its life.
The document also regulates the payments by the businesses incorporated and operating in the FIEZ. They are granted the right to make payments in foreign currency, use the convenient terms and forms payment for exported and imported goods. In future the Zone is supposed to become one of the most important logistical centers of the country.
The city of Navoi was chosen not for nothing. It has advantageous geographic location at the intersection of stable air traffic routes between Europe and Asia, while international transport corridors such as international automobile highway and transcontinental railway also go nearby this area. Besides, large industrial enterprises of the country with significant export potential are also located at Navoi. Among them is Navoi mining and smelting plant, various chemical factories, as well as numerous farms which grow agricultural production.
Korean Air will make some part of flights to Europe by transit from Navoi and will assist in establishing a global network which will contribute to raising the number of passenger and cargo flights, creating the necessary logistics infrastructure, industrial complexes nearby the airport and involving manufacturers to this process.
For over 2009 Uzbekistan Airways made more than 330 flights on international routes and transported around 8,500 tons of cargo which has allowed integrate Navoi airport in the global logistics network.
Besides, the International logistics center was commissioned in the town of Angren whose main purpose is to ensure guaranteed and uninterrupted transport link between regions of the country and provinces of Ferghana valley. The intitial steps on establishing logistics centers in the country have been made. But there is a lot more to do.
It would be beneficial to pay attention to carrying out scientific and methodological researches on logistics and establishing the logistics centers in Uzbekistan, enhancing their availability and efficiency. For that one needs to define the structure, directions of material flows, possibilities of using the country\\\'s available transport system, warehouses and communications, main factors defining the significance and specialization of each logistics center, study the best practices of foreign countries.
Creation the network of logistics centers is an important part of a large-scale economic reforms implemented in our country which will contribute to further development of Uzbekistan\\\'s economy, enhancing its efficiency and strengthening its position in the world markets.
Nailya Asadullina, Senior research officer Institute of Economy Academy of Sciences Republic of Uzbekistan