Independence - the Basis of Economic Development Achievements of Uzbekistan
Independence - the Basis of Economic Development Achievements of Uzbekistan
  • By Choe Nam-suk (info@koreaittimes.com)
  • 승인 2015.09.24 13:32
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Over the years of independence, the economy of the Republic of Uzbekistan has evolved based on a national model developed by President Islam Karimov, which considered the socio-economic potential of the country, the history of the Uzbek people, national values, and the best international practices.

The implementation of the five basic principles of transition to a socially-oriented free market economy in the reform process has enabled the country to reach high results in a short historical period along with providing an annual sustained economic growth and improving the welfare of citizens.

As a result of reforms, the structure of the economy was radically changed with the creation of a reliable legal framework for its dynamic development and favorable investment climate.

This is evidenced by macroeconomic indicators such as the increase of the national economy by 5.5 times and gross domestic product per capita at purchasing power parity by 4 folds over the years of independence. The State Budget execution has reached a surplus since 2005, which contributes to the strengthening of macroeconomic stability.

Investment friendly environment and guarantee of the investor protection contributed to the increase in the volume of accumulated investments totaled the equivalent of $190 billion, over $65 billion of which is foreign investment.

As a result of investment in the industrial sectors of the economy, entirely new industries have been created, such as automotive, oil, gas, chemical, railway engineering, and the production of modern building materials, consumer electronics, pharmaceuticals, modern food and textile industries, and others. They produce more than 60% of the total industrial products of the country with high value added, which is competitive in the world market.

In particular, the automotive industry of the country consists of about 200 companies, which directly employ more than 25,000 people. Among them a number of joint ventures created with the participation of world famous automobile companies like General Motors, MAN, Isuzu, Itochu.

The State Visit of President Islam Karimov to the Republic of Korea

As part of the program to ensure energy independence and development of oil and gas processing industries, Bukhara oil refinery, Shurtan Gas Chemical Complex, Kungrad Soda Plant, Dehkanabad potash fertilizer plant and a number of other high-tech industries have been built in collaboration with foreign companies. Currently, Ustyurt Gas Chemical Complex is under construction on the basis of Surgil field.

In recent years, policy measures on modernization, technical and technological renewal of industries and the increase of production efficiency resulted in increased labor productivity by 2.2 times in the period from 2000 to 2014.

The Fund for Reconstruction and Development of Uzbekistan, which was created in 2006 and the share capital of which currently stands at $25 billion, plays an important role in the implementation of projects on modernization and technical re-equipment of basic industries, and effective structural and investment policies.

The active participation of the Fund in the preparation and implementation of new projects allowed the attraction of over $10 billion of foreign investment and loans in the form of co-financing by the World Bank, the Asian Development Bank, Islamic Development Bank, financial institutions of Japan, Korea, China and other foreign banks and investors.

As a result of ongoing measures to strengthen the country's export potential, the volume of exports from Uzbekistan increased by more than 30 times. Over the past 17 years, despite the global crisis, Uzbekistan has consistently sustained positive trade balance.

During the years of independence, the structure of agricultural production has radically changed. The most important and fundamental factor of reforms in this sector has been a shift from administrative planning and distribution system to market relations.

The implementation of measures to ensure food security during independence has greatly increased the volume and range of domestically produced food products. As a result, over the years of independence, grain production has increased from less than 1 million tons to more than 8 million tons, turning the country into an exporter of wheat.

The light industry of Uzbekistan

Due to extensive work on the comprehensive support and development of farmer movement, strengthening the material-technical base of farms, economy, management of land, water and other natural resources, there has been an improvement in the reclamation of land together with creation of high-yielding areas of intensive gardening and drip irrigation system. As a result, country produces about 17.4 million tons of fruits and vegetables today in comparison to about 4 million tons in 1991.

With the implementation of structural changes in the agricultural sector, the share of cotton in the total volume of gross agricultural output currently does not exceed 9%, while the share of grain is about 9%, fruit and vegetables and grape products - 30%, potatoes - 11%, and livestock products exceed 40%.

During the years of independence, large-scale projects for the modernization and development of road transport infrastructure has been implemented. As part of the program for the development of public roads 2.5 thousand km of roads including 1.5 thousand km national highways were built and reconstructed in the last 5 years.

The unique road through the high pass Kamchik with the construction of two tunnels that connect the Fergana valley with the central part of the country was built, which meets the highest international standards.

Uzbekistan constructs new railways, including the direction of Navoi-Uchkuduk-Sultanuizdag-Nukus length of which is 342 km with a combined bridge over the Amu Darya River, from Tashguzar-Boysun- Kumkurgan length of which is 223 km, passing through the mountain pass at 1,500 meters above sea level. The electrification of railway lines connecting the capital to the regions of the republic took place. A high-speed passenger train "Afrosiyob" on the basis of modern and comfortable trains Talgo-250 was put into operation. The construction of a new electrified railroad Angren-Pap length of which is 123 km with the construction of a tunnel of more than 19 km is of great importance for the development of a transnational transport corridor.

Currently, there are more than 20 international transport corridors in Uzbekistan and two of them are major international roads connecting Western Europe with East Asia.

As part of the development and updating of air transport in Uzbekistan, there are the newest set of maintenance of aircraft of western production, remodeled airports, improved navigation system on the whole territory of Uzbekistan, which is recognized as one of the best air traffic control systems in the CIS. Today the fleet consists exclusively of modern aircraft - world's leading manufacturers Boeing and Airbus. Aircrafts with the flag of Uzbekistan on board fly to more than 40 airports in Europe, Asia and North America.

The implementation of structural transformation and diversification of the economy is supported by the steady growth of banks' resource base, the expansion of the share of long-term sources of funding and the increasing role of commercial banks in these processes. If in 1990 loans for more than three years accounted for about 24% of the total loan portfolio, nowadays their share is 80%.

As a result of the sustainable growth in aggregate capital of commercial banks and a balanced policy for managing portfolio of assets, currently provided indicator of the level of capital adequacy is three times the international standards of the Basel Committee on Banking Supervision.

International rating agency Moody's has been assessing the prospects of the banking system of Uzbekistan as "stable" for the fifth consecutive year. At present, all commercial banks of the republic are rated as "stable" from leading international rating companies, such as Standard & Poor's, Moody's and Fitch Ratings.

Registan Square, Samarkand, Uzbekistan

In recent years, small business and private entrepreneurship are becoming the basis for driving economic growth in Uzbekistan. If small business as a sector of economy was almost absent before the country's independence, more than 56% of the gross domestic product is generated in the sector currently. The expansion of the share and importance of this sector was possible due to country implemented measures for its broad support, the improvement of the business environment, the development of reliable systems for the protection of the rights and guarantees of private property, and reduction of the tax burden.

During the years of independence, resulting in a steady reduction in tax rates, broadening the tax base and the liberalization of tax administration, the total tax burden on the economy has dropped from over 45% to 19.5%, and the single tax rate for small industrial enterprises decreased by more than 3 times - from 15.2% to 5%.

The service sector has become the most promising and dynamically developing sector of the economy of Uzbekistan. If the share of services in the economy amounted to about 33% at the beginning of the 1990s, it reached 54% of GDP lately. At the same time, new modern services' share in the total amount exceeds by far 21%. Among them, there are such fields as digital information and communication technologies, mobile services, computer programming services, consulting, legal and auditing services, real estate and brokerage services, private medicine, car insurance, new types of financial services, including leasing, electronic banking and others.

One of the promising areas of this sector, supported by a great potential, is the tourism industry, the development of which is gaining a momentum. The rich historical heritage of the Uzbek people attracts more and more attention of foreign tourists, as Uzbekistan is one of the leading places in the world in terms of historical sites with more than 4 thousand ancient monuments. Also attractive old traditions and culture are closely intertwined with the history of the Great Silk Road.

The modern tourist infrastructure created recently in the country corresponds to the highest international standards and received positive responses from visiting foreign tourists. The country has a network of world-class luxury hotels and more than 490 hotels, motels, and more than 28 thousand camping sites provide services with international standards. More than 100 hiking trails in all regions of Uzbekistan focus on familiarization with the unique historical, architectural ensembles and monuments, 140 of which are listed as historic buildings and protected by UNESCO.

Uzbekistan's successes and milestones are widely recognized by the world community. In particular, our country occupies the 5th place by the World Economic Forum' ranking of countries with rapidly growing economies. Also according to the study published by the "World Happiness Index" conducted by sociologists at Columbia University (USA), with the assistance of the United Nations, Uzbekistan took 44th place among 158 countries and first place among the CIS countries.

Summarizing the past stage of Uzbekistan's economic development, we can say with full confidence that the continuation of implementing the national model of reform and development of the economy will allow the country to achieve goals in further deepening of reforms aimed at sustained and steady economic growth and improve the standard and quality of life of the Uzbek people.


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