SOCIAL ECONOMIC DEVELOPMENT
OF THE REPUBLIC OF UZBEKISTAN
AND THE MEASURES TAKEN TO IMPROVE
THE BUSINESS ENVIRONMENT
Ministry of Economy
of the Republic of Uzbekistan
August 17, 2012
Main trends
of social economic development of Uzbekistan
Sustained high rates of economic growth
(7-9% per annum on average)
GDP growth rate
(in % to the previous year)
Growth rate of industry production
(in % to the previous year)
14
10
12,1
12
9,5
8
9,0
8,1
6
7,0
8,5
12,7
10,8
10
8,3
9,1
8,3
8,1
7,3
8
7,2
7,0
6,3
6
4
4
2
2
0
0
2005
2006
2007
2008
2009
2010
2011
1 half of
2012
• for the period of independence, the
development of GDP based on
purchase power parity has increased
3,5 times
2005
2006
2007
2008
2009
2010
2011
1st half of
2012
• volume of industrial production has
grown more than 3 times during
1990-2011
2
Main trends
of social economic development of Uzbekistan
Main macroeconomic indicators of development
of the Republic of Uzbekistan for the period of 2012-2015
(in % change to the previous year)
Expected
№
Forecast
Indicators
1. Gross Domestic Product (GDP)
2. Level of inflation (end of period)
3. Volume of industrial products
2012
2013
2014
2015
8.2
8.1
8.2
8.2
7-9
7-9
6.8
6.5
8.6
8.4
9.1
9.3
6.9
5.8
5.2
5.1
9.3
9.1
9.4
9.7
4. Volume of agricultural products
5. Volume of Investment
3
Factors affecting to the growth rate of
social economic development of the Republic of Uzbekistan
1. Maintaining macroeconomic stability, domestic and external
equilibrium in the economy of the state;
2. Active industrial policy, aimed at structural changes, the rapid
growth rate of the share of processing industry with the
production of goods with high value added;
3. Implementation of innovative techniques, including energyconserving;
4. Modernization and development of industrial infrastructure,
particularly transport, power industry, water use and sewer
systems, as well as means of communication;
4
Factors affecting to the growth rate of
social economic development of the Republic of Uzbekistan
5. Intensification of agricultural sector at the expense of the
introduction of new technologies, water conservation,
efficiency and productivity;
6. Further liberalization of economy and improvement business
environment for developing small business and private
entrepreneurship, as well as attracting foreign investment;
7. Stimulation and support for export;
8. Active investment on the building of human capital in the
fields of education, health and physical training.
5
Main trends
of social economic development of Uzbekistan
Macroeconomic stability, internal and external balance of the economy
have been ensured
Inflation rate
(in % to december of the previous year)
•
a moderately tight monetary policy
kept inflation below 7-8 percent
21,6
7,8
3,8
3,7
6,8
6,8
7,8
7,6
7,4
7,3
2009
2010
Budget balance (in % to GDP)
2002
1,1
0,2 0,3 0,4
0,1
-0,8
-0,4
- 1, 5
2002
2003
2004
2005
2006
2007
2004
2005
2006
2007
2008
2011
1,0
0,5
-0,4
2003
2008
2009
2010
2011
•
balanced state budget – executed with a
surplus since 2005
•
conservative policy of domestic and
external borrowing. Government
external debt doesn’t increase 7% of
GDP
6
Main trends
of social economic development of Uzbekistan
•
balanced foreign trade – sustainable surplus and over 6-times growth of the
official reserves in the past 5 years
Volume and dynamics of Uzbekistan foreign trade (USD mln.)
27000
25537
24000
21845
21000
18000
15027
15000
13088
13045
10510
12000
9500
8800
9000
7165
6212
5623
5409
6000
4245
4091
3265
2947
3000
4517
1318
1242
317
0
2000
Foreign trade turnover
2005
Export of goods and services
2010
2011
Import of goods and services
1st half of 2012
Foreign trade balance
7
Main trends
of social economic development of Uzbekistan
Implementation of large-scale structural reforms
and diversification of the economy
• structural reforms of economy have provided growth of
industrial production share in GDP from 14,2% in 2000 to
24,1% in 2011;
• implementation of transport and communication
infrastructure development projects that increased share
in GDP from 7,7% in 2000 to 11,7% in 2011;
• qualitative changes in the structure of economy due to
growth of services in GDP from 37% in 2000 to 50,5% in
2011.
8
Program on priorities of industrial development of
the Republic of Uzbekistan for 2011-2015
Program includes:
Industries
Value of projects
(USD mln.)
Total
47261,5
• Implementation of 519 large-scale industrial
investment projects for the total of USD
47,3 bln.;
• Advanced implementation of projects
producing high-value-added industrial goods
based on deep processing of local feed-stock
and natural resources;
• Annual growth of industrial production at the
rate of 9-12%;
• Increase of industry share in GDP from 24% in
2010 to 28% in 2015;
• Increase of processing industries share in the
structure of industry from 41% in 2010 to 49%
in 2015;
• Increase of export share in the volume of
production from 42,3% in 2010 to 63,2% in
2015.
incl.:
Oil-gas and petrochemistry
28562,1
Power
5470,6
Chemical industry
2867,1
Metallurgy
3065,7
Textile industry
1755,6
Machinery construction
1458,6
Construction materials
production
534,8
Other industries
3546,7
9
Program on priorities of industrial development of
the Republic of Uzbekistan for 2011-2015
Construction of Ustyurt Gas and Chemical Complex
(on the base of Surgil gas field) and Mubarek Gas
and Chemical Complex with total production
capacity of 800 thousands tones of polyethylene
and 100 thousands tones of polypropylene;
Production of synthetic liquid fuel based on refined
methane from Shurtan Gas and Chemical Complex
(671 thousands tones of diesel, 278 thousands
tones of air fuel, 370 thousands tones of naphtha,
65 thousands tones of liquefied gas);
Construction of the modern combined-cycle power
plants in Tashkent, Navoi and
Talimarjan power stations, with the total
capacity of 1746 MWt;
Transferring units №1-5 of New Angren pover
station to year-round coal firing (stage 1) with
modernization of the section "Angren";
10
Program on priorities of industrial development of
the Republic of Uzbekistan for 2011-2015
Construction of urea and ammonia plant with
production capacity of 660 thousands tones of
ammonia and 1 mln. tones of urea;
Expansion of Dekhkanabad potash fertilizers plant
up to 600 thousands tones (II phase);
Construction of propane-butane production plant at
«Mubarek Gas processing plant» for increasing of
liquefied gas production up to 258 thousands tones
and condensate up to 125 thousands tones;
Organization of production of conveyor belts, tires
for agricultural machines and automobiles.
11
Development of transport infrastructure
Development of road infrastructure
More than 2300 km roads sections of the Uzbek National
Highway are being constructed and reconstructed;
International Logistic Center in Angren city put in
operation.
Development and modernization of the railway sector
Currently, 1030 km of railroad is being rehabilitated, 82.4 km are
being constructed, and 278 km is under electrification;
High-speed passenger trains «Talgo-250» have been purchased
and high-speed railway line from Tashkent to Samarkand is
introduced for their exploitation.
Development of air transportation
Construction of new passenger terminals at the airports of
Bukhara and Tashkent are completed;
Exploitation of new ten Airbuses A320-200 and two Boeing767-300 are started;
The purchase of two Boeing-767-300 is foreseen in 2013 and
two Boeing-787-800 in 2016.
12
Government support for
development of the economy
For the years of Independence the aggregate tax burden decreased by
almost 3 times. Moreover the Government provides additional tax
incentives for exporters, small business enterprises and companies
engaged in new investments and starting production of new goods and
products
Taxes
Maximum tax
rates
in 1992-2011
2011
Legal entities income
tax
45%
9%
Dynamics of tax burden
in 1993-2011
(in % to GDP)
50%
45,0%
45%
Individual income tax
13%-60%
9%-22%
30%
20%
41,0%
30,2%
40%
35%
Value added tax
31,7%
30%
Single social payment
40%
25%
23,2%
25%
21,9%
20%
Single tax payment
for small enterprises
15,2%
6% (in industry - 5%)
15%
1993
1996
2000
2005
2008
2011
13
Government support for
development of the economy
A stable banking and financial system in strict compliance
with the Basel Core principles of banking supervision
•
Capital Adequacy Ratio – 3 times higher
than international standards;
•
Total assets of banks – more than 2
times higher than the total balance of the
deposits of population and legal entities,
insuring complete protection and
guarantee of timely payments;
Sources of credit portfolio of
commercial banks
(eq. USD mln)
10000,0
8720
(100%)
9000,0
1308
(15%)
8000,0
7000,0
6000,0
5000,0
•
for the last 10 years volume of loans to
the real sector of the economy, financed
from internal sources has increased by
35 times;
4000,0
3000,0
2000,0
Total current liquidity of the banking
system is 10 times higher than external
payments due.
1188
(46%)
1000,0
0,0
•
2567
(100%)
7412
(85%)
1378
(54%)
2000
2011
domestic sources
external loans
14
Education system of the Republic of Uzbekistan
New education system has been established, which
consist of:
 1539 new academic lyceums and professional
colleges, with the capacity of 1.6 million students;
 9791 renovated and newly constructed secondary
schools for 4.6 million students.
 66 institutions of tertiary education are functioning in
the Republic with more than 300 thousand students,
including branches of leading foreign universities:
Moscow State University named after M. Lomonosov;
Westminster International University; Turin Polytechnic
Institute; Russian Economic Academy named after G.
Plekhanov; Management Development Institute of
Singapore; Russian State University of Oil and Gas
named after M. Gubkin.
15
Small business and private entrepreneurship
From the beginning of economic reforms small business and private entrepreneurship
development has made the basis of multi structure market economy formation
• share of small business in GDP has grown from 31% in 2000 to 54% in 2011;
• number of small business enterprises has increased 2 times during last 10 years;
• share of small business enterprises in employment has increased from 49,7% to 74,8%;
• share of small enterprises in the total volume of industry has grown from 12,9% to 21%.
Dynamics of small business
and private entrepreneurship development
Small business and private
entrepreneurship share (in %)
2000
2011
in GDP
31,0
54,0
In industry
11,3
21,0
in construction
37,0
69,0
in retail turnover
45,3
47,0
in total employment
49,7
74,8
in export
10,2
18,8
16
The number of registered small business entities
per 1000 employed people in 2011 in the countries of CIS (units)
40
35
30
39,5
25
20
23,1
15
16,9
14,9
10
14,1
5
3,4
0
Uzbekistan
Russia
Ukraine
Belarus
Kazakhstan
Azerbaijan
17
Government program
“The Year of Small Business and Private Entrepreneurship”
The results of the Program:
Credit stimulation of small business
entities, billion. sums
• at the legislative level, the principle of priority of the
rights of entrepreneurs is established, according to 4500
which all unavoidable contradictions and ambiguities
in laws and regulations shall be interpreted in favor of 4000
entrepreneurs;
4041,1
3500
• 4 Laws of the Republic of Uzbekistan, more than 20
decisions of the President and the Government, 3000
aiming to reduce inspections of entities of business, to
simplify and cheapen the registration and post- 2500
registration procedures and to create more favorable
2000
conditions for their activities are accepted;
• fees for customs clearance of export is reduced by 1500
twice, a system of registration of export transactions
by the principle of "one window“ and the order of 1000
voluntary product certification are introduced;
• Bureau of export products promotion of Agency
“Uzstandard” and specialized foreign trade company
“Uztadbirkorexport” are created.
500
0
2690,2
419,9
102,9
12,4
2000г.
752,3
485,2
45,4
2005г.
2010г.
2011г.
loans from all sources of funding
including micro loans
18
Reducing tax burden for small businesses
and restricting the inspection of their activities
60
54
52,5
50,1
40
• The financial and economic
activities of newly created small
businesses cannot be target for
planned tax audits in the first three
years from the date of their state
registration.
38,2
20
15
8
7
6
2009
2010
2011*
0
2005
Single tax rate
• Moratorium of 3 years is declared
to conduct tax audits of financial
and economic activities of small
business entities that pay taxes
and other mandatory payments on
time, as well as ensure sustainable
growth rate and profitability.
Share of small business in GDP
* Since January 1, 2012 the rate of individual tax
payment has been decreased up to 5% out of
revenue for microfirms and small enterprises in
the field of industry.
19
Decree of the President of the Republic of Uzbekistan №DP-4453 dated July 16, 2012
“About measures of drastically reducing the statistical, fiscal, financial reporting, licensable
activities and permission procedures"
Overall reduction
№
Indicators
I.
Total
including:
Number of
abolished forms
Statistical reports
65
Number of
reporting forms
Total number of
passing records
during a year
by 1.4 times
by 2.0 times
1. For large enterprises
58
by 1.4 times
by 1.9 times
2. For entities of small business
7
by 1.6 times
by 2.9 times
by 1.4 times
by 2.2 times
II.
Total
III.
Tax reports
6
Financial reports
1. For large enterprises
2
by 1.5 times
by 1.5 times
2. For entities of small business
1
by 1.5 times
by 1.5 times
IV.
Total
V.
Total
VI.
Total
Other reports
50
by 1.7 times
Permission procedures
80
by 1.3 times
Licensing activities
15
by 1.25 times
by 3 times
20
Decree of the President of the Republic of Uzbekistan №DP-4455 dated July 18 2012
“About measures of further radically improving of business environment and
providing greater freedom for entrepreneurship”
Since August 1, 2012, 22 norms (standards) and measures, aiming at further improving
conditions of business environment have been introduced
Cancelled:
requirement for partly payment of the
statutory fund before state registration of
economic entities along with maintaining
obligations on the formation of statutory fund
within a year
notarized specimen of signatures for opening
bank accounts, as well as the requirement
for the mandatody presence of specimen of
signatures of small businesses in cards –
microfrims second signature (accountant)
the procedure of confirming country origin of
imported goods
Optimized procedures (terms, cost)
terms of authorization for connection to water supply networks
and sewage systems has been reduced up to 2 days
terms of providing access of telephone network for enterprises
reduced up to 10 days
rate of state fee for credit institutions’ claims, regardinjg to
recover credits, loans and other liabilities, to the court in civil
cases has been decreased from 20 to 2% of the amount of the
claim
terms of customs clearance of cargo and delivering certificate
for origin of goods has been reduced up to 3 days
terms of authorization for employment of highly qualified foreign
citizens has been reduced up to 15 days
rates of state fees for filing an application to the economic court
on initiation of bankruptcy cases has been decreased from 20
to 3 times as much as minimum wage
21
Decree of the President of the Republic of Uzbekistan №DP-4455 dated July 18 2012
“About measures of further radically improving of business environment and
providing greater freedom for entrepreneurship”
The Program introducing in 2013-2014 measures on further radically improving of business
environment and providing greater freedom of entrepreneurship is approved, which
provides:
Improvement of the legislation of the Republic of Uzbekistan;
Implementation of 35 measures in the following areas:
I. The acceleration of the procedures related to registration and the beginning of business activity;
II. Measures to improve the lending procedures and improving the activity of credit bureaus;
III. Strengthening the protection of the rights and interests of investors;
IV. Further reduction in the tax burden on the business entities and improvement of tax
administration system;
V. Liberalization of procedures related to the implementation of foreign trade operations;
VI. Further simplification of procedures to restore the solvency and liquidation of business;
VII. Improvement of conditions related to employment and labor relations;
VIII. Measures to strengthen the legal protection of business entities.
22
Measures taken to improving the business environment and providing
greater freedom of entrepreneurship in Uzbekistan
Measures
Results
Indicators of the top
ten countries according
to the report
"Doing Business"
Reducing the number of procedures for the
registration of new enterprises
from 6 to 3
procedures
1-3 procedures
Reducing the time spent on the registration
of new enterprises
from 14 to 4 days
1-13 days
Reducing the initial costs of creating new
enterprises
from 27.2% of
income per capita
to 0%
0-25% of income per
capita
Reducing the number of procedures for
obtaining building permits
form 25 to 12
procedures
5-17 procedures
Reducing the number of procedures for
connection to power supply
form 9 to 5
procedures
4-5 procedures
23
Measures taken to improving the business environment and providing
greater freedom of entrepreneurship in Uzbekistan
Measures
Reducing the number of procedures for
registering property
Results
form 12 to 1
procedures
Indicators of the top
ten countries according
to the report
"Doing Business"
1-7 procedures
from 78 to 7 days
2-38 days
Reducing the number of tax payments
from 41 to 7
payments
3-29 payments
Reducing the number of documents for
export
from 6 to 4
documents
3-7 documents
Reducing the number of documents for
import
from 11 to 5
documents
3-5 documents
Reducing the expenses of litigation for
execution of a contracts
from 22.2% to 9%
of the value of the
claim
8.2-26.9% of the value of
the claim
Reducing the time spent on the registration
of property
24
Thank you!