SOCIAL ECONOMIC DEVELOPMENTSOCIAL ECONOMIC DEVELOPMENTOF THE REPUBLIC OF UZBEKISTANOF THE REPUBLIC OF UZBEKISTAN
AND THE MEASURES TAKEN TO IMPROVE AND THE MEASURES TAKEN TO IMPROVE THE BUSINESS ENVIRONMENTTHE BUSINESS ENVIRONMENT
Ministry of Economyof the Republic of Uzbekistan
August 17, 2012
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Sustained high rates of economic growth(7-9% per annum on average)
Main trendsof social economic development of Uzbekistan
GDP growth rate (in % to the previous year)
8,5
7,0 7,3
9,59,0
8,1 8,3 8,1
0
2
4
6
8
10
2005 2006 2007 2008 2009 2010 2011 1 half of2012
Growth rate of industry production(in % to the previous year)
7,2
10,8
12,7
9,18,3
6,37,0
12,1
0
2
4
6
8
10
12
14
2005 2006 2007 2008 2009 2010 2011 1st half of2012
• for the period of independence, the development of GDP based on purchase power parity has increased 3,5 times
• volume of industrial production has grown more than 3 times during 1990-2011
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№ Indicators
Expected Forecast
2012 2013 2014 2015
1. Gross Domestic Product (GDP)8.2 8.1 8.2 8.2
2. Level of inflation (end of period) 7-9 7-9 6.8 6.5
3. Volume of industrial products8.6 8.4 9.1 9.3
4. Volume of agricultural products 6.9 5.8 5.2 5.1
5. Volume of Investment 9.3 9.1 9.4 9.7
Main macroeconomic indicators of developmentof the Republic of Uzbekistan for the period of 2012-2015
(in % change to the previous year)
Main macroeconomic indicators of developmentof the Republic of Uzbekistan for the period of 2012-2015
(in % change to the previous year)
Main trendsof social economic development of Uzbekistan
Factors affecting to the growth rate ofsocial 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 energy-conserving;
4. Modernization and development of industrial infrastructure, particularly transport, power industry, water use and sewer systems, as well as means of communication;
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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
Factors affecting to the growth rate ofsocial economic development of the Republic of Uzbekistan
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Macroeconomic stability, internal and external balance of the economyhave been ensured
• a moderately tight monetary policy kept inflation below 7-8 percent
Budget balance (in % to GDP)
• 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
Inflation rate(in % to december of the previous year)
21,6
7,67,8 7,4 7,3
6,86,87,83,73,8
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Main trendsof social economic development of Uzbekistan
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• balanced foreign trade – sustainable surplus and over 6-times growth of the official reserves in the past 5 years
Main trendsof social economic development of Uzbekistan
Volume and dynamics of Uzbekistan foreign trade (USD mln.)
6212
32652947
317
9500
5409
4091
1318
21845
13045
8800
4245
25537
15027
10510
4517
13088
71655623
1242
0
3000
6000
9000
12000
15000
18000
21000
24000
27000
2000 2005 2010 2011 1st half of 2012
Foreign trade turnover Export of goods and services Import of goods and services Foreign trade balance
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Implementation of large-scale structural reformsand 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.
Main trendsof social economic development of Uzbekistan
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Program includes:
• 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.
Program includes:
• 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.
IndustriesValue of projects
(USD mln.)
Total 47261,5
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
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";
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";
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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.
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.
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Program on priorities of industrial development of the Republic of Uzbekistan for 2011-2015
Development of road infrastructureDevelopment of road infrastructure
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Development of transport 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.
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 sectorDevelopment 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.
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 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 Boeing-767-300 are started;
The purchase of two Boeing-767-300 is foreseen in 2013 and two Boeing-787-800 in 2016.
Construction of new passenger terminals at the airports of Bukhara and Tashkent are completed;
Exploitation of new ten Airbuses A320-200 and two Boeing-767-300 are started;
The purchase of two Boeing-767-300 is foreseen in 2013 and two Boeing-787-800 in 2016.
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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
Government support fordevelopment of the economy
TaxesMaximum tax
ratesin 1992-2011
2011
Legal entities income tax
45% 9%
Individual income tax 13%-60% 9%-22%
Value added tax 30% 20%
Single social payment 40% 25%
Single tax payment for small enterprises
15,2% 6% (in industry - 5%)
Dynamics of tax burdenin 1993-2011(in % to GDP)
45,0%
21,9%
30,2%41,0%
31,7%
23,2%
15%
20%
25%
30%
35%
40%
45%
50%
1993 1996 2000 2005 2008 2011
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A stable banking and financial system in strict compliancewith 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;
• for the last 10 years volume of loans to the real sector of the economy, financed from internal sources has increased by 35 times;
• Total current liquidity of the banking system is 10 times higher than external payments due.
(54%)
(85%)
(46%)
(15%)
0,0
1000,0
2000,0
3000,0
4000,0
5000,0
6000,0
7000,0
8000,0
9000,0
10000,0
2000 2011
domestic sourcesexternal loans
2567 (100%)
8720(100%)
7412
1378
1188
1308
Sources of credit portfolio of commercial banks
(eq. USD mln)
Government support fordevelopment of the economy
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.
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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%.
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
Small business and private entrepreneurship
Dynamics of small businessand private entrepreneurship development
Dynamics of small businessand private entrepreneurship development
3,4
39,5
23,1
16,914,9 14,1
0
5
10
15
20
25
30
35
40
Uzbekistan Russia Ukraine Belarus Kazakhstan Azerbaijan
The number of registered small business entities per 1000 employed people in 2011 in the countries of CIS (units)
17
Government program“The Year of Small Business and Private Entrepreneurship”
The results of the Program:
• at the legislative level, the principle of priority of the rights of entrepreneurs is established, according to which all unavoidable contradictions and ambiguities in laws and regulations shall be interpreted in favor of entrepreneurs;
• 4 Laws of the Republic of Uzbekistan, more than 20 decisions of the President and the Government, aiming to reduce inspections of entities of business, to simplify and cheapen the registration and post-registration procedures and to create more favorable conditions for their activities are accepted;
• fees for customs clearance of export is reduced by twice, a system of registration of export transactions by the principle of "one window“ and the order of voluntary product certification are introduced;
• Bureau of export products promotion of Agency “Uzstandard” and specialized foreign trade company “Uztadbirkorexport” are created.
The results of the Program:
• at the legislative level, the principle of priority of the rights of entrepreneurs is established, according to which all unavoidable contradictions and ambiguities in laws and regulations shall be interpreted in favor of entrepreneurs;
• 4 Laws of the Republic of Uzbekistan, more than 20 decisions of the President and the Government, aiming to reduce inspections of entities of business, to simplify and cheapen the registration and post-registration procedures and to create more favorable conditions for their activities are accepted;
• fees for customs clearance of export is reduced by twice, a system of registration of export transactions by the principle of "one window“ and the order of voluntary product certification are introduced;
• Bureau of export products promotion of Agency “Uzstandard” and specialized foreign trade company “Uztadbirkorexport” are created.
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102,912,4
419,9
45,4
2690,2
485,2
4041,1
752,3
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2000г. 2005г. 2010г. 2011г.
loans from all sources of funding
including micro loans
Credit stimulation of small business entities, billion. sums
Credit stimulation of small business entities, billion. sums
158 7 6
38,2
50,1 52,5
54
0
20
40
60
2005 2009 2010 2011*
Single tax rate Share of small business in GDP
• 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.
• 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.
* 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.
Reducing tax burden for small businessesand restricting the inspection of their activities
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№ IndicatorsNumber of
abolished forms
Overall reduction
Number of reporting forms
Total number of passing records
during a year
I. Statistical reports
Total 65 by 1.4 times by 2.0 timesincluding:
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
II. Tax reports
Total 6 by 1.4 times by 2.2 times
III. 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. Other reports
Total 50 by 1.7 times by 3 times
V. Permission procedures
Total 80 by 1.3 times
VI. Licensing activities
Total 15 by 1.25 times
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"
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
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Cancelled: Optimized procedures (terms, cost)
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
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
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)
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
the procedure of confirming country origin of imported goods 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
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.
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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”
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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
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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 registering property
form 12 to 1 procedures
1-7 procedures
Reducing the time spent on the registration of property
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
Thank you!