Export, investment and production localization issues are discussed

President of the Republic of Uzbekistan Shavkat Mirziyoyev chaired a meeting on August 12, 2019, dedicated to issues of increasing and efficient use of the export potential of sectors of the economy and regions, attracting and developing investments, primarily foreign direct investments, and expanding the scale of localization of production.

The Head of the state pays special attention to these issues, they regularly become the subject of discussion at meetings. Relevant documents are adopted and necessary conditions are created.

In particular, in accordance with the resolution of the President of the Republic of Uzbekistan “On measures for strengthening the export promotion and stimulation” of December 20, 2018, a National Export Support System was created. An Export Promotion Agency has been established under the Ministry of Investments and Foreign Trade. A mechanism has been introduced to compensate 50 percent of transportation costs for the export of goods of 205 items.

Real practical measures in this direction give the expected results. The number of exporters increased by 2 thousand, the geography of exports expanded to 42 countries, the export of 59 types of products was established for the first time.

For seven months of this year, goods and services were exported at 7 billion 331 million USD, which is 23 percent more compared to the same period last year.

At the meeting it was noted that available opportunities for increasing exports are not fully utilized in Uztuqimachiliksanoat Association, the Uzbekoziqovqatholding company, as well as in the city of Tashkent, Fergana, Andijan and Tashkent regions. Responsible managers were criticized for the lack of systematic work with problems of exporters, for the fact that they do not inform entrepreneurs about the opportunities created by the state and do not assist them in entering the foreign market.

It was emphasized that the Republican Commission headed by the Minister of Investments and Foreign Trade for increasing the export potential of regions and industries should hold meetings with representatives of enterprises and entrepreneurs, to help them improve their knowledge of exports, implement international standards and pass certification.

“We have great opportunities for export. One of the growth points should become, in particular, the production of export-oriented products based on processing cotton fiber, fruit and vegetable products. Through this, we will increase exports and create new jobs”, said Shavkat Mirziyoyev.

As it is known, agricultural products grown in Uzbekistan are appreciated all over the world. This ready-made brand is a great opportunity for expanding exports.

Resolution of the President “On additional measures for deep processing of agricultural products and further development of food industry” of July 29 this year aims to effectively use this opportunity and introduce modern technologies in the agricultural sector.

In accordance with this resolution, in 2019-2021 it is planned to create 45 agro logistics complexes, 205 new processing capacities, at least 36 thousand hectares of intensive gardens, for which it is planned to allocate almost 1 billion dollars.

The progress in this direction was considered at the meeting. It was noted that it is necessary to implement these projects on time and double the export of fruits and vegetables in 2021. The importance of growing export-oriented crops, mainly leguminous products, was indicated.

Issues of implementation of export contracts signed within the framework of foreign visits and international exhibitions, holding the international exhibition “Made in Uzbekistan” in October were also discussed.

Proposals were made on increasing the authorized capital of trading houses of exporters abroad.

Investment is the driver of the economy. Active investment policy is being implemented in Uzbekistan, as a result of attracting foreign direct investment in sectors of the economy and regions, many promising projects are being implemented.

For example, in the first half of this year, investments at the amount of 85 trillion 775 billion soums, which is 1.6 times more compared to the same period last year, were attracted. In the structure of fixed capital, the share of foreign direct investment increased 2.5 times and reached 1.7 billion dollars. And foreign loans issued without a state guarantee increased by 3.7 times. Almost 75 percent of the utilized foreign direct investment falls on regional projects.

In the context of these indicators, it was noted that during the remaining period of this year, the main attention should be paid to full development of investments.

Heads of industries, in which the development of foreign direct investment is progressing slowly, reported on the reasons of the current situation and plans for accelerating activities in this direction.

The Cabinet of Ministers has been instructed to ensure the commissioning of industrial facilities within the framework of 145 projects with a total value of 4.2 billion within the time frames provided for in 2019 Investment Program. These include the organization of production of polyvinyl chloride and nitric acid at JSC Navoiazot, expansion of production of liquefied gas at Mubarek Gas Processing Plant, commissioning new combined-cycle plants at Turakurgan, Takhiatash and Navoi thermal power plants, and construction of Tashkent Metallurgical Plant.

The analysis shows that about 40 large enterprises commissioned over the past 10 years are not working at full capacity.

The Cabinet of Ministers, the ministries of investments and foreign trade, the economy and industry were instructed to analyze the activities of enterprises and facilities launched within the framework of investment programs, and take measures on bringing them to the design parameters of capacity.

Formation of the Investment Program for 2020-2022 was also discussed at the meeting. It was noted that the program should include, first of all, specific projects developed under almost 650 agreements concluded within the framework of top-level visits, as well as projects related to deep processing of oil and gas raw materials, alternative energy, mechanical engineering, electrical engineering, construction materials industry, agro-industry and other high-tech industries.

At the meeting, another important issue was discussed in detail – the expansion of localization.

Creation of additional value and production of import-substituting products based on deep processing of local raw materials is an important factor in stability of the economy. In this regard, in Uzbekistan, necessary conditions are created for development of localization, expansion of industrial cooperation between enterprises. It has been criticized that in some industries and regions localization issues are left to chance.

“Opportunities are created, technologies are involved. But local leaders are accustomed to taking the easy path – not working on product localization, but importing it”, the President said.

Only 1.1 percent of molybdenum, 12 percent of natural gas, 21 percent of zinc, 25 percent of copper, 20 percent of fruits and vegetables, 46 percent of yarn are processed in Uzbekistan. It was noted that deep processing of this raw material would increase the added value of the finished product up to 5 times.

The Cabinet of Ministers was tasked with increasing the production of localized goods in all regions and industries by at least 20 percent over the next two years, as well as preparing a program for localization of products, which has a high share in the structure of imports.

The need for creation of a separate unit in the structure of the Accounts Chamber for analyzing issues of expanding localization was noted.

At the meeting, reports and proposals of heads of industries and regions were heard.