Exports, investments and production localization discussed
On August 12, President of the Republic of Uzbekistan Shavkat Mirziyoyev chaired a video-conference meeting to discuss issues of increasing and efficiently using the export potential of industries and regions, attracting and delivering on investments, primarily foreign direct ones, and expanding the scale of localization of production.
The head of state pays special attention to these issues, they regularly become subject of discussion at meetings. Relevant documents are accepted and the necessary conditions are created.
In particular, in accordance with the 20 December 2018 presidential decree on measures to boost export promotion and stimulation, a National Export Support System was created. An Export Promotion Agency has been set up under the Ministry of Investments and Foreign Trade. A mechanism has been introduced to reimburse 50 percent of transportation costs for the exports of 205 items.
The result fr om these practical measures proved swift in coming. The number of exporting enterprises increased by 2,000, the geography of exports expanded to 42 countries, while 59 types of products are being exported for the first time.
For seven months of this year, goods and services were exported for $ 7 billion 331 million, which is 23 percent more compared to the same period last year.
It was indicated at the meeting that in the Uztukimachiliksanoat association, the Uzbekozikovkatholding company, in the city of Tashkent, as well as in Ferghana, Andijan and Tashkent regions, the available opportunities to increase exports are hardly utilized to the full. Responsible officials were criticized for the lack of systemic work with the challenges exporters have faced, for failing to inform entrepreneurs about the opportunities created by the government and help them enter the foreign markets.
The head of our state noted that the Republican Commission to increase the export potential of regions and industries, headed by the Minister of Investments and Foreign Trade, should hold meetings with representatives of enterprises and entrepreneurs, assist them in raising knowledge about exports, implementing international standards and passing certification.
“We have scores of opportunities for exports. One of the growth points should be, in particular, the production of export-oriented goods based on the processing of cotton and fruits and vegetables. Through this, we will increase exports and create new jobs,” Shavkat Mirziyoyev said.
Agricultural products from Uzbekistan are known to be appreciated all over the world. This proven brand provides with a great opportunity to expand exports.
The President’s Decree “On Additional Measures for the Deep Processing of Agricultural Products and the Further Development of the Food Industry”, signed July 29 this year, is aimed at the effective use of this opportunity and the introduction of modern technologies in the agricultural sector.
Under this document, it is planned to organize 45 agrology complexes, 205 processing facilities, at least 36 thousand hectares of intensive gardens in 2019-2021, with almost 1 billion dollars directed toward these schemes.
The meeting participants reviewed the progress in this direction. The necessity to implement these projects on time and double the exports of fruits and vegetables in 2021 was underscored. As was the importance of growing export-oriented crops, mainly leguminous products.
The deliberations also touched on the realization of export contracts signed in the framework of foreign visits and international exhibitions, and the organization of the international exhibition “Made in Uzbekistan” in October.
Proposals were made to increase the authorized capital of trading houses of exporters abroad.
Investment is the driver of the economy. In our country, active investment policy is a priority, and as a result of attracting foreign direct investments into industries and regions, numerous promising projects are being spearheaded.
For example, in the first half of this year, investments amounted to 85 trillion 775 billion soums, which is 1.6 times more than last year’s similar period. In the structure of fixed capital, the share of foreign direct investments grew 2.5 times and reached $ 1.7 billion. And foreign loans issued without a state guarantee increased 3.7 times. Almost 75 percent of the utilized foreign direct investments falls on projects in the country’s regions.
In the context of these indicators, it was noted that from now on, the main attention should be paid to the full development of investments during the remaining period of this year.
Heads of industries wh ere the development of foreign direct investment is progressing slowly reported on the reasons for this and plans to accelerate work.
The Cabinet of Ministers has been instructed to ensure the commissioning of industrial facilities in the framework of 145 projects with a total value of $ 4.2 billion within the time frames provided for in the 2019 Investment Program. These include the organization of the production of polyvinyl chloride and nitric acid in the joint-stock company Navoiazot, expansion of the production of liquefied gas at the Mubarek Gas Processing Plant, installation of new combined cycle plants in the Turakurgan, Takhiatash and Navoi thermal power stations, and the construction of the Tashkent Metallurgical Mill.
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 investment and foreign trade, the economy and industry were instructed to analyze the activities of enterprises and facilities launched as part of investment programs, and take measures to bring them to the design parameters of capacity.
The meeting participants also discussed the formation of the Investment Program for 2020-2022. It was noted that the program should include, first of all, specific projects developed in accordance with about 650 agreements concluded as part of top-level visits, along with schemes related to the deep processing of oil and gas raw materials, alternative energy, mechanical engineering, electrical engineering, the construction materials industry, agricultural sector and other high-tech industries.
At the video-conference meeting, another important issue, localization of production, was considered in detail.
Generation of additional value and production of import-substituting goods based on the deep processing of local raw materials is an important factor in the economic sustainability. In this regard, essential conditions are created in Uzbekistan for the promotion of localization, for the enhancement of industrial cooperation among enterprises.
However, in some industries and regions, issues of localization and optimization of imports have been left to chance, resulting in the growth of imports compared to last year’s indicators.
“Opportunities are created, technologies are brought in. But local officials are accustomed to taking the easy path – not to work on localization, but to import,” the President pointed out.
As low as 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 our country. It was noted that the deep processing of these crudes would increase the added value of the finished product up to 5 times.
The Cabinet of Ministers has been tasked with securing growth in the production of localized goods in all regions and industries by at least 20 percent over the next two years, as well as devising a program for the localization of products that have a high share in the structure of imports.
The need was noted for the organization in the structure of the Accounts Chamber of a separate unit to analyze issues of expanding production localization.
Heads of industries and regions presented reports and proposals at the meeting.