INFORMATION DIGEST OF PRESS OF UZBEKISTAN # 145

July 26, 2017

POLITICS
Messages of President of Uzbekistan

FINANCE
Statement at the Conclusion of an IMF Staff Visit to Uzbekistan

INVESTMENTS
GM Uzbekistan has launched a modified version of the Labo mini-truck at its automobile plant in Pitnak (Khorezm region)

BUSINESS CLIMATE: JIZZAKH REGION
More Opportunities for Business

POLITICS

Messages of President of Uzbekistan
The President of the Republic of Uzbekistan Shavkat Mirziyoyev expressed condolences to the President of the Islamic Republic of Afghanistan Mohammad Ashraf Ghani and the friendly Afghan people in connection with the monstrous terroristic act in Kabul, which led to numerous human casualties and serious injuries to innocent people.
In the message, the head of our state conveyed sincere feelings of compassion to the families and friends of the victims.
***
The President of the Republic of Uzbekistan Shavkat Mirziyoyev sent a message to the President of the Islamic Republic of Pakistan Mamnoon Hussain, noting that he sensed with deep sorrow the numerous victims and injured among innocent people as a result of the terrorist act in Lahore.
The head of our state expressed deep condolences to the President and through him to all the people of Pakistan, conveyed sincere words of sympathy and support to the families and friends of the victims and wished speedy recovery to injured people.
(Source: Press Service of the MFA of the Republic of Uzbekistan)

FINANCE

Statement at the Conclusion of an IMF Staff Visit to Uzbekistan
An International Monetary Fund (IMF) mission led by Mr. Albert Jaeger visited Tashkent during July 17–24, 2017, to discuss economic developments and the authorities’ reform plans. At the conclusion of the visit, the mission issued the following statement:
“The mission welcomed the authorities’ comprehensive plans to reform the economy, based on the 2017-21 strategy for further developing Uzbekistan approved by President Shavkat Mirziyoyev. If implemented in a timely and effective manner, these plans could significantly strengthen the economy’s ability to create good jobs and sustainable growth.
“The mission especially welcomed the authorities’ plan to frontload reforms of the foreign exchange system.
“Unifying exchange rates and allowing a market-based allocation of foreign exchange resources would allow the Central Bank of Uzbekistan (CBU) to pivot to a stability-oriented monetary policy capable of effectively controlling inflation. The reform would also promote job creation and growth by increasing external competitiveness, attracting foreign direct investment (FDI), and improving the allocation of domestic resources. Given Uzbekistan’s ample foreign exchange reserves, the reform can be implemented from a position of strength.
“The reform of the foreign exchange system would need to be backed up by restructuring state-owned enterprises and state-controlled banks, removing other bottlenecks to international trade and FDI, and streamlining laws, regulations, and practices that unnecessarily raise transaction costs for businesses, especially for small and medium-sized enterprises crucial for promoting job creation.”
“The IMF stands ready to provide further technical cooperation and policy advice to support the authorities’ reform plans.
“Implementation of reforms will have to take place against the backdrop of inflationary pressures, which are mainly propelled by rapid money and credit growth. The mission therefore welcomed the CBU’s recent tightening of monetary policy, including by raising the refinancing rate from 9 to 14 percent.
“While the banking system remains well-buffered, there were concerns about strains on liquidity and underlying loan quality. In response to these concerns, the authorities have preemptively re-capitalized state-controlled banks, raised liquidity requirements, and reviewed and adapted the CBU’s liquidity provision and bank intervention frameworks.
“Budget policy has stayed a prudent course so far in 2017, and the consolidated state budget is now projected to reach a surplus of 0.2 percent of GDP. To be consistent with the new exchange rate and monetary policy regime, the 2018 fiscal stance will need to remain tight.
“The mission welcomed the authorities’ determination to work toward improving the quality and transparency of economic statistics. The authorities’ decision to adopt a new CPI to measure inflation, starting in 2018, should already help improve the quality of a key statistical indicator. The mission also welcomed the authorities’ intention to join the IMF’s enhanced General Data Dissemination System (e-GDDS).
“It was tentatively agreed that the next Article IV consultation will take place in fall 2017.
“The mission thanks the authorities for their warm hospitality and constructive discussions.”
(Source: Official website of IMF)

INVESTMENTS

GM Uzbekistan has launched a modified version of the Labo mini-truck at its automobile plant in Pitnak (Khorezm region)
The upgraded Labo now has a 25% longer body against the basic model. The first model car came off the assembly line of the plant on May 25. To date, more than 200 cars have been produced.
“The new design was a requirement of the time. We studied the market and realized that customers needed the Labo with a larger body due to the demand for the transportation of oversized cargo, which would reduce transportation costs. We will monitor the demand, and if the customer likes it, we can completely switch to the production of such cars, while today we retain the ratio at 80 to 20 in favor of the old model,” the company press service reported.
The capacity of the Pitnak plant allows producing up to 5,000 Labo. The car is very popular with the commercial structures that deal with the delivery or small shipments in large cities. In conditions of congestion of modern cities with permanent traffic jams, this small and sufficiently maneuverable car has become a truly irreplaceable.
Labo is a small mini-truck with a carrying capacity of up to 550 kg. The car is a modification of the Damas model with an open side body and is designed for transportation in urban and rural areas for short distances. It is equipped with a three-cylinder engine of 0.8 liters capacity and 38 horsepower, a five-speed manual gearbox.
(Source: «Uzbekistan Today» newspaper)

BUSINESS CLIMATE: JIZZAKH REGION

More Opportunities for Business
41 state property objects have been transferred to business entities at zero cost in Jizzakh region in 2015-2017.
The Actions Strategy initiated by the head of state, as well as the Presidential Decree ‘On measures to raise the efficiency of work with privatized enterprises’ within its framework, is an important guide to action in this area. It has expanded opportunities for using idle buildings and structures, creating favorable conditions for entrepreneurial initiatives.
The agreements on sales of state property at zero cost in exchange for investment and social obligations, concluded between the regional territorial administration of the State Committee for Support of Privatized Enterprises and Development of Competition of the Republic of Uzbekistan and 41 business entities, envisaged over 30.4 billion soums (currency rates of CB RU from 26.07.2017, 1$= 4070.38 soums) of investments in vacant facilities and creation of 1,700 new jobs. Over the past period, business entities invested 13.3 billion soums, and created over 1,000 jobs.
A building of the former supermarket was transferred to a private enterprise Hadicha Hamzayeva of Pakhtakor district at zero cost at the terms of organization of production and service in the district. The company invested 934 million soums of investments, opened a furniture shop and a service complex. Currently, it employs more than 30 people.
"Having received a vacant facility at zero cost in our community, we have seriously expanded our activities," said the head of the private enterprise Usmon Nosirov. “We have established a furniture shop, a beauty salon, a festivities hall. There are plans afoot to create new technological lines and open jobs for young people.”
A Fresh Style Limited Liability Company has efficiently engaged an idle building of the former machine and tractor fleet of Dustlik District, which was transferred at zero cost at the terms of investing $537,000. It was replaced by a finished knitwear manufacture with 800 jobs.
Nozimabegim Nasibasi enterprise, which acquired the building of the former club in the Gallaaral district at zero cost at the terms of investing 174 million soums, opened a sewing workshop there. Blankets, pillows and other garments made by more than 20 workers of the shop are popular owing to their quality.
Along with the entities that effectively use idle facilities and create new jobs, there are those who failed to achieve the expected result due to certain problems in maintenance of state property. Problems with the supply of raw materials, electricity, gas, and other shortcomings hinder the effective use of facilities.
“The acquisition of zero-cost property by entrepreneurs is not only an opportunity for business, but also a responsibility,” said A.Tursunov, acting head of the Territorial Department for Support of Privatized Enterprises and Development of Competition in the Jizzakh region. “Therefore, in order to address the problems with the support of privatized enterprises, we conduct a critical analysis of the progress achieved in the region. In doing this, we pay attention to the organization of a system-based and targeted support for the projects implemented under privatized enterprises, and implementation of contracts on real estate maintenance. We take measures to accelerate the launch of new projects in the facilities at zero cost. In partnership with banks, tax authorities, local administrations, we assist the entrepreneurs, who had received buildings at zero cost, in using the opportunities and benefits of lending and taxation.
Ultimately, experts say, free provision of public facilities to representatives of the private sector expands the ranks of property owners, and even better involve domestic and foreign investment in the production, thereby contributing to an increase in employment and welfare of the population.
(Source: «Uzbekistan Today» newspaper)

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