INFORMATION DIGEST OF PRESS OF UZBEKISTAN # 78

April 21, 2017

POLITICS
Localization and Export Issues Discussed

OFFICIALLY
A State Inspection to Control Quality of Road Construction has been instituted in Uzbekistan. The new state agency will control the road construction, and be accountable to the government

BUSINESS CLIMATE
Order for providing entrepreneurs a security fund gets approval

POLITICS

Localization and Export Issues Discussed
On April 19, 2017, a video-intercom meeting were conducted under the chairmanship of the President of the Republic of Uzbekistan Shavkat Mirziyoyev which was devoted to discus the measures on strengthening the personal responsibility of officials at all levels for optimizing the volume and structure of imports by deepening the localization of the production and expanding the industrial cooperation, and unconditional fulfillment of the forecast export parameters and the full mobilization of reserves to further increase its volumes.
During the event it was noted that over 2.8 thousand localization projects for more than $ 5.5 billion were realized as a part of the programs for localization of production of finished products, components and materials, more than 4.8 thousand previously imported products were mastered. As a result, the volume of imports over the past five years decreased by $ 752 million, including in 2016 - by $ 286 million.
However, despite the measures taken to expand the production of localized import-substituting products, the Cabinet of Ministers’ complexes, ministries, departments and business associations allow unreasonable growth in imports which leads to inefficient use of foreign exchange resources that could be directed to the realization of the projects critical for the national economy aimed at further expansion of production volumes and creation of new jobs.
In 2016, the import volumes were significantly increased at the enterprises of the joint-stock companies “Uzbekenergo”, “Almalyk GMK”, “Uzbekyengilsanoat”, “Uzstroymaterialy”, state interprise “Navoi GMK”, the holding company “Uzpakhtasanoateksport”, the joint stock company “Uzdonmahsulot”, the association “Uzbekcharmpoyabzali”, state joint stock company (SJSC) "Uzfarmsanoat". A number of companies and economic associations, including the national holding company "Uzbekneftegaz", joint-stock companies "Almalyk GMK", "Uzbekyengilsanoat", "Uzbekenergo", "Uzstroymaterialy" and "Uzkimyosanoat", "Uzeltekhsanoat", SJSC "Uzfarmsanoat", holding company "Uzbekozikovkatholding" allowed the import of the products, despite the fact that an analogous production of them has been successfully mastered by the enterprises of our country.
Along with this, individual enterprises imported the products that were not characteristic of their main activity. The heads of these companies and economic associations were strictly warned for the growth of imports, especially for the products, raw materials and materials that produced in our country, as well as for the diversion of foreign exchange resources to non-traditional imports, they will be brought to responsibility measures up to consideration of the issue on compliance with work status.
During the meeting, the State Customs Committee was instructed to establish a permanent control over the compliance of the structure and range of imports with the activity profile of importers and to report monthly to the heads of the Cabinet of Ministers’ complexes to take appropriate measures to prevent the import of non-conventional goods. The State Committee for Investments was tasked with providing a critical analysis of the validity of the price parameters in contracts for imported equipment and technologies, their tender documentation, and the investment projects concluded on a turnkey basis.
The meeting participants focused on the expansion of the localization for the production of quality competitive import-substituting products. With a purpose of further stimulating the production expansion of the localized products, the Ministry of Economy was instructed to critically review the approach in the formation of the Localization Program by envisaging the introduction of a notification mechanism for including new localization projects in the program on the basis of the list of import-substituting products offered for localization at domestic enterprises in 2018.
A special significance of the attendees was attached to the facts of the formal attitude of many enterprises to the conclusion of contracts at the International Industrial Fair and the Cooperation Exchange. Their heads were strictly warned about the personal responsibility for the timely and full execution of the contracts concluded for 2017 at the International Industrial Fair and the Cooperation Exchange.
At the meeting, special attention was placed on the issues of boosting the volume and expansion of the range for exports of the goods, works and services, the involvement of unused reserves in additional exports, taking into account the current conjuncture in the world market.
It was noted that, despite the growth by 9.1% in the exports in the first quarter of 2017 compared to the same period in 2016, a number of enterprises in the sectors and territories of the country did not fully meet the forecast export parameters. Hokims (governors) of the regions that failed to provide the established export volumes of the fruit and vegetable products in the first quarter of 2017 were warned on that if the forecast parameters will not be fulfilled in the first half of the year, the issue of the expediency of their further stay in the working post will be considered.
The Council of Ministers of the Republic of Karakalpakstan, the regional hokimiyats together with the JSC "Uzagroexport" were instructed to take the necessary measures to unconditionally execute the parameters for the export of the fruit and vegetable products, including due to timely sowing, harvesting, hard contracting and shipment of products in 66 districts specializing in the growing of the fruits and vegetables.
At the meeting, separate notice was also placed on the creation of new jobs and employment. In particular, there were considered taken measures to form professional and work skills among graduates of higher educational institutions and vocational colleges, secure their employment, create decent working conditions.
Ministries, departments, hokimiyats and public authorities in places were given orders to organize a new system that assists in the creation of new jobs.
The heads of ministries, departments and economic associations made speeches on the agenda of the event. At the meeting, the decisions were made on the realization of measures to ensure the optimization of the volume and structure of imports by deepening the localization of production and expanding industrial cooperation, as well as an additional increase in the volumes and types of exports of goods, works and services.
(Source: «Uzbekistan Today» newspaper)

OFFICIALLY

A State Inspection to Control Quality of Road Construction has been instituted in Uzbekistan. The new state agency will control the road construction, and be accountable to the government
It will be engaged in monitoring the compliance of legal entities and individuals with the requirements of regulatory documents in terms of technical regulation of road construction, production of road construction materials, products and structures.
SICQRC specialists will be involved in commissions on operational acceptance of constructed road facilities, come up with proposals and participate in streamlining of related regulatory documentation.
Another function will have to do with standardization and certification of road construction materials, products and structures.
The SICQRC staff will employ 26 state inspectors, who will continuously monitor quality of road construction works in all regions of the country.
The agency has huge amounts of work for the next few years. Overhaul and running repairs of 5,454 km of inter-farm rural roads, urban and countryside streets are scheduled for next two years alone - 2,700 km in 2017, and 2,274 km in 2018.
(Source: «Uzbekistan Today» newspaper)

BUSINESS CLIMATE

Order for providing entrepreneurs a security fund gets approval
On April 10, the Cabinet of Ministers of Uzbekistan adopted a Resolution "On measures on organization of activity of Guarantee Fund for small entrepreneurship development".
This Government resolution approved the Regulation on the procedure of providing small businesses loans of commercial banks issued for the purchase of new equipment and other purposes, to the extent not covered by collateral.
Under the regulations, the Guarantee Fund is not available on projects involving:

• the return of previously obtained credits or any other debts;
• the production of alcohol and tobacco products;
• the formation of working capital of trade organizations and public catering enterprises;
• funding the construction of trading objects and public catering facilities;
• the organization of gambling and other games based on risk, as well as the acquisition of equipment for data purposes.

(Source: UzReport.uz)

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