INFORMATION DIGEST OF PRESS OF UZBEKISTAN # 85

May 2, 2017

POLITICS
On telephone conversation of Presidents of Uzbekistan and Turkmenistan

ECONOMY
Important factor of stability of the enterprises

LOCALISATION
Uzbekistan: Localisation Program includes 12 new projects

FREE ECONOMIC ZONE
FEZ Urgut: Thousands of New Jobs

BUSINESS CLIMATE
The Support Foundation for Privatized Enterprises is being established in Uzbekistan

POLITICS

On telephone conversation of Presidents of Uzbekistan and Turkmenistan
A telephone conversation of President of the Republic of Uzbekistan Shavkat Mirziyoyev with President of Turkmenistan Gurbanguly Berdimuhamedov took place on 1 May on mutual agreement.
The Heads of the two countries discussed the pace of implementation of the agreements and documents, reached and signed during the state visit to Turkmenistan on 6-7 March this year.
The parties underlined with deep satisfaction the intensification of bilateral contacts on a high level in political, trade-economic, transport-communications and cultural-humanitarian spheres.
At present, a full-scale implementation of commercial contracts and joint cooperation projects in the agro-industrial complex, on repairs and modernization of railway cars and other spheres are underway.
The Heads of state underscored the importance of further active interactions to timely accomplish planned programs and projects of cooperation, primarily in the economic sphere.
The Presidents also exchanged views on topical issues on the regional and international agenda, agreed the schedule of upcoming joint events in the nearest future.
President of Turkmenistan Gurbanguly Berdimuhamedov expressed sincere greetings and the best wishes to the fraternal Uzbek nation.
The conversation took place in a traditionally warm and friendly atmosphere, in the spirit of mutual understanding, respect and good neighbourliness, a characteristic of the Uzbekistan-Turkmenistan relations.
(Source: UzA)

ECONOMY

Important factor of stability of the enterprises
Increase in production efficiency, meaning in general terms obtaining the best result at the minimum costs of labor and materials is the basis of economic progress at all times and in any society. Mathematically the formula of efficiency looks as fraction where numerator is a result, and denominator contents costs. The more the result and less expense, the higher efficiency and vice versa.
With transition of economy to the market relations the former attention to efficiency, unfortunately, has considerably weakened, the price, profit, income, expenses, etc. became more attractive. The same can be said with respect to labor productivity which characterizes activity of society for creation of new or additional material benefits and values necessary for lifehood. Practice shows that society which consumes more than produces is eventually doomed. To assess this fatal difference, to be exact, to prevent society becoming doomed, in fact, labor productivity serves which growth is characterized by efficiency and decrease is characterized by decline and inefficiency. Therefore productivity is the first and important reflection of efficiency in any sphere of economy. In this regard, it appears, it would be appropriate to decide how are things going with this major economic indicator at the level of the enterprises today.
Efficiency is a complex category. It reflects action of many factors affecting both results of production, and expenses. Growth of results of production gets its concrete expression in improvement of quality of production, increase in profit (income), ensuring compliance of structure of the manufactured goods to structure of public requirements, acceleration of rates of economic growth. In turn, cost reduction includes economy of labour (increase units productivity), economy of the current material costs (reduction of material consumption), economy of the investments invested in the fixed business assets (increase in capital productivity), etc. It follows that efficiency is not only scientific and complex category, but also guarantee of economic stability and long activity of all enterprises, irrespective of their form of ownership, industry classification, size (small or large), the area of location and other signs. In the conditions of the developing competition only effectively working enterprise survives.
As can be seen, aspiration of the enterprises to efficiency and its account in present conditions when every year production scales grow, the modern equipment and technology are implemented in production, economic turnover joins new mineral deposits, investment cooperation actively develops are very important. They, especially the accounting of efficiency of enterprise activity mean fixing of inefficiency and inadmissibility of increase in production scales through deteriorating working conditions, causing damage to the environment, decrease in other indicators of human activity. It is important not only from the point of view of ensuring survival of the enterprises in the conditions of the competition, but also strengthening of social orientation of economic growth. For this reason production efficiency should be considered not only as purely economic one, but also as social and economic category. The matter is that efficiency is related not only to production, but also the standard of living of the population, content and working conditions, a condition of human environment, scales of free time, etc. So, without achievement of efficiency in all spheres, first of all at the enterprises we cannot expect serious progress. Efficiency makes profit, opens a way to new achievements. As observations and the analysis of an economic situation in the country show, majority of domestic enterprises today follow such way. They participate in implementation of the State program of localization of production, introduce modern energy saving technologies in production, take out the production to foreign markets, try for import substitution and decrease in costs of production. So, in nine months of the last year within the adopted Program of localization products output totaled about 4092 bln. Soums (currency rates of CB RU from 02.05.2017, 1$= 3734.91 soums). At the same time estimated economic effect of import substitution has made $1,3 bln. During period the volume of export of domestic goods and services has increased almost by 1,5%, in comparison with the same period of 2015, the geography of supply has expanded. At the large enterprises decrease in product cost on average by 9,4% is reached. Day-to-day experience convinces that production efficiency and its major components such as profit, labor productivity growth, and cost reduction alone or automatically don’t occur at enterprise, they are provided, first of all, with the thought-over and effectively arranged management. However, it isn’t always easy to create effectively organized production, rather it is even difficult. To do this, first of all, the competent command structure competent not only in economy, but also in production technology, aspiring for innovations, supporting success and image of the enterprise is required. Certainly, a lot of things depend on the top officials, i.e. the management of the enterprise which has to know well the "strong" and "weak" sides of production and do whatever is necessary to prevent the latter. It is also important to know market "breath", that is how a market demand is formed to avoid manufacturing once "invented wheel". The enterprise has not produce those articles it is able or can produce, but marketable products being in great demand. Knowledge of the closest competitors, their orientation and strategy would be useful for business. It will allow working on innovations, production diversification though these kinds of activity have to be always on the agenda of the enterprise.
Summing up the above, it should be noted that production efficiency is an indispensable condition of economic and financial stability of the enterprises, their survival in the conditions of the developing competition. Achievement of efficiency shouldn’t become a single action, one should seek it constantly. At the same time not only director alone, as quite often happened earlier, but also all collective have to worry about production efficiency which is equivalent, in essence, to success and growth of image of the enterprise. It is promoted by the corporate control system applied today at many enterprises.
(Source: «Business partner.uz» newspaper)

LOCALISATION

Uzbekistan: Localisation Program includes 12 new projects
The Resolution of the Cabinet of Ministers of Uzbekistan has adopted a decision on inclusion of 12 projects of 9 companies in the Program of localisation of production of finished goods, components and materials for 2017-2019.
The document was adopted in order to further deepen the level of localisation of production, expansion of inter-sectoral industrial cooperation, including between small businesses and large enterprises of the Republic, to saturate the domestic market with necessary consumer goods and components, the rational use of currency funds, create new jobs and increase employment.
(Source: «Business partner.uz» newspaper)

FREE ECONOMIC ZONE

FEZ Urgut: Thousands of New Jobs
The Liberal Democratic Party of Uzbekistan (UzLiDeP) has organized a meeting with the participation of deputies, entrepreneurs, business people, youth and the general public in the Urgut Free Economiс Zone. They discussed the tasks identified during the President’s visit to the Samarkand region on the further development of the economic zone.
It was noted that the territory of the “Urgut-1” in the Urgut district, “Urgut-2” in the Nurobod district and “Urgut-3” in the Pastdarghom district were created under the relevant presidential decree. 816 hectares of land were allocated for these territories; the work has already began on providing them with the necessary engineering and communication infrastructure.
The projects to organize the production of light industry products, household appliances, medical equipment, pharmaceutical, leather-shoe products, stationery and building materials are realized on the territory of "Urgut-1". In 2017-2018, 83 projects are planned to be implemented, 20 of them will be completed this year.
These projects with a total cost of $ 250 million will be financed through the loans from commercial banks and founders’ funds. As a result, 5.5 thousand new jobs will be created.
“In the second half of this year, it is planned to launch a joint Uzbek-Turkish venture on the production of polyurethane with a capacity of 15,000 tons", said the deputy director of the Free Economic Zone Gayrat Abdurahmatov. “The total cost of the project is more than $ 6.2 billion. It is planned to create more than 65 new jobs at this enterprise”.
To date, 40 industrial and 19 joint ventures is operating in the region that provide 1,2 thousand people with the work. Last year, 20 types of industrial products were produced with the cost of 157.6 billion soums (currency rates of CB RU from 02.05.2017, 1$= 3734.91 soums), the total amount of exports was $ 10 million. In particular, there is produced the carpets and rugs made of local raw materials, synthetic fibers, electric stoves, gas stoves, disposable plastic items, polymers, glue and other products.
“The activities of free economic zones play a significant role in socio-economic transformations”, a deputy of the regional Kengash of people’s deputies Otabek Akhtamov noted. "This puts great responsibility on the people’s representatives, and we defined their specific tasks in this direction. Deputies will meet once a quarter with work in the FEZ Urgut, assist in solving the emerging problems”.
(Source: «Uzbekistan Today» newspaper)

BUSINESS CLIMATE

The Support Foundation for Privatized Enterprises is being established in Uzbekistan
It will be part of the State Committee for Support of Privatized Enterprises and Development of Competition of the Republic of Uzbekistan.
The new foundation will be established on the basis of the Foundation of State Property Privatization Funds. Its primary mission will come to the allocation of funds for practical support for privatized enterprises, implementation of investment projects, and organization of trainings for entrepreneurs.
Dividends from the state share in business entities, which are channeled to the republican budget, as well as the funds from the lease of state property that are channeled to local budgets of the regions will be additional sources of support for privatized enterprises.
The Cabinet of Ministers is expected to endorse the regulation on the procedure of formation and use of the funds of the Support Foundation for Privatized Enterprises by the end of May.
(Source: «Uzbekistan Today» newspaper)

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