Small and Private Business
It is the most dynamically developing sector of the economy, and stimulated due to several state reforms effective from the end of 1998 with a view of supporting of small and private business. In particular: reduction of inspections by state bodies, unified tax for carrying out of small business, liberalization of a cash turnover and conditions of crediting of domestic and foreign financial institutions. In the earlier years of the independence the share of turnover of small and private businesses in the country’s GNP made approximately 1% in comparison to the year of 2002 the parameter was 35%. Small and private businesses contribute to the reduction of unemployment by job creation in the country. Foreign credits and attracted investments directed by the GOU for stimulation of small and private business are repaid in due time under the favorable tax conditions and the optimized mechanism of sales of output on export by the enterprises of small and private business.
Import Substitution
The main purpose of import substitution, per se an instrument of currency exchange regulation, is to reduce unreasonable import of the goods similarly produced in the republic and direct the flow of released monetary resources for the development of a domestic production and an increase of the application of hi-tech. effective from 1996. The changes that were introduced in 1996 to the legislation that regulated the currency flow can be one of the examples of the simplification and flexibility of the currency exchange regulation. Besides, the currency fund derived form sales of automobiles, agricultural equipments, flour and sales of other several liquid goods on foreign markets has allowed to provide currency self-recoupment of enterprises using in manufacture of imported raw materials, materials and componentry. It is necessary to note that currency earnings of enterprises derived due to sales on export sufficiently directs to a profit markup and an enterprise development, workflow automation, labor stimulation and an improvement of a current infrastructure.
Economic Growth and Inflation
One of the factors constraining the economic growth and the stability of any country is inflation. However, the GOU as a consequence of number economic reforms has achieved real decrease in inflation rate. According to the official statistical data, the inflation rate was more than 26.0% in 2001, but because of the favorable economic conditions, the datum has decreased by 6.8% in 2006.
According to bases of economy, the growth of GDP also depends on the exchange rate used for converting national currency into a foreign currency. In this respect the GOU has created the steady mechanism of the free currency convertibility by means of several Currency funds and stock exchanges. The exchange rate is periodically fixed by the Central Bank of
The analysis of the trend of GDP shows stable growth and significant budget surplus of
Balance of Payments (BoP)
As a result of implementing of number significant reforms by the GOU directed to liberalization of a national economy as a whole, the volume of currency reserves by the end of 2002 was increased by 167.9% and has made about USD 4.7 bln in comparison to those of past period. Due to the implemented protection policy of interests of domestic manufacturers, the import of the goods similarly produced in
The control system of the external debt of the country in 1999-2006 has been stable and less moderate. Furthermore, the external debt rate has been at the rate of 20.6% of GDP in 1999 towards 22.8% in 2006. The critical ratio was marked in 2003 when the parameter made about 40.0% of GDP. Hence, investments into any sector or region of the country today can be considered guaranteed to the development and repayment in time, due to constant growth of priority macroeconomic parameters. The main investors of the country have been such companies as Gazprom, Lukoil, Mitsui, Mitsubishi, Itochu, Nestle, Coca-Cola Bottles, Vimm-Bill-Dann, SIEMENS, ZEROMAX, MTS, Vimpelkom, BAT, Marubeni, Samsung, ABN Amro Bank, Kanebo Silk, KOC, IRANSADERAT and etc.
Currency Convertibility
With a view of strengthening of currency balance of the country in
The incomes of the foreign investor derived in
Foreign investors are guaranteed for free transfer of cash resources in a foreign currency into
Priority Sectors of Economy
Agriculture
The main and leading sector of economy is the agriculture (about 40.0% of GDP). Basic manufacturing of the sector is cotton-fiber, wheat, and fruit-and-vegetable products.
Favorable weather conditions have determined the corresponding regional distribution of the basic export-oriented products of the agricultural industry of the country. For example,
- vegetables, fruit, melons and gourds are raised basically in
- rice and other cereals in the
- meet and dairy products and tanning materials mainly are produced in Bukhoro, Surkhondaryo and Qashqadaryo provinces,
- wine and other alcoholic products are produced in
- tobacco products are produced in
Light industry
One of the priority directions in the development of an export policy of
It is also necessary to note that
Due to re-equipment of manufacturing by modern equipments the Program of Quality Improvement and Increase in volumes of production, expansion of assortments, the organization engaged in processing of cotton fiber on the basis of attracting both local and foreign investments by creation of JVs is realized.
The followings are the mainstreams of the development of the sector:
- Spinning manufacture - updating of plants of not-spindle spinning on the basis of modern equipment;
- Weaving manufacture – implementing of automatic winding machines, warp drawing-in machines, replacement of weaving looms by modern shuttleless weaving machine;
- Dyeing manufacture – implementing of new equipments with the electronic control and regulation of processes.
Heavy Industry
Uzbek heavy industry is represented by the developed and complex spheres of aircraft construction, motor industry, a network of the enterprises producing agricultural machines and equipment, cable conductor products, tools and parts for a railway transportation and etc.