Economic and Social Development of Uzbekistan in 2007 (extracts from the Address by the President of the Republic of Uzbekistan Islam Karimov at the meeting of Cabinet of Ministers, 8th February 2008)
Press Release ¹3
1. Uzbekistan’s GDP growth rate accounted for 9.5% in 2007. The volume of industrial production increased by 12.1%, agriculture – by 6.1%. All these indicators significantly exceed the forecast parameters for 2007. The state budget was fulfilled with the surplus of 1.1% towards GDP. The level of inflation made up 6.8%.
2. Industry, construction, the sphere of communications and services are growing with an advanced pace. The share of industry in the GDP now accounts for 25%, the net share of sphere of services accounts for 43%, and the small business - 46%.
3. Sustainable growth of Uzbekistan’s economy is not being provided by such factors, as the increase of extraction of hydrocarbon raw in the conditions of high world prices for oil, gas and other raw resources. The economic growth is being ensured by consistent implementation of the system-based market reforms and attraction of foreign investments, deep structural changes in economy, modernization and renovation of production, creation of the new export-bound sectors and enterprises.
4. Volume of exports of goods increased by 40.7% and secured the positive balance of foreign trade over 3.5 billion dollars and 1.5-time-increase of gold and foreign currency reserves of the country.
5. Share of finished commodity in the exports has increased and accounts for more than 38%. These are machines and equipment (increased to 1.5 times), petrochemical products (1.6 times), pharmaceutical commodities (1.5 times), textile (1.2 times), construction materials (2 times), fruits and vegetables (1.6 times), etc. Exports of services, primarily in transport and telecommunications are growing fast.
6. 270 projects on implementation of localization programs have been introduced, production of 60 new types of commodities has been put in order, expenditures have been decreased substantially and production has grown fast. The effect of localization program reached 2 billion dollars.
7. Agriculture has changed fundamentally. The reorganization of shirkats (collective farms) into private farms was practically completed. Today, there are more than 215 thousand farms, employing 1.6 million workers or 90% of all in this sphere. 85% of agricultural areas under crop are assigned to them. The share of farms in the production of cotton accounts for almost 99%, grain – 82%. More than 200 agricultural firms operating in processing the agricultural production.
8. Record high harvests and volume of agricultural production are achieved. Raw cotton production reached more than 3 million 650 thousand tons, wheat – 6 million 250 thousand tons.
9. Total volume of investments into the economy increased by 23% in 2007 and accounted for more than 4.3 billion dollars in the equivalent. These are the highest indicators for all the previous years. Over 70% of all investments have flown into production construction, including technical and technological modernization – about 50%. Direct foreign investments make up the bulk of the attracted investments. The volume of assimilated investments has accounted for over 1 billion dollars with a growth of over 58%. The foreign investments have made up nearly 76%.
10. More than 700 new companies were established in 2007 with participation of foreign investments. The joint ventures are being launched in the high technological sectors – the textiles, food, electro technical, chemical and petrochemical industry, machine building, construction materials industry, telecommunications and information technologies. Now the enterprises with foreign investments account for the third of the foreign trade turnover of the country. In this, for over the last year the volume of exports of their products increased by 62%.
11. In the framework of Investment Program, more than 300 large investment projects were implemented in 2007. Particularly, the booster station at the Zevardy deposit, the three installations on utilizing the casing head-gases at the Kokdumalak deposit, 142 km-long gas pipeline and 184 km-long electricity power lines have been commissioned. The construction of Rezaksay reservoir has also been completed. The reconstruction of international airport in the city of Navoi was accomplished.
12. In the textile industry, 34 enterprises from 66 that are part of the Program are manufacturing the finished products. The construction works and supply of equipment are being completed at other 20 companies. For over very short period of time the volume of production in modernized companies has increased by 1,5 fold.
13. Hard to overestimate the role and importance of the newly built 223 km-long railway “Tashguzar-Baysun-Kumkurgan”. 245 kilometers of automobile roads were built and reconstructed. Over 1 thousand 750 kilometers of international and national general-use roads were commissioned following the full and medium repairs.
14. In cooperation with international financial institutions, the soft loans worth 330 million dollars and grants worth 46 million dollars were attracted for the implementation of strategic projects in the sphere of education, healthcare, agriculture and water economy and finance management.
15. However, some provinces exist at the expense of Republican budget, such as the Surkhandarya, Jizzakh, Namangan provinces and many rural districts, firstly, conditioned by the lack of attention to the development of modern enterprises, trade networks, sphere of small business, trade and infrastructure, as a whole. The very fact that not a single project with attraction of direct foreign investments has been implemented in the Syrdarya province last year on the initiative of local authorities cannot stand any explanation. The situation is not better in Jizzakh, Kashkadarya, Navoi, Namangan and Surkhandarya provinces, the Republic of Karakalpakstan. The Cabinet of Ministers must consider this issue in particular and adopt corresponding resolutions.
16. On international criteria the volume of our external debt and the level of its annual current servicing are characterized by the lowest parameters. The net external debt towards GDP by the end of 2007 accounted for 17% in total, and towards the annual volume of exports of goods and services – 44%. This enlists Uzbekistan in the rank of most reliable and solvent partners which guarantee the timely payments on its liabilities.
17. Reliable food supply of population is another most important factor which provides for the stability of domestic market and Uzbekistan’s financial standing. All this takes on a special significance if to take into account the latest rapidly increased prices for the food supplies in neighboring countries and the world markets. In this regard it is worth remembering the rightness of the objective set yet in 90s to provide for the grain self-sufficiency. Now, on wheat, flour, cotton-seed oil, fruit and vegetable products, dried fruits and vine, melons and gourds Uzbekistan not only fully provides for its internal needs but also exports abroad.
18. Work on further liberalization and promotion of private entrepreneurship was continued. The procedures of registration, voluntary shutdown and terminating business, as well as issuance of licenses and permits for particular types of activity have been simplified and put into order. The fine sanctions for many violations have been considerably lowered and particular fines have been totally cancelled. All forms and time-frame of financial, tax and statistical accounting are cardinally reduced. Unified and lowered are the tax rates. In particular, the rate of single tax payment for small enterprises reduced from 13% to 10%.
19. Total volume of sales at the Uzbek Commodity and Raw Exchange grew almost two-fold.
20. According to the Heritage Foundation, which annually publishes index of economic freedom on 162 countries of the world, the value of liberalisation index in Uzbekistan in 2000-2007 has improved by 18 points and made up 53%.
21. Approach to state’s control and privatization of the state property was radically reconsidered. The total amount of agreements on sale of the state property with foreign and domestic investors grew 3-4 times and made up 310 million dollars and UZS 57 billion. Over 65% of the total amount of financial inflows is fully directed to modernisation and technical re-equipment of privatized enterprises. As a result, the share of the private sector in GDP in 2007 reached 85%. Almost 80% of industrial production is manufactured locally, as much as the entire volume of agricultural production and retail turnover.
22. Unfortunately, not always the new proprietors having redeemed for a symbolic payment the state property could handle this property properly and set up effective manufacture. The checks of activity at more than 7 thousand earlier privatized enterprises show that 315 of them have appeared staying idle, another 450 work at half capacity. As a result, within the past year it was necessary to accept drastic measures, after which at 198 of such enterprises the procedures of bankruptcy were completed, at 204 enterprises these procedures continue and at 34 are in the initial stage.
23. Authorized capitals of commercial banks increased almost two-fold in 2007, and their cumulative capital increased in comparison with 2006 more than 40%, reaching the level of UZS 1,5 billion. The process of banks incorporation goes on actively, the number of shareholders in a year increased by 12,5 thousand and as of beginning of this year made up about 200 thousand with 68% of the total number of shareholders are being the natural persons. Three commercial banks - National Bank of Foreign Economic Activity, Pakhtabank and Hamkorbank are among the first to have received the international ratings of leading rating companies.
24. About UZS 2 trillion were channeled be the banking structures for projects on modernization, technical and technological re-equipment of economic subjects. Credits allotted by banks to financially support the small businesses and private entrepreneurship increased by 36%, while volumes of micro-credits allotted to businesspeople and private persons increased by 70%.
25. More than 630 thousand additional jobs were created, two third of which in rural areas. The small businesses and the sphere of services account for about 65% of the newly created jobs, whereas home labor made up more than 20% of the jobs. In 2007, more than 350 thousand citizens in the business of raising the livestock were able to get official employment record books in 2007, which made them eligible for social and legal protection. The total number of such citizens exceeds 1 million. The measures directed at creation of new jobs allowed to decrease the percentage of the unemployed able-bodied citizens to 5,0 % as of the end of 2007.
26. According to the strategic task on increasing the salaries up to 2-2,5 times within the next three years, the amount of monthly salaries, allowances, pensions and scholarships were increased 1,5 times in 2007. Monthly salaries calculated on the basis of the monthly paycheck of those citizens employed at the public service sector and commercial enterprises averaged at 210 dollars. The real monetary earnings of the people increased to 27% the last year. If the average salary in 2001 could cover only the 99,0% of the cost of living or monthly maintenance rate, but in 2007 the average salary increased more than 3 times than MMR, which is one of the highest indices among the CIS countries.
27. With participation of the international financial institution, we have implemented the large-scale investment projects on providing the people with drinking water in the Republic of Karakalpakstan, Khorezm province, Samarkand, Bukhara, Gulistan, Jizzakh, and Karshi cities for the passed period. More than 1,6 thousand km. water and 710 km. gas pipeline networks have been installed at rural areas last year. The level of access to the clean drinking water of the people increased to 84%, including 77% at rural areas. The figures in terms of natural gas make up 82%, including 77% in rural areas.
28. More than 169 professional colleges, 18 academic lyceums and 558 schools equipped with the modern classrooms, laboratories, and production facilities for 336,0 news students were commissioned in 2007. Additionally more than 170 children’s activity facilities, including 27 sports halls and 143 school gyms have been constructed in 2007.
29. As a result of the gradual improvement of the living standards of the people and healthcare system, the mortality rate for the past 10 year decreased to 20%, infant mortality per 1000 newborns decreased from 23 to 13 cases, and in 2007 alone to 11%. The Program on realization of the second stage of the fundamental reformation of the healthcare system was adopted in 2007 and the program is currently well underway.