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Information Digest 18 (January 26, 2015)

THE JOINT SESSION OF THE LEGISLATIVE CHAMBER AND SENATE OF OLIY MAJLIS OF UZBEKISTAN
Houses of Uzbekistan’s Parliament Hold Joint Session, President Karimov Delivers Keynote Speech
 
ECONOMY
The Government of Uzbekistan sums up year and outlines plans for near future
 
INVESTMENTS
Uzbekistan uses investments for US$14.6bn in 2014
 
ELECTIONS OF THE PRESIDENT OF THE REPUBLIC OF UZBEKISTAN
Election Campaign Picking up Steam
 
2014TH YEAR – “THE YEAR OF HEALTHY CHILDREN”
Uzbekistan spends 4.96 trln. soums and US$266.1m to implement programme “The Year of healthy children”
 
 
THE JOINT SESSION OF THE LEGISLATIVE CHAMBER AND SENATE OF OLIY MAJLIS OF UZBEKISTAN
Houses of Uzbekistan’s Parliament Hold Joint Session, President Karimov Delivers Keynote Speech
Tashkent played host January 23 for the joint session of the Legislative Chamber and Senate of the Oliy Majlis of the Republic of Uzbekistan. 
President of the Republic of Uzbekistan Islam Karimov took part in the meeting. 
Among those attending the meeting were members of the Cabinet of Ministers, heads of government agencies and public organizations, representatives of the diplomatic corps and international organizations accredited in our country, reporters of local and foreign mass media. 
The session was chaired by Nurdinjon Ismoilov, Speaker of the Legislative Chamber of the Oliy Majlis. 
After they approved the agenda, deputies and senators considered the appeal of Uzbekistan’s Cabinet of Ministers to lay down its powers before the newly elected Oliy Majlis. 
President Islam Karimov delivered a keynote speech before the participants of the joint meeting.
Speaking afterwards, leader of the parliamentary group of the Movement of Entrepreneurship and Businesspeople – the Liberal Democratic Party of Uzbekistan Sodikjon Turdiev, Deputy Chairman of the Writers’ Union of Uzbekistan for youth issues – Senator Ikbol Mirzaaliev, leader of the parliamentary group of the People’s Democratic Party of Uzbekistan Hatamjon Ketmonov, director of the Tashkent Professional College of Information Technologies – Senator Agrepina Shin, leader of the parliamentary group of the Milliy Tiklanish Democratic Party of Uzbekistan Sarvar Otamuratov, director of the Nukus branch of Tashkent Pediatric Medical Institute – Senator Oral Ataniyazova expressed support for the provisions unveiled in the speech by the head of our state. 
Houses of the Oliy Majlis passed a joint resolution on the speech of President Islam Karimov to work out a program of measures directed at the realization of goals and objectives outlined. 
The leader of our country nominated Shavkat Mirziyoev for the position of Prime Minister of the Republic of Uzbekistan to be considered by the Oliy Majlis. 
Following the nomination, Mirziyoev came up with a report containing a short- and long-term action plan of the Cabinet of Ministers. 
Members of the parliament voiced their approval for the presented candidacy and endorsed Shavkat Mirziyoev as Prime Minister of the Republic of Uzbekistan. Both houses of the Oliy Majlis adopted respective resolutions on the issue.
(Source: Press-service of the President of the Republic of Uzbekistan)
 
ECONOMY
The Government of Uzbekistan sums up year and outlines plans for near future
Stuck in ups and downs and escalating geopolitical crisis in the global economy, the Year 2014 proved the correctness of the economic model of Uzbekistan as never before, as the country’s policy is focused on the modernization and diversification of industry, creation of equal conditions for competition, localization and import substitution, and drawing of foreign investment. Uzbekistan is likely to face even tougher challenges that can be addressed only through synergies and through progress and democratic development.   
Key pillars
The government traditionally holds its final meeting in January-February to sum up the past year and outline the prospects for the future. It is fundamental not just in terms of development of the strategy of the country’s socio-economic development for the near future, but it is very interesting in terms of the traditional messages that the head of state addresses to the people and state authorities. Every year Islam Karimov’s keynote speech outlines new directions for enhancing structural reforms of socio-political model. This year, the speech was filled with special content, because, as noted by Islam Karimov, “The ongoing rapid processes in geo-space, especially the growing opposition, the hardly predictable and uncertain global market, the ongoing global financial and economic crisis and its consequences, the decreasing investment activity and falling growth rates in most countries of the world inevitably affect the Uzbek economy, they require a sober assessment of the situation and maximal engagement of all available reserves and opportunities.” 
Uzbekistan has something to counter the impending new wave of the global financial and economic crisis. Since 2006, Uzbekistan has been maintaining the GDP growth rate within 7.5-9.5%, which, according to international credit and financial institutions, ranks among the best in the world. Last year, the GDP grew by 8.1%, and next year the domestic analysts predict an increase of 8%, while many leading industrial powers cannot even boast about similar results. 
There is another important indicator: last year the national budget was implemented with a 0.2-percent surplus to the gross domestic product, despite the fact that the tax burden was reduced from 20.5 to 20%, and the income tax rate was cut from 9 to 8%. Western countries again serve as an example. In order to eliminate the negative effects of the crisis the governments and central banks of many countries allocated huge amounts of money, and pursued extremely improvident external credit policies. As a result, in several EU countries – Greece, Spain, Italy, Ireland and Portugal – foreign debt exceeded 100% of GDP, and they still have unsolved problems linked with the budget deficit. 
The external debt of Uzbekistan makes up only 17% of GDP while the world, and particularly developed countries, keep scaling up their borrowing policy. Experts of the International Monetary Fund rank the Uzbek index among the world’s lowest. Since 2005, the national budget has been performed with a surplus to GDP, which testifies to an effective fiscal policy.
Experts emphasize that reformation of the banking system proved key in ensuring sustainable economic growth. Against 2013, the volume of loans the banks issued for modernization and technological extension programs increased by 1.2 times, and the funds they invested in the working capital grew by more than 1.3 times. 
Flagship international rating agencies have been assessing the activities of the Uzbek banking system as ‘stable’ in recent years.  In 2011, only 13 commercial banks enjoyed the highest ratings, while to date all the 26 banks in the country have been rated as highest. The gradual and targeted reforms are regarded as an opportunity to not just protect the country from the negative effects and consequences of the global financial crisis, but they allow for important changes, expanding the scope of lending to the real economy and dramatically improving the quality of banking and financial services. 
Attracting domestic and foreign investment to the real sector has been another important trend of the national economy. In 2014, the volume of investment increased by 10.9% and made up $14.6 billion. Foreign investments and loans, including three quarters of direct foreign investment, have made up more than 21.2% of all capital investments, totaling more than $3 billion. Experts point out the growing tendency of direct proprietary investments of companies, which increased by 10.3% in 2014 alone, and exceeded $4.3 billion. Over 73% of all investments were allocated to industrial construction. 
The country is promising yet more active dynamics this year. Capital investments are estimated to exceed more than $15.9 billion, or 10.1% growth against 2014. Of these, it is planned to allocate about 74.5% for industrial construction. Foreign investment will exceed $3.5 billion, and their share in the total volume of capital investments will make up 22.1%. The share of foreign direct investment is to grow by 11.2%.
The priority for the investment projects aimed at creating new high-tech industries and provision of deep processing of domestic raw materials has been another distinctive feature of the Uzbek investment policy. In 2014, the leading sectors of the economy commissioned 154 large facilities worth $4.2 billion, and equipped with advanced high-tech equipment. 
The review is an essential moment of the final meeting of the government. Meanwhile, the attention of the business community is traditionally focused on the new initiatives of the state’s leader. The President’s speech was rich in promise for entrepreneurs and government officials.
The President proposed approving four structural documents that would draw the future of the domestic economy for the next five years. In the coming months it is scheduled to develop a program of measures on structural reforms, modernization and diversification of production for 2015-2019. 
“Many times Uzbekistan was challenged by steep downfalls in prices for raw materials in the world market, like cotton and other raw materials. Meanwhile, an enhanced processing of the same raw cotton in the textile and other light industries and exporting, let’s say, dyed yarn, knitted fabrics and cloth with subsequent and intensive introduction of advanced technologies and designing of finished textile articles might bring a tremendous effect,” said the head of state.
According to President Islam Karimov, there are still big untapped capacities. “I primarily mean the introduction of advanced processing technologies of raw materials and semi-finished products, the construction of new related facilities and manufactures in oil and gas, petrochemical, chemical, light industries, electrical engineering, as well as the production of domestically and globally demanded finished textile and leather goods, footwear, food and pharmaceutical industries, household chemicals, electronic and electrical appliances, construction and decoration materials,” he said. 
Intensification of production localization and expansion of intersectoral industrial cooperation is seen as another important field. The current situation in the world strongly suggests that the establishment of import-substituting industries on the basis of domestic raw materials ensures economic independence of the country.
“Our own experience of localization programs shows the benefits we get from them, especially in terms of decreasing dependence on external risks, shaping of the domestic demand, filling the market with consumer goods and components, optimal engagement of available production capacities, economy and rational use of currency, and well as addressing employment problems. This is proved by the rapidly growing level of localized production in the volume of industrial production, which grew from 9.2% in 2005 to almost 20% in 2014,” the President said. With this in mind, the President entrusted relevant ministries and agencies to develop a program for localization and production of finished goods, components and materials for 2015-2019. 
The government is going to retract its presence in the economy in the coming years. According to Islam Karimov, it is high time for a full-scale and critical analysis of the state’s presence and the effectiveness of its share in economic sectors, and consequent elaboration of respective measures on drastic increase of the presence of the private sector. That would require the development of a new program for state property privatization for 2015-2016, which would envisage a radical reduction of the state’s presence in sectors and areas of the real economy.
The President also touched upon the issue of effective management of industrial enterprises and joint-stock companies. He pointed out to certain recurring problems.
“We have to recognize that the currently expanding scale of corporatization is revealing numerous unsettled problems in corporate governance and the distribution of income of joint stock companies, and in some other areas of the privatization process. This is especially relevant for the joint stock companies where the state acts as the stakeholder. In such companies, the shareholders, especially the minority shareholders, are actually detached from management and decision-making due to the small number and disorder of the share stock.
As a result, in fact, the production is still administered by the board of directors, who are often not interested in the efficient use of resources, diversification, reduction of costs and increase of the product competitiveness. They often adhere to the old administrative and command management style with the predominant mechanism of subjective ‘manual’ control, which leads to passivity and lack of initiative of executives who are pending instructions from above”, said the head of state.
The Ministry of Economy and the Ministry of Labour and Social Protection will develop a new classifier of basic positions and professions, which is going to be a key to addressing the problem. It should become a benchmark for training professionals of the new formation in line with the requirements of the market economy.
A thesis about the elimination of all barriers and limitations, the guarantee of complete freedom for the development of private property and enterprise was the keynote of the President’s speech. During the years of independence, the country has done much to build a robust legal framework, to protect the private property and investments, and provide the private owners with the conditions and guarantees they need.
Meanwhile, as noted by President Islam Karimov, there are still numerous administrative barriers and obstacles to the development of private property and enterprise. “Unfortunately, there are many examples when officials violate the legitimate rights and interests of private entrepreneurs”, he said.
In order to change the situation, there is a need in the system-based enhanced study of rating indicators of doing business that are regularly published by leading international financial institutions, and primarily the World Bank’s report  on Doing Business, and consequent elaboration of measures and proposals on elimination of gaps and bottlenecks.
Besides, there is a need to reinforce the provisions of the legal protection of the rights and guarantees for businesses and private property owners. The paramount importance comes to enhancement of the role of the judiciary in protecting the legitimate rights and interests of the private sector, strengthening of responsibility of public officials, law enforcement and regulatory authorities for illegal interference in the economic and financial activities of businesses.
The President pointed out another gap in the current economic model: there are no specific assessment indicators, which would define the degree of openness for the private property development and its contribution to the country’s economy. This work will involve the Ministry of Economy, the Central Bank, the State Statistics Committee, and other economic agencies.
According to experts, if implemented, these goals would bring new incentives and opportunities for private business development, establishment and strengthening of the middle owner class as a strong foundation of stability in the society, and is going to be an important step toward the strategic goal of seeing Uzbekistan join the ranks of developed nations.
(Source: «Uzbekistan Today» newspaper)
 
INVESTMENTS
Uzbekistan uses investments for US$14.6bn in 2014
The volume of investments directed to economy of Uzbekistan grew by 10.9% in 2014 and reached US$14.6 billion in US dollar equivalent, the President of Uzbekistan Islam Karimov said at the session of the Cabinet of Ministers of Uzbekistan on 16 January.
He said that at the same time over 21.2% of total capital investments or over US$3 billion made up foreign investments and loans, of which three fourth were foreign direct investments.
Islam Karimov said that the volume of investments due to own resources of the enterprises rose by 10.3% year-on-year in 2014 and reached US$4.3 billion, or almost 30% of total investments.
The commercial banks directed US$1.7 billion of loans to investment purpose in 2014, which grew by 20% year-on-year, President said.
Over 73% of all investments were directed to construction of production capacities and about 40% - to purchase of machines and equipment, he noted.
President said that 154 large objects with total cost of US$4.2 billion, equipped with high technologic equipment, were commissioned in Uzbekistan in 2014.
He said that in particular, production of Damas and Orlando cars were launched at Khorezm Automobile Plant with the capacity of 60,000 cars a year, production of 700,000 tonnes of Portland cement and 350,000 white cement a year in Jizzakh region, etc. Syrdarya thermal power station was fully modernized.
Uzbek leader said that third line of the gas pipeline Central Asia – China with the length of 1,830 km and the capacity of 25 billion cubic meters of gas a year was commission, he said.
(Source: UzDaily.com)
 
ELECTIONS OF THE PRESIDENT OF THE REPUBLIC OF UZBEKISTAN
Election Campaign Picking up Steam
The election campaign picks up speed as presidential elections near.
With less than two months to go before the main political event of the year, presidential elections, political parties have nominated candidates.
The Liberal Democratic Party of Uzbekistan, which has the largest number of seats as a result of the parliamentary elections, held a meeting of the Political Council, during which the issue of the party’s participation in the upcoming presidential elections on March 29 was discussed. The proposal to nominate Islam Karimov as head of state will be discussed at the Party Congress on February 6.
A plenary session of the Central Council of the People’s Democratic Party of Uzbekistan was held on the same day. The nomination of a candidate for President from the People’s Democratic Party was discussed. The proposal of nominating Hatamjon Ketmonov was accepted, which is subject to approval at the party congress on February 9.
Following the decision of Liberals and Democrats on Friday, two other political parties have named their candidates. The Democratic Party of Uzbekistan ‘Milly Tiklanish’ has made its choice. At the plenum, it was decided to nominate Akmal Saidov, a member of the faction of ‘Milly Tiklanish’ in the lower house of the parliament as a candidate for President. Saidov’s candidacy will be approved by the Congress party on February 7.
At the plenary meeting of the Political Council of the Adolat Social Democratic Party, the proposal to nominate Nariman Umarov was accepted. The final decision on the nomination of the applicant for the post of head of state will be taken at the qurultoi (congress) of the party, which is scheduled for February 10.
As it is known, in order to use their right to nominate a candidate, all political parties must be registered with the Ministry of Justice no later than six months prior to the date of the announcement of their election campaign. Following on from the plenums of the parties, they have all submitted the necessary documents to the Central Election Commission.
In particular, the members of the Movement of Entrepreneurs and Businesspeople of the Liberal Democratic Party of Uzbekistan, the People’s Democratic Party of Uzbekistan, the Milly Tiklanish Democratic Party of Uzbekistan and the Adolat Social Democratic Party have submitted a package of necessary documents to the Central Election Commission, in order to participate in the presidential elections, i.e. the requests to participate in the elections that were signed by the leaders of the parties, the certificates of the Ministry of Justice with information about the registration of political parties and an information paper about the future presidential candidate.
During the regular meeting of the CEC (Central Election Commission), on the basis of the submitted documents it was decided to approve the admission of political parties to participate in the presidential elections in Uzbekistan.
Authorized representatives from UzLiDeP, People’s Democratic Party, the Milliy Tiklanish DPU, and the Adolat SDPU were given registration certificates and forms of signature sheets of standard pattern for collecting signatures in support of the nominated candidate. 
Earlier at its meetings, the CEC decided to form electoral districts, to approve the personal staff of the district election commissions of the Presidential elections. The members of these commissions which consist of eminent members of the public, have been previously discussed in the meetings of Jokargy Kenes of Karakalpakstan, regional and Tashkent city councils of people’s deputies, held on January 13-14 this year, and recommended for approval by the CEC.
These days, political parties of the country have actively started to collect signatures in support of the nominated candidates - each must collect at least five percent of the total number of voters in the country (more than 1 million signatures), representing at least eight administrative-territorial formations. In one of the administrative-territorial entities (Republic of Karakalpakstan, regions, Tashkent) a political party cannot collect more than eight percent of the signatures of the total. Also in this case, the voters have the right to sign once in support of only one candidate.
(Source: «Uzbekistan Today» newspaper)
 
2014TH YEAR – “THE YEAR OF HEALTHY CHILDREN”
Uzbekistan spends 4.96 trln. soums and US$266.1m to implement programme “The Year of healthy children”
Uzbekistan directed 4.965 trillion soums and US$266.1 million to implementation of the state programme “The Year of healthy children”, the Ministry of Economy of Uzbekistan said (currency rates of CB RU from 26.01.2015   1$= 2430.17 soums).
President of Uzbekistan Islam Karimov with his resolution from 19 February approved a state programme “The Year of healthy children”.
According to the resolution, Uzbekistan planned to direct about 4.51 trillion soums and US$302.9 million to implementation of the state programme “The Year of healthy children”.
The programme consisted of seven chapters and 125 points, which covers all issues related to upbringing healthy and education children, strengthening family.
(Source: UzDaily.com)
 
 
 
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