Measures for further developing production and services defined

On December 18, President Shavkat Mirziyoyev chaired a meeting on additional enhancing production and developing the region’s service sector.

Due to events in the world, prices for raw materials and products necessary for the economy of Uzbekistan and the costs of their delivery are rising. Therefore, first of all, we must process our raw materials profoundly and increase the output of competitive products.

At the meeting, measures were defined to improve the work system in this direction. Thus, from now on, issues of production, industrial zones, and local exports will be dealt with by the Chamber of Commerce and Industry. Regional and district departments of the Ministry of Investment, Industry and Trade will be abolished. The Export Support Agency and Fund, the Uzbekexpertise structure, will also be transferred to the CCI system.

The Head of state noted new opportunities for increasing production and exports.

Today, some fabrics and synthetic yarns used in the textile industry are imported. In this regard, many projects have been launched to increase the localization and export of these products.

For example, projects are planned to launch fabric production and create dyeing factories worth $350 million in Yuqorichirchiq district, artificial fiber, weaving and dyeing production worth $60 million in Nukus city. It is planned to produce curtains and furniture fabrics made from manufactured fiber in Andijan and Samarkand. A textile industrial zone will be created in Pakhtaabad district. It is planned to implement 15 projects to produce synthetic fibers in Karakalpakstan and 6 regions.

Overall, it was noted that the textile industry could generate another $700 million in added value next year. Therefore, a new procedure will be introduced to support enterprises in this sector. To achieve this, $200 million will be allocated as a resource for new value-added projects. The state will cover the costs of building treatment facilities for dyeing plants. Textile industry enterprises implementing international sanitary standards will be allocated up to 100 million UZS subsidies.

It was emphasized that to ensure product quality, it is necessary to attract designers, marketers, and constructors from abroad.

A brand’s presence is one of the most important factors for successfully launching products worldwide. Domestic products labeled “Made in Uzbekistan” are quoted little on the foreign market since they do not have a brand.

Therefore, the President emphasized the need to support the sales of the country’s products and brand recognition in foreign markets.

The Chamber of Commerce and Industry is tasked with supporting local textile, clothing, carpet, footwear, leather accessories, food, household, and building materials businesses to connect with special sourcing companies and adapt to brand requirements.

Instructions were given to expand the participation of domestic enterprises in international exhibitions and to open trading houses in the cities of Europe and Asia.

Uzbekistan also has every opportunity for brands to locate their production facilities here. For example, next year, a plant with a capacity of 2.5 million aluminum containers using German technology will open in Chirchiq. This is a source of materials for manufacturers of soft drinks, cosmetics, household chemicals, and food companies. It was noted that it is necessary to use such opportunities to attract prestigious brands to Uzbekistan.

To achieve this, new approaches will be introduced:

– enterprises launching the production of branded products will be reimbursed for the costs of implementing international standards, environmental requirements, and certification;

– all raw materials necessary for them will be exempt from customs duties, subject to localization of at least 60 percent;

– entrepreneurs who produce at least 30 percent of their products under the brand will be provided with benefits and preferences provided for enterprises with foreign investment;

– technologists, designers, marketers, and other specialists hired from large brands will not be charged for work in Uzbekistan.

Uzbekistan has a huge raw material base for the chemical industry. The industry has formed projects with a total value of $3 billion.

The electrical industry is capable of delivering $2 billion worth of projects. For example, the 27-gigawatt solar and wind power plants under construction in Uzbekistan require $500 million worth of cable products. Similarly, there is a high demand for equipment such as home appliances and transformers.

Five projects worth $120 million are aimed at localizing these products, which will be launched next year in “Ohangaron” industrial zone, and a technology park worth $120 million being created in Bukhara city.

Tasks have been set to increase production volumes in these industries.

The Head of state paid particular attention to the issue of industrial development of districts of Karakalpakstan and Nukus city. $100 million in low-interest resources have been allocated to expand production in this area. 23 promising projects have been formed, to which regions of the country and commercial banks are assigned. The persons responsible provided information on the implementation of these projects.

Issues of further expanding opportunities in the services and tourism sectors were also discussed at the meeting.

Over the 11 months this year, services worth 421 trillion UZS were provided, which is 13.6 percent more than last year. The share of services in the economy is expected to exceed 43 percent by the end of the year. But these indicators are not enough. There is excellent potential in finance, transport, tourism, education, medicine, and information technology.

The Business Development Bank and the Entrepreneurship Development Company were recently created. From January 1, 2024, microfinance banks will be launched to provide essential banking services. Based on this, financial services are expected to increase by 30 percent next year.

Work is underway to place Eurobonds in the amount of $500 million.

To stimulate entrepreneurship, it was decided to allocate, within the framework of the “Family Entrepreneurship” program, unsecured loans in the amount of up to 50 million UZS to individuals who have opened their own small business and have a positive credit history and up to 100 million UZS to those wishing to expand their activities. A proposal to provide loans to self-employed people taking their first steps in business was also approved.

A quarter of the total volume of services in Uzbekistan comes from the transport sector. This year, about 1.5 thousand buses and 25 new aircraft were delivered. Private airlines have started operating, and 17 routes have been opened.

In continuation of this work, instructions were given to increase bus routes and flights between the cities of Uzbekistan, regions, and neighboring countries.

In the railway sector, tariffs were revised, and unnecessary benefits were canceled. The delivery of 6 high-speed trains and 30 electric trains is in progress. This will ensure 20 percent growth in the sector next year.

The private sector of education and medicine is rapidly developing in Uzbekistan. The possibility of putting up empty land plots for targeted auctions to create private educational organizations and clinics was noted.

Today, the share of IT services in our GDP is 3-3.5 percent. The importance of increasing the volume of services in this area to 41 trillion UZS and doubling exports, ensuring at least 30 percent growth next year, was emphasized.

Uzbekistan has great tourism potential. It was emphasized that to effectively use this, increasing the number of hotels and guest houses is necessary.

It was decided to prepare master plans for historical and resort tourist sites and allocate additional funds for their infrastructure. Along with repairing the roads leading to them, the task has been set to place trade and service points along them.

As foreign experience shows, tourists are often attracted by the opportunity to purchase jewelry. Although Uzbekistan has sufficient conditions for this, such products are produced in small quantities. In this regard, it was instructed to organize modern jewelry complexes in each region starting next year.

A proposal was also made to organize an international fashion week “Uzbek Silk” in Uzbekistan.

It was noted that improving the convenience of the country’s markets for tourists is necessary. The importance of turning them into complexes where tourists can spend a long time was emphasized.

As a result of these measures, more than 2 million people will be able to be employed in the service and tourism sectors.

At the meeting, reports from industry and regional leaders and proposals from entrepreneurs were heard.