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Jamshid Khodjaev


Economy  I  Leader  I  Uzbekistan 2023


_BIOGRAPHY From 2017 until his new appointment, he served as Minister of Investments and Foreign Trade and Minister of Agriculture. He graduated from the Tashkent State University of Economy, studied at the European Institute of Public Administration and has an MBA degree in international economic relations and public administration from the University of Birmingham (UK).




The reforms carried out in Uzbekistan since 2017 have seriously advanced the market mechanisms for the development of the country’s economy. The Strategy of Actions on five priority areas of the country's development for 2017-2021 was developed on the basis of an analysis of urgent issues and marked the beginning of a new dynamic stage in the development of Uzbekistan, which radically changed the country. The Strategy of Actions laid a new foundation for large-scale reforms and foreign economic activity was liberalised, state participation in the economy was reduced and the role of the private sector was increased, and a number of mechanisms were created for social protection.


The successful implementation of the 2017-2021 programme became a basis for the adoption of the "Strategies for the Development of New Uzbekistan for 2022-2026", which envisages further deepening of economic reforms and strengthening economic and international investment cooperation as well as bolstering its position in the global economy. The current course of the Government is aimed at further development of the market economy and full support of entrepreneurship, development of small and medium-sized businesses, FDI attraction, innovative development of industry and production, as well as active application of the principles of public-private partnership.


In the coming years, one of the main objectives of the Government will be the implementation of the Investment Programme, which envisages attraction of FDI in the amount of U$70 billion during 2022-2026, including U$11.7 billion in 2022, within the framework of implementation of more than 950 projects in various industries and sectors. To ensure the success of the Investment Programme, it is planned to introduce a project management system. The Central Project Management Office has now been established under the MIFT, which is coordinating work on all strategic and major investment projects. The work on attracting FDI and implementing projects covers not only the Investment Programme, but also the coordination of the implementation of regional investment programmes, which include more than 9,500 projects totalling U$7.4 billion.


Closely linked with the task of implementing Investment Programmes are the objectives of accelerating the development of industrial production in the country, filling the domestic market with demanded products, reducing imports and expanding exports. The potential of a number of sectors of the economy of Uzbekistan - including oil and gas and chemical industries, food, textile and silk industries, mechanical engineering and pharmaceuticals, construction materials, agriculture - is still significantly underestimated and represents a large-scale field for investment. SMEs are also of great importance for our country, and the Government will do all measures to promote its development and protection.


The emphasis will be placed not only on the development of industrial production, but also on the services sector in the field of education, healthcare, information technology, consumer services, trade and construction. At the same time, work will continue to further promote administrative reforms. Despite the successes already achieved, the current model of public administration is characterized by centralization of decision-making, underdeveloped institutions of self-regulation, as well as weak operation of checks and balances. This leads to the fact that the executive authorities continue to actively use administrative management methods that are incompatible with the effective functioning of the market economy.


Thus, another main goal of the Ministry will be cardinal administrative reform and reduction of state participation in the economy, based on the international experience. This reform should include, in our opinion, a review of the functions and powers of central and local authorities as well as state-regulated industry associations; simplification and optimization of public procurement procedures and the provision of public services; redistribution of functions, powers and financial opportunities between central and local authorities. The development of entrepreneurship and competition, the protection of property rights and the improvement of the business environment are also among the main tasks of the Government.


Uzbekistan's leadership has done a lot in recent years to improve business conditions, including measures on tax reduction, elimination of customs and administrative burdens, simplification of business procedures, improvement of money circulation and transformation of the banking sector. Nevertheless, there are still certain problems associated with the lack of transparency, inconsistency and inefficiency of legislation, and the Ministry is planning a number of measures to increase transparency and further optimize business procedures. Another important problem is the high level of monopolisation, in particular, reforms in "natural monopolies" (energy, utilities, transport) are extremely slow, where state-owned enterprises dominate and there is practically no competition. Meanwhile, in most of these industries, it is quite possible to create a healthy competitive environment and attract private investors. We will continue to implement measures to further reform and simplify, as well as optimise procedures, remove tariff and non–tariff barriers, and expand exports. The export orientation of the economy is put at the forefront of the ongoing reforms. A number of important steps have already been taken along this path, including the unification of exchange rates, the liberalization of the foreign exchange market, the introduction of conversion on current transactions, the elimination of a number of administrative barriers to the cross-border movement of goods and the reduction of administrative costs, the reduction of customs duties, the reform of the banking sector and money circulation, among many others.





IN FDI DURING 2022-2026.”


This direction will continue and will concern not only regulatory measures, but also the adoption of practical measures to comprehensively expand exports. As an example, I would like to cite the recent decision of the President on the implementation of the programme "New Uzbekistan – the Country of Competitive Products" on the selection of exporting enterprises and their transformation into leading exporters, within which support is extended to the promotion of their products in the markets of other countries. Cooperation of the Republic of Uzbekistan with the World Trade Organisation should be noted as a separate programme in matters of trade development. Our country plans to join this organisation in the coming years, in accordance with which it systematically solves the tasks necessary to join this trade bloc.




One of the urgent priorities was the liberalization of foreign economic activity, within the framework of which a number of important measures were taken, such as the unification of exchange rates and the introduction of free conversion on current transactions, the elimination of a number of administrative barriers, the reduction of customs and tariff barriers, the cancellation of a number of permits and licenses, and many others. The business and investment environment was significantly improved, changes were made to the investment legislation, which in general facilitated the conduct of entrepreneurship and business.

During this period, more than 10 Laws, 25 decrees and resolutions of the Head of State and 30 Government resolutions were adopted, which significantly simplified the activities of exporters, manufacturers and entrepreneurs.


The rates of customs duties have been halved, zero rates of import duties have been applied to more than 3,500 items of products and excise taxes to more than 1,000 types of products. An automated risk management system has been introduced, the procedure for claiming unnecessary documents during export-import operations has been cancelled, the "Single Window" customs information system has been introduced.


Similar work has been carried out in the field of tax administration. Taxes paid have been reduced from 13 to 9 types, the right of tax authorities to write off a taxpayer's debts from his debtors has been abolished, the procedure has been introduced on issuance of tax benefits and preferences only in accordance with the Tax Code, an accelerated VAT refund procedure has been introduced, the procedure for settling tax disputes in a pre-trial procedure has been specified, and liability measures have been established depending on the type of tax offense.


Important reforms have been carried out in the banking sector, where the process of deregulation and commercialization has been carried out in recent years, the activities of the Central Bank in the field of control and regulation of commercial banks, money circulation and the foreign exchange market have been significantly restructured. Banks have become more customer-oriented, the cost of banking services has significantly decreased, their quality and range have improved. Administrative restrictions on the purchase of foreign currency and cash turnover were lifted.


Fundamental reforms have been implemented in land ownership. The Law of the Republic of Uzbekistan "On Privatisation of Non-Agricultural Land Plots" was adopted in 2019 to regulate the procedures for privatisation of land plots and the legal status of privatised land plots. A decree on the system of sale and allocation of land was adopted in June 2021, to introduce a transparent, market-based and equal procedure for allocating land plots, ensuring stability in property and legal relations in the field of land use, guaranteeing the property rights of landowners, as well as introducing them into free circulation by determining the economic value of land.


The final result of land reforms is the transformation of land into a market asset, the determination of its economic value and its involvement in financial turnover, as well as strengthening public control over the allocation and use of land. In order to improve the institutional framework for the development of the investment environment and the protection of entrepreneurship, attracting investment and implementing projects, expanding foreign trade and exports, a number of institutions and platforms have been created, including the Foreign Investors Council under the President of the Republic of Uzbekistan, the Institute of the Business Ombudsman, the Agency for Attracting Foreign Direct Investment, the Agency for Export Development, the Agency for Countering Corruption, as well as Project Development Centre. The positive effect of the ongoing reforms is confirmed not only by consistently high indicators of GDP growth, trade growth and investment inflow. The most important indicator in recent years is the growing level of economic freedom of entrepreneurs and investors along with the financial stability of the state. The World Bank and the International Monetary Fund note that, despite the pandemic, Uzbekistan is one of the few countries where the economy did not decline, and they predict noticeable growth in the coming years.


Thanks to the measures taken, in 2017-2021, the amount of disbursed investments in fixed assets from all sources amounted to more than U$79 billion, of which U$43.5 billion were FDI and loans. This indicates an improvement in the investment position of the country, as well as the growing interest of foreign companies in the country. Today, Uzbekistan is increasingly being considered as a destination for investment, although the volume of foreign direct investment in the country is still significantly lower than in comparable economies. Nevertheless, some companies, confident in the great potential of Uzbekistan, are already investing in the country — today there are more than 8,000 companies with foreign capital are operating in the country.


In February 2019, Uzbekistan placed the first 5-year and 10-year Eurobonds totalling U$1 billion with a four-fold oversubscription. Orders were distributed among more than 150 investors from the UK, the EU and the USA, which also indicates the growing interest of investors in the country. With the acceleration of reforms, investment opportunities are emerging in both traditional and new sectors of the economy. The traditional sectors of Uzbekistan, which include oil and gas and mining, agriculture and textile production, rely mainly on natural resources. These industries already occupy stable positions, but their investment potential has not yet been fully realized. On the other hand, global trends such as digital transformation, the growth of income and spending of the population, as well as the current demographic trajectory, create significant development potential in relatively new sectors for Uzbekistan — the financial and banking sector, the construction industry, telecommunications and tourism.


Uzbekistan is a large-scale and promising investment benchmark. A number of the world's largest companies, including General Motors, Isuzu, MAN, Claas, Case New Holland, Samsung, LG, Huawei, CNPC, Rieter, Nobel, Lactalis, Coca-Cola, Lukoil, Knauf, Indorama, and many others chose cooperation with Uzbekistan. In this context, joint work is underway in the automotive industry with the technological leaders General Motors, Isuzu and MAN. Today, industry enterprises are producing a wide range of vehicles, including cars and trucks, special vehicles, buses, as well as spare parts, including engines. The industry plans to increase production by 1.4 times and double its exports by 2026.


In agricultural engineering, the world's leading manufacturers Claas, CNH and Lemken have created high–tech production facilities for the production of modern tractors, cotton harvesters, and spare parts and other equipment. By 2023, it is planned to create a large industrial cluster of agricultural machinery in the Tashkent region. In the agriculture, we are implementing new promising design models for the development of the potential of the sector. Measures to create agricultural clusters in the regions of the country, where all the links in production, processing, storage, packaging, logistics and export will be concentrated, should be separately noted. Major projects are being implemented in the energy sector. Last year, the Emirati Masdar and the French TOTAL Eren won tenders for the construction of two solar power plants with a capacity of 100 MW each on the basis of public-private partnership.


The share of foreign investments in the chemical industry is also growing. At the end of June this year, loan agreements totalling U$25 million were signed between Indorama Kokand Fertilizers and Chemicals, the International Finance Corporation and the EBRD for the modernization of production lines Kokand Superphosphate Plant JSC. Great attention is also paid to the prospects in the electrical industry which has grown production 4.5 times in the past 5 years. In cooperation with LG, Samsung and Honeywell companies, the production of a wide range of modern electronic and household appliances has been mastered.


In recent years, Uzbekistan has become more actively engaged in the development of the digital economy. Not only in creating a digital infrastructure but also about increasing the level of digitalization of production and operational processes in industry, finance and banking to 70% by the end of 2026. Large-scale changes have taken place in the IT sector over the past 5 years with the volume of exports growing by more than 75 times – up to U$46 million. The sector is today essential for effective modern development and the total volume of exports is planned to be expanded to U$100 million this year and U$500 million by 2026. To accelerate the development of the industry, the President has set an ambitious task to make the country a regional IT centre, for which in the medium term it is planned to launch a network of IT parks in the capital as well as the regions, and to train qualified personnel.




Over the past few years, under the leadership of President Shavkat Mirziyoyev, the Government has been implementing ambitious, large-scale and irreversible reforms that have already led to the creation of a more open, market-oriented economy.  Thanks to the strong political will and determination of the President, Uzbekistan has taken measures that have led to an improvement in international ratings on the investment climate and ease of doing business in the country, improved the business environment, simplified business procedures.


Uzbekistan intends to continue reforms and improve its investment climate and actively attract FDI. We actively invite foreign investors, including from the EU and France, and are ready to support all their business initiatives in various sectors of the economy, including the oil and gas industry, energy, manufacturing, agriculture, ICT, finance, education, healthcare and others.


I would like to note that the EU is one of the leading partners of Uzbekistan. At the same time, relations with European states are developing both at the bilateral level and within the framework of the Partnership and Cooperation Agreement (PCA) between the Republic of Uzbekistan and the European Communities and their member states. I would like to emphasize economic and investment cooperation, which already has its own positive history and is an example of dynamic and sustainable development of relations. The annual volume of mutual trade with the EU countries exceeds U$4 billion.


Currently, we are working on signing an Enhanced Partnership and Cooperation Agreement (EPCA) between Uzbekistan and the EU. We are confident that with its adoption, Uzbek-European cooperation will receive an even more reliable basis for further expansion and deepening of relations.


We are very interested in expanding France's economic presence in Uzbekistan by attracting French companies, as well as financial institutions to implement joint projects in the country. In this regard, we propose to intensify our mutually beneficial cooperation. We are ready to create all the necessary conditions for the successful and efficient operation of French business in our market.

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