CAN YOU TELL US MORE ABOUT THE GOVERNMENT’S STRATEGY FOR SUSTAINABLE DEVELOPMENT WHILE CONTINUING TO IMPLEMENT REFORMS?

 

The New Uzbekistan Development Strategy aims to ensure a sustainable and inclusive economic growth and increase the GDP per capita level to at least U$2,800 in 2026 from the current level of around U$2,000. Another target to reach U$100 billion GDP as this milestone will allow the country to enter into the upper group of the middle-income countries or reach the GDP per capita level of around U$4,000 by 2030. We also aim to reduce the poverty level by 2 times during the period of 2022 – 2026.

 

WHAT ARE THE EFFORTS BEING IMPLEMENTED BY THE GOVERNMENT TOWARDS MAINTAINING FINANCIAL STABILITY?

 

Together with the Central Bank of Uzbekistan, we are implementing a systematic approach to ensuring financial stability. Since 95% of activity in the financial market belongs to the banking system, maintaining the stability of the banking system is a very important issue. A risk-oriented approach has been formulated in regulating the activities of the banking system. The balance sheets analyses and all operations of commercial banks are conducted on a daily basis in accordance with international practice, as well as regulatory ratios were implemented based on Basel standards.

 

In addition, macro-stress tests systematically conducted to identify the instability and solvency of the system. During the pandemic, liquidity has been provided through various short-term instruments. After the pandemic period, much attention was paid to improving the quality of bank assets. While non-performing loans rose to 6.2% in August 2021, they have declined to 4.2% as of November 2022 after the measures were taken. It is projected to decline to 4% by end of the year.

 

Also, during the period of financial difficulties, banks were recommended to conduct monitoring of the financial condition and recovery of clients' cash flows and provide revolving loans to maintain the working capital of business entities. In the current environment, when external risks and uncertainties are high, all banks were recommender to do caution approach with external transactions. All banks have strengthened the compliance control system in order to get to know their clients better. Moreover, ensuring stability of foreign exchange market is gaining importance in sustaining social-economic growth during the current conditions.

 

WHAT HAVE BEEN THE MOST IMPORTANT MEASURES AND WHAT IS YET TO BE DONE SO THAT UZBEKISTAN CAN EXPLORE ITS FULL INVESTMENT POTENTIAL?

 

To reach and ensure fast and stable growth rates, the Government of Uzbekistan under the leadership of President. Shavkat Mirziyoyev will continue the solid portfolio of economic reforms aimed at improving the well-being of the people of Uzbekistan. For these high growth rates, we need more private investments, especially foreign direct investments (FDI). But we clearly understand that the inflow of FDI will be dependent on the pace reforms in such areas as reforming the energy market, improving the energy sufficiency and efficiency; accelerating the privatization and transformation of SOEs and SOB; improving the connectivity by implementing the PPP projects modernizing the airports, building the automobile roads and possibly the railways; reforms in agricultural sector leading to the efficient usage of land and water resources; strengthening the rule of law, further creating a favorable business environment; developing the human capital and labor market.

 

THE PPP PROGRAM FOR 2022-2026 HAS PROJECTS OF OVER U$14 BILLION. WHAT ARE THE KEY PRIORITIES AND INITIATIVES UNDER THIS PROGRAM?

 

The Development Strategy of Uzbekistan for 2022-2026 will require to implement PPP projects which worth U$14 billion with a pipeline of 154 PPP that have already been approved and the work started. These projects are being implemented in energy, transportation, utilities, waste management, healthcare, education and other sectors. In the energy sector, there are 7 PPP projects currently in our pipeline. These projects are construction of 100 MW and 150 MW solar power plants, and a 700 MW wind power plant. Also, we have already signed advisory mandates for implementation 1 GW solar and 500 MW wind programs as well as 1 GW combined renewable energy program. In transportation, there are three large road PPP projects: Tashkent-Andijan toll road, Tashkent-Samarkand toll road and Takhtakoracha tunnel. Moreover, we also plan to attract investors for Tashkent International Airport and other regional airports within the next 5 years.

 

In utilities, there are two large projects: modernization of Tashkent sewage treatment plant and modernization of Bukhara district heating system. In healthcare, there are three large PPP projects: establishment of radiotherapy centres, establishment of multi-profile hospital in Ferghana region and establishment of medical centres in Andijan and Bukhara. In education, there are several significant PPP projects for the construction of 100 schools, 100 preschools and 100 dormitories programs under PPP modality.

 

We have already implemented a dedicated regulatory and institutional framework for PPPs and are further strengthening the enabling environment by processing a number of policy interventions, supporting provisions and incentives. Structured training programmes, guidelines and toolkits are being developed to enhance capacity within our ministries and agencies; stakeholder engagement workshops are being launched to build understanding and promote participation of our local contractors and financiers.

 

THE GOVERNMENT’S IS IMPLEMENTING A BOLD STRATEGY THAT WILL SEE POVERTY LEVELS REDUCED BY 2 TIMES BY 2026. CAN YOU TELL US MORE ABOUT IT?

 

In accordance with the Strategy for the Development of New Uzbekistan we set the task of reducing the poverty level in our country by 2 times by 2026. In particular, the Strategic Goals of increasing enrollment in higher education, training the unemployed in relevant professions, and creating new jobs will undoubtedly serve to poverty reduction. On top of that, in our way of achieving reducing poverty, we defined the "transition to the green economy" as one of the main directions. For the first time in 2020, the President of Uzbekistan raised the concept of poverty to the state policy level and based on international experiences, in the shortest period we created a regulatory and legal framework in this field, including the minimum social standards of the population and the poverty line.

 

We introduced and started implementing the Strategy of Social Protection of the Population and the monthly per capita income criterion for assigning child allowance and financial assistance to families equalized to the value of minimum consumption expenses, which is used as the poverty line. As a result, the number of low-income families included to the following register increased from 595,000 in 2019 to 2,4 million by 2022, or an increase of 4 times.

 

In accordance with a Decree of the President, from 1st May 2022, pensions and social benefits are set at an amount not less than the value of minimum consumption expenses. To develop human capital in the last five years, we created 375,000 new quotas for students and also built 27,500 preschools and about 1,700 medical institutions. Furthermore, we built more than 180,00 thousand new houses, and the number of houses completed annually increased by 3,5 times, the supply of drinking water to more than 6 million people improved, and more than 36,600 km of internal roads were repaired and continuing to carry out construction work.

 

WHAT WOULD BE YOUR MESSAGE TO INVESTORS INTERESTED IN UZBEKISTAN?

 

Invest in Uzbekistan now and invest with confidence. The country is stable and offers a reform-minded political system led by President Mirziyoyev pursuing sound macro-economic policy. Uzbekistan is a top reformer according to the Economist and has a low risk of debt distress according to the IMF. This is a high growth country – we will be 40 million people in 8 years with U$160 billion economy from U$80 billion now.

 

Early results are very promising. Uzbekistan has made consistent progress in Competitive Industrial Performance index, Worldwide Governance indicators, Corruption Perception index, Rule of Law index, Global Innovation index and many others. Last but not least, continued focus on implementing irreversible market reforms to create opportunities for private sector and investing to deliver sustainable development goals will enhance long-term competitiveness of Uzbekistan’s economy.