April 02, 2008

Politics:
President of Uzbekistan to participate in NATO/EAPC summit
Economics:
Uzbek Agriculture Ministry launches project to halt degradation of soils
Elimination of discrepancies in tax benefits for fair competition in financial sector
Ravnak Bank receives international quality award
Society:
Uzbek-German Friendship Society Marks Navruz In Tashkent
Opened Centre for Women's Social and Legal Support in Termez
Uzbek experts visit Russian medical establishments

POLICY

PRESIDENT OF UZBEKISTAN TO PARTICIPATE IN NATO/EAPC SUMMIT

President of Uzbekistan Islam Karimov will participate in the summit of the Euro-Atlantic Partnership Council in Bucharest on April 3-4.

The head of the state will take part in the event on the invitation of the NATO Secretary General Jaap De Hoop Scheffer, UzA reported.

ECONOMY

UZBEK AGRICULTURE MINISTRY LAUNCHES PROJECT TO HALT DEGRADATION OF SOILS

This month the Ministry of Agriculture and Water Economy of Uzbekistan launched the project "Achieving the stability of eco-system on the degraded soils in Karakalpakstan and Kyzylkum Desert of the Republic of Uzbekistan".

The project will be carried out until 2011, according to Jahon information agency quoting local newspapers.

At the moment, about 85 percent of the territory of Uzbekistan is deserted and half-deserted. One of the big deserts of the Central Asia, the Kyzylkum, is also among them. For over the 40 years its territory has been broadening due to drying up of the Aral Sea.

"The problem of degradation and desertification of lands has a global nature. During the visit of the UN Secretary General Kofi Annan to Uzbekistan in 2002 the Uzbek Leader proposed to consolidate the cooperation with the UN to address this problem," Irina Bekhmirzaeva, the head of international cooperation department of State committee for protection of nature, has said.

The main goal of the project is to achieve the stability of eco-system at the degraded soils. The authors of the project aim to stop the expansion of boundaries of deserts by increasing the level of fixation of carbon and expanding the habitation environment for various flora and fauna.

ELIMINATION OF DISCREPANCIES IN TAX BENEFITS FOR FAIR COMPETITION IN FINANCIAL SECTOR

In the report of the President of the Republic of Uzbekistan Islam Karimov on "Ensuring the prioritization of human interests – the top aim of all reforms being implemented" delivered at the meeting of the Cabinet of Ministers on the results of the country's socio-economic development in 2007 and the top priorities for the intensification of economic reforms in 2008 reducing the tax burden, simplifying and unifying the systems of taxation was defined as one of the main tasks on the way to liberalizing the economy, Uzreport Business Information portal reported.

The report also pointed out that the norms and provisions of the Tax Code prepared on the basis of the study of world best practices and the principles of taxation that have been checked on practice were mainly aimed at unifying the taxation system and tax relations, strengthening the stimulating role of taxes in sustainable and balanced development of the economy of the country. It also emphasizes importance of the careful study of the efficiency of the new code in practice, and understanding where it functions efficiently and where there is still a need to improve it further and introduce corrections.

In light of this attention should be given to the proper implementation of the norms of the Tax Code envisaging the taxation of the interests paid on deposits. After the new Tax Code entered into force, the interest earnings of individuals received from deposits in credit unions have been included in the taxable income of individuals, whereas the interest earnings on deposits in commercial banks have been exempt from taxes.

As of 1 January 2008 the total volume of individuals' deposit accounts in commercial banks has comprised 994.6 billion soums, and the total volume of deposits in credit unions for the same period made up 34.6 billion soums, or 3.5% of the deposits in commercial banks. The use different tax benefits with regard to the individual income from deposits placed in commercial banks and credit unions that provide identical financial services on deposit operations and are equal participants of the financial system seems unfair and contradicting the principles of fair taxation stated in the Article 8 of the Tax Code.

The Article 8 on the "Principle of justice of taxation" of the Tax Code states that taxation should be universal. The established tax benefits have to comply with principle of social justice. The provision of tax benefits of individual nature is inadmissible. Taxes and obligatory payments should not be discriminatory in nature or be applied differently, based on social, racial, religious or other similar features.

The application of benefits in taxation of the personal income received from the same type of service but from different financial institutions thereby does not comply with the main principles and approaches lying at the base of the new Tax Code of the Republic of Uzbekistan. One of such principles was the principle of "justice and neutrality", according to which the tax system should be economically neutral and not distort the production and consumption or provide unfounded advantages to some sectors disadvantaging the other sectors, and the conditions of taxation should be equal first of all by elimination of exclusions from the general tax regime.

According to the Article 759 of the Civil Code of the Republic of Uzbekistan under the contract of banking deposit one party (the bank) that had accepted a certain monetary sum (deposit) from the other party (depositor) is obliged to return the sum of the deposit and pay an interest on it according to the terms and conditions stated in the contract. The rules of this chapter regulating the banks are also applied to other crediting organizations that take deposits from corporate entities according to the legislation of the country, which illustrates that the deposit services provided by commercial banks and credit unions are identical.

The taxation of the personal income from deposits placed in credit unions and the non-taxation of the income from deposits in commercial banks leads to the competitive disadvantage of deposit products of credit unions, although the objective of credit unions and commercial banks in provision of savings services is the same (financial intermediation – attracting idle funds and their redistribution for financing of various sectors of the economy). Taking into account the fact that 98% of the whole resource base of credit unions is personal deposits one can speak of the high level of negative effect the taxation of personal income from interest earnings has on the development of the system of credit unions in the country in general. This situation also contradicts the principles of fair competition in the financial sector of the country.

Today credit unions whose main sphere of activity is aimed at the development of small business, private enterprise, small farming businesses, and provision of a wide range of financial services to the population that had no access to the financial resources earlier are growing in popularity. As the main mission of the credit unions is to raise the welfare of its members, it has a major social meaning and importance. According to the specificity of their activity, credit unions provide services to the relatively more vulnerable groups of the population by providing them socially-oriented deposit products on special conditions (higher interest rates, lower minimum deposit requirements, monthly payment of interest, etc), the sources of which are commonly pensions, allowances, stipends, etc.

The taxation of personal income earned on deposits in credit unions also forces the credit unions to raise the interest rates to stay competitive, which in turn makes the financial resources more expensive. As a result the interest rates on loans are also raised, which limits the accessibility of credit products for the members of credit unions, consisting mainly of small business entities and a part of the population that had not earlier had the access to financial resources.

Today the Government of the Republic of Uzbekistan pays close attention to the development of small business, micro-financing and non-banking financial institutions. The Resolution of the Cabinet of Ministers of the Republic of Uzbekistan "On the development of micro-financing in the Republic of Uzbekistan to 2010", one of the main provisions of which is intended to support the creation of economic and organisational conditions for the expansion of the network of credit unions and micro-credit organizations in all regions of the country to cover the whole population in need of micro-finance services, has served as an additional impulse for further development of the system of credit unions. Also the resolution envisages the development and implementation of a set of recommendations on the provision of benefits to the credit unions to further stimulate their establishment throughout the country.

In light of this and taking into account the need to support the system of credit unions at the stage of its formation and development, to create equal conditions for the personal deposit operations leading to the achievement of fair competition in the financial market, it would be wise if the concerned state agencies discuss the unification of the tax benefits applied to the personal income earned from deposits in commercial banks and credit unions, and introduce corresponding amendments to the Tax Code.

RAVNAK BANK RECEIVES INTERNATIONAL QUALITY AWARD

The 10th Century International Quality ERA Convention for Excellence and Business Prestige organized by the Business Initiative Directions (BID, Spain) was held on March 10 in Geneva.

The Chairman of the Board of the Ravnak Bank B. Tursunov, and Acting Deputy Chairman of the Board E. Inamov attended the 10th Century International Quality ERA Celebration, Uzreport Business Information portal reported.

As a mark of recognition of its achievements in provision of high quality products and service Ravnak Bank was awarded the Century ERA Award in the "Gold" chategory.

This award is given to companies for their continuous commitment to satisfaction of the consumer needs, innovation and strategic development. The basic criteria on which the Century International Quality ERA is based include excellence in leadership and business management, quality and excellence, business and brandname prestige, and technology, innovation and expansion.

The organizer of the event, BID, has developed and integrated one of the most modern Total Quality Management (TQM) models – QC100, a highly technical tool for management of models of communication among the clients, suppliers and employees of a company. It is also the author of the award symbolising the company's achievements in constant quality improvement.

QC100 TQM Model is recognized internationally. It outlines the methods of management and use of communication in the process of administration. In this programme, quality is presented through 100 principles, which explain in detail the method of monitoring the actions aimed at improvement.

The number of countries using the B.I.D. symbol and the QC 100 Total Quality ̀anagement model technology is constantly growing, and currently constitutes 173 states. The list of the awarded clients is growing too. Some of the known companies of Uzbekistan that had received this award before are the Navoi Mining and Metallurgy Combinat, Pharmed, etc.

QC 100 TQM model helps achieve success to those companies that step forward to serve as an example to the rest of the companies. The quality is assessed by the clients.

All the distinguishing features of the services offered should have the priority interest for the management system of the company. The concept of quality not only emphasizes the need for the product or service features to match clients' expectations, but also highlights the distinguishing features and advantages of the service compared to the competitors.

Ravnak Bank was set up on April 26, 2001 through the decision of the general meeting of its founders.

SOCIETY

UZBEK-GERMAN FRIENDSHIP SOCIETY MARKS NAVRUZ IN TASHKENT

On March 29 this year the festive gathering dedicated to the Navruz holiday was held at the Poytaht Hotel in Tashkent. The Uzbek-Germany Friendship Society along with Council of society of friendship, culture and enlightenment ties of Uzbekistan with foreign countries organized the event.

The representatives of public and foreign missions accredited in Uzbekistan and members of their families participated in the festive gathering, according to Jahon Information Agency.

The participants of the event, which took floor at the opening ceremony, have said that such kind of events would promote consolidation of the spirit of trust and mutual understanding between the representatives of two countries. It will also give an opportunity to learn closer the traditions, cultures, and costumes of the nations and further extend the multilateral relations.

They have also said that the youth had an important place in consolidating the bilateral relations. In line with this the participation of the Kelajak Ovozi Youth Initiative Center in the event was symbolic. The guests have enjoyed their best performances.

In their turn, the foreign guests to the festivity also have had an opportunity to show off their national dances and songs.

OPENED CENTRE FOR WOMEN'S SOCIAL AND LEGAL SUPPORT IN TERMEZ

Recently the opening ceremony of the Centre for Women's Social and Legal Support took place in Termez. This Center established by Women's Committee of Uzbekistan with financial and technical assistance from UNFPA, United Nations Population Fund in Uzbekistan, is established under aegis of Women's Committee.

The Centre will not only provide social and psychological support to women in crisis situations, but will also implement activities on strengthening the role of women in family life and socio-political area, according to the report of Uzreport Business Information portal.

It is expected that the Centre will also conduct regular training on business development for women, teach them various useful skills and help finding employment opportunities.

Representatives of Women's Committee of Uzbekistan underlined that the overall mission of the Centre will be in coordinating the work done to promote women's rights and strengthen their role in the society.

Similar centers are acting in Andijan, Fergana and Namangan provinces of Uzbekistan and it is planned that a number of new centers will be established soon in other parts of the country.

UNFPA is an international development agency that promotes the right of every woman, man and child to enjoy a life of health and equal opportunity. UNFPA supports countries in using population data for policies and programs to reduce poverty and to ensure that every pregnancy is wanted, every birth is safe, every young person is free of HIV/AIDS, and every girl and woman is treated with dignity and respect.

UZBEK EXPERTS VISIT RUSSIAN MEDICAL ESTABLISHMENTS

Specialists of the Republican Pathology Center of Health Ministry of Uzbekistan paid a visit to Moscow in March to learn the experience of leading technical and medical institutions of Russia in use of telemedicine system in pathology service.

The visit was organized within UNDP pilot project "Use of ICT for Medical Diagnosis of Poor Rural People in Remote Areas" (the telemedicine project). The objective of the project is to build and maintain the capacity of a group of trainers on diagnostics and research activities and to improve access to qualified medical services for population in two selected regions, with special attention to women and children and those, who can not afford or have limited access to health care services in the field of pathologoanatomy, particularly the poor and the disabled.

During the visit, the experts from Uzbekistan visited Moscow Engineering Physics Institute, Russian Oncological Research Center, Russian Medial Science Academy, Hematologic Scientific Center and other medical establishments.

The exchange visit provided the opportunity to learn the experience of leading technical and medical institutions of Russia in use of telemedicine system in pathology service (histological, hematological and cytological diagnostics) and the development of electronic database and atlas of blood elements, macro- and micro-preparations. The most important part of visit was learning the programmes of automated analysis of micro-preparations, characteristics of macro-objects, comparative cariosities morphology, which serves for pathological diagnostics of different types of tumors.

Malika Abdullakhojaeva, director of the Republican Pathology Center of Uzbekistan, said: "The visit provided good networking opportunities on biopsy diagnostics through telemedicine system with Russian Oncology Research Center (RORC). At RORC we were able to learn advanced methods of histological diagnostics of tumors (immune-histochemical researches), received more information about new classifications, methods of differential diagnostics of tumors."

The practical training organized by the department of medical IT system at Moscow Engineering Physics Institute helped to improve knowledge on automated system of microanalysis, technology of designing of computer medical systems, methods and means of telemedicine and others. The department provided methodological and training materials. Upon arrival to Tashkent the Uzbek experts organized training for the medical staff of the Republican Pathology Center and shared the experience and lessons learned.