Economy Displays Sustained Growth Rates in the first half of 2010

Uzbekistan’s Cabinet of Ministers has convened to review the socioeconomic progress in the country for the first part of the year. The government has also worked out an additional action plan directed at unconditional implementation of priority policies in social and economic development in 2010. The guidelines had been mapped out by President Islam Karimov during the government’s similar session on January 29, 2010.

In the first six months, the growth of gross domestic product has amounted to eight percent as compared to the same period last year. The volume of industrial production rose by 8%, consumer goods production by 11.8%, agriculture by 6.9%, while construction works expanded by 11.5%, retail trade by10.3%, and services by 10.9%. The efforts undertaken to support exporters and search for new markets ensured the growth of exports by 14.3% and a significant positive trade balance. National manufacturers in this period exported goods and services in 139 countries in the world, including 26 new countries.

State budget was fulfilled with a surplus of 0.2% to GDP, inflation did not exceed the projected limits.

Anti-crisis program in action

At the meeting the Cabinet of Ministers has extensively reviewed and deeply analyzed the outcomes of the ongoing and deepening structural reforms, modernization of the country’s economy, the anti-crisis measures for 2009-2012 and analyzed on its basis the efforts to ensure high and sustainable economic growth, improve its efficiency and macroeconomic balance.

The economic performance achieved during the first half confirm the correctness of the chosen strategy, recognized by authoritative international financial structures. Thus, a mission of the International Monetary Fund in late June this year highly assessed the anti-crisis measures and overall economic policy of the country.

“Thanks to the anti-crisis package of measures, the government’s program on industrial upgrading and infrastructural development and improvement of external economic environment in 2010 real GDP is expected to show 8% growth,” noted the Joint Statement of the IMF, the Government and the Central Bank of the Republic Uzbekistan.

Foreign experts emphasize that the government’s program to modernize the industry is rightly focused on the development of infrastructure, which will lay the foundation for more investment in Uzbekistan. It is recognized that in recent years the republic has considerably developed the financial sector.

At the cabinet meeting the ministers examined in detail the progress of the government’s measures to increase the capitalization of banks and accelerate their investment activity, attract long-term credit resources for stable financing of industries in accordance with the target of economic growth.

It was noted that as a result of taken efforts the volume of individual deposits increased by 41.8% in comparison with the beginning of the year, the resource base of banks has been considerably enhanced, which enabled a 30.3% growth in credit investments. During the reporting period, the volume of drawn investment loans increased 2.3-fold.

In their reports heads of commercial banks paid special attention to additional measures to further strengthen the resource base and enhance credit support for manufacturing enterprises, especially those carrying out investment projects to build new, modern production floors, modernize and technologically rebuild the enterprises, including bankrupt ones transferred to banks.

The country continues to expand an effective cashless payment system based on plastic cards. At the meeting of the government it was said that the further development of cashless payment system has increased the number of issued plastic cards and installed terminals against the same period in 2009 by 38.7% and 66.5%, respectively, the volume of cashless payments via plastic cards grew 2.7 times.

The Cabinet of Ministers fully considered the impact of measures taken to ensure stable operation, financial stability and competitiveness of basic industries, business associations and large enterprises. It was stressed that the continuation of an active investment policy had ensured 7.1 trillion soums of drawn investment, including foreign direct investment, which was 1.3 times more than in the first half of last year. Implementation of 108 projects of technical modernization of production had completed, and 529 production facilities were launched.

However, the government set specific objectives to ensure the unconditional implementation of the policy measures on modernization, technical upgrading and diversification of industries. Thus, ministries, agencies and relevant companies were instructed to develop a program of additional measures to reduce energy consumption and the introduction of energy saving systems in the economy sectors in the medium term.

Particular attention was paid to the implementation of the employment program for 2010. It was mentioned the targeted efforts in the first half of 2010 ensured the creation of more than 509,000 jobs, including more than 350,000 jobs in rural areas.

However, the heads of the Council of Ministers of Karakalpakstan, regional, district and city councils, ministries and agencies were charged with specific tasks to adopt additional measures aimed at further increasing the employment and incomes. It primarily envisaged creation of more jobs, their stable operation, as well as the employment of graduates of vocational colleges and academic lyceums, especially in rural areas.

Rapidly changing villages

Today everyone can meet in rural areas of the country modern residential quarters that literally grew up in the eyes, and fundamentally different from the old design. New homes are designed and constructed to meet modern standards of architecture. They have original architecture, and the same amenities met in urban areas. However, they are constructed to satisfy all the peculiarities of rural housing. Another benefit is that the new homes are built in conjunction with the necessary social infrastructure: outlets, medical institutions, educational institutions, sports facilities...

This promising project was initiated by President Islam Karimov last year with a national program of the Year of Rural Development and Improvement. In accordance with the program, the republic started an extensive work on the organization of the architectural planning of villages, improving the design of individual housing and social facilities in rural areas.

In accordance with a presidential resolution of January 21, 2009, for the integrated development of rural settlements and radical change in appearance of villages, a special Design and Research Institute Qishloqqurilishloyiha was established, which develops model projects of individual multi-room houses, public service facilities whose construction apply modern industrial technologies.

In addition, the institute has developed mechanisms of carrying out these projects. A decisive role here is played by an engineering company Qishloq Qurilish Invest providing complete construction of individual houses and social facilities and having its branches in every region of the country.

In addition, a special Joint-Stock Commercial Qishloq Qurilish Bank was established for financing the project and establishing a system of long-term concessional lending, which is successfully operating today.

The government’s meeting had extensively reviewed the progress of projects of social, transport, engineering and communication infrastructure, housing construction in rural areas based on typical design.

Currently, 223 tracts of land located in rural areas are allocated for construction of 6,800 homes of typical design, to be put into service in the third quarter of 2010; 213.9 km of external engineering and communications networks of new rural residential areas have been already completed. 116 new construction materials enterprises have been commissioned this year, including 25 brick plants.

President Islam Karimov during his visit to Andijon and Ferg’ona regions in May this year examined the first houses erected in accordance with model projects, and talked with local residents. Noting in his conversations with the owners of new homes the benefits of the new homes, he expressed his views on the further development of designs and give appropriate suggestions and recommendations.

The president shrewdly noticed that it was about the construction of good houses that will serve not only current but also future generations. “The most important thing is that people do not just want to live in a house for decades peacefully and quietly with their families, but leave it to future generations. We have no right to forget about it, about the bright faith of people in their own future, we must inspire confidence,” he stressed.

The program is carried on. In this regard Joint-Stock Commercial Qishloq Qurilish Bank, Qishloq Qurilish Invest jointly with the State Committee for Architecture and Construction, the Council of Ministers of the Republic of Karakalpakstan, regional administrations were instructed at the meeting of government to develop and submit to the Cabinet of Ministers a draft program of individual housing construction in rural areas of new model designs for 2011.

Path to the future

It is known that the key priority for the modern economy of Uzbekistan is to attract investments, particularly through the mobilization of domestic resources toward the implementation of accelerated modernization, technical and technological rearmament of the most important sectors of economy, rapid development of transport infrastructure and construction of social infrastructure. Among these priorities, the development of road-building industry became an important component of the national policy aimed at full integration of national transport networks to the global communication system.

To date, the country has made an enormous work on the development and modernization of general highways, improvement of road management, raising the capacity of road construction industry. And today, the transportation system of Uzbekistan is one of the most extensive in Central Asia.

Today a total of twenty international routes and directions run through the territory of Uzbekistan located in the heart of Central Asia. Such a favorable geographical position enables the country to receive significant revenues from the export of motor transport services, including the transit services for foreign cargoes through the roads network of the republic.

As part of this work the republic has initiated a large and ambitious project of construction of the Uzbek National Highway to run from north-west to south-eastern border of the country. This highway will connect the major cities of the republic, create strong incentives for socioeconomic development of regions and increase the volume of transit traffic through the territory of Uzbekistan 1.5-2 times. The road of 2755 km in length is to assume the main stream of international transit and intra-traffic traffic across the whole country, and eventually to come to China and the Caspian Sea ports.

The full functioning of this route would create thousands of jobs, increase investment rating of the republic, solve the problem of high tariffs on transportation, increase the availability of natural resources. The Uzbek National Highway will give impetus to the development of mutually beneficial trade relations with countries of the world, protect the economic interests of Uzbekistan.

At the meeting of the Cabinet of Ministers it was reported that the program of construction and reconstruction of roads of international and national significance, including construction facilities of the Uzbek National Highway had already drawn 190.6 billion soums, or 1.8 times more than in the first half of 2009; roadside and service infrastructure is under construction and commissioning.

An important component of large-scale economic reforms in our country is creation of a network of logistics centers. They are, according to local and foreign analysts, will contribute to further boosting the economy of Uzbekistan, increase its efficiency and strengthen the position of the country in the global market.

In this regard, at a cabinet meeting it was reported that in the first half of 2010 the freight and passenger traffic through Navoi International Airport, which creates a free industrial economic zone, increased by 22%. In addition, another major logistics center was launched in Angren.

The successful implementation of such promising projects becomes a kind of powerful engine that drives the economy on a path of stable and rapid development, serves as a basis for future prosperity.