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INFORMATION DIGEST № 68

Press-service of MFA of the Republic of Uzbekistan
ECONOMY
Development of "small economy" of Uzbekistan
Today, there is no need to establish the importance of small business and entrepreneurship for any economy. If a country wishes to be successful, as exemplified by advanced European nations like Germany, France, UK, it has to invest inthe ‘small economy’that employs the majority of the population. Benefits and preferences, government support, and yet, above all, thriving success stories in promoting personal business and using all the opportunities available, are rather important in this process.
There is much to report on what is being done in Uzbekistan for small business and private entrepreneurship by bringing figures, facts and evidence. In a short time small business has taken the lead in the Uzbek economy: last year, small businesses produced 55.8% of total GDP, and crucially, provided employment to more than 9.51 million people or 76% of the total employed population. However, the personal example of farmers, businesspeople and artisans, who have ‘made it themselves and their own business’ is the best model for those planning to open their own business.
A competition with a symbolic name Tashabbus (Initiative) was launched in Uzbekistan in 1995 to encourage the initiative-prone and the enterprising. In 19 years, it has not lost its effectiveness, and has expanded in scale. It has turned into a peculiar mirror that reflects the present state and trends of development of small business and entrepreneurship.
This year, the unique month-long rally has involved over 10,000 farmers, artisans and entrepreneurs. This record-breaking figure (last year it brought together more than seven thousand participants) demonstrates an ever growing popularity of the contest with the business community, and raises the degree of competition. This is a direct consequence of the fact that today the representatives of the national ‘small economy’ stand at the forefront of competition not only between each other by producing goods and providing with international standard services, but also successfully promote them in foreign markets. Last year alone, the industrial output exceeded 15.1 trillion soums (14.6% growth against 2012), and exports of various goods and services amounted to $2.7 billion (18% of total exports).
It is noteworthy that the formula of the contest has changed this year. District and city rounds were held late February, granting the winners with ticket to the regional level. The worthiest and successful participants of the regional round – 41 winners – made it to the national round, which finished last week in the capital. Previously, category winners were announced immediately after a two-day exhibition of products of the finalists. This time around, the organizing committee is to hold a ceremony of awarding the winners on April 10, most likely to give the jury the opportunity to fully explore the achievements of participants and select the truly best and brightest.
As far as categories are concerned, they are to present the best female entrepreneur, the best employer for youths, the year’s top exporter and young entrepreneur, along with the traditional best farmer, craftsman and entrepreneur. Besides, the jury will select the year’s top innovative project, the family business and winner in the category “My Motherland is My Pride”.
Generally, it is worth noting that the competition was very symbolic. For example, the visitors were welcomed by a deeply emotional and conceptual motto “Let’s Build the Future Together”. Uzbekistan has been actively developing a system of public-private partnership, where small business is entrusted with the development of regions. Here, it is important to realize that an individual entrepreneur or a farmer certainly does not influence the overall economic potential of the country. However, through opening mini-workshops, consumer service centers, stores, they create new jobs and raise population incomes in their districts, and promote the development of a social infrastructure and raise living standards. There are tens of thousands of such entrepreneurs throughout the nation, each of whom is a building block that erects the robust economic model of Uzbekistan, especially in the context of global instability. Last year alone, more than 26,000 small business entities started up, and at the end of the year their total number exceeded 190,000. Under the national program the Year of Wellbeing and Prosperity, commercial banks and other public and commercial organizations created favorable conditions to involve young people, graduates of vocational colleges and universities, in this field.
Year by year the number of those actively diversifying their businesses, launching the production of new products in demand, is growing among the participants. Today, farmers aim at not just producing a wide range of agricultural goods, but also at processing them, and supplying the market with finished dairy, meat and canning products, fruit juices, purees, jams and much more. Such a model helps farmers to be financially viable and depend on economic fluctuations to a lesser extent. At the same time, farmers are actively exploring new businesses, like beekeeping, poultry and fish farming, displacing expensive and not always quality imported products. Poultry farming is a striking example of how this approach succeeds. Some five to ten years ago, counters of domestic markets and stores were filled with frozen chicken legs, and carried a really dubious pleasure, both in terms of usefulness and taste. To date, the situation has changed radically. Modern poultry complexes keep opening across the country, supplying the population with quality and inexpensive products. Moreover, in contrast to previous years, when the range was represented by chicken legs only, today’s shop boards please the customers with a wide range of poultry goods.
Entrepreneurs, another component of small business, primarily aim to expand exports. They are motivated both by modern and upgraded capacities and products meeting international quality standards, and also by the successful experience of their colleagues. For example, many Uzbek textile and food brands have been long known in the world. Thus, our businesspeople have all chances to be active in CIS markets.
Artisans, whose goods are already well known abroad, keep up with their colleagues. There are perhaps very few people in the world not familiar with rich crafts traditions and dynasties of Uzbek masters. Today, gold embroidery, woodcarving, pottery, jewelry and many other items please the eyes of holders of big private collections, and hundreds of thousands of tourists who have visited Uzbekistan over the years of independence.
The organizers keep in mind another major task of the contest: they both demonstrate and share good expertise. The leading entrepreneurs, farmers and artisans held master classes for those willing to work in related fields, and also visited several educational institutions: entrepreneurs traveled to Turin Polytechnic University in Tashkent, farmers went to the Tashkent State Agrarian University, artisans called on the Kamoliddin Behzod National Institute of Arts and Design. Besides, with tribute to the Year of the Healthy Child, the organizers arranged a special auction among the participants to forward all the funds raised for charity.
TARGET REFERENCES
This year, according to experts, is going to be a milestone for the development of ‘small economy’, primarily owing to the implementation of certain initiatives that are expected to drastically improve the business environment. Much has been done in the country of late to create a favorable setting. Last year alone, Uzbekistan canceled more than 80 kinds of licensing procedures, 15 licenseable activities, cut 65 types of statistical reports, introduced 22 kinds of online tax services, cut twice the terms of issuing permits and their cost fivefold. Costs of licensing procedures for business entities decreased eight times, and the fee for opening bank accounts was canceled. Many other measures have been taken as well. Most importantly, the republic introduced the principle of priority of the rights of business entities. As a result, Uzbekistan climbed by 66 positions in the World Bank’s rating and now ranks 21st among 189 countries in the principle of business registration, and 24th in lending.
Meanwhile, Uzbekistan is planning to improve these indicators through the implementation of large-scale complex measures. Money is one of the eternal issues for building business, so it is planned to expand the opportunities for its support. This year the Uzbek banks plan to allocate 7.5 trillion soums for lending to small business and entrepreneurship. Of these, 160 billion soums are to be allocated for starting business for graduates of vocational colleges, 170 billion soums to family business, 700 billion soums to entrepreneur women. It is noteworthy that concessional loans will be also allocated to small business entities with no less than 50% of women in overall staff.
The switching of all business entities to online reporting, which is scheduled to be completed by late 2014, is expected to bring about significant outcomes. There is a scaled ongoing work in this direction throughout the country, various seminars and workshops to introduce business representatives to all the details and benefits of this process. A special part is assigned to raising juridical and technical competence of managers and accountants of enterprises. All regional tax offices and inspections are entrusted with allocating equipped classrooms for representatives of business entities to practice the online submission of reports, and be distributed with printed handouts and videos. It is planned to elaborate proposals on the introduction of specialized courses at higher and secondary special educational institutions on Electronic Reporting for accountants.
Small businesses are to be supported in exporting their products. For example, a specialized foreign trade company Uztadbirkoreksport, which was established to assist small businesses and enterprises in exporting their goods, has recently opened a trading house in Riga. According to experts, it will allow the Uzbek manufacturers enter not only the Baltic markets, but also be an outpost of exports in the European Union. Once it passes all the customs procedures, it will sell the goods in Latvia, Lithuania, Estonia, Finland, Norway, Sweden, Denmark, Germany, the Netherlands, Czech Republic and Poland. Today, the geography of the company’s exports goes beyond 20 countries.
Entrepreneurs are actively engaged in efforts to perfect the business environment. They do not just make use of all the opportunities provided, but elaborate new mechanisms for the promotion of the small business sector and bring it to a drastically new level through close partnership among various nongovernmental nonprofit organizations and government agencies.
(Source: “Uzbekistan Today” newspaper)

EXHIBITIONS
Effective Stage to Step up Cooperation
Opening ceremonies of international exhibitions, “WorldFood Uzbekistan-2014” and “AgroWorld Uzbekistan-2014”, have taken place at the Uzexpocenter in Tashkent.
They were attended by more than 150 companies from 22 nations like China, the Republic of Korea, Austria, Belgium, Bulgaria, Germany, Spain, Italy, Kazakhstan, Latvia, Malaysia, the United Arab Emirates, Poland, Russia, Romania, Slovakia and other countries.
The wide range of meats and dairy, marine products, vegetables and fruits, the exposition has been presented at the WorldFood Uzbekistan- 2014 exhibition by the national group of Belgian companies VLAM, Fresh from Belgium, Kipco-Damaco, Glacio and others. Rather appealing to the visitors also were stands of companies from South Korea, who displayed beverages for healthy lifestyle and biologically active additives to boost immunity.
“This is the first time that we take part in the international exhibition WorldFood Uzbekistan,” says In Young-Bay, foreign sales manager of the South Korean company Sunnuts. “As soon as on the very first day of the exposition, we were able to establish contacts with partners from Uzbekistan and we intend to ink contracts. The scope of the exhibitions and the efficiency of our participation have surpasses all our expectations.”
The visitors were rather keen to get familiarized with food products, machinery for their production, reprocessing and expertise, as well as technologies for bottling and packaging beverages. In this regard, a group of German companies who participate in this event every year has demonstrated meat processing, bakery and chilling equipment.
“Our five-year experience of participation in this exhibition shows that Uzbekistan’s food industry has been advancing dynamically,” says Fedor Franz, sales manager of PETKUS Technologie Gmbh, Germany. “The tremendous potential of the Uzbek economy opens up extensive opportunities for an effective mutually advantageous cooperation. Our company specializes in grain reprocessing, and owing to our attendance of this exposition we have been able to conclude a range of contracts with Uzbek companies. We intend to keep with expanding partnership ties in this sphere.”
A traditionally extensive exposition is presented by local representatives of the food industry, including the producers of soft drinks, food products and their ingredients – Mehrigiyo, Top Star Food, Good Food Group, Carlsberg Uzbekistan, Aroma Classic, and Agro-Bravo. They have exposed a wide range of cooked meats (sausages), dairy products, and varying sorts of tea, along with confectionery – wafers, biscuits, spice cakes, chocolate candies and many other sweets. Equipment for storage and production of food products could be observed at the stands of Matimex Vostok, Kholod System Service, Engineering Solutions», Salar Baraka and others.
“The dairy products presented by us have been exported for several years to a number of foreign countries,” Avaz Ergashev, sales manager of Samarkand region-based Agro-Bravo Ltd., says. “It is greatly contributed by the exhibition WorldFood Uzbekistan. We see how the scales of this occasion have been enhancing from one year to another, which is immensely instrumental in the expansion of foreign economic activity of domestic companies.”
Among the newcomers to the WorldFood Uzbekistan-2014 are the local manufacturers Anis Pro Product (producer of packaging goods), as well as Sayxun Baraka and Agro Makon Impex who specialize in the production of foods.
The international agriculture exhibition AgroWorld Uzbekistan-2014 is characterized with an enthusiastic participation of European companies, who have presented a broad selection of agricultural machinery for the pre-sowing processing of soil, planting and caring for agricultural crops, harvesting vegetables and herbage, as well as wheel tractors, compact aggregates, machinery for the collection of fodder crops.
Notably, a group of companies from Italy who have been taking part in this exhibition for the first time has displayed agricultural machines for reprocessing soil and gardening, high-tech greenhouses with plastic roofing and many others.
Given the wide-ranging efforts to introduce modern highly effective technologies for water management in the agriculture of our country, foreign and local manufacturers presented the state-of-the-art developments in this area. For instance, the affiliate Polipropilen Quvurlar under the Shurtan Gas Chemical Complex revealed polypropylene pipes and fittings, as well as shut-off-and-regulating rods for drip irrigation of agricultural crops. Representatives of the Chinese company Lutian Machinery introduced a model range of pumping aggregates for the transmission of water. These irrigation technologies impressed the farmers visiting the international exhibition.
The participants specializing in poultry farming and livestock have grown in number. A lot of newcomers are among manufacturers of agricultural machines, greenhouses and plant protection substances. The Dutch company Pas Reform presented its latest innovations in incubator technologies. The German manufacturer Big Dutchman revealed a wide range of equipment and machinery for poultry farming.
“The dynamic development of agriculture in Uzbekistan and the enormous prospects of the Uzbek market deserve praise,” says Edwin Vaags, sales manager of the company Prinzen BV, the Netherlands. “In particular, taking into account the huge potential of your country in poultry farming, we have presented integrated technologies in incubation, transposition and packaging of chicken eggs. We have already received a few offers for cooperation. For instance, our produce has stirred a keen interest among representatives of farmer enterprises.”
Thus, international exhibitions WorldFood Uzbekistan-2014 and AgroWorld Uzbekistan-2014 are going to become an effective stage for talks and definition of prospects for interaction between the business circles of our country and foreign participants of sector-based expositions. They will facilitate growth in foreign investments and cutting-edge technologies for the realization of promising projects and the enhancement of the export potential of our nation.
(Source: Uzbekistan National news Agency - UzA)