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Uzbekistan uses Uzbek model of transition to socially oriented market economy

UZBEKISTAN

Uzbekistan welcomes foreign investors

Uzbekistan uses Uzbek model of transi-
tion to socially oriented market economy

From the outset of Independence, Uzbekistan has been following its own path of development - the Uzbek Model -- of transition to a socially oriented market economy based on five key principles developed by country’s President Islam Karimov: the priority of economics over politics; the state is the main reformer; the rule of law; strong social policy; a step-by-step transition to market relations.

Automobile industry in Uzbekistan is one of the important areas of cooperation between Korea and Uzb-
ekistan.

Thanks to successful implementation of this model, today Uzbekistan has achieved the following milestones:

- macro-economic stability, equilibrium of domestic and foreign sectors of economy, growth of currency reserves;

- maintaining steady high rates of annual economic growth by over 8% at average;
- the reduction of aggregate tax burden almost 3 times, while the State is providing additional packages of benefits and preferences to exporting enterprises, small businesses and entities, making investments and introducing new production;
- the creation of sustainable a banking and finance system with strict observance of Basel principles of banking supervision. In particular, the degree of sufficiency of banking capital is more than 23%, which is almost 3 times higher of international standards;

- the development of new high tech industries through an intensive investment policy, technological modernization of industrial facilities and production infrastructures.

Railroad transportation is one of the key industries contributing to the rapid development and growth of -the economy of Uzbekistan.

Over the years of Independence Uzbekistan has created a broad spectrum of legal guarantees and preferences for foreign investors, developed an integral system of measures on encouraging the activity of enterprises with foreign investments.

The state guarantees and protects the rights of foreign investors which carry out investment activity within the Republic of Uzbekistan. In the event, the consequent legislation of Uzbekistan makes investment environment less favorable, then, within 10 years from the moment of investment, foreign investors will use the legislation which was in effect as of the date of investment. Upon their discretion, after notifying the authorities, foreign investors are entitled to apply those provisions of a new legislation which make the investment environment more favorable.

Foreign investors also could be provided with additional guarantees and measures of protection of rights in case if they investment into priority industries or projects, which ensure sustainable economic growth, strengthening and enhancing export potential of the country, projects in the field of small enterprises.

Over the past few years, the Government has pursued a consistent policy on significant reduction of tax burden for both legal entities and individuals. Unprecedented tax incentives are provided to enterprises that faction in Navoi Free Industrial Economic Zone, Angren and Djizak Free Industrial Zones. These incentives include exemption practically from all types of taxes and customs duties imposed in Uzbekistan, which makes these Free Industrial Economic Zone one of the most liberal and attractive free economic zones in the world.

Uzbekistan is one of the leading countries in term of reserves of gold, uranium, copper, silver, zinc, tungsten, rare metals, natural gas, coal and fossil minerals. In the Republic there are more than 2,800 deposits and prospective depositions of minerals, with total mineral-feed potential of the country to be about US$ 3.5 trillions.

On many categories, including non-ore and metallic minerals, agricultural commodities, Uzbekistan is one of the leading countries in the world. In particular, on copper reserves it’s 11th largest, on gold production -- 7th, uranium -- 7th, production of cotton fiber -- 5th. In addition, Uzbekistan is among TOP 10 countries of the world in term of reserves of gas, coal, uranium. Aggregate reserves of energy carriers of Uzbekistan are sufficient to satisfy demands of the economy at least for 100 years.

Uzbekistan is located at the crossroads of Central Asia, which creates favorable environment for development of regional cooperation, participation in regional and transnational projects on development of transport corridors. Foreign companies investing in Uzbekistan get access to 5 largest and the most dynamically developing markets: CIS with the customer market of more than 300 million people, Central and Eastern Europe, South and South East Asia, Middle East.

Favorable geographic location on the intersection of all trade routes among above regions, a developed multimodal network, covering the markets located far outside of Central Asia, including Eastern part of the Middle East, Northern part of India and Western part of China, is an important competitive advantage, which allows to significantly reduce the time and costs of delivery of cargoes through the territory of the Republic.

All in all, Uzbekistan has a myriad of opportunities for foreign investors and is looking forward to a long-term mutually beneficial cooperation with them. k

이경식 기자  edt@koreapost.com

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