Investment opportunities / By Province

Khorazm province

1. Geographical location. Territory, climate

Khorezm province is located in northwest part of Uzbekistan, on the left bank of Amu Darya river. The territory amounts to 6,1 thousand sq. km, or 1,4 % from the total  area of Uzbekistan.

In the north Khorezm province borders with Republic of Karakalpakstan, in the south - with Turkmenistan, in the northeast - with Bukhara province of Uzbekistan. The province according to its geographical position is between 40 42 of northern latitude and 60 62 east longitude, the territory is stretching from north west to south east to 280 km in those coordinates where the city of Urgench is located, from the West to the east - to 80 km, the most northern part of province is Nuronbobo Tugan that is near to Olchin kishlak of Gurlensky district. The most southern point is slightly to the south of Tuprakkalinsky file.

Province climate is extreme continental, the difference between the minimum and maximum temperatures can reach 78 ⁰. Because the province territory is surrounded by sand, the summer temperature reaches  +43 ⁰, +45⁰. During winter time the cold reaches -30 ⁰C, -33⁰C . The hot summer, cold winter, sharp change of temperatures within a day, small amount of precipitation and dry air are characteristic to the region.

2. Historical excurse

Khorezm region is located in a fertile oasis of Amu Darya river lower reaches between deserts of  KaraKum and KyzylKum. Khoresm is the native land of ancient civilisations. The Greek scientist Gerodot named these earths the country of thousand fortresses. During archeological excavations it was revealed that in X century BC there were irrigation canals in length not less than 300 km. Archeologists are still struggling with a riddle of the ancient cities which were found in waterless desert, naming Khoresm the second Egypt. There is evidence to consider Khoresm to be the native land of Zoroastrism. In the sacred book of zoroastians "Avesta" Khoresm was named the Sun country. Geographically the western areas of modern Uzbekistan, and also northern Turkmenistan and Aral Sea banks were parts of ancient Khorezm. The first written sources (519 BC) mention Khoresm as the state grasped by Persian governor Dariy I.

Since X century Khorezm became large economic, cultural centre of science. The great scientists such as Al-Khorezmi and Beruni worked and lived here. The first Academy of Sciences (Academy of Mamun) in the east has been established here. In XIII century Khorezm became such a powerful state that its governors have won extensive territories in Persia and Afghanistan, besieged Bukhara and Samarkand. But, despite strong resistance, Khorezm has fallen before the Mongolian horde, which wiped the capital of Khorezm Urgench off the face of the earth. Only in XVI century Khorezm again became an independent state The Khiva khanate with the capital Khiva which has existed long enough, before it  has been conquered by Russia in the end of a XIX-th century.

Khorezm is a cradle of an ancient civilization, the unique monument of writing of "Avesta" has been created here. It is an area of great thinkers who have become famous around the whole world, such as Muhammad al-Khorezmi, AbuRajhonBeruni, NajmiddinKubro, MahmudZamahshari, PahlavonMahmud, Ogahi. Khorezm is the earth with rich past and bright future. The first mentions of Khorezm are met in Behistun inscription of Dariy I and "Avesta"; many researchers identified Khorezm as Aryanam-voychah the first Zoroastrian country. The most ancient archaeological monuments of Khorezm belong to Neolith epoch.

Avesta the collection of sacred books of ancient Iranian religion, which dominated in Near and Middle East prior to Arabian conquest (VIIVIII centuries D.C.). This religion is called Mazdaism in science (by name of the main deity Agura-Mazda), Zoroastrizm (by name of its legendary founder prophet Zoroastra, or Zaratushtra),  Magizm (under the name of its priests natives of a tribe of magicians), religion of Avesta (by name of its main sacred book), fire-worship (because of a special role of fire in its cult). Later, the branch of this religion has received the name of Mitraizm - on behalf of god Mitra.

Painting and sculpture of Khorezm developed in synthesis with architecture, have been inspired by ideas of glorification of fructifying forces of nature and idolization of imperial power (the Toprak-kala, clay painted statues and bas-reliefs, multi-colored paintings made with mineral paints). Beruny informs about accession of tsar Afriga in Khorezm in 305, about his founding a new dynasty and citadel-residence building in Kyat (near modern Beruni city). In 712 Khorezm was conquered by Arabs. The Arabian commander Kuteyba, as Beruni informs, has delegated the power to his protégé. The capital of northern Khorezm Urgench whose governor Mamunibn Mohammed in year 995 united Khorezm, had gradually increasing significance . At the same time, such outstanding scientists, as Beruni and Ibn Sina (vicenna) have worked in Urgench.

3. Social-economic development

The main objectives of economic development of the region are creating of favorable conditions for ensure stable business development and form of active proprietors class.

Gross Regional Product (GRP) was 3378.7 billion soums (796.5 million dollars). Region's economy in recent years, steady growth, as evidenced by the following macroeconomic indicators: in the 2010 GRP growth was 110.2%, inflation rate for the area established at 6.6%, the share of small business and entrepreneurship in the total GRP reached 71.8%.

GDP per capita amounted to 1231.7 thousand soums (533.4 dollars without purchasing power parity), or 105.9% in relation to that of 2009.

In 2010 in the area reported more than 34 thousand businesses. The number of newly established enterprises in 2010 amounted to 2.2 thousand, of which 2.035 thousand - small businesses.

3.1. Population

The province is divided into 10 administrative provinces: Bagatsky, Gurlensky, Kushkupyrsky, Urgenchsky, Hazoraspsky, Hankinsky, Khivan, Shavatsky, Jangiaryksky and Jangibazarsky. The Administrative centre is the city of Urgench. Other big cities Khiva and Pitnak. Quantity of villages 98, mahallas - 552.

Number of population of the region reaches to 1 million 590 thousand people (to January 1, 2011), 37% of which living in urban areas and 66.3% - in rural areas. Average density 262.8 people per square kilometer.    

Number of able-bodied citizens made up 888 thousand people or 55.8% out of total number of population. Main part of able-bodied citizens composed of high-qualified specialists of agriculture, industry, capital construction and social sphere. 

Main part of population engaged on agriculture (over 20%), industry (5.5%), construction (over 6%), trade and catering services (6%), transport and communications (2.5%) and education (about 10%).

3.2. Banking and Financing system

There is developed financial infrastructure in the region. In particular, 48 commercial banks branches, 141 mini-banks, 23 saving-banks, 52 special cashiers, 20 insurance companies branches, 1 credit union and 1 leasing company are operated.

3.3. Development of agrarian sector

The share of agriculture on gross regional product (GRP) makes up about 35.9%. Main agrarian sectors are cotton-growing, grain-growing, vegetable-growing and gardening.

There were produced 258 thousand ton of cotton, 277.7 thousand ton of vegetables, 333.8 thousand ton of grain crops, 118.3 thousand ton of fruits, 94.5 thousand ton of melons and gourds and 26.0 thousand ton of grapes in 2010. Agricultural production growth reached to 105.0% in 2010.

Area of crops makes up about 228.5 thousand hectares. There are nearly 6.050 thousand farms are working in Khorezm region.

Now, 12 plants on processing of agricultural products are operating in the region.  There is also poultry-farm.

Increase of processing agricultural products is priority direction of further development of agrarian sector. Availability of solid raw materials source and rather economy manpower enables to develop processing.  

3.4. Mineral and Raw materials potential

There are natural and raw materials resources such as silicate goods, brick stuff and mineral waters in Khorezm region.  

3.5. Industrial potential

Share of industry on total volume of gross regional product (GRP) makes up 5.5%. 

Main industrial sectors are cotton-processing, light industry, food industry, building materials manufacture and machinery construction.  

In 2010 gross product of light industry reached to 189.4 billion Uzbek som (122 million USD),

food industry to 102.3 billion som (43.2 million USD), flour-milling and feed-mill industry to 100.6 billion som (31.6 million USD), building materials manufacture to 22.4 billion som (9.5 million USD), machinery construction to 20.1 billion som (9.1 million USD).   

There are operating 25 main industries in the region among which Urgench Oil OJSC, Khorazm-Nurtop JV, Bagattextile JV, Urgench excavator plant JSC, Urganch Vine JSC, Khiva carpet OJSC and Grass mowing machinery OJSC.

There are producing such industrial outputs in the region such as agricultural technique, ready-made garments and knitwork, yarn, cotton and silk fabrics, ceramics, chinaware, furniture, carpets, plastic goods, wine and vodka products, as well as seed oil. In 2010 industrial manufacture growth made up 110.5%.    

3.6. Trasportation and communication

The province possesses the developed communication networks. The total length of railways is 128,7 km, highways 2265 km. Highways connect a network of roads of Kazakhstan and Russia with Turkmenistan, Iran.

The river Amu Darya which length is 148 km flows through this province.

The international airport which has a capacity to accept various types of cargo and passenger planes function in the city of Urgench. Charter flights to Moscow, Paris are carried out from the airport.

Cable, international and long-distance, city and rural, and also post and cellular communication work in Khorezm province. Providers of cellular communication in province are: "MTS-Uzbekistan", "Beeline", "Perfectum Mobile" (CDMA standard) and U-CELL.

3.7. Social infrustructure development

In the developed system of education: 3 higher educational institutions, 85 average special professional colleges, 540 comprehensive schools, 371 preschool institutions are available in this province. Including 423 libraries, 189 clubs, 2 museums, 2 theatres, including 1 puppet theatre, 11 cinemas, and also more than hundred cafes, restaurants and public catering points are functioning. The most popular of them are "Tabassum", "Sharshara", "Nargiz", "Tavallud", "Indaba" and others.

The special attention in province is given to health of citizens,  41 medical institution, 65 first-aid- obstetric  units, 23 rural ambulance stations, 170 medical-out-patient polyclinics operate in cities and districts. 

Khiva is one of the most ancient cities in our planet, 2500 anniversary of which was widely celebrated by world community in 1997.  

Historical center of Khiva, particularly, Ichan-Qala (inward fortress) was included to UNESCO World Heritage List. Here are a lot of architectural monuments such as Knans palaces, mosques, madrasahs, mausoleums and towers.   

There are more than 15 private travel agencies and other tourism facilities in Khiva now. About 1000 person engaged on tourism field. The main hotels of region are KhorazmPalace, Asia Khiva, Jayhun, Khiva malikasi, Urgench and Avesto. Costoflivingthererangesfrom 19 to 100 USD.   

4. Investment potential

4.1. Foreign investments in region

On the outcomes of 2010 foreign investments and credits at the amount of over 25.6 millio USD have been attracted to the region.

More attractive sectors for investing are textile and food industries, fruit and vegetable processing, building materials manufacture and tourism.  

In the Republic of Uzbekistan the national regulation for foreign investments, which envisage to grant them terms not less favorable than relevant terms for investments, carried out  by legal and phisical entities of the country has been established.   

Enterprises, attracting foreign direct private investments and located in the Khorezm region, as well as engaged on such economic sectors as production of electronic products and component parts for computers, light industry, silkworm industry, construction materials industry, industrial production of poultry meat and eggs, food, meat and milk, chemical and pharmaceutical industries are exempt by main activity from income (profit) tax, property tax, tax for develoment of social infrastructure and territories inmprovement, the single tax for micro-firms and small-scale enterprises, as well as mandatory contributions to the National Road Fund

Aforesaid tax remissions are granted at following amounts of foreign direct investments:

- from 300 thousand USD to 3 million USD - for a period of 3 years;

- over 3 million USD to 10 million USD - for a period of 5 years;

- over 10 million USD - for 7 years.

At that these tax remissions apply to the following terms:

- attraction of foreign private direct investments by foreign investors without guarantee of the Republic of Uzbekistan;

- the share of foreign contributors in autorized fund of enterprise must be at least 50 percent;

-  attarction of foreign private direct investments after state registration of the aforesaid enterprises;

- investing in a form of hard currency or modern technological equipment;

- contributing the income received due to granting of aforesaid benefits within the date of their use to reinvestment for the purpose of further developent of company.

4.2. Enterprises with contribution of foreign investments

There are registered 29 enterprises with contribution of foreign investments in the region, which are operating on textile, food and chemical industry, as well as building materials manufacture, trade and services. 

Joint ventures established with contribution of investments from Russia, Turkey, Germany, USA, China, Switzerland and Great Britain. 

Among them such companies as Khorazm-Nurtop JV, Bagattextile JV, Urgench oil OJSC, Khorezm provincial branch of Uzdunrobita FE and Khiva FE.

MFERITMEDEF InternationalInternational Business CenterGov.uzPress ServiceOliy MajlisUzASARIO