Investment opportunities / By Province

The Republic of Qoraqalpoghiston

1. Geographical location. Territory, climate.

Republic of Karakalpakstan is located in the northwest of Uzbekistan in the lower bench of the river Amudarya, along the southwestern shore of the Aral Sea. Plains transforming into the plateau Ustyurt, in the southwest into hilly chain of the Karakums, and in the east into the KyzylkumsDesert occupy the most part of its territory. Sultan-Uvaysriseinthesoutheast.

On the north, northeast and west it borders with the Republic of Kazakhstan; on the south and southeast with the Republic of Turkmenistan; onn the east and southeast with Navoi and Khorezm provinces of Uzbekistan.

Republic of Karakalpakstan is a sovereign republic in the structure of the Republic of Uzbekistan, and has its own Constitution, emblem, flag and anthem. Karakalpak and Uzbek languages are official languages of the Republic of Karakalpakstan. Russian language is also widespread, often used in official documentation.

Area of the republic is equal to 166.6 thousand sq. km (37.1% of total area of Uzbekistans territory). Population is 1,604.8 thousands people. Population density is 9.6 people on 1 sq. kilometer. Population size annually rises in the range of 0,7-0,8% or in the range of 13 ths. people. Urban population amount 48,6% and rural is 51,4% from total amount of population.

Administrative and territorial division of the republic is represented by 14 districts: Amudarya, Beruniy, Kanlikul, Karauzyak, Kegeliy, Kungrad, Muynak, Nukus, Takhtakupir, Turtkul, Khodjeyli, Chimbay, Shumanay and Ellikkala. Capital of the Republic of Karakalpakstan is Nukus city with population of 266,4 ths. people.

Climate in Karakalpakstan is sharply continental with hot and dry summer and cold winter with some negligent precipitation. Average temperature in January varies from 5 to 8º. Minimum temperature during winter fall down to 38 . Average temperature in June varies from +26 to +28º, and in July and August - +50º. Average precipitation level is 100mm annually.

2. Historical excurces.

As a result of national and state demarcation of republics in Central Asia, an Karakalpak autonomous province was founded in 1924 in the structure of Kazakh ASSR. In 1932 it was annexed to the Russian Federation, and was turned into the Karakalpak ASSR, and in 1936 it was included in the Uzbek SSR.

Contemporary territory of Karakalpakstan is situated on the territory of Khorezm, the most ancient state of Central Asia. This region has rich history and culture, interesting cultural monuments.

Toprak-Kala, I-IV centuries A.D.

It has been established that one of quarters was occupied by patronal buildings traditionally built here over the whole history of the citys existence. Decorated glassware, adornments, fragments of alabaster sculptures and wall paintings, warriors figures in the warriors hall and kings hall sculptural image of kings figures had been found in another building.

Kyzyl-Kala, I-II centuries, XII - early XIII centuries

Was probably erected as a defensive fortress and was included in the chain of Khorezmian fortifications created by the state for protection of northeastern borders of the Ancient Khorezm. In addition, the fortress served as the center of rural neighborhood and the joint of caravan roads through the Sultanuizdag Mountain Ridge.

Djanbas-Kala, fortress of IV century B.C. - I century A.D. Materials collected on its territory, mostly ceramics, are inherent to the early antique (Kangyuy) culture of the Khorezm.

Great Guldursun fortress of III-IV centuries B.C., XII-XIII centuries A.D.. Located in 20 km to the east from BeruniTown. Great Guldursun, one of largest border fortresses of Khorezm, was built based on a desolated ancient fortress. The last period refers to 1220., i.e. time of invasion of Mongol troops.

Mizdakhkan (KhodjeiliGyaur-Kala) archaeological and architectural complex of IV century B.C. XIV century A.D. situated on the substantial area of more than 200 ha.

Mazlumkhan Sulu Mausoleum.

This monument is located half in the ground, and only cupola and entry portal were above the surface. Stairs from the portal lead down to a small interim cupola facility through the vaulted corridor. Another stairs go down to the central room from here.

Shylpyk

Religious building of II-IV, IX-XI centuries A.D. Ring-shaped building was built in II-IV centuries as a Zoroastrian dakhma. In IX-XI centuries it was used by local people as a beacon.

Koykrylgan-Kala

Religious building of IV century B.C. - IV century A.D. Defensive wall with nine towers represented a reliable fortification. Ancient architects relied on calculations that allowed use of building as a place for astronomical observations. Possibilities of observation were provided for in the building design and the location of windows. It is assumed that the star Fomalhaut was that astral symbol, to which was dedicated the temple Koykrylgan-qala. In Arabic Fomalhaut means "the end of the water in the mouth of South Fish," which connects the star with the water element.

3. Social-economic development

The analysis of indicators of Gross Regional Product for the last years demonstrates the tendency of increase in KarakalpakstanRepublics GRP.  For instance, in 2006 Karakalpakstan Republics GRP was 578 billion UZS. in 2010 this indicator has reached the level of 1389,8 billion UZS., with an annual gain of 105-108 %. Also the growth and gain of GRP tendency per capita (see the table) is observed.

 

 

Table. The dynamics of GRP growth in Republic of Karakalpakstan.

 

Indicators

2006.

2007

2008

2009

2010

GRP (billion UZS)

578

754,2

993,0

1246,1

1389,8

Growth rate, in % (to previous year)

106,3%

106%

108,3%

108,2%

110,0%

GRP per capita (thousand UZS)

365,7

472,3

617,3

766,2

845,2

Growth rate, in % (to previous year)

105,9%

107,5%

107,9%

107,0%

108,8%

In GRP structure of Republic of Karakalpakstan the main place is occupied by different branches of economy (35,6 %) and agriculture (24,4 %). Relative share of an industrial output is 9,6 %, of construction 8,3 %, trade and public catering 8,1 %, transport and communication 7,6 %, taxes 6,4 %.

In 2010 the quantity of subjects of small-scale business, without agricultural and farms has reached 8967. The small-scale business share in republican GRP has reached 63,6% (a gain of 4,6 % in comparison with 2009).

Volume of produced building materials in 2010 has approached 32547,8 million UZS (a gain of 199,0% in comparison with 2009.)

The industrial output volume has reached 387877,3 billion UZS (109,4 % to indicators of 2009).

In 2009 consumer product production equaled 153634,5 billion UZS (109,2 % to indicators of 2009).

In 2010 the quantity of farms operating in Republic of Karakalpakstan equaled 4119,0 units, including 3532 farms are engaged in plant cultivation, 435 in animal industries and 240 in other spheres.

4. Population

Populationof the Republic of Karakalpkstan as of 1st of January of 2011 is 1650,2 ths. people. 

Total number of able-bodied population is 934,6 ths. people (56,6% of total population of the region) and has grown in compare of 2009 be 0,2%.

The largest city of the Republic of Karakalpakstan is the capital Nukus city, with population of 274,2 ths. people. Other largest cities are Khodjeyli, Takhiatash, Chimbay, Beruniy, Turtkul and Kungrad.

The number of employed population has amount 580,8 ths. people (62,1%able-bodied population). People engaged in production sphere are 385,3 ths., in sphere of nonmaterial production 195,5 ths.

Main part of employed population work in agriculture sector (33,0% from employed population), educational and cultural sphere (17,0%), construction (9,1%), industry (8,8%), trade (8,4%) and public health (7,6%).

5. Banking and financial system

Karakalpak Republican Directorate of the Central bank of Uzbekistan and 13 affiliates and departments of commercial banks of Uzbekistan including the Deparment of National bank of Uzbekistan for Karakalpakstan, Promstroybank (Construction and industrial bank), Pakhtabank, Microcreditbank, Savdogar-bank, Gallabank, Turon bank, Asaka bank, Aloqa bank, Ipoteka (Mortgage) bank, Khalq bank, Universal-bank (Nukus mini-bank) and Khamkor bank operate in Karakalpakstan, which are actively participating in financial support for the entrepreneurship development.

In 2010 the volume of bank credits allocated was UZS 215 billion, which increased by 15.8% compared to 2009.

5.1. Agricultural sector development

The major branches of agriculture in Karakalpakstan are grain growing (wheat and rice), cotton growing, livestock sector and sericulture.

As of January 1, 2011, the area of agricultural lands all over the republic amounted to 262.9 thousand hectares.

There are 4119 farms and they employ 191.9 thousand people.

Volume of gross agricultural output is around UZS 482 billion.

In 2010, there was grown more than 188.0 thousand tons of cotton and 82.3 thousand tons of grain. Also 134.1 thousand tons of vegetables, 29.2 thousand tons of potatoes, 69.5 tons of melons, 24.7 thousand tons of fruits and berries and about 3.47 thousand tons of grapes were grown there.

In the livestock sector there was produced 58.9 thousand tons of meat, 183.6 thousand tons of milk, 46.0 million eggs, 68.5 thousand pieces of karakul and 861 tons of silkworm.

5.2. Minerals and raw materials potential

Raw materials for building materials production are being extracted in Amudarya District of Karakalpakstan, including porphyry for rubble stone production, and road metal for hydraulic concrete production.

In Beruni district there are being produced such building materials as gabbro-amphibolite (decorative facing material) and marble of various colors. There are also deposits of marbleized stone, limestone, clay, such mining raw materials as talc and talc stone, feldspar.

In Karauzyak District there are reserves of porphyria, which is used in construction. There also granodronite and pyroxenite ores under development (construction materials). There are reserves of gunch (used for the production of gypsum), bentonite clay, limestone, gravel, titaniferous magnetite, vermiculite.

Kegeyli District possesses natural resources of sodium sulfate salt (used for the production of ceramics, glass, medicine, and for fertilizer production) and bentonite clay.

In Kungrad District natural gas and gas condensate deposits are being developed. Approved gas reserves amount to 219.4 billion cubic meters and gas condensate reserves 7.8 million tons. There are also natural resources of sodium sulfate salt and table salt.

There are also natural gas and gas condensate reserves in Muynak District.

In Nukus District, there are natural reserves of glauconite, which can be used as a water distiller for the production of mineral fertilizers.

5.3. Industrial potential

In 2010 the industrial enterprises of the republic produced goods and services worth UZS 406.7 billion, the growth of output was 109.4% compared with 2009.

In 2010, there were produced goods worth UZS 136.0 billion (USD 82.4 million) the light industry, UZS 65.5 bln (USD 39.6 million) in the energy sector, USD 63.4 bln (UZS 38.4 million) in the food industry, UZS 44.5 bln (USD 26.9 million) in flour-milling and provender milling, chemicals and petrochemicals UZS 35.2 billion (USD 21.3 million).

Industrial production of the fuel, chemical and petrochemical products and metallurgy has seen a growth recent years. Growth in the fuel industry was due to increased production of gas and petroleum products, and growth in chemical and petrochemical industry is due to commissioning of Kungrad soda plant, which produces soda ash.

There are 25 major industrial enterprises in the Republic of Karakalpakstan, including "Zarubezhneftegaz GPD Central Asia" (natural gas extracting), Kungrad Soda Plant (soda ash), JV "Igilik-gas" (kerosene and fuel), Takhiatash Thermal power plant (electricity), JSC Chimbai May (vegetable oil), JSC "Karakalpakboyan" (licorice root), JV "Lanekstrakt" (processing of licorice root), "Berunii eggar" Co. Ltd. (vegetable oil), "Nukus Wineries" Co. Ltd. (wine and alcohol), JV "Univer" (garments), "Nukus balyk" Co. Ltd (fishery), "Karakalpakvermi" Co. Ltd. (productionofvermiculite).

6. Transportation and communication 

The dominant role in transportation of cargoes in Karakalpakstan is played by motor transport. The length of highways in Karakalpakstan makes 4389 km, including ones with firm covering - 4241 km. Almost all settlements of republic have access to highways.

In 2010, 31,7 million tons of cargoes and 169,9 million persons were transported in Republic of Karakalpakstan.

The length of railroads equals to 880 km. Railway routes are directed to other provinces of Uzbekistan, Kazakhstan and Russia. The railway of Chardzhou-Kungrad-Beneu-Makat passing through Karakalpakstan, is the basic route from the Central Asia to Russia and other European countries.

The airports of the Republic Karakalpakstan are available in three cities: Nukus, Muynak and Turtkul. In the cities of Muynak and Turtkul the airports are designed for small planes. The city airport of Nukus has possibilities to accept the big passenger and cargo planes. There are flights to the city of Tashkent daily twice a day. Also flights (3-4 times a week) to cities of the Russian Federation (Moscow) are made.

Cable, international and long-distance, city and rural, and also post and cellular communication functions in Karakalpakstan. Providers of cellular communication are: "MTS-Uzbekistan", "Beeline", "Perfectum Mobile" and "Ucell".

 7. Social infrustructure and recreatinal services


Central city of the Republic Karakalpakstan is its capital Nukus city

In the capital there are two recreational parks, the Central Stadium, two museums, three theaters, one central market, a chain of stores with a large range of consumer goods.

There are 91 colleges, 10 academic lyceums, 754 education school, including 85 special schools with advanced study of certain subjects, 10 lyceums, 2 gymnasiums, and 322 childrens pre-school institutions in the republic.

There are 161 libraries, 159 clubs, 10 movie theaters functioning in the republic.

Particular attention is given to the public health in the republic. 51 hospital institutions, 301 medical outpatient clinics and 122 first aid and obstetric stations functions in towns.

Karakalpak people have ancient, richest history. Its national culture, unique arts, classical literature, customs and traditions wide widely known.

State ArtsMuseum named after I.V.Savitskiy with more than 1,000 exhibits is located in the Republic of Karakalpakstan, amphitheatre where national holidays are holding annually. Museum of Berdakh, outstanding classical poet of the Karakalpak people is the pride of the Nukus City.

Lake Ashshykkol and Rookery Grove where one can relax in family circle are popular places of summer vacation for both Nukus City population and its guests during summer season. One can also stay in yurtas, national home place of local population.

8. Investment potential

8.1. Foreign investments in the province

In 2010 the Karakalpakstan attracted foreign investment and loans totaling USD 38174.1 thousand, with the share of FDI in it amounted to USD 20139.1 thousand.

For foreign investments in the Republic of Uzbekistan there have been set national treatment, which grants foreign investment the terms not less favorable than the corresponding conditions for investments by domestic individuals and legal entities.

Enterprise attracting direct private foreign investment and located in the Republic of Karakalpakstan, as well as carrying out activities in the following sectors: radio-electronical industry, production of computer components and computer engineering, light industry, silk industry, construction materials, industrial production of poultry and eggs, food processing, meat and dairy industry, chemical and pharmaceutical industries are exempt from operating activities income (profit) tax, property tax, social infrastructure and territories face-lift tax, the single tax for microfirms and small enterprises, as well as compulsory contributions to the Republican Road Fund.

These tax credits are available for private foreign direct investment.

At the same time these tax credits are applied in the following conditions:

- Private FDI  is made by foreign investor without warranty of Uzbekistan;

- The share of foreign participants in the charter capital of the enterprise must be at least 50 percent;

- Contributing the private FDI after the state registration of the enterprises;

- Foreign investment in the form of freely convertible currency or new equipment;

- Income received as a result of providing these benefits for the duration of their use, is re-invested to further development of the company.

8.2. Enterprises with foreign investments

Today 40 enterprises with foreign investments (EFI) are registered in Karakalpakstan. Foreign trade turnover of EFI was USD 18.9 million in 2010.

8 new joint ventures were created in 2010, including:

Vietnamese FE "SIA-SILK"  (cocoon processing), Uzbek-Chinese JV "MANGIT INVEST PLYS" (confectionery production), British FE "AMUDARYOTEX" (cotton yarn), British FE "ASTERA TEXTILE" (cotton yarn), Karakalpak-Ukrainian JV MSKh Agrosnab (agricultural products), Karakalpak-Swiss JV "ELIX INTERNATIONAL" (construction),  Uzbek-Chinese JV "LANFIBER" (padding polyester), Karakalpak-Russian JV KARAKALPAKENERGOHIM (building materials production and assembly).

MFERITMEDEF InternationalInternational Business CenterGov.uzPress ServiceOliy MajlisUzASARIO