Living in Uzbekistan

Economy

From the first years of Independence, Uzbekistan selected own course of development, the Uzbek Model of transition to socially oriented market economy based on 5 key principles developed by the President of Uzbekistan H.E. Islam Karimov, as follows: the priority of economics over politics; the state is the main reformer; the rule of law in all areas of life of the society; strong social policy; step-by-step transition to market relations.

Thanks to weighted and targeted economic policy of the Head of the State, Uzbekistan achieved and ensured:

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

- framework for maintaining steady high rates of annual economic growth by 8% at average, predominantly, thanks to internal factors;

-reduction of aggregate tax burden almost 3 times, while the State is providing additional packages of concessions and preferences to exporting enterprises, small businesses and entities, making investments and introducing new productions;

-creation of sustainable banking and finance systems 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;

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

Economy of Uzbekistan, thanks to successful implementation of this model appeared to be resistant to negative consequences of global economic and financial crisis. The issued strategy of struggle against crisis and neutralization of its consequences allowed the country among few states of the world to ensure for the past period steady growth rates of economic development. Growth rate of GDP in 2010 comprised 8.5%, which is according IFIs one of the highest indicators in the world.

Structural transformations taking place in the economy of Uzbekistan deserve special attention. Thus, if ten years ago, in 2000, the share of industrial production, and small business and private enterprise in GDP of the country comprised totally 14.2% and about 31% accordingly, in 2010, these indicators reached 24% and 52.5%.

Active implementation of State Investment and Localization Programs is facilitating steady growth of industrial production which in 2010 reached 8.3%.

Under steady high growth rates of the economy and growth of real incomes of population, the inflation in 2010 comprised 7.3% vs 7.4% in 2009.

For the last 6 years, the country’s state budget is fulfilled with surplus. Foreign debts towards GDP as of the 1 January, 2010 did not exceed 10%, while internal – 0.4%.

Despite continuing global economic and financial crisis, total exports in 2010 increased by 10.8%, and the positive balance of foreign trade increased 1.8 times and comprised US $ 4.2 billion. Accordingly, gold and currency reserves of the country also increased.

In the structure of the import, the share of equipment and technologies is growing (from 35% in 2000 up to 44% in 2010), which reflects the ongoing process of technological modernization and creation of new high tech productions.

The favorable investment environment for foreign and domestic investors facilitated attraction of more than US $ 100 billion investments into the economy of the country for years of Independence out of which US $ 35 billion are foreign capital investments.

High growth rates are observed in banking and finance sectors and stock market. Today, 31 commercial banks are functioning in the country, including: 3 state-owned, 13 joint-stock companies, 11 private and 5 with participation of foreign capital.

Aggregate capital of banks in 2010 versus 2009 increased 1.5 times, aggregate assets - by 36%. Shareoflendingforinvestmentcomprised75.2%. Capitalization of banking sector is permanently growing, that allows to raise the amount and terms of lending and to supply the real sector of economy with additional investment resources.