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1NOVEMBER 17 INTERNATIONAL SCIENTIFIC AND PRACTICAL CONFERENCE
0 n 0 Q IMPROVING UZBEKISTAN'S POSITION IN INTERNATIONAL RATINGS L U L O AND INDEXES: THEORY, PRACTICE, AND STRATEGY
IMPORTANCE OF INVESTMENT PROMOTION AND TECHNOLOGY TRANSFER
FOR ADVANCING INDUSTRIAL COMPETITIVENESS OF UZBEKISTAN
Doniyor Usmanov https://doi.org/10.5281/zenodo.10139750
In the current global economy, investment and technology transfer play a crucial role in national strategies aimed at achieving sustainable economic and industrial development. Governments worldwide actively seek investments and advanced technologies, and the international community has increased efforts to assist developing countries in this process.
Considering the current realities, Uzbekistan, along with other developing countries, faces difficulties in promoting investment and technology transfer from advanced economies. These challenges arise due to language barriers, geographical distance, and technological gaps.
Current Industrial development trends
The Republic of Uzbekistan, located in Central Asia is world's only double landlocked country in the world (along with Liechtenstein). In such situation Uzbekistan suffers from that lack direct access to a sea or ocean, local businesses must typically resort to shipping their product by rail, road, or air rather than over the water.
This adds cost and make it difficult for local enterprises to remain competitive in the global marketplace. Further, these difficulties can reverberate through a country's entire economy, dragging down the overall quality of life.
Taking into account such conditions Uzbekistan interested in more economic integration with foreign partners.
It must be admitted that by the mid-1990s, the growth of the Uzbek economy began to slow down due to too strict administrative regulation and closeness, which did not allow the full use of the potential of market incentives for its development.
In this regard, the new Government of Uzbekistan led by President Shavkat Mirziyoyev, elected in 2016, began a new stage of profound transformations in all spheres of economy and finance.
Uzbekistan has seen stable economic progress and significant industrial growth last 7 years. Uzbekistan's GDP annual growth rate recorded 5.7% in 2022 (5.5% in 1st quarter of2023)1.
Historically main sector of the economy of Uzbekistan was agriculture. As a result of the measures taken to promote industrial production, it was possible to achieve significant changes in the structure of the economy.
Thus, in general, over the period 2000-2022, the share of agriculture decreased from 50% to 26.9%, while the share of industry increased to 27.8%. The share of services for 1990-2022 rose from 18.7% to 38.6%.
Moreover, the proportion of high-tech industries is growing in the overall technological structure of the manufacturing industry. However, it still remaining very low comparing to other countries. In 2020 Uzbekistan for the first time ever entered "UNIDO Competitive Industrial Performance Index (CIP)" (Annex 1) and reached ranking 89 among 154 countries with overall score 0.017 (world overall 0.062)2.
1 Statistics Agency Under the President of the Republic of Uzbekistan (may 2023)
2 Competitive Industrial Performance Index 2020: Country Profiles (Report, 03 Jul 2020)
NOVEMBER 17
2023
INTERNATIONAL SCIENTIFIC AND PRACTICAL CONFERENCE
IMPROVING UZBEKISTAN'S POSITION IN INTERNATIONAL RATINGS AND INDEXES: THEORY, PRACTICE, AND STRATEGY
According to UNIDO CIP data high tech industries accounts only 1.4% of overall industrial manufacturing.
Policy and Legal Framework.
Last 6 years Uzbekistan is implementing ambitious market-oriented economic reforms. Starting in September 2017, the government unified the exchange rate, liberalized the foreign exchange market, initiated price and trade liberalization and, since January 2019, has made significant cuts to tax rates for both enterprises and individuals.
Increasing the rule of law has been a central feature of Uzbekistan's reform agenda over the recent years. As part of the comprehensive reform program led by current government of the country, new edition of the Constitution of the Republic of Uzbekistan was adopted by nationwide vote at the referendum held on April 30, 2023.
According the Constitution responsibilities of the Government expanded for ensuring sustainable economic growth, macroeconomic stability, creating a favorable investment climate, reducing poverty, etc.
Under the new Constitution, the state required to:
- Provide a favorable investment and business climate
- Enable entrepreneurs to undertake independently any business activities in accordance with national laws
- Guarantee the free movement of goods, services, labor and financial resources across the whole of Uzbekistan
Challenges and opportunities in Industrial growth
The industrial development of the country's regions is a pivotal factor contributing significantly to the overall economic growth of the nation.
Regional economic development and competitiveness are dependent on the regional industrial mix3. The comprehensive and sustainable development of regional economies, as well as their competitiveness in the broader economic landscape, is intricately linked to the composition and diversity of industries operating within those specific regions.
3 Zhikai Wang, Rural-urban industrial growth in the private sector: the case of Zhejiang province, In Chandos Asian Studies Series, The Private Sector and China's Market Development, Chandos Publishing, 2008, p. 5-21
NOVEMBER 17 INTERNATIONAL SCIENTIFIC AND PRACTICAL CONFERENCE
0 n 0 Q IMPROVING UZBEKISTAN'S POSITION IN INTERNATIONAL RATINGS L U L O AND INDEXES: THEORY, PRACTICE, AND STRATEGY
The analysis reveals that the regions of Uzbekistan have specific needs and requirements for their economic development. Based on the analysis, the following key points emerge:
- Access to New Technologies: One of the pressing needs identified is the acquisition of new technologies for manufacturing processes. Many businesses in the industry lack access to modern technologies and often rely on outdated or low-profit foreign technology. This limitation negatively impacts the region's ability to promote exports effectively.
- Diversification of Technological Partners: The regions express a desire to diversify their technological partners, which currently mainly consist of China, Russia, and Belarus. The predominant use of Chinese and Russian technology is attributed to their affordability and extensive marketing activities in Uzbekistan. Exploring partnerships with other countries or regions can bring about technological diversity and foster innovation.
- Attracting Investors in Key Sectors: The regions of Uzbekistan are keen to attract more investors in sectors such as manufacturing automobile spare parts, textiles, high-value-added goods, and agriculture machines. These sectors hold potential for growth and can contribute significantly to the region's economic development.
- Utilizing Available Resources: The regions possess abundant land, a cost-effective labor force, affordable electricity and gas, and well-developed infrastructure. However, the absence of technology and investors hampers their ability to accelerate economic activity and fully leverage these resources.
Addressing these identified needs would involve initiatives to facilitate technology transfer, attract diversified investments, support targeted sectors, and strengthen partnerships with a broader range of countries and regions. By addressing these challenges, the regions can enhance their economic potential and contribute to the overall development of Uzbekistan.
REFERENCES
1. United Nations Industrial Development Organization Annual report 2022 (Vienna, 2023).
2. The Competitive Industrial Performance (CIP) report 2020 (United Nations Industrial Development Organization, 2021).
