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УДК 338.4(677+685+687)
Tukhtasinova M.M. senior lecturer department of economics Fergana Polytechnic Institute Republic of Uzbekistan OR CID:0000-0003-0443-7261
SOME ISSUES OF THE DEVELOPMENT OF THE TEXTILE INDUSTRY OF THE REPUBLIC OF UZBEKISTAN
Abstract. Light industry is a strategic sector for the economy of Uzbekistan, providing a high level of employment, contributing to the economic and industrial international prestige of our state. The article examines the current state of development of the textile and sewing-knitting industry of the Republic of Uzbekistan in recent years. The forecasts for the implementation of the objectives of the Action Strategy in this area in five priority areas of development of the Republic of Uzbekistan in 2017-2021 are analyzed. The role of the industry in the development of the economy and industry, the growth of exports, the introduction of a cluster model of development, and the provision of employment is shown.
Keywords: economy of Uzbekistan, textile industry, analysis of industry indicators.
Uzbekistan is one of the world's largest producers of natural textile fibers, cotton yarn and knitwear. More than 1 million 250 thousand cotton fibers are produced annually in the republic. Considering that among the CIS countries, the most developed base of light industry is available only in Uzbekistan, the sales figures of domestic textile products are increasing tenfold.
The textile industry is strategically important for the development of the economy of Uzbekistan. Its own large raw material base, the labor intensity of light industries, the presence of a relatively massive market in neighboring countries make the development of textile and clothing production in Uzbekistan one of the potential drivers of growth. The disclosure of this potential and the formation of a strong textile and clothing sector in the country is one of the priorities for the development of the national economy.
Given that the textile industry is one of the priority areas of economic development, the state pays special attention to it and provides manufacturers with all possible support. In recent years, especially in 2020, when enterprises were in dire need of effective support, the government has provided textile and clothing manufacturers with various tax, customs, credit benefits and preferences. For example, in 2017-2020, enterprises were granted preferential loans totaling $ 365 million.
According to the Presidential decree "On the Program of measures for the further development of the textile and sewing and knitting industry for 2017-
2019", adopted on December 21, 2016, enterprises specializing in the production of non-food consumer goods of the textile and sewing and knitting industry (fabrics, ready-made garments, clothing, hats, hosiery, textile haberdashery, accessories and accessories for the sewing and knitting industry) were granted tax and customs privileges, preferences in the form of exemption from income tax, property, from a single tax payment for micro-firms and small enterprises, customs payments for imported equipment, components, raw materials and materials not produced in the republic, and others.
A year later, by Presidential Decree "On measures to accelerate the development of the textile and clothing and knitwear industry" dated December 14, 2017, textile industry enterprises were additionally exempted until 2021 from paying customs duties (except VAT and customs clearance fees) for imported cotton, artificial and synthetic fibers, wool, raw materials and other materials necessary for production and not produced in the republic.
Exemption from customs privileges for the import of manufactured goods and equipment is due to the expediency of reducing the costs of domestic producers, which is quite logical. If the goods necessary for production are not produced in the country and the manufacturer will import it anyway, then it makes no sense to increase its costs and thereby reduce the competitiveness of products in the domestic and foreign markets. At present, sufficient capacities have been created for processing cotton fiber and at the same time a mechanism is being introduced to curb the export of cotton yarn.
The Presidential Decree "On measures for the further development of light industry and stimulating the production of finished products" dated September 16, 2019 prescribes the introduction of a fee for each kilogram of exported yarn in the amount of 0.01 dollars from 2021. 75 percent of these funds will be directed to the Uztextilprom Association to finance the introduction of international standards at enterprises, product certification, covering the costs of enterprises to participate in international exhibitions and fairs, creating and promoting national brands, implementing research and innovation projects, training, retraining and advanced training of personnel and other measures.
It is expected that due to an increase in the volume of yarn processing within the republic, as well as the introduced export fee, the share of yarn exported will decrease from the current 59 to 48 percent in 2021. At the same time, an increase in the volume of output of these products is predicted.
In addition, in February 2019, serious support measures were introduced in the form of concessional lending and covering interest payments on loans for enterprises exporting textile and clothing and knitwear products. In September of the same year, an exemption from paying property tax until 2023 was granted to enterprises that have a share of exports of finished sewing and knitting products in the total revenue of at least 60 percent.
Today, there is an accelerated dynamics of increasing the production of textiles and clothing: in four years it has increased in nominal terms by 2.8 times. In natural volumes, the production of cotton fiber increased by 17 percent, yarn - by 2.1 times, fabrics - by 2.9, knitted fabric - by 3.2, hosiery - by
7.1, sewing - by 5.6, knitted - by 3.5 times. The share of the textile industry in the total industrial production of the country increased from 7.5 percent in 2016 to 12.4 percent in 2020, which indicates its advanced development relative to other sectors of the economy.
In 2020, the production of products in kind increased by large enterprises: knitted outerwear almost doubled, cotton yarn - 1.7 times, cotton fabrics - 1.5 times, knitted fabric - 1.2 times. According to the State Statistics Committee of the Republic of Uzbekistan, investments worth more than 32.4 trillion were invested in the fixed capital of textile and sewing and knitting industries of the republic in 2017-2020. sum, and for 2020 - 12.3 trillion. sum with an increase in investments compared to 2016 by almost 2.5 times. New facilities have been created and existing ones have been upgraded.
There have also been serious structural changes in the production of textiles and clothing: a departure from the sale of primary products of low levels of conversion and a shift to increasing production and sale of finished products of high levels of conversion. If in 2016, the revenue from the sale of yarn accounted for 52 percent of the total revenue of the industry, then in 2020 it was already 38, despite the fact that yarn production continued to increase during these years, and the volume of revenue from its sale doubled. At the same time, the share of products of the 4th conversion in the total revenue of the industry increased from 32 in 2016 to 42 percent in 2020. The share of products of the 3rd level of conversion similarly increased from 16.5 to 19.4 percent. All this suggests that the industry is rapidly moving away from the production of raw materials and semi-finished products to a greater extent and is reorienting towards the production of products intended for the end consumer.
The pandemic period has become an objective indicator of the success of the industry's development. Large-scale restrictions within the country and on foreign markets have created difficulties for the normal operation of textile and clothing enterprises, however, the accumulated margin of safety in previous years has prevented a large-scale decline in production and exports, layoffs of workers, as was observed in many countries - major manufacturers of textiles and clothing. Moreover, the industry continued to develop dynamically in 2020, and at a higher rate than in 2019. So, for example, the production of knitwear has more than doubled over the year, sewing products and fabrics by almost 50 percent, hosiery - by 53. All this testifies to the industry's resilience to shocks. In addition, it should be noted that the coronavirus pandemic, on the one hand, led to a decline in demand for clothing and at the same time sharply increased the demand for various kinds of protective textiles such as masks, overalls. The increased demand from the healthcare sector for textile products compensated for the decline in demand for other goods, creating new opportunities for the development of the industry.
The textile industry is one of the drivers of these transformations. The tasks outlined in the Action Strategy, such as modernization and diversification of industry by transferring it to a qualitatively new level, increasing the processing of local raw materials, mastering the production of fundamentally
new types of products, increasing the competitiveness of domestic goods in foreign and domestic markets, localization of production and import substitution were successfully completed in the textile industry.
Within the framework of the annual state programs for the implementation of the Action Strategy until 2021, activities aimed at implementing strategic priorities for the development of the textile industry were carried out.
The strategic priorities for the development of the industry during this period were determined by:
■ increasing the share of the textile industry in the economy;
■ reforming the textile industry management system with the introduction of advanced management technologies;
■ implementation of a cluster development model based on the integration of production, starting with the cultivation of raw cotton and ending with the production of final textile products with high added value;
■ expansion of production of high-value-added products through diversification and reduction of exports of raw materials and semi-finished products;
■ increase in the level of processing of cotton fiber and gradual reduction of its exports;
■ ensuring the competitiveness of products and expanding sales markets;
■ further harmonization of the standardization system and
■ certification in the textile industry according to international requirements and standards;
■ wide introduction of advanced ICT, innovative technologies, know-how, design developments into the production process, localization of production of modern samples of accessories and accessories;
■ improvement of the system of training, retraining and advanced training of personnel for the textile industry;
■ creation of new jobs, especially for women, given the labor intensity of this industry and its potential to provide employment to the population.
As part of the annual state programs, targeted program documents aimed at the development and transformation of this particular industry were adopted. They contributed to a noticeable breakthrough in the development of the textile industry during this period.
The main final results of the implementation of the Strategy of development of the textile industry are:
- significant outstripping the development of the industry;
- creation of a single chain from raw materials to finished products, organization of clusters;
- major shifts in the expansion of the export potential of
textile products;
- strengthening the social significance of the industry as a labor-intensive
production and creating new jobs.
Sustainable and advanced development of the textile industry. The role of the textile and clothing and knitting industry in the macroeconomic complex of Uzbekistan can be judged by the following data: today, about 28% of all workers employed in the manufacturing industry of the republic are concentrated in it, its share in the volume of manufacturing output by the end of 2020 amounted to more than 15.2%, and in the volume of production of consumer non—food products - more than 30%.
Production capacities for the production of the main product range are: yarn - 705 thousand tons; fabrics - 1.2 billion square meters; knitted fabric - 140 thousand tons; finished products - 2.2 million pieces; hosiery - 132 million pieces.
In 2020, according to the Uztextilprom Association, more than 90 percent of the country's total cotton harvest was harvested in clusters. The yield in clusters has increased by 6.2 quintals over the past four years. By the end of 2020, except for seven clusters, all the others have already established the production of higher-grade products: yarn is produced, 46 - fabrics, canvases, hosiery, 40 - finished sewing and knitting products.
The most important direction of using the internal reserves and capabilities of the industry was the gradual increase in the depth of processing of domestic raw materials, as well as the expansion of the volume and range of production of products with high added value. If earlier a significant share of cotton fiber was exported, then by the end of 2020 the fiber was completely processed into cotton yarn by domestic enterprises. As a result, yarn production in physical terms increased almost 3 times compared to 2016.
A significant increase in the export of products. The textile and sewing and knitting industry is the most export-oriented among other industries. Thus, in terms of the share of exports in the volume of industrial production - an indicator characterizing the competitiveness of manufactured products, it is significantly ahead of other industries, while ensuring a significant increase in this indicator for the period 2016-2020 from 25.7% to 45.5%.
Industrial policy of Uzbekistan in the field of textile industry is characterized by continuous improvement of quality and technical parameters of manufactured products. Textile and clothing products manufactured by domestic enterprises are in demand among buyers both on the domestic market and on the external market, and over the years it has become increasingly popular with foreign consumers. To date, the export of textile and sewing and knitting products is carried out in more than 50 countries of the world. If in 2016, textile exports varied in the region of 1.1 billion. By 2020, it has reached the level of $2.1 billion.
Textile and clothing products of Uzbekistan are supplied to many countries of the world, and the geography of exports is expanding annually. For example, if in 2016 products were supplied to 60 countries, then in 2020 - to 71. However, the main consumers of Uzbek textile products, which are in the Top 4 by the end of 2020, accounting for about 85% of the volume of supplies (in value terms) from more than 70 countries, are Russia, which accounts for
36.5%, China (21.6%), Kyrgyzstan (15.2%) and Turkey (11.4%). At the same time, 95% of exports of finished sewing and knitwear fall on the CIS countries.
Uzbekistan's achievements in cooperation with the Cotton Campaign coalition and the report of the International Labor Organization on the results of the 2020 harvest, which for the first time confirmed the absence of systematic forced labor during the cotton harvest in Uzbekistan, also played an important role in solving these issues.
In Uzbekistan, more than 1300 textile industry enterprises operate according to international quality standards. This figure is expected to reach 1,650 in 2022. Currently, international standards and certificates such as ISO 9001:2015 are implemented in 1100 enterprises, 45 - OEKOTEX, 12 - BSCI, 6 -GOTS, 7 - SEDEX.
In March 2021, thanks to the successful implementation of international quality standards, the management of the Uztextilprom Association was awarded the international certificate ISO 9001:2015 by representatives of the Swiss certification company SGS.
The attraction of new investments in combination with effective management, the introduction of the most modern equipment and innovative technologies using digital platforms contribute to the increase in export potential.
The further development of the textile and sewing and knitting industry is due to the constantly growing demand of the sectors of the economy and the population for the products of textile and clothing production, the solution of a number of systemic problems reduced to complex development, the introduction of digital technologies, increasing the level of competitiveness, expanding export potential.
The main strategic priorities for the development of the textile and clothing and knitwear industry in the next five years are:
■ development of a full cycle of technologies of the chain for in-depth processing of cotton fiber (from the production of cotton yarn, ready-made fabrics for sewing production and technical textiles to sewing products made of knitwear and textiles);
■ ensuring the production of a wide range of high-tech, competitive products in foreign markets that meet international standards;
■ transformation of the republic into a leading textile manufacturer in Central Asia;
■ introduction of modern quality management methods and international standards, creation of a certification system for local products in accordance with international requirements;
■ development of mutual cooperative ties between light industry and other sectors of the economy and, on this basis, increasing the level of localization of textile and clothing production;
■ increase in the production and expansion of the assortment of ready-made, cotton, and non-cotton fabrics (mixed, synthetic, wool, wool pile, quilt, furniture and decorative, technical, special fabrics with chemical fibers, with
special types of finishes - low-crumpled and low-shrink, increased shape stability and lower material consumption);
ш production of sewing and knitwear, taking into account the increase in the level of modeling and designing of clothing through the creation and development of domestic clothing brands, strengthening the role of fashion designers and designers in creating industrial collections, increasing the production of clothing under licenses of recognized fashion designers in the world, the release of modern fashionable knitwear of various styles and shapes using fabrics from new types of yarns, combined with a new generation of synthetic and artificial fibers and other factors.
In conclusion, it should be noted that despite the fact that textile production in Uzbekistan is traditional, nevertheless, the industry still has significant potential for further effective and successful development.
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