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43THE ROLE OF FOREIGN INVESTMENT IN THE DEVELOPMENT OF
ECONOMY
Mukhayyo Khudayberdiyevna Dustova Sevara Shomurotova
Karshi Engineering Economics Institute
ABSTRACT
The importance of foreign investment and their role in the development of the national economy are discussed in this article and they are analyzed on the basis of statistical data.As well as, the article considers the existing problems in attracting foreign investment to the national economy and what measures should be taken to intensify their prevention.
Keywords: Investment, foreign investment, direct investment, portfolio investment, investor, export of capital, charter capital, dividends, business profits, exports, imports.
Introduction
From the initial years of independence, Uzbekistan has set a specific direction for the development of the national economy. As a result of timely understanding of the unique role of investment in the development and stability of the economy, there has been an increase in attention to investment, in particular, foreign investment, which leads to the development of investment activity in our country today.Nowadays ,it should be noted that the development of investment activity is because of a prudent investment policy pursued by our government. Indeed,in Target 26 of the third direction of the new Development Strategy of Uzbekistan for 2022-2026, adopted by Shavkat Mirziyoyev, the President of the Republic of Uzbekistan, it is expressed to further improve the investment climate and increase its attractiveness and the issue of taking measures to attract $120billion, including $70 billion in foreign investment. Attracting foreign investment in the economy of our country is important to accelerate the expansion of its economic potential, ensuring the economic power of the state through the use of domestic potential and reserves in all areas, the development of new equipment and technology, export-oriented goods, their production.
Analysis and results
The role of foreign investment in the development of the national economy is significant, which is explained by: initially, the introduction of modern techniques and technologies in production and the development of export-oriented products; furthermore, the introduction of import-substituting goods, which will allow to attract foreign investment to priority sectors of the economy and, ultimately, to ensure a decent standard of living for the population; moreover, it will provide jobs for the growing
population through the development of small business, private entrepreneurship, and the acceleration of agricultural production; fourth, it will renew and technically re-equip outdated production facilities, material and technical base of enterprises; finally, it will contribute to the establishment of enterprises that recycle natural resources and increase tax revenues to the state budget. The large-scale attraction of foreign investment in the national economy is due to the need to address the strategic and current challenges of the transition period. As a result of these tasks, investment growth has accelerated in recent years.
Currently, the rapid growth of foreign investment in the economy of Uzbekistan is determined by the following factors: 1) the stability of the investment climate in the country; 2) positive changes in exchange rate regulation; 3) clear directions for improving the country's tax mechanism; 4) development of decisions and laws regulating the activities of foreign investment in the tax legislation; 5) the emergence of a favorable price environment for exporters in world commodity markets; 6 ) nowadays, more than 4.2 thousand enterprises with foreign investment are successfully operating in the leading sectors and industries of the economy. More than $ 3 billion is invested annually, mainly in foreign direct investment, accounting for more than 26.6% of the total investment in the country's economy. This is a clear indication of the growing interest and confidence of foreign investors in the stability of the republic's economy, the prospects for its development.
Table 1
Fixed capital investments (growth rate, in %)
2018 2019 2020 January-December in 2021
Republic of Uzbekistan 129,9 138,1 91,8 105,2
Republic of Karakalpakstan 169,9 100,3 80,4 102,1
regions:
Andijan 113,7 129,0 100,5 115,3
Bukhara 60,6 95,9 96,7 136,4
Jizzakh 158,1 194,9 152,5 104,0
Kashkadarya 112,4 131,2 74,1 72,7
Navoiy 188,0 144,3 78,7 93,4
Namangan 178,1 131,1 87,9 102,9
Samarkand 131,4 134,5 117,9 112,0
Surkhandarya 164,2 144,0 76,3 103,2
Sirdarya 131,0 186,0 111,0 116,4
Tashkent 139,9 158,5 82,8 119,1
Fergana 145,9 132,0 116,4 108,2
Khorazm 111,7 150,7 114,5 144,2
Tashkent city 138,2 145,8 96,5 104,0
Table 2
Investment in fixed assets per capita (thousand soums)
2017 2018 2019 January-December in 2020
Republic of Uzbekistan 2227,8 3769,6 5834,6 5900,9
Republic of Karakalpakistan 1542,2 3641,1 4644,4 4273,7
regions:
Andijan 999,6 1550,3 2406,0 2772,4
Bukhara 6254,2 5112,4 5429,3 5812,1
Jizzakh 1361,9 2693,9 5778,9 9291,9
Kashadarya 3583,4 5193,4 7534,6 6032,2
Navoiy 4185,4 10892,1 17855,2 15954,9
Namangan 1340,3 2992,5 4344,1 4220,5
Samarkand 1189,4 1878,3 2674,9 3431,7
Surkhandarya 1427,1 2848,3 4552,8 3737,3
Sirdarya 2011,1 3280,2 7002,9 8404,0
Tashkent 2087,2 3898,4 6970,0 6399,9
Fergana 822,4 1516,8 2336,2 2990,0
Khorazm 1215,1 1655,6 2718,4 3544,6
Toshkent city 5552,7 10627,8 16710,5 17062,5
Table 3
Structure of investments in fixed capital by sources of financing (as a
percentage)
1 and the populations Funds received From them:
State budget Bank loans and other borrowing s S3 ne ? 1 & CQ W ojs ,
January-December in 2020
Republic of Uzbekistan 34,6 65,4 6,5 14,1 42,9
Republic of Karakalpakistan 34,1 65,9 10,9 7,0 46,0
regions:
Andijan 39,1 60,9 6,8 12,9 40,0
Bukhara 34,7 65,3 5,9 9,5 49,5
Jizzakh 31,6 68,4 5,4 15,2 45,6
Kashkadarya 23,4 76,6 3,6 4,5 66,8
Navoiy 17,7 82,3 1,9 7,6 70,8
Namangan 37,8 62,2 5,2 24,4 31,7
Samarkand 43,5 56,5 6,8 18,9 29,4
Surkhandarya 21,2 78,8 6,9 8,7 62,1
Sirdaryo 30,2 69,8 7,5 16,3 43,4
Tashkent 47,5 52,5 10,1 8,0 30,8
Fergana 29,0 71,0 6,3 24,3 39,6
Khorazm 41,7 58,3 7,0 21,2 27,0
Tashkent city 40,9 59,1 6,6 19,0 31,5
Source: prepared according to the State Statistics of the Republic of the Uzbekistan
On December 23, President Shavkat Mirziyoyev held a meeting to discuss the effectiveness of work in the field of investment and foreign trade, as well as the main priorities for 2021. The coronavirus pandemic has hit the global economy hard. There were various difficulties, especially in the export and investment processes.Preliminary measures to improve the investment climate in our country have paid off. $ 6.6 billion in foreign direct investment has been disbursed this year. Exports are also expected to reach $ 15 billion by the end of the year.
At the meeting, President Shavkat Mirziyoyev said that 2021 will not be easy for the economy, so concrete, targeted measures have already been taken to attract investment, develop and ensure export forecasts, increase production of import-substituting products. He stressed the need for review. It aims to attract more than $ 7.5 billion in foreign direct investment next year. The meeting identified measures for the full and timely use of these funds for each project. At the expense of such investments, it is instructed to take concrete measures for the timely and quality implementation of 226 major projects.
It also set the task of creating additional reserves for economic growth by implementing 69 promising new industrial projects.
Special attention will be paid to the chemical, energy, mechanical engineering, geology, electrical engineering, pharmaceutical and light industry sectors, which are the main drivers. From January 1, in order to introduce a new system of projects funded by loans from international financial institutions, to improve the skills of managers and staff of "Project Offices" in order to ensure the effective use and efficiency of funds allocated for each project. the importance of training them was emphasized.Exports are projected to be around $ 17 billion next year. As a result, officials have been instructed to conclude export contracts already, and to establish a system of pre-export financing from January 1 at the expense of the Export Promotion Fund.
Conclusions and suggestions
The growing number of new enterprises with foreign investment and the construction of new ones are the result of the state's great attention to this area and the
facilities it provides to them. Therefore, one of the most important issues is to provide economic incentives and create the necessary conditions for enterprises that attract foreign investment to our country. Thus, it is necessary to take the following measures to intensify the attraction of foreign investment in our national economy: first, to reduce the impact of inflation on the growth of the value of investment projects, as well as to further increase the volume of foreign investment; second, to attract investment in the real sector of production, ie in the processing of raw materials; third, to further improve the system of incentives to create a more favorable investment climate for foreign investors, in particular, to reduce the tax burden and simplify the tax system for investors; fourth, to improve the system of implementation of mutually beneficial projects with foreign economic entities and to establish free investment economic zones with them; fifth, systematic industrial development by attracting investors to areas with well-developed infrastructure; sixth, to intensify efforts to attract long-term, low-interest foreign direct credit; seventh, the establishment of state-supported funds for foreign investors based on foreign experienceThe implementation of the above proposals will have a positive impact on further attracting foreign investment to our national economy. This will ultimately enable the full implementation of investment policy in the country in the future, based on the continuous technical and technological renewal of production, the implementation of profound structural changes in the economy, the gradual continuation of modernization and diversification of industry.
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