Mehmood Ul Hassan Khan
Moreover, its sustained GDPs growth which exceeds 8 percent over the last 10 years, which is one of the highest rates in the world. Over the past decade, the economy of Uzbekistan has doubled highlights its industrial potential.
Since 2005, Uzbekistan maintains a positive trade balance, government budget surplus and balance of payments mainly because of its export-oriented policies based on massive industrialization.
Light industry goods are the largest industry of the country which produces about 90 percent of Uzbekistan’s textiles. Food processing is Uzbekistan’s second-largest industry, based on the country abundant production of fruits and vegetables. This sector is also in need of investment to modernize its processing and packaging equipment.
Uzbekistan’s machinery industry is the primary producer of machines and heavy equipment in Central Asia. Uzavtosanoat is the cornerstone of the country’s automotive industry, and has developed joint ventures with Daimler-Benz (Germany) and Daewoo (ROK). The UzDaewoo-Avto plant in Andizhan began production in 1996 and produces 200,000 units annually. Two kinds of cars, the Nexia and the Tico, and a microbus called the Damas are the main models produced.
The aerospace industry centers near to Chkalov Tashkent Aircraft Production Co., is one of the largest and most significant aircraft assembly plants in Central Asia. Equipment used on the Salyut and Mir space stations was some of the products of the program, which also includes explorations of the Moon, Mars and Venus.
Metal processing industries are developed in the Olmaliq-Oharangan (Almalyk-Akhangaran) complex, southeast of Tashkent. Metal alloys, wire, rods and sheet and gas-based nitrogen are manufactured in Chirchiq, close to the Kazakhstan border in the northeast. Chemical fertilizers used mainly in cotton production are also produced in the Chirchiq.
In recent years Uzbekistan is actively implementing policy measures on modernization and technological renewal of industries, enhancing their production efficiency. As a result, labour productivity in the country has increased by 2.2 times during the period from 2000 to 2014.
Uzbekistan Fund for Reconstruction and Development (UFRD), created in 2006, plays an important role in the implementation of modernization and effective investment policy in the Republic. Its assets reached $25 billion this year.
The active participation of the UFRD in implementation of new infrastructure projects has been served to attract more than $10 billion of foreign investment and loans in the form of co-financing from the World Bank, Asian Development Bank, Islamic Development Bank, financial institutions of Japan, South Korea, China and other foreign banks and investors.
On-going measures on to strengthening the country’s export capacity allowed to increase the volume of Uzbek exports by more than 30 times. Despite different global downturns and recessions, Uzbekistan has consistently provided trade surplus over the past 17 years.
Moreover, seventh, unprecedented benefits and preferences provided to investors in “Navoi” Free Industrial Economic Zone and Special Industrial Zones “Angren” and “Jizzakh”. Investors of these areas are exempt from almost all types of taxes, depending on the amount of investments from 3 to 15 years (FIEZ “Navoi”), and from 3 to 7 years (SIZ “Angren” and “Jizzakh”).
Now, there is a great potential and befitting proposition in the industries of agricultural products processing, automotive industry, textile industry, oil & gas and plastic articles. Small and medium enterprises industry is particularly important, because new Uzbek entrepreneurs in various sectors need exactly new investments, technologies and machines. Number of small businesses has been increased by 2.3 times over the last 14 years. Share of small business in the GDP has been increased from 1.5 percent in 1991 to 56.7 percent in 2015. Small business provides jobs for 77 percent of the employed population. Share of small business in total industrial output increased from 12 percent to 33.3 percent in 2015.
Even Uzbekistan fashion industry has bright prospect in terms of FDIs. Food industry offers good prospects as well. The country not only offers great opportunities for capital goods and consumer goods supply, but it is also particularly interesting for investments in SME in the manufacturing sector.
The Uzbek Government is realizing a privatization program. It is looking for foreign partners, especially for the development of the medium industry. Uzbek authorities issued a list of more than 300 companies for which it is required a foreign investor. There are interesting prospects for Pakistani manufacturers who would create production centers in the country and, therefore, intend to widen their market share in the country. Uzbekistan would like to develop is pharmaceutical industry which needs FDIs too.
It is high time for Uzbekistan and Pakistan to extend their cooperation in the fields of industries and its associated fields which provide a win-win situation for both the countries. Uzbekistan offers great opportunities for the Pakistani investors to invest in textile, automobile, chemical, alternative energy mix, fashion and even in pharmaceutical industries.