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Uzbek president names priorities of country's development

19 January 2015

The foremost task of Uzbekistan is the modernization and diversification of the economy, said the president of Uzbekistan Islam Karimov, speaking at a meeting of the Cabinet of Ministers of the country.

"Creation of ample opportunities for the development of private property and private enterprise through fundamental structural changes in the economy of the country in 2015, consistent continuation of the processes of modernization and diversification is our top priority," he said.

First, it is necessary to ensure advanced development of the sectors and industries, which are highly competitive on the global market and may become engines of economic growth, to further modernization and diversification of the economy, according to the president.

The president said that this requires the use of unused reserves for the introduction of modern technologies of deeper processing of raw materials and semi-finished products, construction of new facilities and production in oil and gas, petrochemical, chemical, light and electrical engineering industries, as well as the production of finished goods in demand.

In this regard, the Cabinet of Ministers of Uzbekistan needs to develop and adopt a program of measures on provision of structural reforms, modernization and diversification of production for 2015-2019 within 2 months, he said.

Another important task is to eliminate all barriers and constraints for the development of private property and private enterprise, Karimov said.

In particular, the president considers it necessary to radically revise and significantly simplify, and to make a more transparent mechanism of providing private entrepreneurs with raw materials, primarily due to the expansion of the volumes of their sale on the open stock auctions.

"Enhancing of the role of the judicial bodies in protecting the legitimate rights and interests of private owners, strengthening of the responsibility of state officials, representatives of the law enforcement and controlling bodies for illegal interference in the businesses' activity are of paramount importance," the president said.

Moreover, the president stressed the need for the critical assessment of the state's level of involvement in the economy, its reduction to strategic and economically reasonable interaction.

"First, it is necessary to sell the unprofitable and economically insolvent state enterprises at a zero cost to the private owners, especially, to the professional foreign investors," he said. "The investors must make commitments to restore and establish new modern production facilities on their basis."

"Radical change in the principles and approaches to the corporate governance system, the introduction of modern international corporate management standards by the producers, foreign economic and investment processes require much attention," President Karimov said.

"First of all, it is necessary to critically evaluate the effectiveness of the activity of our corporate or joint stock associations," he said.

Over 1,100 joint stock companies have been created and are operating in Uzbekistan. Their total authorized capital of more than 11.7 trillion UZS has in recent years risen 5.3 times.

However, the growing scale of incorporation demonstrated that there are many unsolved problems in the system of corporate governance and distribution of income from the joint stock companies' activities; in particular, of those where the state is the shareholder and the other shareholders are actually isolated from management and decision-making.

As a result, production is still actually managed by the directors, who are often not interested in the development of production and remain committed to an administrative-command management style that leads to passivity and lack of initiative taken by managers.

The president said it is necessary to better examine the experience of foreign companies to create and introduce the standard corporate governance structures in the country, and, on this basis, to rebuild the entire management system within domestic joint stock companies.

"The deepening of localized production and expansion of inter-sectoral industrial cooperation are among the important reserves and factors for economic growth and structural transformations in the economy, as the creation of import-substituting industries on the basis of our own raw materials will provide the country's economic independence," Karimov said.

The fastest growing level of localized production in Uzbekistan in the industrial production volume, which rose from 9.2 percent in 2005 to nearly 20 percent in 2014, is evidence of this he stated.

The president said the government should also pay attention to the creation of developed infrastructure, first of all, information and communication systems, road and transport, engineering and communications construction, as well as implementation of the integrated development program of the national information and communications system for the period of 2013-2020.

All t responsible institutions are instructed to take effective measures on the unconditional implementation of the parameters scheduled for 2015 on construction, reconstruction and repair of the highways' sections which are the part of Uzbekistan's national highways and railway communications, said Karimov.

"I'm confident that our goals and tasks for 2015 and the subsequent years on continuing and further intensifying reforms, the sustainable development of economy, progressive and the continuous increase in the level and quality of life of our people - all this are quite real and manageable tasks," said Karimov.

It was earlier reported that Uzbek government plans to ensure 8 percent GDP growth, 8.3 percent - industrial production, 6 percent - agriculture, 9.6 percent - volume of capital investments, as well as forecasted inflation at the level of 5.5-6.5 percent.