Uzbekistan provides assistance to entrepreneurs-exporters

4 October 2017 14:07 (UTC+04:00)

By Kamila Aliyeva

Export volumes of agricultural products are set to increase in Uzbekistan due to the country's attempts to support  entrepreneurs-exporters.

Uzbek President Shavkat Mirziyoyev’s decree "On additional measures to stimulate the export of fruits and vegetables, grapes and melons" dated September 19, 2016 created even greater convenience for farmers.

Today, Uzbek agricultural products are in great demand in Norway, Vietnam, Thailand, Brazil, Cyprus, Macedonia, the U.S. and many other countries, according to the information published on the website of Uzbek Foreign Ministry.

Since the beginning of this year, export contracts worth $2.2 billion have been concluded with the assistance of the Fund for Support of Export of Small Business and Private Entrepreneurs under the Uzbek National Bank for Foreign Economic Activity.

Experts of the Fund regularly study the demand for fruits and vegetables, melons and gourds in the world market and provide the entrepreneurs with necessary consultations and recommendations.

For instance, according to the marketing research, Uzbek dried fruits are of high demand in Latvia and Germany, where they cost from $2-10 per kilogram. At the same time, annual imports of melons amount to 516,000 tons in Germany.

Based on the results of these studies, Uzbekistan may increase its incomes. In order to support agricultural producers, 85 agro firms have been established with the assistance of the fund. Till the end of the year, these agrofirms plan to implement about twenty projects. This will contribute to the annual export of fresh and processed fruits and vegetables for more than $59 million and the creation of 1,590 new workplaces.

Over the past period, agrofirms signed export contracts worth $128.4 million. As a result, in January to September 2017, more than $38 million was received from foreign partners. This year, the agrofirms carry out projects aimed at growing, storing, sorting, drying, freezing and packing fruit and vegetable products," Fund's director Jahongir Mustafoyev said.

The Big Agro Export company of the Karshi district is building a complex for cooling, fast freezing, processing and packaging of fruits and vegetables, as well as a modern greenhouse. A greenhouse and a workshop for the production of jams, various canned and dried fruits and vegetables will be put into operation in the Bukhara region in the near future. In 2018, the company will export goods worth $4 million.

A number of works in this direction are also conducted in Navoi and Samarkand regions. In order to support exports, logistics centers are being created. Such a center is already operating in Surkhandarya and construction works are underway in the Syrdarya, Kashkadarya, Ferghana and Tashkent regions.

The Fund provides active financial assistance to small businesses and private entrepreneurs for concluding new export contracts, entering new markets, participating in exhibitions abroad, supplying competitive goods to world markets and thereby actively participating in further increase of their share in the economy of the country.

To find reliable partners for small businesses and private entrepreneurship, the Fund closely cooperates with a number of foreign organizations.

Thus, recently, memorandums of understanding were signed with the export-insurance company Kazakhexport, joint-stock companies of the national company Kaznex invest, the international association Fruit and Vegetable Association and the Association of Trade Enterprises of Kazakhstan.

The documents foresee the establishment of the delivery of products produced in Uzbekistan to the markets of Kazakhstan, the organization of joint ventures, the financing of projects, the holding of joint business forums, cooperation exchanges, finding reliable partners, marketing research and a number of other activities that will further promote trade and economic cooperation between the two states.

Another important task of the fund is to provide financial assistance to entrepreneurs. For this purpose, short-term interest-free loans are established. Since the beginning of the year, the Fund provided financial assistance for 4.5 billion soums. Such loans have already been used by Elit Global Plast LLC (Yangiyul District), Unison Group (Tashkent) and Bofanda (Samarkand).

Aiming to bring commercial offers of domestic producers to foreign customers and further increase their export potential, more than a 100 small business entities rendered practical assistance in finding partners, over 200 - in concluding export contracts, registering with banks, obtaining insurance policies, licenses, certificates and other permitting documents, about 170 - in participation in foreign exhibitions and fairs.

The overall investment climate demonstrated some improvement in recent years in Uzbekistan – the government simplified business registration procedures, introduced some additional tax incentives for investors, improved private property protection legislation and streamlined customs regulations. 

In 2017, the government reduced the mandatory sale rate by businesses of foreign currency earnings from 50 to 25 percent. The president announced upcoming liberalization of the banking sector and transition to a system of free currency conversion.

The Asian Development Bank (ADB) has previously lowered the GDP growth forecast for Uzbekistan in 2017 by 0.2 percentage points to 6.8 percent. The bank’s specialists noted that GDP growth of Uzbekistan will be slightly weaker, as the economy is adjusting to the devaluation of the soum and the liberalization of monetary policy. 

However, the Uzbek economy will grow 7.3 percent in 2018, according to ADB. The forecast has been improved by 0.2 percentage points. 

In 2017, inflation in Uzbekistan is expected to be within 11-12 percent. The inflation forecast is increased under the influence of various factors including the devaluation of the soum.

The Central Bank of Uzbekistan devalued the national currency – soum – by almost two times on September 5, setting the official exchange rate of US dollar at 8,100 soums/USD compared to 4,210.35 soums/USD on Sept. 4.

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Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva

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