Uzbekistan focuses on localization program
By Vusala Abbasova
The Uzbek production localization program plays an important role in the further dynamic and sustainable development of the country’s economy, according to a recent presentation from the Uzbek Ministry of Economy.
The localization program, providing high growth rates in producing of modern competitive products, became one of the main drivers for the development of the country's industrial base.
Uzbekistan has mastered the production of 4,000 types of import-substituting products worth $6.2 billion under the localization program over the last 15 years.
Moreover, it has developed and implemented over 2,500 projects worth more than $4 billion over the previously stated period.
The positive trends in the localization of products, components, and materials is reflected in the creation of hundreds of high-tech industrial products, the growth of industrial production and the GDP, the growth of domestic demand, saturation in the market demand for industrial and consumer products, increasing export potential, and a reduction in the volume of imports.
In 2014, Uzbekistan exported 550 types of products worth over $1 billion. The output of import-substituted products in the country at the end of 2014 amounted to 20 percent of the total industrial production volume (compared to 9.5 percent in 2005).
The attraction of foreign investors and creation of joint ventures with leading global technology leaders play a major role in the successful implementation of the localization program.
Uzbek President Islam Karimov approved a program of localization and production of finished products for the 2015-2019 period in February 2015.
The program will provide a solid foundation for further economic growth, enhancing structural reforms and diversification of production, raising the development of vital industries to a new level, creating a modern and developed infrastructure.
Encompassing 600 projects, the document stipulates the deep processing of local minerals, production of 1,225 groups of commodities, which are particularly sought after and the achievement of an annual import-substitution effect to the tune of $3.5 billion.
A number of benefits under previous localization programs (exemption from customs duties, income tax, property tax in funds used for the production of localized products) for a period of three years have been established for enterprises that implement approved projects.
The annual economic effects of the program in the balance of payments will exceed an estimated 13 billion dollars, including a volume of import- substitution in amount of $10.3 billion and the export of local production worth $2.7 billion.
Since 1998, the substitution effects in the economy exceeded $10 billion and made it possible to create hundreds of thousands of new jobs, according to the government of Uzbekistan.
This not only reflects an innovative approach to meeting the nation’s economic needs and the solution of problems associated with the indigenous manufacturing industry in the country, but makes a tangible contribution to the Uzbekistan’s economic power.
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