Social and Economic Development of the Republic of Uzbekistan Ministry of Economy of the Republic of Uzbekistan November 6 th, 2014
Main trends of social economic development of Uzbekistan Sustained high rates of economic growth (7-9% per annum on average) 10 8 6 4 7,3 9,5 9,0 GDP growth rate (in % to the previous year) 8,1 8,5 8,3 8,2 8,0 8,1 14 12 10 8 6 10.8 12.1 Growth rate of industry production (in % to the previous year) 12.7 9.1 8.3 6.3 7.7 8.8 8.4 4 2 2 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 III- Quarter 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 III- Quarter for the period of independence, the development of GDP based on purchase power parity has increased 3,8 times volume of industrial production has grown more than 3,2 times during 1990-2013 2
- 1.5 Main trends of social economic development of Uzbekistan Macroeconomic stability, internal and external balance of the economy have been ensured Inflation rate (in % to december of the previous year) a moderately tight monetary policy kept inflation below 7-8 percent 25 20 15 21.6 Budget balance (in % to GDP) 10 5 0 3.8 3.7 7.8 6.8 6.8 7.8 7.4 7.3 7.6 7 6.8 6.5 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 III-qr 1.1 1.0 0.2 0.3 0.4 1,1 0.3 0.1 2007 2008 2009 2010 2011 2012 2013 2014 III-qr balanced state budget executed with a surplus since 2005 conservative policy of domestic and external borrowing. As of January 1, 2014 the total amount of external debt of Uzbekistan does not exceed 17,0% of GDP 3
Main Economic Indicators of CIS countries GDP Growth Rate 15.0% 10.0% 5.0% 0.0% -5.0% 2001 2010 2012 2014 I-hy Azerbaijan Belarus Kazakhstan Kyrgyzstan Russia Tajikistan Uzbekistan Ukraine -10.0% Countries Azerbaijan Belarus Kazakhstan Kyrgyzstan Russia Tajikistan Uzbekistan Ukraine 2001 9.9% 4.7% 13.5% 5.3% 5.1% 9.6% 4.2% 9.2% 2010 5.0% 7.7% 7.3% -0.5% 4.5% 6.5% 8.5% 4.1% 2012 2.2% 1.5% 5.0% -0.9% 3.4% 7.5% 8.2% 0.2% 2014 I-hy 2,1% 1,2% 3,9% 4,1% 0,8% 4,7% 8,1% -4,7% 4
Main Economic Indicators of CIS countries 20,0% 15,0% 10,0% 5,0% 0,0% -5,0% -10,0% -15,0% -20,0% -25,0% Industrial Growth Rate 2001 2010 2011 2012 2014 I-hy Azerbaijan Belarus Kazakhstan Kyrgyzstan Russia Tajikistan Uzbekistan Ukraine Countries 2001 2010 2011 2012 2014 I-hy Azerbaijan 9.9% 5.0% 0.1% 2.2% -2,4% Belarus 4.7% 7.7% 7.7% 1.5% -1,0% Kazakhstan 13.5% 7.3% 7.5% 5.0% -0,4% Kyrgyzstan 5.3% -0.5% 6.0% -0.9% 7,2% Russia 5.1% 4.5% 4.3% 3.4% 1,5% Tajikistan 9.6% 6.5% 7.4% 7.5% 2,9% Uzbekistan 4.2% 8.5% 8.3% 8.2% 8,1% Ukraine 9.2% 4.1% 5.2% 0.2% -4,7% Countries 2001 2010 2011 2012 2014 I-hy Azerbaijan 9.9% 5.0% 0.1% 2.2% 3,4% Belarus 4.7% 7.7% 7.7% 1.5% -6,7% Kazakhstan 13.5% 7.3% 7.5% 5.0% 5,2% Kyrgyzstan 5.3% -0.5% 6.0% -0.9% 20,6% Russia 5.1% 4.5% 4.3% 3.4% -2,8% Tajikistan 9.6% 6.5% 7.4% 7.5% 28,4% Uzbekistan 4.2% 8.5% 8.3% 8.2% 10,8% Ukraine 9.2% 4.1% 5.2% 0.2% -17,5% 50,0% 40,0% 30,0% 20,0% 10,0% 0,0% -10,0% -20,0% -30,0% Investment Growth Rate 2001 2010 2011 2012 2014 I-hy Azerbaijan Belarus Kazakhstan Kyrgyzstan Russia Tajikistan Uzbekistan Ukraine 5
Main Economic Indicators of World countries GDP Growth Rate by Regions Uzbekistan 8.0% European Union 0.0% Central and eastern Europe 2.2% CIS 3.4% Developing Asia 7.1% Latin America & the Caribbean 3.4% Middle East and North Africa 3.1% Investment share in GDP Uzbekistan 23.0% Brazil 18.5% European Union 17.9% Japan 21.2% Singapore 22.9% Turkey 21.0% United States 16.8% 6
Main trends of social economic development of Uzbekistan Expansion of export capacity and its diversification: export increased 35,4 times during 1990-2013; eliminated dependence on monoculture export - cotton, whose share in the export reduced from 59,7% in 1990 to 7,7% in 2013; share of non-primary goods in total exports increased from less than 30% in 1990 up to 72% in 2013; in the last 10 years export of high value added goods increased sharply, in particular, export of automobiles increased 11,6 times, cotton yarn 4,1 times, knitted fabric - 114,8 times, fertilizers 11,3 times. 30000 25000 20000 15000 10000 5000 0 Dynamics of foreign trade (million USD) 21842 13045 9500 6212 8798 3265 5409 2947 4091 806 443 363 28895 15087 13807 1990 y. 2000 y. 2005 y. 2010 y. 2013 y. Export of goods and services Foreign trade turnover Import of goods and services Commodity structure of export, in % 1990 2013 cotton fiber 59,7 7,7 foodstuffs 3,9 9,8 chemical products 2,3 4,0 energy and oil 17,1 31,1 ferrous and nonferrous metals 4,6 6,3 machinery and equipment 1,7 5,5 transportation and construction services 1,3 16,2 other 9,4 19,4 7
Main trends of social economic development of Uzbekistan Key results of the implementation of large-scale structural reforms and diversification of the economy 1 2 3 Structural reforms of economy have provided growth of industrial production share in GDP from 14,2% in 2000 to 24,2% in 2013; Implementation of transport and communication infrastructure development projects increased their share in GDP from 7,7% in 2000 to 11,9% in 2013; Qualitative changes in the structure of the economy provided growth of services in GDP from 37% in 2000 to 53,0% in 2013. 8
Main trends of social economic development of Uzbekistan Implementation of active investment policy, technical modernization of industries and industrial infrastructure provided the creation of new hightech industries, including: Volume of capital investment (USD million) Automobile production petrochemical Electrical Railway engineering Textile industry Construction materials Pharmaceutical Furniture industry 14000 12000 10000 8000 6000 4000 2000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total investment Budget funds Funds of enterprises Foreign direct investment and credits 9
Investment projects implemented during the years of Independence For the years of independence over 5000 new investment projects have been implemented, including: New automobile factories to manufacture cars jointly with General Motors (USA) in Asaka and Pitnak, buses with Isuzu (Japan) and trucks with MAN (Germany) in Samarkand; Bukhara petroleum refinery in cooperation with Technip (France); Shurtan gas and chemical complex in cooperation with ABB (Switzerland); Kungrad soda ash plant in cooperation with CITIC (China). 10
Investment projects implemented during the years of Independence Construction of Dehkanabad potash fertilizer plant with the productive capacity of 200 thousand tons of potash; Development of polymetallic deposit ores of Khandiza; Construction of the gas pipeline Akhangaran- Pungan through Kamchik pass; Development of new deposits for mining and metallurgical industry; Construction of compressor stations on the fields Dengizkul and Pamuk; Construction of propane-butane extraction units (3rd and 4th line) in the field Shurtan; Production of big-diameter polyethylene pipes at JSC "Djizzakh plastic, Navoi FIEZ and others. 11
Factors that provide further sustainable social economic development of the Republic of Uzbekistan 1 2 3 4 5 6 7 8 Retaining macroeconomic stability, domestic and external equilibrium in the economy of the state; Active industrial policy aimed at structural changes, the rapid growth rate of the share of processing industry with the production of high value added goods; Modernization and development of industrial infrastructure, particularly transport, power industry, water use and sewer systems, as well as means of communication; Implementation of modern innovative technologies, including environmentally friendly and energy-efficient; Intensification of agricultural sector at the expense of the introduction of new technologies for water conservation, farming efficiency and crop productivity;; Further liberalization of the economy and improvement of the business environment for promoting small business and private entrepreneurship, as well as attracting foreign investment; Stimulation and support for export; Active investment on raising human capital in education, health and physical training spheres. 12
Main trends of social economic development of the Republic of Uzbekistan (in % to previous year) Forecast # Indicators 2014 Average rates until 2020 1. GDP growth rate 108.1 107-108 2. Inflation rate (end of period) 6-7 5-6 3. Industry production growth rate 108.3 108-109 4. Agriculture production growth rate 105.8 105-106 5. Investment growth rate 109.5 109-112 13
Program on priorities of industrial development of the Republic of Uzbekistan for 2011-2015 Program includes: Implementation of 519 large-scale industrial investment projects for the total of USD 47,3 bln.; Advanced implementation of projects producing high-value-added industrial goods based on deep processing of local feedstock and natural resources; Annual growth of industrial production at the rate of 9-12%; Increase of industry share in GDP from 24% in 2010 to 28% in 2015; Increase of processing industries share in the structure of industry from 41% in 2010 to 49% in 2015; Increase of export share in the volume of production from 42,3% in 2010 to 63,2% in 2015. Industries Value of projects (USD mln.) Total 47261,5 incl.: Oil-gas and petrochemistry 28562,1 Power 5470,6 Chemical industry 2867,1 Metallurgy 3065,7 Textile industry 1755,6 Machinery construction 1458,6 Construction materials industry 534,8 Other industries 3546,7 14
Development of transport infrastructure Development of road infrastructure Construction and reconstruction of sections of more than 2,300 km of roads that are part of the Uzbek national highway; Launch of International Logistics Center in the city of Angren. Development and modernization of the railway industry Ongoing rehabilitation of 1030 km and and construction of 82.4 km of rail line, as well as the electrification of 278 km railways; Purchase of high-speed passenger trains «Talgo-250" and launch of high-speed passenger trains on Tashkent-Samarkand railway line. Development of air transportation The construction of passenger terminals at airports in Bukhara and Tashkent; The running of ten new Airbus A320-200 and Boing-767-300 aircrafts; The purchase of two more Boing-787-800 aircrafts in 2016. 15
Major projects maintaining modernization, technical and technological re-equipment of the sectors of Uzbekistan s economy until 2020 # Project name Cost (mln. USD) Power Industry Expected results 1. Expansion of Talimardjan Thermal Power Plant by installing two steam and gas beds with the capacity of 450 Megawatt 650.0 Increasing energy generating capacity of the Republic for 900 Megawatt with the production of 6.5 billion kilowatt/hour electricity per year as well as withdrawing morally and physically outdated energy generating powers from exploitation. 2. Expansion of Navoi Thermal Power Plant by constructing the second steam and gas bed with the capacity of 450 Megawatt 346.0 Gradual withdrawal of morally outdated energy generating powers from exploitation saving 40% of natural gas. 3. Construction of new Thermal Power Plant with total capacity of 900 Megawatt (2 SGBs each 450 Megawatt) in Namangan region 650.0 Increasing energy generating capacity of the Republic for 900 Megawatt with the production of 6.5 billion kilowatt/hour electricity per year as well as withdrawing morally and physically outdated energy generating powers from exploitation. 4. Implementation of automatic system for 0.4 kilowatt electricity consumption accounting and control in 6 regions of the Republic 330.0 Reducing the loss, timely accounting and control of electricity transmission to consumers, first of all, to population; improving the payment discipline and providing timely payment for used electricity; opportunity to automatically match the energy generating capacity with the change in consumption. 5. Implementation of measures on modernization and renewal of electric networks 04-6-10-35 kilowatt 807,3 Reducing the loss in electric networks, stable provision of the population with electricity by modernizing 24.9 thousand kilometers electricity transmitting lines, more than 5.7 thousand pieces of transformer substations, 35 kilowatt 43 substations and others. 16
Major projects maintaining modernization, technical and technological rearmament of the sectors of Uzbekistan s economy until 2020 # Project name Cost (mln. USD) Expected results 6. 7. 8. 9. 10. Construction of Usyurt Gaschemical Complex at the base of Surgil deposit with the due development of the field Production of synthetic fuel at the base of refined methane at Shurtan Gaschemical Complex Construction of Gaschemical Complex at UDC Mubarek Gaschemical Complex Construction of a Plant for ammonia and carbamide production in Navoiazot JSC Construction of Plant for polyvinylchloride (PVC), caustic soda and methanol production at the base of Navoiazot JSC 11. Construction of new electrified Angren-Pap railway line 12. Construction and reconstruction of sections of automobile roads, included in Uzbek National Highway. Oil and gas Industry 3 198.4 Production of 3.8 billion cubic natural gas, 387 thousand tons of polyethylene, 83 thousand tons of polypropylene annually Production of 863.4 thousand tons of diesel fuel, 304 thousand tons of 3 704.9 kerosine, 393.5 thousand tons of oil and 11.2 thousand tons of condensed gas. Production of 492 thousand tons of polyethylene, 66.0 thousand tons 1 640.1 of gas condensate and 53 thousand tons of petrol annually. Chemical industry Production of 660 thousand tons of ammonia and 577.5 thousand tons of carbamide with the application of modern energy saving 961.7 technologies; competitiveness enhancement of national producers of mineral resources. 501.1 Production of 110 thousand tons of PVC, 71.8 thousand tons of caustic soda and 295.4 thousand tons of methanol. Transport infrastructure 1 769.5 Construction of 122.7 kilometers electrified railway line with the construction of the tunnel through complex section of the Qamchiq pass connecting via railway Andijan, Namangan and Farghana regions with other regions of the Republic. 1 086.9 Implementation of project on construction and reconstruction of 230.6 kilometers of automobile roads of general use included in Uzbek National Highway. 17
Government support for development of the economy For the years of Independence the aggregate tax burden decreased by almost 3 times. Moreover the Government provides additional tax incentives for exporters, small business enterprises and companies engaged in new investments and starting production of new goods and products Taxes Tax rates in 1992-2009 Tax rates in 2014 Legal entities income tax 45% 8% Individual income tax 13%-60% 7.5%-22% 45% 40% 41.0% Dynamics of tax burden in 1996-2013гг. (in % to GDP) Value added tax 30% 20% 35% 30% 28.6% 31,7% Single social payment 40% 25% 25% 23,2% 21.9% 20.5% 20% 16.8% Single tax payment for small enterprises 15,2% 6% (in industry - 5%) 15% 1996 2000 2005 2008 2011 2013 2014 III-qr 18
Public utility services cost (USD) Electricity (1 kilowatt/h) Natural gas (a cubic meter) Potable water (a cubic meter) Hot water (a cubic meter.) Uzbekistan 0.058 0.072 0.129 1.111 Kazakhstan 0.06 0.079 0.265 1.195 Russia 0.117 1.368 0.867 3.459 Belarus 0.085 0.205 0.156 1.404 Ukraine 0.06 0.211 1.81 1.81 19
Small business and private entrepreneurship From the beginning of economic reforms small business and private entrepreneurship development has made the basis of multi structure market economy formation share of small business in GDP has grown from 31% in 2000 to 55.8% in 2013; number of small business enterprises has increased 2 times during last 10 years; share of small business enterprises in employment has increased from 49.7% to 76.0%; share of small enterprises in the total volume of industry has grown from 12.9% to 24.8%. Dynamics of small business and private entrepreneurship development Small business and private entrepreneurship share (in %) 2000 2013 in GDP 31.0 55.8 In industry 11.3 24.8 in construction 37.0 71.9 in retail turnover 45.3 46.3 in total employment 49.7 76.0 in export 10.2 18.0 20
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