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Ministry of Foreign Affairs of the Republic of Uzbekistan

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29 August 2014

23 years ago Uzbekistan made a historic step towards independent development

In a few days all the people of Uzbekistan will celebrate the national Independence Day.

23 years: is that much or little? For a person it is a quarter of life, a time when all roads are open in front of him, and he is free to choose his own destiny. For a state 23 years is a mere trifle; great nations were built for centuries, and sometimes millennia. Meanwhile, the people and the state are inseparable. Only synergies make it possible to develop and move on. GDP rates, achievements, reforms, figures are the background of the lives of hundreds of thousands of people who are building the history of a new independent Uzbekistan. It is always important to remember that the state means us, its residents, so September 1 is not just a holiday, but the contribution of everyone of us to the future of the country.

There are fateful dates in the history of any state. They symbolize the beginning of a new era, and define the vector of development of the nation for many years ahead. September 1, 1991, is a momentous date for Uzbekistan. Those days, in the early 1990’s, the world faced an event unprecedented in scale and significance: fifteen new states emerged on the political map of the world, every one of which was in a very difficult situation. They had to build the institutions of power from scratch, define their economic policies, and address social problems and contradictions that have been cumulating for years. Those were the days when the future states of the former Soviet Union were laying their foundation.

Since the early years of independence Uzbekistan has chosen its own path of development – the so-called Uzbek Model of transition to socially oriented market economy, based on five key principles, developed by its first President Islam Karimov. They include the priority of economics over politics, the government as the principal reformer, the rule of law in all spheres of society, a vigorous social policy, and the implementation of a phased transition to a market economy. Many experts and analysts were skeptical about the policy Uzbekistan opted for as too slow and cautious. However, some two decades later, the practice has shown that the policy of gradual development has fully justified itself.

Uzbekistan faced all these problems at the dawn of its independence. However, unlike many of the former Soviet republics that chose the model of ‘shock therapy’ to quickly achieve appropriate economic indicators, Uzbekistan went its own way – the phased development and gradual integration of the national economy into the global market. Many economists call that historical period a time of great economic experiments and upheavals. Most of the former Soviet republics that have chosen the path of rapid entry into market relations virtually put both the traditionally vulnerable social groups and the middle class, which is the basis of any state, on the brink of survival. Refusing the economically impracticable projects with their instant profit, Uzbekistan embarked on a gradual construction of its own economic model without looking to the patterns offered by Western countries.

Domestic economists realized the inappropriateness of moving the experience of developed countries on the construction of economic and socio-political model on the Uzbek land. Having lived in a single civilization platform for more than 70 years, the republic would not be able to move to a different model in a couple of years without a huge loss. Moreover, the East has always had its own mentality and special attitude towards human values. Therefore, those days, in the early 1990’s, the country laid the main idea as a basis of all reforms: that people are always in priority. As a result, in twenty-three years of independent development, Uzbekistan’s economy has grown by 4.1 times, the real income per capita increased 8.2 times, and the gross domestic product growth rate has been no less than 8.1% within the last ten years.

Today, it is hard to overestimate the difficulties that challenged the young republic in 1991.

Shortages in food stores, long queues. It was like balancing on the edge of a precipice. The President of Uzbekistan Islam Karimov openly told about the thorny situation at the Tenth Session of the Oliy Kengash of the Republic of Uzbekistan in July 1992. “Today we can state openly: in late 1991 - early 1992 the republic was in the grip of a severe deficit, almost on the verge of starvation. It was difficult to sell at the cost price what we produce, and thus take the earnings. Our biggest companies engaged in deliveries from other regions and countries were approaching a shutdown. So we were challenged by feeding 21 million people. The issue of foreign currency was especially tough. These problems had to be addressed in extreme conditions. Our people and economy faced a great danger.”

It was the time when the foundations of the new economic policy were laid with a focus on import substitution and localization, and achievement of energy and food independence. The new economic system of the country was driven by modernization, foreign investment and technologies, business development of entrepreneurship based on international experience. Together with legislators, our local experts studied the conditions created for business development in other countries, guarantees for investors, mechanisms of the creation of business environment. The world’s best practices were adapted to local conditions and peculiarities.

Step by step the country was building the investment climate and opportunities, which today is a subject of study and draws a keen interest of foreign experts. For the past twenty three years Uzbekistan has been pursuing a policy of reducing administrative barriers and creating favorable conditions for the enthusiastic and enterprising. Small business and private entrepreneurship, foreign investors, exporting enterprises are provided with tax and customs privileges, which have allowed the domestic industry to re-equip its facilities and expand into new export markets in the short term. Today the goods under the brand ‘Made in Uzbekistan’ are widely known in the CIS countries, Europe, Asia and the Middle East.

Let’s cite a simple example: the country had no food industry at the dawn of its independence. In the conditions of the shortage of foreign currency the nation had to import the basic necessity goods like grain, meat, cereals, dairy products, eggs and sugar. To meet the demand in the domestic market Uzbekistan annually spent more than $900 million – a huge amount for those times, while the climatic conditions and rich traditions of agriculture allowed the country to not just provide itself with fruits and vegetables, but also export them. However, 90% of all cultivated land in the late 1980s was occupied by cotton. Uzbekistan had to untie this ‘Gordian knot’ by radical measures: acreage of cotton was cut in half, and released lands were assigned for food crops. The role of the premier violin in this process was given to farmers as representatives of the new class of owners, who were entrusted and capable to provide the country with reasonable-priced agricultural products. With this purpose they were provided with a special preferential treatment through a simplified taxation system by paying only one type of tax - the single land tax.

Yet in the initial years of independence, 400 thousand hectares of irrigated land were allocated to 2.5 million families, and the process was gaining momentum year by year. Owing to these measures, cereal production increased from 1 million to 7.8 million tons, and the country started exporting wheat. In general, during the years of independence the volume of agricultural production has more than doubled: every year Uzbekistan produces about 16 million tons of fruits and vegetables.

The economic model of Uzbekistan faced another serious challenge in 2007-2008, when global markets were captured by a financial crisis and a subsequent recession. The world was covered by a wave of bankruptcies; companies reduced their capacities, leaving millions of people unemployed. Exports and industrial production decreased as a consequence, global markets were fevering, and several countries announced default.

Despite the stormy weather in the world economy, our nation was confidently moving along its course by creating its own crisis response program. It allowed the country to pass this period without substantial turbulence, and move successfully ahead in the current environment while many advanced nations are still in the grip of slowdown. There was the only way out: loosing a part of exports, and hence foreign currency earnings, the domestic real economy sector had to reorient production. In some way, the global crisis offered a new chance for our country to accelerate the development of local production, and replace expensive and not always quality imported goods in the stores into the domestically produced ones. Within a short period of time Uzbekistan established a manufacture of a wide range of previously imported household appliances, building materials, clothing, and many food products. Later on, the improved situation in the global market helped domestic enterprises to enter the regional markets with the world standard products.

Uzbekistan has taken a full advantage of the downturn period in the world economy to not just consolidate its industry, but also significantly promote its image of the global investment market. A successful policy on overcoming the negative impact of the global slowdwon, and the ultimate support for the real sector of the economy has demonstrated that the country is making great efforts to create an encouraging investment climate and effective business environment not in word, but in deed. It is no accident that the flow of foreign investment has been growing with the years, and partners from abroad have been coming to our country with not short-term plans, but proposals of strategic partnership for the years ahead. Uzbekistan has never been afraid of non-standard solutions, despite the skepticism of many international experts. This fact was especially obvious in the midst of the 2008 crisis, when the government resolved on the establishment of the first free industrial economic zone in Navoi despite the current situation.

It is worth mentioning the unique industries that have been established in twenty-three years of independence, many of which were created from scratch. In 1992, the first airliners of the national airline of Uzbekistan took off. Today, when the country’s air fleet consists solely of the cutting edge aircraft, it is difficult to imagine that it had outdated models.

The construction of the first and the wider region’s only car factory in Asaka was launched in mid-1993. Again, there were many doubts about the validity of investing significant funds in a complicated period for the country. As a response to all the critics, the two millionth car came off the assembly line mid last year. To date, the domestic auto industry lineup consists of nine cars - Matiz, Spark, Nexia, Lacetti, Cobalt, Damas, Captiva, Malibu and Orlando.

The manufacture of high-tech gadgets is another successful example. Uzbekistan ranks among the few countries in the world to handle the production of cell phones, tablets, modems and various communication devices. This is not the limit. In the coming years it is planned to establish the production of up-to-date personal computers jointly with the Singapore-based Prescient Systems & Technologies Pte., Ltd. And there are many other examples.

Independence Day... In many ways, it is also a personal attitude of a citizen who has gained an internal freedom. Today, he is free to go anywhere in the world, start his own business, freely express his views. It might seem as a usual stuff, but it was previously unavailable to ordinary citizens. Therefore, according to tradition, on the holiday’s threshold the head of state rewards the people who had personally exemplified that only free people can achieve true success, moving the wheel of progress forward. Along with specialists in different fields, the nation’s southernmost city of Termiz has been awarded the Amir Temur Order this year. Scorched by the sun, during the years of independence the city has proved that despite any difficulties it is possible to go ahead and actively develop the socio-economic and cultural areas while preserving the historical and spiritual heritage of the people, interethnic friendship and harmony, and set the tone for other cities of the country. Today, when the country is getting prepared for the splendid holiday, no one doubts the ability of its hardworking and hospitable people to address the toughest of challenges.

Author: "Uzbekistan Today" newspaper
Views: 12149