This interview was conducted before the TIIF was postponed due to the novel coronavirus outbreak.
The Republic of Uzbekistan has witnessed transformational social and economic change since its independence. Could you please brief us about the main factors which contributed to this change?
The economy of Uzbekistan is diversified, and our Government pays great attention to the development of all sectors of industry simultaneously. One of the main factors for this is the rich raw material base and highly skilled young generation of the country. We can compare the early 1990s when our export was mainly comprised of cotton and raw materials, but today we can see that export comprises of goods with high added value, such as chemical and petrochemical products, textiles, automobiles, agricultural machinery, fresh and processed fruits and vegetables.
We have macroeconomic and political stability in Uzbekistan by enforcing the rule of law in the country. According to the reports of several worldwide financial institutions and thinktanks, Uzbekistan is considered a very fast developing country. In other words, the political, economic, and investment environment in Uzbekistan is stable and predictable. As stated by the World Bank our country is in the Top 5 fastest-growing nations of the world with diversified economic structure. Our country is holding leading positions in gold, coal, natural gas, uranium, copper, zinc, silver, tungsten reserves.
Another factor assisting the steady development of the country is its very favourable geographical location and existing Free Trade Agreements with all CIS countries and Georgia, allowing goods produced in Uzbekistan to be freely and easily exported to these countries with a total population about 280 million inhabitants. Also, we have Most-Favoured-Nations Treatment with 45 countries of the world, increasing the competitiveness of our products by introducing international standards.
The progress of Uzbekistan’s economy has been notably moving at a faster pace since President Shavkat Mirziyoyev was elected at the end of 2016. Could you outline the top reforms/policies which were introduced to cause this acceleration?
During the year following Shavkat Mirziyoyev's election as president of the Republic of Uzbekistan, he introduced great changes for the favour of the people of the country. Uzbekistan entered a fundamentally new era of development, aimed at building a free, democratic rule of law, strong civil society and market economy. In time, the processes of modernisation and liberalisation have acquired a dynamic and comprehensive character in all spheres of the public and political life of the country.
The goals of implementing the principles are “Human interests above all”, “Not the people serve the state bodies, but the state bodies serve the people”, which are at the centre of all reforms. These reforms are irreversible. The important document regulating all these reforms and serving as a roadmap to them is the Strategy of Actions on the Further Development of Uzbekistan in 2017–2021, which was initiated by the president. The strategy involves the following directions of development of the country in the next five years:
Today vital attention is paid to the digitalisation of the economy and state services are provided to make everything transparent and easy. During his address to the Oliy Majlis (Parliament) of Uzbekistan in January 2020, the President of Uzbekistan H.E. Mr. Shavkat Mirzoyoyev mentioned that the country is stepping into a new development era. He said that the achievements we have secured turned into history and enormous tasks and opportunities are emerging before us in terms of accomplishing the new changes.
He mentioned that foreign direct investments made up 4.2 billion dollars by growing up by 3.7 times in comparison with 2018. The share of investments in the gross domestic product composed 37 per cent. Our country, for the first time, obtained an international credit rating and successfully issued bonds in the world finance market in the amount of 1 billion dollars.
Deep structural reforms were started in the spheres of energy, oil and gas, geology, transport, road construction, agriculture and water economy, potable water and heating supplies, as well as a number of other branches of economy.
Modernisation and competition reinforcement programs are being actively implemented in 12 leading sectors of the industry. As a result, last year the economic growth made up 5.6 per cent. The volume of the production of industrial goods increased by 6.6 percent and export by 28 per cent. Our gold and foreign currency reserves in 2019 increased to 2.2 billion dollars and reached 28.6 billion dollars. We have been continuing our learning and research process in terms of increasing the profits of farmers and peasants in agriculture. Advanced technologies and cluster systems are being introduced to the sector.
In the framework of the new tax policy, the payroll tax was decreased to 1.5 times. As a result, during the year the number of persons working in the official sector increased to 500 thousand. The value-added tax rate was decreased from 20 percent to 15 per cent. As a result of the reforms, last year 93 thousand or in comparison with the year 2018 two times more businesses were established in the country. We have climbed up seven positions in the World Bank’s “Doing Business” rating and on the business registration index, we have secured an eighth-place among 190 states of the world and were recognised as among the top best reformer states. Uzbekistan’s credit risk rating by the Organisation for Economic Cooperation and Development has improved for the first time during the last decade.
2020 was announced as the “Year of Development of Science, Education and the Digital Economy.” An IT-Park with modern infrastructure is being created in Tashkent. Such IT-Parks are also going to be established in Nukus, Bukhara, Namangan, Samarkand, Gulistan and Urgench. In order to train highly-qualified specialists in the area of information technologies, along with our foreign partners we have launched a “1 Million Programmers” project. Also, the president pointed out that there will be a new program “Digital Uzbekistan 2030”. Therefore, in order to ensure macroeconomic stability and contain inflation rate and further develop all sectors of industry the following steps will be taken:
The Tashkent International Investment Forum will be organised on 5 and 6 March 2020 with a comprehensive programme to attract more investment into the country. Could you tell us more about this Forum?
The First Tashkent International Investment Forum (TIIF) will take place on 5–6 March 2020 in Tashkent city. The Forum is held at the initiative, and in the presence, of the President of the Republic of Uzbekistan, H.E. Mr. Shavkat Mirziyoyev. It is planned that the event will bring together more than 1,500 senior government officials, international experts, executives of international organisations, financial institutions, companies, banks and mainstream media from across the world. This event will serve as a unique platform for establishing business contacts between national and foreign companies and create new growth trajectories in the dynamically developing market of Uzbekistan.
More detailed information about the event is available at https://tiif.uz/en. We welcome all companies to join this event, as this is the best opportunity to receive information about the economic potential of Uzbekistan, created favourable conditions for running a business and find out about the newly and dynamically developing country, which has an open-door policy for foreign investors today. Talking about the participants, we are attracting governmental official and business delegations from about 60 countries of the world.
Speaking of strong and ever-improving Uzbekistan-Malaysia relationships, how many participants are expected to attend the TIIF from Malaysia?
The foundation for the development of friendly relations and mutually beneficial cooperation was laid during the exchanges of official visits of the late President of Uzbekistan Islam Karimov in 1992 and 2005, as well as Prime Ministers of Malaysia Mahathir Mohammad in 1993 and Ahmad Badawi in November 2008. In particular, Prime Minister Mahathir Mohammad had great efforts to enhance interstate cooperation on the basis of mutual respect, trust and friendship. A new Government of Malaysia under the leadership of such great a statesman as Mahathir Mohammad is a good sign for strengthening bilateral relations between our countries in various fields. In particular, it is necessary to resume interactions on the highest level and continue Inter-parliamentary ties, which have been gradually developing.
The political consultations between the Foreign Ministries serve as an important mechanism to promote relations, the last – fourth round of which was held in September 2019 in Tashkent. Also from 18 to21 October 2019, we arranged the visit of Dato Marzuki Yahya, Deputy Foreign Minister of Malaysia to Uzbekistan. The Malaysian delegation held meetings in Ministries of Foreign Affairs, Investments and Foreign Trade and Finance. During the negotiations, a thorough review of bilateral relations was held with an emphasis on prospects for further development of cooperation in political, trade-economic, investment, tourism, cultural-humanitarian and other fields.
Also, I would like to mention that the High-level Delegation of Uzbekistan participated in the Kuala Lumpur Summit that took place from 18 to21 December 2019. We had very good and constructive negotiations and several agreements in trade, investment and education spheres. We have also the Joint Trade Committee (JTC) between our countries, which has been operated since 2005. The last-second meeting was held in October 2009 in Tashkent. However, at this time we are considering the resumption of the meetings of the JTC after a 10-year hiatus. The joint meeting of this committee is considered as one of the efficient grounds for the businesses of the two nations to remove existing barriers, further develop mutually beneficial bilateral trade, economic and investment cooperation, and resolve existing problems.
We will be working to further strengthen our mutually beneficial cooperation with Malaysia especially in trade, economic, investment and tourism spheres. We know that Malaysia has good experience in these fields, and we will try to learn the experience of the country to introduce your modern technologies andmanagement skills to the different sectors of our economy.
Talking about the number of participants from Malaysia to the TIIF, we are expecting to attract about 30 Malaysian companies, as we received confirmation about registration from about 21 people already, including representatives of MATRADE, Serba Dinamik Holdings Berhad, EXIM Bank of Malaysia, Malaysian-Uzbekistan Chamber of Commerce, Hadid Engineering, Midlands Aviation and others.
So far, what is the balance of trade between Uzbekistan and Malaysia? What are the main imports and exports exchanged between the two countries at the moment, and are there new deals to import/export new goods and services?
Before moving to the section of bilateral trade relations, I want to say that our countries have a very big potential for further development of it. According to statistics, the volume of mutual trade between Uzbekistan and Malaysia in 2019 amounted to 116.2 mln, which grew up to 46.9% in comparison with 2018. Main exporting goods from our country to Malaysia are fresh and dried fruits and vegetables, chemical fertilizers, readymade textile products, honey and others. Today Uzbek companies are very keen on entering with their highly qualified products into the Malaysian market.
Thus, we are working on opening trade showroom of export-oriented products of Uzbekistan in Malaysia and recently we reached an agreement with Parkson company on selling Uzbek goods, especially textile garments and perfumery products in five shops of the company, located in well-known places of Malaysia including Pavilion Bukit Bintang. At the same time, we are working on opening a showroom of export-oriented products of Uzbekistan at the GM Klang WholSale City. Also, we are working on diversifying our exporting products to Malaysia and we are working on bringing highly qualified products most needed for Malaysian people. We hope to double our export to Malaysia in 2020.
Uzbekistan was recognised as the “Best country of Asia with a rich historical heritage” in November last year. How do you expect the tourism sector will grow in the coming years in view of various promotional programmes being implemented?
Talking about the tourism sector I want to mention that the number of tourists visited Uzbekistan as of 2019 was 6.7 million by growing up to 26% in comparison with 2018 (5.3 million tourists). At the same time, exports of tourism services in 2019 reached almost $ 1.3 million, grew by 30 percent. The number of Malaysian tourists that visited Uzbekistan in 2019 was 4390 (2018 was 2770). This year we are targeting to reach about 6000 tourists from Malaysia. One of the significant steps towards increasing the number of guests and attractiveness of Uzbekistan was the introduction from 1 January 2020 of the visa-free regime for citizens of 86 countries, including Malaysia, Indonesia and Singapore. The rest of the guests from other countries can easily and quickly get an electronic visa to Uzbekistan. Moreover, citizens of 101 countries can enjoy five days of transit visa-free entry to Uzbekistan.
To make fast and easy access to Uzbekistan for Malaysian tourists we have twice-weekly direct flights from Kuala Lumpur to Tashkent, which are being operated by Uzbekistan Airways company. Uzbekistan Airways has launched its regular flight from Tashkent to Jeddah, with the daily flight frequency, so Malaysian tourists can easily get Umra Plus packages. All this innovation and measures are surely proof of the saying that Malaysian tourists are the most welcome in Uzbekistan. Just to share with you, Uzbekistan is among the five safest countries in the world to travel. It is one of the most peaceful and secure countries, based on its scores on Gallup's Law and Order Index, also Uzbekistan ranked 5th in the Solo Travel Safety Report 2019, produced by a travel website Wegoplaces.me, as the safest and most peaceful country for independent adventurers. Singapore scored highest with a score of 97, followed by Norway, Iceland, Finland and Uzbekistan.
As well as, according to the Global Muslim Travel Index rating for 2019, Uzbekistan is in Top 10 of attractive countries among the Organization of Islamic Cooperation member-states. The top ten also includes countries, such as Malaysia, Indonesia, Saudi Arabia, Turkey and the United Arab Emirates. Moreover, according to the report “Muslim Women in Travel 2019”, Uzbekistan entered the top ten attractive states for Muslim women travelers. Experts from Mastercard and the Crescent Rating agency found that two factors most affected the country's popularity with Muslim women: security and religious worship, including tolerance for Islamic clothing. To promote Uzbekistan in Malaysia we also have implemented several joint projects:
We are also working closely with the famous Malaysian designer Jimmy Choo and cook Chef Wan to promote Uzbekistan among Malaysians. All these measures will contribute to an increase in the flow of foreign tourists, as well as improvement of the positive image of Uzbekistan in the international arena.