August 24, 2012
Investment priorities of Uzbekistan: modernization and expansion of production
According to the State Statistics Committee, in the 1st half of 2012 the national economy spent over 9.9 trillion soums of investments with an increase of 7.6% against the same period last year. 67.7% of capital investments were absorbed in the manufacturing sector.

As an analysis of official data shows, own funds of enterprises and the population along with the state budget and off-budget funds and credits of commercial banks were locomotives for economic development. The share of intra-funding had 81.3% of the capital investment. The share of foreign investments and loans amounted to 18.7%.

The program of contracted construction works for 2012 adopted by the Government in February this year identified the main areas of capital construction in the country. They are to improve the efficiency of internal resources and attract foreign investment to modernization, technical and technological renovation of enterprises. The focus is on the rapid development delivered a modern network of transport, engineering, communications and social infrastructure and other development.

Modernization and renewal of production remains the main priority of the investment policy of the state. To improve the technical condition of the fixed assets the country launched a large-scale program of industrial development for 2011-2015. Implemented from October 2011, the program of priority measures to improve production and development of new types of competitive products in 2012-2016 with an estimated cost of $6.2 billion includes 270 investment projects. More than 33% of capital investments this year are directed on the construction of large industrial facilities - Ustyurt Gas Chemical Complex at Surgil deposit, a factory for the production of synthetic liquid fuels, the second phase of Dehkanabad potash fertilizer plant and Kungrad soda plant, two combined-cycle plants at Talimarjan TPS, the new power unit at Angren thermal power plants and other facilities.

In solving significant issues, the role of the Fund for Reconstruction and Development of Uzbekistan (FRDU) increases. Its capital in the current year amounted to $11 billion. FRDU co-finances 29 strategic investment project with the investment volume of $758 million. About 32% of costs are intended for new construction in the oil and gas system, more than 20.8% - the construction of new facilities in the electricity sector. More than 12% of the funds are directed for reconstruction and expansion of production capacity in the non-ferrous metallurgy and chemical industry.

The contribution of domestic banks to the economy increases with 10% gain in the 1st half-year. According to the Ministry of economy, growth of the resource base of commercial banks allowed to increase the volume of lending to the real sector by 1.3 times. At the same time long-term credit investments for over one year also rose by 30.5%. More than $2.6 trillion soums of loans were provided for modernization, technological and technical re-equipment.

The purpose of modernization is to make domestic companies more competitive. Funds mainly are invested in efficient equipment and technology. All projects are aimed at improving productivity, production quality and competitive products, the increase of exports.

The development of industrial potential of Uzbekistan in the first half received more than 3.3 trillion soums - 33.2% of the total capital investment.

In second place in terms of capital investment with a volume of 19.4% (more than 1.9 trillion soums) is the construction of individual housing on the approved standard designs, as well as social and cultural and sanitary and domestic facilities in rural areas. The construction of convenient, technologically advanced and well-equipped houses not only dramatically improves the living conditions of the rural population, but also, most importantly, stimulates domestic demand - the foundation of economic growth.

Advanced development in the first half had gotten transport and communications, which accumulated 18.9% of capital investments (more than 1.8 trillion soums) in the national economy.

The investment program approved by the President of the Republic of Uzbekistan for 2012 outlined the main parameters of capital investments. Their total volume exceeds 23.6 trillion soums of investments with a share of 75.7% of non-centralized investments. (Source: UzReport.com)


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