February 10, 2010
Fourth, one cannot but note still continuing large speculative games and danger of inflating the new “bubbles” on stock, raw and financial markets, which can cause a new financial collapse and diversion of finds from renewal and modernization of a real economy.

Fifth, the biggest problems for making and developing economies, above all, of the developing countries are caused by a continuing policy of protectionism in the world practice.

Despite numerous statements on unacceptability of such practice at the meetings of G20 there is an impression that eradication of protectionism as a vivid obstacle for a free economy is hardly possible in the near-terms prospect.

Sixth, the priority task for 2010 and forthcoming years, according to the IMF experts, is preparation to curtailing extremely high level of state interference in economy.

The extensive continuation of support measures in financial and economic sphere can entail the risk of disproportions in balancing the economy and serious restrictions on the way of free entrepreneurship.

The conclusion, which arise out of these assessments and forecast of further development of the world economy in the conditions of continuing crisis testify for the fact that despite that the peak phase of the crisis has passed, the entire cycle of financial and economic crisis is still to be overcome.

The process of leaving the crisis and post-crisis rehabilitation of economy can have quite long, complex and uneven character.

Dear participants of the session!

The most important task and the main priority of social and economic development for 2010 is continuation and deepening of reforms, renewal and modernization of the country, unconditional implementation of Anti-crisis action plan for 2009-2012 and on its basis ensuring the high and sustainable rates of economic growth, its effectiveness and macroeconomic balance.

The growing potential, new and modern production capacities, which have been commissioned for over the last years, development of production and social infrastructure, systemic reforms and liberalization of economy, exclusively favorable investment climate allow us to envision in 2010 the following:

The growth of the GDP and industrial production at 108,3 percent, agriculture – at 105 percent, achieve growth of investments in the economy to 30 percent against GDP.

The target task is to ensure growth of production exports to 8,5 percent, qualitatively change its structure at the expense of increasing the share of finished products with high added value.

It is envisioned to tighten the budget and financial fiscal and credit policy, saving regime in comparison to 2009, above all, by introducing modern resource and energy efficient technologies.

The inflation is expected to be within 7-9 percent.

The achievement of the set goals will depend, firstly, on to what extent in full we shall be able to mobilize all our capacities and resources, ensure the unconditional implementation of the measures envisioned by the Antic-crisis action plan in terms of neutralizing the still remaining big risks and consequences of the crisis.

This will require the Cabinet of Ministers undertaking the strict and system-based control over the implementation by each and every executor of the tasks laid on him vis-à-vis sector complexes and sphere of economy, as well as territories.

Taking into consideration the ongoing global financial and economic crisis and its impact on the country’s economy, ensuring the financial and banking sustainability remains to be the most important priority task.

The point is about further capitalization and enhancement of the investment activity of banks, increasing the volumes of crediting directed to resuming and expanding the priority directions of structural transformations in the economy, modernization, technical and technological renewal of production.

All of us must realize one single truth – we can have nor modernization or renewal without investments! And here we mean not only acceleration of implementation by enterprises of the investment projects, but also that to what extent actively the commercial banks are directly interested in implementing the investment processes with their credit resources.

For this the commercial banks must have a sufficient capital, be financially stable, and in a word, they must turn into large investment institutions.

Thanks to the measures taken in terms of stimulating the rise of share of long-term of credits of commercial banks, the proportion of credits allocated with a term of over 3 years, has now made up 69 percent in the total sum of the credit portfolio of banks, while having increased for over the last 10 years for 28 times.

Along with that, taking into account the dynamics and scale of growth of economy, structural transformations, implementation of investment projects, the need to increase the credit potential of the banking system requires further attention and support.

The Central Bank, Ministry of Finance jointly with commercial banks need to elaborate the program of further increasing the total capital of banks, including its growth in 2010 no less than by 20 percent, with taking its share in the nearest two years to no less than 10 percent towards GDP.

One should additional elaborate the issues on introducing the new types of banking services, attracting the spare funds of population and economic entities for long-term deposits of banks with growth of no less than by 30 percent, creating the firm basis to increase the share of long-term credit investments into the country’s economy at the expense of domestic sources.

There is a need to change the criteria of assessing the activity of commercial banks – today their work must be assessed through the prism of growth in the long-term credit investments and attraction of domestic sources for this purpose.

In this regard, I would like to note the work of the National Bank of Foreign Economic Activity and Uzpromstroybank, which have respectively over 85 and 71 percent of long-term credits in their credit portfolio. This must be a benchmark for other banks, as well.

The practice of involving commercial banks in the process of financial rehabilitation of unprofitable and economically insolvent enterprises has fully proven its correctness. I think it is not necessary to once again repeat the unacceptability of keeping such enterprises with obsolete equipment and technologies and with no economic prospects. They must be mopped up and new modern productions must be established on their basis.

The work in terms of enhancing the role of commercial banks in financing small business, private entrepreneurship and farmers needs to be continued. In 2009 the volumes of bank crediting of small business increased for 1,5 times as compared to 2008, while the volume of allocated micro-credits grew twofold.

In 2010 the target is to allocate not less than 2,5 trillion UZS-worth of credit resources to enterprises of small business and private entrepreneurship, which will be 1,4 times more against 2009, the volumes of micro-credits is to be increased up to 420 billion UZS or 1,3 times of last year.

The most important priority of implementation of economic program for 2010 must be continuation of the policy of deepening the structural reforms in the economy with a view of enhancing the competitiveness of the country.

One should objectively admit that in this direction a lot has been accomplished and significant results have been secured.

As a result of implementation of consistent program, the share of industrial production in the country’s GDP in 2009 increased from 14 to 24 percent against 2000, the transport and communication – from 7,7 to 12 percent, while the share of agriculture fell from 30 to 18 percent.

Along with that, we realize that there is much yet to do on structural reforms and diversification of our economy so that in the following years it becomes ever more sustainable, self-sufficient, less dependent on external factors, and above all, competitive on the world and regional markets.

Given the specific conditions of our country and the region the point is about advanced development of modern industries such as gas processing, petrochemical, chemical industry, energy, motor-car construction, electrical engineering, pharmacy, machine-building and, certainly, the industry of modern information technologies and telecommunications systems, transition in the near future to digital and broad-format television.

In addition, a special attention should be paid to the further development of production, first of all, in the light, textile and food industries, on deeper processing cotton, other agricultural products and raw materials, industry of construction materials, organization of production of the finished high-quality products, which are in sustainable demand.

The Cabinet of Ministers must once more critically review the sector programs and take additional steps on their adjustment and accelerated implementation.

At that, it is necessary:

First, to continue the work on expanding and establishing the stable cooperation relations between enterprises and ensure active involvement of small businesses and private entrepreneurship into the process. The work of the Republican Industrial Fair and Cooperative Exchange must be raised to a qualitatively new level. It should be kept in mind that the development of cooperative relations in current terms is a powerful factor of sustainable work of enterprises and industries of the economy, the most important direction in development of new types of products, and most importantly – creation of new jobs, ensuring employment and income growth of population.

Last year the government took decisions to improve the mechanism of formation and implementation of programs on localization of production, established the entire system, clearly defined the roles and delimited authority of bodies responsible for elaboration of localization programs – the Ministry of Economy and Ministry of Foreign Economic Relations, Investments and Trade.

It is necessary to bring this work to its logical end and, taking into account the worked-out approaches and criteria, critically review the projects included into the current localization program, as well as to prepare within a month a localization program for 2010.

The volume of localized products should rise in 2010 comparing with that of last year by 40 percent, while the proportion of localized products exported to foreign markets – by 12 percent.

Second, for over the last years the total and real incomes of population has significantly increased, as well as the consumer demand has grown steadily, and all these were possible due to the measures taken to increase wages, pensions, stipends and allowances, reduction of individual income tax rates and decrease the inflation level. Thus, compared with 2000 last year the average wage increased for 28,5 times, average pension - almost for 18 times, cash income per capita - 12 times. It is planned to increase wages this year not less than by 30 percent, the real incomes – by 23 percent. The expenditures of the population on purchasing the non-food industrial durable goods considerably increased.

In these circumstances, the issues of ensuring balance in the domestic market of growing solvent demand of the population with volumes of production by domestic companies of consumer goods, increasing their range and list of products, reliable saturation by them of the domestic consumer market are gaining a special importance.

The Cabinet of Ministers at its meetings should critically assess the progress of adopted programs and to take additional measures for their rapid implementation and stable saturation of the internal market with domestic products, which are superior by quality and pricing as compared to imported goods, and full satisfaction of growing demands of our people.

Third, it is extremely important to expand the scope of services provided to the population. These sectors do not depend neither on external conditions nor weather conditions, i.e. are resistant to change of external factors. At the same time, they create internal demand for many types of domestic products, as well as play an important role in balancing the consumer market. The share of services in GDP should grow from 47 percent in 2009 to 49 percent in 2010.

Fourth, the resolution of the task of active development of small businesses, more sustainable and flexible to changes of market conditions and creating new jobs remains crucial in our conditions.

Therefore indeed, we have decided to reduce the single tax payment to 7 percent for all small enterprises in 2010. The government, local state authorities are obliged to strengthen measures in terms of supporting the development of small enterprises and entrepreneurship through a substantial expansion of crediting, prevent cases of illegal interference in their activities by public bodies and creation of any barriers to their activities. The goal is to bring the share of small businesses in GDP to 52,5 percent in 2010 against 50 percent last year.

Fifth, further diversification of the export structure of our products and foreign trade turnover in general remains a pressing task. We need to go away as quickly as possible from the continuing export of raw materials, prices of which have recently plummeted down on the world market, and intensively increase export of finished and competitive products, while expanding the geography of their supplies.

We must look for new markets, new transport corridors, in a word, to conduct an active marketing in foreign economic policy.

In 2010 we must come to grips with issues of improving the system of transportation of export cargos through the optimization of tariffs with member countries of international transport corridors and flexible system of tariff preferences.

In this regard, the Ministry of Foreign Economic Relations, Investments and Trade, Ministry of Economy and Ministry of Finance shall be instructed to develop special programs for 2010-2012 to each industry, which produces finished products, on promoting finished products to new foreign markets, providing with all necessary measures, including marketing, financial and institutional support.

The next our important priority, which is a long-term and crucial for the growth of potential, power and competitiveness of the country’s economy, is to conduct the active investment policy for implementation of strategically important projects aimed at modernization, technical and technological renewal of the leading basic industries, development of a powerful modern network of transport and infrastructural communications.

We have always given priority to implementation of an active investment policy as an important factor of structural transformation of the economy. Suffice it to say that each year the funds from all sources of financing are directed to investing into the economy in excess of a quarter of gross domestic product, and in 2010, in accordance with the Investment program, the capital expenditures will compose more than 30 percent of increase against last year’s level of 22,1 percent. Thus, more than 75 percent of all capital investments are spent for implementation of investment projects for production purposes.

The distinctive feature of our investment strategy is that the priority is given to those investment projects, which are aimed at creating the new high-tech industries with advanced technology and provides the downstream processing of our raw materials, increasing the country\\\'s export potential and creating new jobs.

Thus, in 2010 over 3 billion dollars-worth foreign investments will be attracted to implementation of strategically important projects, or with growth against last year making up more than 30 percent. Also, the foreign direct investments will increase by 46 percent.

Establishment of the Reconstruction and Development Fund of Uzbekistan in 2007, which has so far accumulated more than 3,7 billion dollars, was of a great importance in terms of involving the domestic resources to implementing the long-term strategically important projects, primarily to building infrastructure, reconstructing and modernizing the production.

Our major partners in implementing the investment projects on production of high-tech products with high added value are the largest and the world-renowned companies, as well as such major international financial institutions as the Asian Development Bank, World Bank, Islamic Bank, the investment banks of South Korea and Japan, as well as of a number of Arab States, and others.

A great perspective significance to bring our economy to the leading positions has the implementation of such strategically important projects as the construction of combined-cycle plants in Tashkent, Navoi and Talimarjan thermal power plants, construction of Ustyurt gas-chemical complex at the base of the Surgil field on production of polyethylene and propylene, creation of a new production complex PVC and caustic soda, the construction of installations of propane-butane mixture at the Muborak Gas Processing Plant and Shurtanneftegaz to increase production of liquefied natural gas, conversion of units Novo-Angren Thermal Power Plant to coal fuel, organization of production of automotive power-trains and number of other important projects.

All of these projects, despite the global financial and economic crisis, were included into the Program of measures for implementation of important projects on modernization, technical and technological re-equipment of production for 2009-2014, which was adopted in 2009. This program includes over 327 projects at a total cost of more than 42,5 billion dollars. The funding sources have been specifically identified for most of them with consortium of investors to have been formed.

The Ministry of Foreign Economic Relations, Investments and Trade jointly with the Ministry of Economy, Ministry of Finance and concerned ministries and departments must intensify the work on harmonization the terms and conditions for implementation of strategic investment projects included in the list of the Investment program, as well as new projects being developed in the context of long-term technical policy of strategic industries and major enterprises.

I would like to especially mention that important and key place in our long-term projects is reserved to establishing modern communication and transportation system, including all types of transport: road, rail and air.

In 2010 it is envisaged to allocate 540 billion UZS at the expense of the Republican Road Fund for the development of automobile roads, or almost 2 times higher than the last year. Today, it is being worked out a new project on the construction of parts of the Uzbek national highway at the expense of the funds allocated by the ADB.

The ultimate goal of implementing the envisaged program is to increase the volume of transport and transit services by way of reorienting the substantial part of trade flows between Europe and Asia onto domestic transit routes, establish the logistics centers based on existing infrastructure, as well as provide thousands of people with jobs.

The Cabinet of Ministers must take under its special control the implementation of the adopted program of development of roadside infrastructure and services along the Uzbek national highway for the period 2010-2015.

A special attention should be paid to the further development of the railway communication, for modernization of which it is scheduled to channel more than 105 million dollars in 2010. It is necessary to ensure the completion of construction of the Tashguzar-Baysun-Kumkurgan railway line, including its infrastructure and continue construction of electrified railway lines along destinations Yangiyer-Jizzakh and Yangiyer-Farhad.

Along with this, it is necessary to accelerate implementation of projects on updating the fleet of passenger locomotives, modernization and rehabilitation of cargo locomotives and wagons. The implementation of the project on procurement and commissioning of the two Spanish high-speed trains for use on the route Tashkent-Samarkand must be started this year with fulfillment of all procedures.

The pressing direction in the sphere of investments is to further increase the volume of foreign investments being attracted to the Free Industrial-Economic Zone “Navoi”.

First of all, it is necessary to implement 17 projects, which have already been launched, and continue to focus on attracting to FIEZ “Navoi” the investments from the high-tech level countries such as Republic of Korea, Japan, Germany, the United States, Great Britain, France, Italy and others.

Dear friends!

I think it will be absolutely fair, if we shall place the Program on accelerated development and construction of housing and social infrastructure in rural areas as one of the top priorities in 2010.

Announcement of 2009 as the “Year of development and improvement of the countryside” and implementation of the adopted State program in this regard became the beginning of a long-term focused work in terms of radical reorganization and renewal of the countryside’s appearance upon modern architectural and industrial basis, construction of housing, social and community facilities and communications. All these measures were intended to radically improve the living standards in rural areas and bring them closer to the urban conditions.

In 2009 alone at the expense of all sources of funding over 2 trillion 600 billion UZS were allocated for these purposes.

Most importantly, in 2009 we practically created a powerful planning, industrial-construction and engineering-technical potential with a long-term perspective for the construction in rural areas.

The sources of financing and mechanism of allocation of funds are identified; a specialized “Qishloq Qurilish Bank” (Rural Construction Bank) and “Qishlokqurilishloyiha” Design and Research Institute were established; 22 models of housing projects and 16 projects of social construction, and model plans for complex house construction were developed and approved after an extensive discussion on the outcomes of the national and regional exhibitions; a specialized company-customer – “Qishloq Qurilish Invest” (Rural Construction Invest) was established; new housing construction has been started at 42 sites of the country.

And most importantly, this comprehensive project – unique both in its nature and substance – enjoys a powerful support throughout the rural population and the public of the country in general.

It is envisaged to allocate over 250 billion UZS for housing construction alone in the framework of the 2010 Investment Program as the soft loans to residents issued through a specially established for this purpose “Qishloq Qurilish Bank”, which is more than 4 times as much as it was allocated in 2009. Thus, the own funds of developers will make up yet about 70 billion UZS.

In 2010 it is planned to build 7630 homes with an estimated value of over 470 billion UZS in all 159 rural areas of the country.

It is envisaged not only to build modern and comfortable cottages, but also to create modern systems of residential areas, including kindergartens, secondary schools and schools of music and the arts, sports and medical facilities, service facilities, improved roads, in short, everything you need for a comfortable and decent living for the rural population.

In fact, a dynamically growing strong housing market with all the necessary social and communication infrastructure is practically being formed in the country.

It is necessary for the State Architectural Construction Agency to carry out a strong systematic control over the strict implementation of development plans, requirements of sanitary and construction norms. We need to improve the system of development of documentation related to the settlement patterns, regional planning, general plans of cities, continue the work on improving the projects of individual houses, of facilities for social-cultural and sanitary-household purposes in rural areas using modern building materials and technologies, taking into consideration the climatic conditions and terrain, as well as socio-demographic characteristics of the regions of the country.

We must not forget that this program provides huge scale of work, allows to create tens of thousands new jobs and promote an active involvement of the whole population of the country in its implementation.

Setting forth the goal to implement the long-term program on the intensified development and building of housing and social infrastructure, we greatly contribute to solving the most acute problem of our country in terms of job creation and interrelated problems of income growth and improvement of living standards.

In 2010 in total over 950,000 new jobs are envisioned to be created in the country. About half of them will be created by developing small enterprises, micro-firms, private entrepreneurship, sphere of services, expansion of volumes of subcontracts on construction work, including repair and housing reconstruction.

The major direction in the sphere of employment, that proved itself in practice, in 2010 remains involving population in various forms of home-based labor, expansion of workmanship and national crafts, stimulation of family business which is supposed to employ more than 208,000 people, mainly women with many children, disabled, and other socially vulnerable categories of the population.

The special working commissions at the level of a province, city and district have been established to control the implementation of all provided measures on creating the new jobs. All these measures have been stipulated in the Republican program “On creation of jobs and employment for 2010 on all territorial levels of Uzbekistan” which was worked out in collaboration with all the ministries, departments, economic entities and the enterprises and have been adopted by Oliy Majlis.

Preliminarily, on the level of territories of the Republic of Karakalpakstan, provinces and city of Tashkent all parameters of this program have been thoroughly worked out and taken under control by the local Kengashes (Councils).

The Ministry of Labor and Social Protection, the Ministry of Economics, the State Committee on Statistics must create the accurate system of statistics on the exact number of actually created jobs in each province and a city, as well as the monitoring system over implementation of the program. If necessary, those agencies must put forward concrete proposals to the Cabinet of Ministers to prevent lagging behind in the implementation parameters stipulated in the program.

Dear participants of the meeting!

We declared 2010 as the “Year of harmoniously developed generation”.

We aim to create necessary opportunities and conditions to ensure that our children grow healthy not only physically and spiritually, but also grow into harmoniously developed people having obtained contemporary intellectual know-how as well as meeting the requirements of the 21st century in which they will live and work. The State program on this issue that has been adopted recently by the government provides for mobilization of all our resources and capabilities to achieve the set goals given all – both state and non-state sources.

Using all the sources of financing 8 trillion UZS, including 1,8 trillion UZS from the state budget, 3,3 trillion UZS – credits by commercial banks and over 2,7 trillion UZS – the financial assets of responsible agencies, are planned to be channeled to accomplishing a comprehensive set of measures stipulated in the Program in 2010. I believe I will express our overall opinion, the opinion of people living in this blessed land of Uzbekistan, if I say that the implementation of this program is a cause of each and everyone of us. The main thing is to approach to its implementation not just formally, but sincerely and comprehension of the fact that through this Program we are building the great future of our country.

Dear compatriots!

The tasks we set before us, the priorities of socio-economic development we put forward in 2010 are well-grounded and we are fully capable of implementing them.

The basis for it is the experience we have obtained and the powerful potential created by the tireless efforts of our people for over the past years and our confidence in the future.


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