Embassy of the Republic of Uzbekistan in Singapore

President criticizes business environment in districts and cities

On September 24, President Shavkat Mirziyoyev chaired a videoconference on additional measures for development of entrepreneurship in the regions.

Small business and private entrepreneurship are one of the points of economic growth and an important source of employment. Therefore, special attention is paid to development of this sphere in the country. All necessary conditions have been created by decrees and resolutions of the Head of the state. Now it is important for hokims and sector managers to organize their work correctly, take measures to open and support continuous operation of production facilities, increase the volume of output and the number of jobs.

A system for rating the socio-economic development of regions was introduced in accordance with the resolution of the President of the Republic of Uzbekistan of May 1, 2020. Accordingly, economic indicators, business support environment, infrastructure and the level of using available resources in districts and cities were studied for the first time. Based on the results of the analysis, territorial units were assigned good, average and unsatisfactory categories based on the state of business development. Thus, the situation is considered good in 48, average in 119, and unsatisfactory in 33 districts and cities.

Measures on solving problems at places, taking into account the results of analysis and providing assistance to territories with low indicators were discussed at the meeting.

It was noted that the ministries and agencies included in the economic complex should turn into organizations that serve entrepreneurs. The importance of using the potential of districts and cities with an unsatisfactory situation and popularizing the experience of territories of good category, was emphasized.

For example, the volume of industrial production amounted to 1.1 trillion UZS or 4.5 million UZS per capita in Samarkand region. This is the highest indicator for the region. In addition, 508 business entities were created, and 71 percent of new jobs were created by small businesses. Local budget revenues have doubled over the past three years.

Over the same period of time, 802 new business entities were created in Kamashi district, and the activities of 132 inactive enterprises were restored. Exports increased by 1.5 times compared to the last year.

Conversely, the situation in Nukus, Baliqchi, Bekabad, Khavas, Bakhmal, Mirzachul, Yangikurgan, Shavat, Kasbi, Kumkurgan and Uchtepa districts is unsatisfactory, despite the fact that they have sufficient capacity and infrastructure.

Thus, Kumkurgan district is one of the most backward in Surkhandarya region in terms of entrepreneurship. This is despite the fact that there are 124 thousand hectares of pastures and 48 thousand hectares of land that has been withdrawn from circulation. No projects have been developed for their effective use.

The share of small business in the regional domestic product of Bekabad district is one of the smallest in the country. It produces 10,000 tons of cotton and 100,000 tons of grain a year, but they are not processed.

Responsible officials were given instructions on improving engineering communications in districts rated as unsatisfactory, creating small industrial zones, developing animal husbandry, Karakul breeding, horse breeding on pastures, border trade and services.

It was indicated that hokims of districts and cities and their deputies, who have achieved approximate indicators, will be assigned a 30% salary supplement, and penalties will be applied to heads of territories with an unsatisfactory situation.

“A manager who does nothing to improve people's lives will not work a day”, stressed the President.

It was determined that anti-crisis management system will be implemented in districts and cities rated unsatisfactory and average. Those who wish to manage the territory can submit their program for development of district or city to local councils of people's deputies. Applicants who have defended their programs before people's representatives will be appointed hokims with the right to lead their team.

“Hokims shall be elected by people. We will definitely come to this”, said Shavkat Mirziyoyev.

Issues of organizing new and supporting existing enterprises were also discussed at the meeting.

More than 60,000 small businesses were launched in the first eight months of this year. Each of them provides an average of 38 million UZS of tax revenue and creates at least 2 jobs. But more than 31 thousand enterprises have not yet restored their activities. There are also many people who want to start their own business.

The Chamber of Commerce and Industry management and Business Ombudsman are recommended to solve problems hindering establishment of entrepreneurship, especially to help youth and women in implementation of their initiatives.

The President gave instructions to finance business projects of families included in the “iron notebook”, to launch projects that received funds from banks, but suspended their activities due to lack of raw materials, energy resources or logistics problems.

It was noted that it is important for commercial banks to offer entrepreneurs a package of preferential services depending on the results of their activities.

As it’s known, tax revenues from small business and local resource taxes are fully left at the disposal of regions. Consequently, budget stability and overall regional development are directly linked to business activity.

For example, in Kanimekh district, tax revenues to local budget for 8 months this year increased by 141 percent compared to the same period last year. As a result of granting tax breaks to 20 businesses facing financial difficulties during the pandemic, 100 jobs were saved.

The State Tax Committee is charged with organizing similar work in all regions and strengthening local budgets.

Measures on ensuring additional revenue to minimize the budget deficit expected by the end of the year were discussed. The need was noted for carefully studying tax potential of regions, identifying sources of additional revenue, increasing revenues of budget organizations from paid services, and effectively using buildings and structures.

Over the past 4 years, many small businesses have expanded due to opportunities created for business development. The Head of the state noted the importance of stimulating this trend and creating even more favorable conditions for consolidation of enterprises.

To do this, as it was noted at the meeting, it is necessary to differentiate benefits provided to business entities. It is advisable to help enterprises that are able to move to medium-sized businesses category through allocation of targeted funds from Entrepreneurship Support Fund, assistance in product certification, partial coverage of costs for science and innovation, as well as other measures.

At the meeting, hokims outlined their plans for development of entrepreneurship and using additional reserves.

UzA