The updated Constitution of the Republic of Uzbekistan enshrined the right to private property as a factor in stimulating private investment, contributing to economic growth. The New Constitution strengthens the constitutional guarantees for the free activity of entrepreneurs and the protection of private property.
In particular, Article 65 of the draft Constitution establishes that “private property is inviolable. The owner cannot be deprived of his property except in cases and in the manner prescribed by law, and on the basis of a court decision.
The position that the state should ensure a favorable investment and business climate is also being strengthened. This rule is designed to stimulate the attraction of direct investment in the country’s economy, strengthen investor confidence, and ensure reliable protection of the rights and legitimate interests of entrepreneurs.
Over the past period alone, foreign direct investment has been attracted, such major projects have been implemented as the construction of a 1,500 MW power plant in the Syrdarya region, geological exploration at the 25 Years of Independence field, development of the field and construction of a gas chemical complex.
In 2022, investments worth 37.0 trillion soums
($1 = 11,450 soums) were disbursed, the volume of investments increased by 1.2 percentage points compared to 2021, thanks to the creation of a favorable investment climate to attract foreign direct investment in order to accelerate economic growth in Uzbekistan.
The Constitution establishes that entrepreneurs have the right to carry out any activity in accordance with the law and independently choose the direction of their activities.
It should be noted here that support for entrepreneurship in our country has increased to the level of state policy, effective results are achieved thanks to ongoing reforms in the industry.
Every year the number of newly created enterprises in the field of entrepreneurship is growing throughout the country.
If we focus only on numbers, for example, if in 2019 there were 323 thousand enterprises, then by 2022 their number reached 592 thousand, an increase of almost 2 times. In 2022 alone, 90,565 new enterprises were created in the regions of the republic.
Also, entrepreneurship is actively developing in our country, which is a priority direction of the country’s economy.
Thus, in 2022, of the enterprises operating in the republic, 69.6% (367,149) were limited liability companies, 17.7% (93,141) were private enterprises, and 11.2% (59,110) were family enterprises.
Thanks to the development of market relations and the creation of conditions for fair competition, sustainable growth rates are ensured in the economy.
In 2022, the volume of the gross domestic product of the Republic of Uzbekistan at current prices amounted to over 888.3 trillion soums, having increased by 5.7% compared to 2021 and exceeded $80 billion for the first time. This year alone, the national economy received $8 billion in foreign direct investment, and the country’s exports reached $19 billion. In 2018, that figure was $14 billion.
The updated Constitution, based on the standards and requirements of the World Trade Organization, establishes a norm that guarantees the unity of the economic space and the free movement of goods, services, labor and financial resources on the territory of the Republic of Uzbekistan. It is also provided that monopolistic activity is regulated and limited by law.
Strengthening the unity of the economic space, guarantees of free movement of goods, services, labor resources and financial resources on the territory of the Republic of Uzbekistan contributes to the prevention of illegal restrictions on the free movement and sale of goods and services and creates the basis for the free movement of labor resources.
The Law of the Republic of Uzbekistan “On Guarantees of Freedom of Entrepreneurial Activity” establishes that business entities can carry out their activities in any territory of the republic and provide their goods or services.
As a result, as of January 1, 2023, the number of enterprises and organizations operating in the republic amounted to 592.4 thousand (except for farms and dekhkan farms) (among them, small enterprises and microfirms – 523.6 thousand, their number increased by 12.0 %, and in 2022 it increased by 60.8 thousand).
Decree of the President of the Republic of Uzbekistan dated September 2, 2017 No. UP-5177 “On priority measures to liberalize foreign exchange policy”, aimed at ensuring the free movement of financial resources and increasing the efficiency of their use, was adopted.
Thanks to this, the rights of legal entities and individuals to the free purchase and sale of foreign currency, the free disposal of their funds at their own discretion are realized.
The Decree defines the priority areas of state economic policy as increasing the role of market instruments in the use of foreign exchange resources, creating equal competitive conditions in the foreign exchange market for all economic entities, increasing the stimulating role of foreign exchange policy in the development of exports in non-traditional industries, strengthening regional and international economic cooperation.
The customs clearance processes have also been significantly simplified in order to create broad opportunities for export and import trade transactions.
Another tool has been created for the unhindered movement of goods and services, namely “free economic zones” (hereinafter – SEZ).
Currently, the country has created a legislative framework that regulates the activities of the SEZ, a system of tax and customs benefits and an infrastructure aimed at attracting foreign and local investment.
The Law of the Republic of Uzbekistan “On Special Economic Zones” was adopted, which improved the procedures for creating, prolonging and terminating the activities of SEZs, their management systems.
FEZ participants are provided with a number of benefits and preferences, depending on the volume of investments made by the state, tax and customs benefits are guaranteed for a period of 3 to 10 years.
Today there are 21 free economic zones in the republic (19 of them were created in the last 5 years). They have implemented more than 560 projects worth almost $3 billion and created about 49,000 jobs.
It is envisaged that due to the abolition of the “propiska” system, citizens will be able to work throughout the republic, and entrepreneurs will be able to carry out free entrepreneurial activities.
In recent years, the country has formed a balance of labor resources based on modern approaches, introduced new mechanisms to ensure the employment of citizens, especially women and graduates entering the labor market for the first time, and their wide involvement in entrepreneurship, as well as reducing informal employment.
In particular, for individuals who are in labor relations with individual entrepreneurs, the minimum amount of social tax has been reduced from 50% of the gross income tax per month to 1 times the gross income tax amount per year.
In addition, if citizens who work on their own personal plots pay social tax in the amount of at least 1 times the size of the BRF per year, then they are included in the category of the officially employed population, and this period is counted in their seniority.
At the same time, benefits have been introduced aimed at the development of home-based work, according to which the personal income tax for home-workers is calculated with a decrease in the total income from home-based work up to 50%, but not more than 1 million soums for the reporting period (month).
Most importantly, business entities that have created home-based work in remote and hard-to-reach areas are provided with a one-time subsidy in the amount of the average monthly income for the first three months of work of each homeworker.
The data show that in 2022, the total per capita income amounted to 17.8 million soums, the nominal growth rate of total per capita income was 119.8%.
In 2022, most of the total income of the population is formed from income from labor activity, including income of employees and income from self-employment (61.6% of the total income of the entire population), the nominal growth rate was 115.9% compared to the corresponding period in 2021 .
In addition, it was found that the state is taking measures to ensure the employment of citizens, protect them from unemployment, and reduce poverty.
In the Republic of Karakalpakstan and the regions, Ishga Markhamat monocenters have been created in order to introduce effective labor market mechanisms in the country, increase the business activity of the population, train poor and unemployed citizens in modern professional and entrepreneurial skills, and ensure their employment by involving them in labor and entrepreneurial activities on this basis. that generates a stable income.
In addition, graduates of non-state vocational schools who have received a certificate of professional qualification (Skills passport) at the level of WorldSkills and other international standards are provided with benefits at the expense of the State Fund for the Promotion of Employment of the Population.
The costs associated with the training of unemployed citizens who have received a job offer from the labor authorities are paid at the expense of the State Fund for the Promotion of Employment of the Population.
These efforts undertaken by the state are, of course, important to ensure that the wages of citizens correspond to their work, to provide the population with their income.
So, only in 2022, the total amount of income increased in 2022 by 2.5 times compared to the previous 5 years (since 2017).
In order to further develop competition in the commodity and financial markets, to ensure the free involvement of new participants, the principles of 185 types of licensing and permit procedures for entrepreneurs have been reduced or simplified.
The development of the service sector ensures the development of new economic territories, an increase in the efficiency of production and the consumption of material goods by the population.
As of January 1, 2023, 392.8 thousand enterprises and organizations operate in the service sector, which is 66.3% of their total number. The growth rate compared to the corresponding period last year amounted to 113.0%.
In addition, Decree of the President of the Republic of Uzbekistan dated December 30, 2022 No. UP-287 “On measures to divide the territories of the republic into categories and introduce a differentiated business support system” was adopted in order to reduce economic inequality between regions, introduce new approaches to the development of districts and cities based on from their conditions, potential and opportunities, further improvement of the business environment, improvement of the order of state support and increase its efficiency.
According to this Decree, from January 1, 2023, 208 districts and cities of the republic are divided into 5 categories. Depending on the category of district and city, entrepreneurs are provided with tax incentives and subsidies.
It should be noted that these rules ensure competition and create equal economic and legal opportunities for entrepreneurs in the respective markets for goods and services.
The Republic of Uzbekistan strictly regulates the provision of equality and legal protection of all forms of ownership. This is aimed at improving the welfare of citizens and contributes to the development of the economy of Uzbekistan, an increase in the number of owners.
Erkin Gadoev, Chairman of the Committee on Budget and Economic Reforms of the Senate of the Oliy Majlis of the Republic of Uzbekistan
Source : Avesta