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NEWS

Uzbekistan courts foreign investment

centralasiaonline.com
22 May 2013

Uzbekistan has laid out the welcome mat for foreign investment.

As part of the Year of Prosperity, which 2013 was proclaimed last December, Uzbekistan is seeking to accelerate economic growth by attracting foreign investment. Since May 9, it has been airing a 35-second video titled "Welcome to Uzbekistan" on euronews and other international TV channels. The ad describes Uzbek economic potential, tourism and investments.

"Uzbekistan has created and continues to create flexible conditions for foreign investors," Rasulzoda D., an Economic Ministry spokesman, said. "We have incentive to ensure that an entrepreneur coming here remains content and stays here for a long time."

Uzbekistan also plans to promote itself at several international investment forums and to invite groups of foreign business leaders to visit and discuss investment conditions with potential investors, he said.

Benefits of foreign investment

Business investment usually leads to related improvements, mainly by creating jobs but also by helping the country manage energy resources.

For example, in February a representative from a South Korean company was in Uzbekistan to discuss the creation of some textile factories in Uzbekistan, Uzbekistan Today reported.

Although the scope of the Young One Corporation's investment has not been determined, new factories are likely to bring in job opportunities for Uzbeks.

A Singaporean company also made inroads into Uzbekistan in 2011, with a pledge to support the Indorama Kokand Textile mill in Tashkent. The parent company, Indorama Industry, has built a modern facility, complete with its own energy unit, and should be producing at full capacity by the end of this year, UzDaily.com has reported.

Uzbekistan also has partnered with South Korea's Kogas for the Ustyurt Gas Chemical Plant, which will produce 4.5 billion cu. metres of natural gas annually.

Much-improved business climate

The World Bank study Doing Business 2013 lists Uzbekistan as one of 10 countries whose regulatory climate for business improved the most in the past year.

"Uzbekistan is quite convenient for foreign capital," economist Said Formonov said. "It doesn't put any obstacles in [investors'] path, help is always available ... and officials at all levels always are ... ready to answer foreign entrepreneurs' questions. Furthermore, Uzbekistan's economy is quite stable."

However, Firuza Jakhonova, a Tashkent marketing specialist, disagreed with Formonov. On the whole, Uzbekistan's business climate still needs improvement, she said. "Foreigners still find obtaining an Uzbek entry visa quite difficult," she said. "Even our own businesses have ... problems with ceaseless inspections. ... Uzbekistan still has to fix many details before we can invite foreign capital to invest here."

If the authorities find that inspectors broke the law while checking a business, they investigate, Rasulzoda D. said. Acquiring a visa isn't difficult, he said, adding that foreign investment boosts the economy by creating new jobs. "Our aim, of course, is to see that Uzbeks rather than [foreign] specialists take those jobs, though we realise it's not possible to do without them altogether."

Another factor requiring government attention is the need to steer investment to the provinces, not just to Tashkent, Formonov said. "Why? Because we already have quite a few foreign investors in the capital, but there are few in the regions. Unemployment is always higher in the provinces ... new investments could help create jobs there."