INTERNATIONALISATION OF THE ECONOMICS OF UZBEKISTAN

ABSTARCT

In the context of this work will be illustrated Challenges facing nowadays and resolutions in doing markets and industries competitive word wide by promoting the internationalization of small and medium-sized businesses (SMEs) in Uzbekistan by improving the export promotion policy, so the diversification and modernization of the economy of Uzbekistan is a priority of the government's policy. SME barriers are problematic not only in the foreign policies of Uzbekistan, but inside of the country as well. In this regard, I want to provide with relevant trends, describe Uzbekistan’s policy for SME by emphasizing Exports.

Within a long time since independence in 1991, Uzbekistan’s approach to economic advancement has been cautious but, in any case based on the acknowledgment of the require for reform. The government committed to a progressive arrangement of changes, which pointed to minimize negative impacts of SME barriers and Economic growth by Exports as well as supporting competitive SMEs.

Keywords: Uzbekistan, Small and Medium-sized businesses, SMEs, Export, Import, foreign policy, barriers, GDP, monopoly, enhanced competition, agriculture, natural resources.

Picture 1. Uzbekistan’s exports as a share of GDP, and annual GDP growth

Within the early 2000s, as Uzbekistan confronted an economic slowdown, the government enacted a number of economic changes, with positive impacts on economic development. From 2005 to 2015, average annual GDP growth surpassed 7%, driven by net exports, state-led ventures and settlements Picture [1] (World Bank, World Development indicator Data), 2017). However, GDP per capita remains below that of neighboring nations and below the average of low-and middle-income economies overall (World Bank, 2017).  The improvement of private small and medium-sized enterprises (SMEs) and entrepreneurship has been consistently distinguished as a priority by the government since independence. A few government procedures, programs and decrees have pointed at supporting the advancement of SMEs, outstandingly by moving forward get to fund for small businesses, creating ICT infrastructure, streamlining and disposing of administrative methods, and streamlining and decreasing the tax burden. The government’s points include upgrading the overall trade environment and decreasing the impedances of the state within the economic activities of SMEs, eventually creating occupations and wage through SME growth and enterprise (Uzbekistan, 2013). In 2017, the Government stepped up its change efforts to these ends. As a result, Uzbekistan moved up 13 positions in the World Bank’s2018 Doing Business Report. The nation ranks 74th and was among the beat ten economies worldwide in terms of reform progress, with the foremost outstanding enhancements coming from doing Business reforms (World Bank, 2018) [2].

Picture 2. SMEs’ contribution to exports, GDP and employment in Uzbekistan

SME trades have moreover essentially expanded since 2000, and advance accelerated since 2010, with their share of total exports rising from 10.2% in 2000 to 13.7% in 2010 and 26.5% in 2016, The government’s stated priorities have been focused on rearranging customs procedures, supporting SME export financing, and boosting export advancement. SMEs’ commitment to exports remains generally limited. Uzbekistan’s development within the past decade was mostly driven by trade, as rising costs for essential commodities helped maintain a trade overflow. However, the trade overflow is additionally due to tax and non-tariff barriers to imports, reinforced by policies to empower import substitution. More recently, trade profit has fallen strongly, due to the drop in product costs and the slowdown within the Russian Federation; Uzbekistan’s positive foreign trade adjust diminished and the current account overflow limited to 0.3% of GDP (ADB, 2016). Trades of goods and services represented only 18.8% of Uzbekistan’s GDP in 2016, compared to28.5% in Kazakhstan and 28.5% on average among OECD nations (World Bank, 2017) [3]

SMEs can be an engine for internationalization–but they require particular support. Given assist advance within the in general conditions for trade examined above, SMEs might play an imperative part in supporting the government’s aspiration to extend exports as a source of development. Due to their strong innovation and alteration capabilities, SMEs can drive internationalization in modern markets. Interest in international trade through worldwide value chains and the foundation of joins with huge companies and foreign affiliates, offers further opportunities to SMEs. Such linkages can help SMEs overcome through superior export advancement policies key boundaries to exporting, such as access to international markets, finance, technology and innovation, management abilities and knowledge.

Here are some actions that could be done by Government in order to prioritize SMEs and support to them as a key Export growth factor:

1. Recognize target markets and divisions through public-private dialogue
2. Expand advisory and training capacities and support preferential access for SMEs
3. Attract more certification companies to the country
4. Extend the number of representation workplaces overseas with local staff
5. Work on a clear esteem suggestion in co-operation with the trade community
6. Create and actualize a set of noteworthy key performance indicators

In a nutshell, Although Uzbekistan has started major changes to boost export, support entrepreneurial activities and progress the generally trade climate, still there are barriers and challenges in reaching to the competitiveness in Foreign markets. This incorporates the alteration of the legitimate definition of business entities, support to SME advancement through modern incentives within the tax administration, and the simplification and reduction of authorizing and export procedures and controls in order to better comply with worldwide measures in trade markets

References:

1. World bank data on annual growth of Uzbekistan. World development indicator Data. https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=UZ
2. “Doing business report” 2018 World Bank, page - 4.
3. Asia Development Bank. (2016). Asian Development Outlook 2016: Asia’s Potential Growth.
4. UzStat. (2017a). Госкомстат -Развитие Малого Предпринимательства (Бизнеса) В Узбекистане, State Committee of the Republic of Uzbekistan on Statistics.Retrieved from www.stat.uz/ru/90-interaktivnye-uslugi/ekonomika-v-tsifrakh/773-razvitie-malogo-predprinimatelstva-bizne
5. UzStat. (2017b). ОСНОВНЫЕ ПОКАЗАТЕЛИ социально-экономического развития Республики Узбекистан за 2012-2015гг [Main indicators of the socio-economic development of the Republic of Uzbekistan between 2012 and 2015]. Retrieved March 21, 2017, from State Committee of the Republic of Uzbekistan on Statistics: www.stat.uz/ru/statinfo/dinamicheskie-ryady