Uzbek President Islam Karimov
Tashkent, Uzbekistan (UzDaily.com) --
The global financial crisis, primarily its consequences, were negatively affecting the Uzbek economy, President Islam Karimov said on 13 February at a session of the Cabinet of Ministers on socio-economic development in 2008.
He said this could be seen in the performance of major export-oriented companies due to low demand for Uzbek exports and price cuts in the world market. For its part, this was negatively affecting the balanced and efficient development of the Uzbek economy on the whole and creating lots of problems in the implementation of projects and in achieving our goals, President Karimov said. At the same time, the president said the crisis affected the Uzbek economy less than other economies thanks to measures taken in time by the government. The country’s GDP grew by nine% despite the crisis, he said.
The following is an excerpt from a special programme on the session by Uzbek state-owned Television First Channel on 13 February; subheadings have been inserted editorially:
The Uzbek Cabinet of Ministers has held a meeting on the results of the country’s socio-economic development in 2008 and on the priority tasks of the economy’s consistent development in 2009. Uzbek President Islam Karimov attended the meeting and delivered a speech.
Dear participants in the meeting.
The main goal of today’s plenary session of the Cabinet of Ministers is to sum up the results of socio-economic development in our country in 2008 and to outline the priority areas of an economic programme for 2009.
Global financial crisis
It should be noted in the first place that we must fulfil new tasks that we set for this year in a complicated situation, in other words, when the economies of almost all countries are being very strongly affected by the global financial crisis. You know that the crisis, which began in 2008, is gradually getting deeper and more intense in many developed and developing countries. This leads to production cuts, a rise in the unemployment rate, as well as to worsening people’s living standards. In other words, the crisis is getting serious and unpredictable in many aspects.
Taking into account our economy’s progressive integration into the global economic and financial system, I believe that it is needless to say that the global financial crisis, primarily its consequences, are negatively affecting us.
First and foremost, the consequences are seen in the performance of our major export-oriented companies due to price cuts in the world market and, naturally, in low demand on the world market for strategic products being exported from our country. For its part, this is negatively affecting the balanced and efficient development of our economy on the whole, creating lots of problems in implementing projects and in achieving our goals.
In brief, last year was very complicated and difficult for us and, above all, for our workers. However, despite all problems and difficulties, we managed to ensure not only the stable operation of our economy in 2008 but also its high and steady growth rate thanks to our people’s dedicated work and to measures taken.
In 2008, GDP increased by nine%, industrial output by 12.7%, consumer goods production by 17.7%, and the volume of public services by 21.3%.
Other sectors of the economy praised; US$6.4 billion were invested in the economy in 2008.
Among large industrial facilities that were commissioned in 2008 and being constructed today, I want to especially note the construction of the 165-km-long high voltage power line linking the Yangi Angren thermal power plant and the Ozbekiston station, which ensures stable electricity supply to the [eastern] Ferghana Valley. No need to say that this issue is of strategic importance. If we do not solve the issue related to these facilitates, which are very important to our life, the economy in the future [changes tack] Because it is impossible to build such facilitates in one day, one month or in one year. If we did not start the construction three, four or five years ago, the problem of linking the Ferghana Valley with other parts of Uzbekistan [changes tack]. Look at the map, how were we used to reach the Ferghana Valley before? By whose territory? By which railway and motorways? If any of you sitting here will take a closer look at this from a patriotic point of view, he will understand its importance well. Someone, who does not know and does not care about it, will not pay special attention to this.
Banking and finance system
I think that you all understand very well that strengthening and improving quality of the banking and finance system is especially important today, when the global financial crisis is getting worse. I want to speak about issues of developing the banking and finance system.
You know that important decisions were taken last year on increasing capital of banks such as Uzsanoatqurilishbank, Asaka Bank, Pakhta Bank and Galla Bank. The Uzbek presidential degree on increasing the authorized capital of the Microcreditbank, which is a major loan centre to finance small and private business, was a practical step in this field.
As a result of attracting additional resources, total capital of our country’s banks increased by 40% compared with 2007, this figure will double by 2010.
Anti-crisis action plan
International prominent experts forecast that the crisis may continue and perhaps, get worse this year and in 2010.
Therefore, it is obvious that an anti-crisis programme for 2009-12 on withstanding the aftermath of the global financial crisis in our country will remain a priority of Uzbekistan’s socio-economic development in 2009.
We have every reason to say that the socially-oriented model of transition to a free market economy, which was adopted by us in the first years of independence, is based on five principles and is justifying itself in practice and proving to be right and well-founded with every year passing.
We realize well that as an integral part of the global economic space, Uzbekistan is experiencing and will experience in the future increasing negative affects of the global financial crisis. Therefore, we have started to work out an anti-crisis programme in the second part of 2008, taking into account the real state of and conditions in our economy.
Today, the anti-crisis programme on preventing and eliminating consequences of the global financial crisis has been approved and send to specific bodies and agencies in regions.
A government commission and territorial groups were set up to strictly control the programme’s implementation.
In brief, the implementation of the programme of anti-crisis measures has started, and the results of January 2009 showed that the programme’s implementation is producing its first but satisfactory results.
Using this opportunity, I want to briefly mention specific areas of a set of measures outlined in the anti-crisis programme. They are aimed at dealing with following tasks:
First, it is about upgrading production, speeding up technical and technological modernization of enterprises, widely implementing modern flexible technologies. This task primarily applies to the leading fields of the economy, export-oriented companies and enterprises specializing in producing goods locally.
The task is set to speed up the implementation of adopted sector programmes on moderniziation, technical and technological upgrade of production. For its part, this will enable our country to have stable position both in foreign and domestic markets.
Second, it is taking specific measures to support export-oriented businesses to ensure their competitiveness in foreign markets in rapidly-worsening conditions, and giving additional stimulus to export.
Export-oriented businesses should be provided with soft loans.
Third, is carrying a strict regime of saving, boosting competitiveness of enterprises by encouraging cuts in production costs and cost prices. It should be said that proposals by economic entities on taking measures on reducing production costs by at least 20% in the leading sectors of our economy have recently been approved.
There are plans to work out an effective mechanism of encouraging the heads of enterprises and managers to achieve the tasks on reducing cost prices.
Fourth, is a mechanism for restricting an increase in prices for all types of energy carriers as well as in prices for main types of public utilities by 6-8%; this is envisaged in the anti-crisis programme.
Fifth, in the conditions when demand is dropping in the world market, supporting domestic producers by stimulating demand in the domestic market is very important in maintaining high economic growth rates.
The expansion of a programme on producing goods locally plays a key role in fulfilling this task. The action plan is to increase the volume of projects as part of the programme by three or four-fold.
Crisis affects Uzbekistan less than others
I repeat once again that measures taken by us in the past and our thoughtful policy and well-thought-out programmes help us to live through the hard times. Some countries have been badly affected by the crisis compared with us. May God save us. He is merciful to us. Therefore, I will thank God once again in public. I am never tired of doing so. When I get up every morning I always think how the day will be and how yesterday’s problems may develop today and what should we do to prevent them. Above all I ask God to always save us.