Uzbekistan uses direct foreign investments for US$2.5 billion in 5 months
Tashkent, Uzbekistan (UzDaily.com) -- The Central Bank of the Republic of Uzbekistan published a report on the volume of net inflows of foreign direct investment in Uzbekistan in the first quarter of this year, according to which net inflows of foreign direct investment fell to US$198 million in the first quarter of 2019, which two times less compared to the same period of last year.
The press service of the Ministry of Investment and Foreign Trade notes that in world practice, based on the goals and objectives, various methods of calculating foreign direct investment in the country are used. The published report of the Central Bank of the Republic of Uzbekistan was compiled on the basis of the methodology of the International Monetary Fund and is used exclusively for drawing up the country’s balance of payments, that is, it characterizes the movement of funds in the form of payments from country to country.
At the same time, the indicator of the net inflow of foreign direct investment is calculated by the ratio of the sum of inflows of foreign direct investment during a certain period and the volume of repatriation of these investments (return of capital to the investor’s country) during the same period, that is, there is a certain balance between inflows and outflows of money. At the same time, the basis for the inflow of foreign direct investment is the increase in the authorized capital of an economic entity mainly due to cash receipts.
However, this method of calculating the inflow of foreign direct investment does not reveal the full picture of foreign direct investment attracted and mastered into the country during a certain period. In this regard, the Ministry of Investment and Foreign Trade, together with the State Statistics Committee of the Republic of Uzbekistan, as part of the Investment Program annually approved by the decision of the President of the Republic of Uzbekistan, calculates foreign direct investments in fixed capital not only due to a monetary increase in the statutory capital of an economic entity, but also investments in a commodity form, as well as in the form of intangible assets and technology transfer d, licenses, etc.
Indicators of attraction and development of foreign direct investment in fixed assets are subject to confirmation on the basis of statistical reports "1-ID" and "2-Invest", submitted by business entities to the state statistics bodies. At the same time, statistical reporting is formed on the basis of internationally recognized methods, is quarterly, mandatory and subject to nationwide publication.
Thus, in the first quarter of 2019, the actual amount of foreign direct investment utilized, confirmed by statistical reports, amounted to US$783.3 million, or 11% of the forecast year. Compared to the same period in 2018 (US$325.8 million), the growth in the use of foreign direct investment amounted to US$457.5 million or 2.4 times.
At the end of 5 months of 2019, the volume of direct foreign investments disbursed amounted to US$2.5 billion or 40% of the forecast year, and by the results of the first half of 2019, this figure is expected to reach US$3.7 billion or 52% to the forecast of the year. At the same time, compared to the same period of 2018 (US US$618.2 million), the net growth in the use of foreign direct investment will exceed US$3.06 billion (or 5.9 times increase).
Remarkably, in recent years, growth in investment activity has been observed mainly in industries and areas that are not related to areas traditionally recognized to attract foreign direct investment, such as, in particular, the oil and gas sector.
So, for example, the growth of foreign direct investment is more than 2 times observed in the metallurgical industry (2.4 times compared to 2018), the textile industry (2.7 times), food production (3.1 times), pharmaceutical industry (6.3 times).
It is necessary to note the growth in foreign direct investment in projects of regional subordination. Thus, the volume of foreign direct investment in the regions increased by 4 times compared with the figures for 2018.