The president said maintaining macroeconomic stability and sustainable economic growth rates, and further improving people’s living standards were priorities of economic reforms to be implemented in 2008.

Karimov said: "Last year we maintained high rates of sustainable economic growth and macroeconomic stability as well as continued the work on further diversification, modernization and technical and technological renovation of production."

The GDP growth rate stood at 9.5%, industrial production increased by 12.1% and agricultural output grew by 6.1%. All these indicators significantly exceed the figures forecast for 2007. The state budget surplus was at 1.1% of GDP. The inflation rate was maintained within the approved range and amounted to 6.8%.

"I would like to particularly stress that the sustainable economic growth in Uzbekistan has not been achieved because of extensive factors such as continuously increasing prices of oil, gas and other raw material resources in the world market. It is principally important that the economic growth is achieved, above all, by consistent implementation of a comprehensive policy aimed at carrying out systematic market reforms and attracting foreign investments, modernizing and renovating production facilities, creating new export-oriented sectors and enterprises as well as speeding up the development of businesses and private entrepreneurship."

The industrial, construction, communications and services sectors have been rapidly growing. The industrial sector currently accounts for 25% of GDP, while the services and small business sectors make up 43 and 46% of GDP respectively, Uzbek leader said.

The fuel and energy, as well as gas, oil and chemical estates, the power generation sector, gold and non-ferrous metals production, chemical industry and production of construction materials as well as information and communication technology industry are strengthening their dominant positions in the economy, Karimov added.

Uzbek president said cotton and grain production in 2007 exceeded 3.7 and 6.3 million tonnes respectively.

Significant structural developments in the country’s economy are reflected in foreign economic indicators. Exports grew by 40.7% in 2007 significantly exceeding the dynamics of imports which made it possible to generate foreign trade surplus at over US$3.5 billion and increase the country’s gold and foreign exchange reserves by 1.5 times.

The total volume of investments into the economy grew by 23% and amounted to over US$4.3 billion last year. These are the highest indicators achieved over the past years. Over 70% of investments were channelled into the production sector.

The volume of utilized foreign investments amounted to over US$1 billion, which indicated a 58% growth. "We need to note that direct foreign investments accounted for almost 76% of this total amount," he added.

Uzbek President said: "We are actively developing cooperation with international financial institutions. About US$330 million of loans and US$46 millon of grants were attracted last year to implement strategic projects in the education and health care sectors, agriculture, water resources industry as well as in the sphere of financial management."

"It is nobody’s secret that one of the most serious and troublesome problems experienced by many countries today is the rising volume of financial debt and illiquidity of bank assets. We need to note with satisfaction that the volume of our external debt and the funds allocated annually to service the debt are characterized by the lowest indicators on the international scale. The total external debt accounted for only 17% of GDP and 44% of the annual exports in 2007. This ascertains Uzbekistan’s true position among the most reliable and creditworthy partners which guarantee timely repayment of their obligations.

"We have observed a sharp rise in food prices in neighbouring countries and the global market recently. Reliable food supplies to the domestic market and population is of particular importance in this situation, Karimov said.

Uzbek head said the private sector key player in GDP growth. The share of the private sector in GDP reached 85% in 2007. The private sector accounts for around 80% of industrial production, almost 100% of agricultural output and for the entire volume of retail trade.

Karimov said: "I would like to stress once again that our key goal in privatizing state-owned enterprises is to attract efficient proprietors and to hand over the enterprises to real owners and skilled managers who are capable of carrying out measures to modernize and technically and technologically renovate a privatized plant or factory and organizing production of goods which will be competitive in the world market.

A the same time, Islam Karimov said about 10% of the privatized enterprises have failed to organize efficient production; reforms in the banking sector aimed at increasing banks’ financial resources and developing their capacities to support private business initiatives.

"We carried out solid work on resolving problems of unemployment and increasing household incomes last year. Over 630,000 new jobs were created for this purpose, about two thirds of which were created in rural areas. The small business and services sectors created about 65% of the new jobs, while over 20% were created in craft industries [people are engaged in small-scale production at home."

The measures that were taken to create new jobs made it possible to reduce the unemployment rate to 5% by the end of 2007.

In accordance with the adopted strategic objective to increase wages by 2-2.5-fold in the coming three years, sizes of wages, pensions, student allowances and social benefits were increased by 1.5-fold. The average salary throughout the business and public sectors was equivalent to US$210 in December 2007.

"Based on the critical analysis of the achievements made in the past period, the long-term objectives we have set and the current trends in the global market, we have identified the following key priorities in the socioeconomic development of the country in 2008," he said.

Maintaining macroeconomic stability and sustainable and balanced economic growth rates as well as continuing to carry out structural reforms and to modernize and renovate major sectors of the economy by increasing attracted investments will remain our key objective.

"We set an objective to achieve 8% GDP growth, boost the industrial production by 9.6% and agricultural output by 5% and to increase investments into production capacities by 17%. The inflation rate is to be maintained within a range that prevailed in 2007, i.e. between 6-8%," Uzbek head said.

"Key areas to be developed in 2008 are the oil and gas sector, metals production, chemical and light industries, petrochemical industry, production of construction materials and consumer goods and the transport sector.

"Over 5.4 billion in dollar equivalent are to be invested into the country’s economic development from all sources of finance in 2008, including about US$1.5 billion of foreign investment," Islam Karimov noted.

Stepping up the reforms and further liberalization of the economy and tax and budget policy as well as ensuring rapid development of the market infrastructure is one of top priorities of Uzbekistan, he said.

Another priority is to support and encourage the development of small and private businesses, the services sector and craft industries, which is a key direction in improving employment opportunities and increasing people’s welfare.

Karimov said the small and private business sector plays a key role in generating income for the majority part of population; raising wages, improving social services and developing small business sector are said to be essential in increasing people’s living standards.

"Today we have all grounds to increase the share of small business and private entrepreneurship in GDP up to 48% in 2008 and to 50-52% in 2010 and to raise the share of the services sector up to 45 and 49% [in 2008 and 2010] respectively".

President Islam Karimov noted that a steady and progressive increase in the standards and quality of people’s life is key target to which all plans, resources and capacities should be ultimately devoted.

Sustainable economic growth rates and increasing financial capacities and reserves as well as stable saturation of the domestic market with, above all, locally produced good quality products create a solid basis for continuing the policy aimed at progressive increase in wages and household incomes and encouraging the consumer market in the country, he said.

"We set a task for 2008 to find sources that will ensure that the average wage is increased by at least 1.5 times with the inflation remaining within the parameters set for the current year.

"I would like to repeat once again that achieving growth at 9.5% is not easy as you know. We have set a target to ourselves to achieve a 8% growth in the new year of 2008. However, I would like to tell you today that there are such things as aspiration, estimation and absolute trust. I believe that our [growth] rates in 2008 will not be lower than that in 2007," he said.

"When we make a comparison with the last year, I think you will note one more aspect. We focus our work and efforts largely on the social sphere - on the demands, needs and benefits of an individual person - in 2008. Speaking on this rostrum, I am pleased to say that these tasks are our top priority objectives. You might have noticed that leaders across the world and the former-Soviet Union area note this in the first place in their speeches today, repeating time and again the individual’s interests. These speeches may remain to be words, but it [the situation] would be completely different if we prepare, build a basis for this [serving people’s interests] and take into account that we are able to fully utilize capacities to realize this. I mean that these are not just general words. We are talking about using our capacities in practice.

Islam Karimov said: "I would like to repeat once again an aspect that I have mentioned before. Who is respected in the world? The world respects people, nation or a state which trusts in its own strength, capacities and power and which is able to demonstrate them. It respects people or nation which is prepared to protect and feed itself, to build its future and to pursue its comprehensive independent policy without being inferior and bending its head to anyone."