Dynamic Uzbekistan № 5 (English) by Dynamic Uzbekistan

IN COOPERATION WITH AMCHAM UZBEKISTAN

30 years

#5 | 2021

of Progressive Reforms

2020, #5

EDITORIAL LETTER In recent years, Uzbekistan has undergone an impressive series of structural reforms, through which many of the drawbacks in the economy have been eliminated, transforming it and increasing the potential for higher economic growth and improved living standards. In the reform process, the role of the state in the economy is changing. The authorities have demonstrated their commitment to developing market principles and creating the most favorable business climate to increase investment potential. At the same time, the government is accelerating its efforts to integrate the country into regional and global markets, and these advances are providing a favorable boost to economic activity in Central Asia. Overall, the pace of reforms has opened up new opportunities for regional cooperation and economic connectivity. Currently, the main challenge for the economy of Uzbekistan is prioritizing reforms and increasing their effectiveness. It is not for nothing that experts agree that in the long term, the country will have to carry out more complex and sensitive reforms. In this regard, strengthening the potential of the entire state machine, reducing corruption and predictability of economic policy measures is an objective necessity. Strengthen the independence of ministries and departments in the effective and high-quality implementation of state policy, further reduce the administrative impact on the economy and expand market management mechanisms, reduce excessive administrative regulation . This is one of the key areas that will directly address the institutional weaknesses that are the main constraint to the reforms implemented in Uzbekistan.

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Contents

UZBEKISTAN 2.0: RAPID CHANGE REFORMS

AT THE TURN

The challenge for Uzbekistan in the years to come will be to maintain the current pace of reforms and ensure their effective implementation

12 SUMA CHAKRABART: «I EXPECT MORE REFORMS IN THE NEXT FIVE YEARS» Suma Chakrabarti spoke in an interview with Dynamic Uzbekistan about his tasks as an adviser to the President of Uzbekistan, the need to accelerate the transformation of state-owned enterprises and the importance of public administration reform, which should increase the efficiency of the public sector

Where the global technological challenge will lead Central Asia?

60 FROM SERVICE FOR GAMERS TO A UNICORN COMPANY OSON, THE FIRST E-MONEY PAYMENT SYSTEM IN UZBEKISTAN, IS MAKING BIG PLANS TO EXPAND ITS BUSINESS. THE COMPANY, WHICH HAD FIRST STAGE INVESTMENTS OF $6 MILLION, EXPECTS TO BRING ITS CAPITALISATION TO $1 BILLION BY 2025

78 GENDER EQUALITY: UNTAPPED POTENTIAL FOR LOCAL DEVELOPMENT IN AN INTERVIEW WITH DYNAMIC UZBEKISTAN, MAVLYUDA SHIRINOVA, DIRECTOR OF THE SABR CENTRE FOR SOCIO-ECONOMIC DEVELOPMENT, SPOKE ABOUT THE NEED FOR GENDER EDUCATION OF YOUTH, AND INSTILLING PROFESSIONAL SKILLS IN WOMEN AND GIRLS FROM POOR FAMILIES

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Editorial Board EDITOR Ruslan Ramazanov DESIGNER Avaz Abduraimov SALES & MARKETING Zafar Anvarov

Sodyq Safoev

First Deputy Chairman of the Senate of the Oliy Majlis (Parliament) of Uzbekistan

Shadab Khan

President, the American Chamber of Commerce in Uzbekistan

CONTRIBUTORS Tatyana Bystrushkina, Rustam Makhmudov, Cassandra Colbert, Diana Baizakova, Saltanat Sandykbayeva, Farrukh Abdullakhanov, Madina Tursunova,Timur Zhursunov, Jamshid Juraev, Ben Pietersen, Alisher Zufarov, Anna Bjerde PHOTOGRAPHERS Farruh Isamukhamedov, Bakhodir Saidov Viktoriya Bots, Yuriy Korsuntsev, A’lokhon Abdullayev, Otabek Mirsagatov, Diana Ibragimova, Evgeniy Sorochin PROOFREADER Sophie Ibbotson

Hugo Minderhoud

Senior Adviser, the American Chamber of Commerce in Uzbekistan

Dinara Dultaeva

Publisher of Dynamic Uzbekistan magazine and founder of Dinara & Co

Tatyana Bystrushkina

Executive Director, the American Chamber of Commerce in Uzbekistan

esfandyar batmanghelidj

Founder and publisher of Eurasian Investor

Dynamic Uzbekistan Magazine №5, 2021 Dinara Media Relations PC Dinara&Co. Trademark Tel.: (+998 93) 500 55 65 www.dinara.co info@dinara.co

The magazine is registered by the Agency of Information and Mass Communications on 26.02.2020. Registration number 1052 Printed by «PrintUz» 41/2,Mirabadskaya street, Tashkent, Uzbekistan Order № 1374 All rights reserved. © Dinara&Co. © Dinara Dultaeva

JAMSHED SAFAROV

Editor of Dynamic Uzbekistan, career diplomat, and senior executive at Veres Vert Ltd.

Bobur Bekmurodov

Chairman of the nationwide “Yuksalish” movement

TRENDS & REFORMS

UZBEKISTAN 2.0: RAPID CHANGE REFORMS T

his year Uzbekistan celebrates 30 years of independence, more than four of which were spent under the leadership of President Shavkat Mirziyoyev. Under the new president, Uzbekistan is changing rapidly: large-scale changes affect the very organisation of the state and society.

Shavkat Mirziyoyev is moving Uzbekistan towards the liberalisation of public administration, the economy, and foreign policy. And it is not just about reforms and changes in the course of foreign policy, but above all about changing the relationship between the authorities and the people, and about a new policy of openness. Coming to power, Mirziyoyev proposed a comprehensive development programme for the country. The document was named the Uzbekistan Development Action Strategy 2017-2021. In the political sphere, administrative restructuring has already begun. One of the main achievements in the economic field has been the free conversion of the national currency and the removal of currency restrictions. It was very important to carry out tax reform and reduce the administrative costs of doing business. Today, Uzbekistan is the fastest growing economy in Central Asia. The country rightly occupies a leading role in the region and acts as one of the engines of economic development. Overall, Uzbekistan enjoys macroeconomic stability which, combined with ongoing reforms, opens up opportunities in various sectors of the economy. Uzbekistan has long been a relatively closed country, but today the country is opening up to the outside world and offering investment opportunities. After the change

of management at the end of 2016, the investment climate is improving rapidly, which makes it possible to attract more active investors. Reforms aimed at overcoming obstacles in the legislation, tax, and customs systems are being implemented at a rapid pace. In recent years, the business climate has improved considerably; in the World Bank's Doing Business ranking, the republic moved from 166th place in 2012, to 76th place in 2019. Three times it has been included in the list of top 10 countries with the most improved investment climate. The growth in investor interest is evident . In February 2019, Uzbekistan placed its first five- and 10-year Eurobonds on the London Stock Exchange, for a total amount of $ 1 billion. They were four times oversubscribed. Ultimately, the orders were distributed to over 150 investors from the UK, Europe, the USA, and Asia. Uzbekistan is pursuing numerous reforms to simplify the regulatory framework, customs and tax systems, and make them more transparent. With this ambitious and effective reform programme, Uzbekistan is moving from a country-focused model to a more open and integrated one.

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UZBEKISTAN ENJOYS MACROECONOMIC STABILITY WHICH, COMBINED WITH ONGOING REFORMS, OPENS UP

OPPORTUNITIES IN VARIOUS SECTORS

OF THE ECONOMY

CHASING THE DRIVERS The challenge for Uzbekistan in the years to come will be to maintain the current pace of reforms and ensure their effective implementation. Despite positive developments, Uzbekistan continues to face serious structural challenges in its transition to a sustainable market economy. These include differences in competitiveness, the need for successful administrative reform, the fight against corruption, real judicial independence, etc. The question of reducing the role of the state remains at the forefront of new economic policy. The strong presence and preferential treatment of SOEs in certain sectors discourages the entry of new players into the market and the development of the private sector. According to official statistics, commodity and financial markets are dominated by economic entities with state participation, for example 80% of monopoly organisations have state shares or are controlled by economic entities with state participation. Economic entities with state participation create structures under their control in the form of state unitary enterprises (SUEs) and subsidiaries which adversely affect competition. Currently there are more than 4,000 joint stock companies, 1,300 limited liability companies, 1,800 unitary state enterprises, and more than 1,100 of their subsidiaries. The underdevelopment of the market environment and excessive state participation in the economy lead to inefficiency in the activities of individual economic entities with state participation. This is compensated for with state support in the form of cross-subsidies, tax and customs concessions, preferences, and soft loans. Innovation, technological development, efficient use of resources, and high quality goods and services can only be achieved in highly competitive markets. For this reason, the government plans to triple the number of enterprises over the next two years and, by 2024, reduce the indicator of state participation in the economy to 40% of GDP. The quality of socio-economic transformations will depend on successful administrative reform. Throughout the period since independence, the state system of Uzbekistan has undergone significant changes and continues to develop actively.

The organisation of the civil service in Uzbekistan is one of the most urgent questions. Important steps were taken after the adoption of the concept of administrative reform. The implementation of this strategy has made it possible in recent years to radically modernise power structures. The creation of a public administration system capable of ensuring the full implementation of planned reforms, revealing in a timely manner and solving effectively the problems of socio-political and socio-economic development, continues to be a relevant segment of reforms. Without a gradual leap forward in the energy sector, it will be more difficult for Uzbekistan to meet the growing needs of the economy and the people. As the modernisation of Uzbekistan started late, it is more difficult for the energy system to meet the energy deficit. Delay in this regard could increase the scale of economic damage, as the country's electricity demand will continue to grow and meeting it will require a doubling of generation capacity by 2030. The fundamental problem remains the same year after year. A significant proportion of energy installations has been operating for more than 30 years, which is one of the factors contributing to energy loss. According to official data, the average level of loss in backbone networks is 2.72%, and 12.47% in distribution networks. TPP accounts for 80% of the production structure, but the capacity of modern, energy-efficient power plants is only 25.6%. The system urgently needs modernising. The sensitivity of the country's energy sector to shocks and peak loads manifests itself during periods of high demand in winter, as an underdeveloped heating system forces people to use electricity and gas for heating. Another important factor is the continued growth of the population. Over the past 10 years, the population has grown by almost 7 million people. Demand is increasing and the system is in frequent deficit. Between 2012 and 2019, electricity production increased by 2.6% on average per year. The deficit represented about 9.4% of the need. The level of corruption is worrying. Despite the fact that a number of anti-corruption reforms have been undertaken, this area remains one of the main obstacles to the development of the economy and the creation of a favourable business environment and investment climate. Additionally, the level of corruption in a country directly affects its political and economic authority on the international scene. Corruption negatively affects economic growth and hinders the development of the country, in part because it leads to a thriving underground economy. According to official data, the size of the underground economy in Uzbekistan varies between 40 and 50% of GDP. Official documents indicate that corruption is one of the most serious threats to the state and to social development in Uzbekistan.

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PHOTO: PRESIDENT.UZ

THE CHALLENGE FOR UZBEKISTAN IN THE YEARS TO COME WILL BE TO MAINTAIN

THE CURRENT PACE OF REFORMS AND ENSURE THEIR EFFECTIVE IMPLEMENTATION Corruption also adversely affects people's standard of living. A study by Harvard University showed corruption results in an increase of 5-15% in the price of goods and services. According to the Office of the Prosecutor General of Uzbekistan, in the past 4.5 years alone, 9,546 people have committed various corruption offences, with damages estimated at 3,200 billion soums. According to the opinion polls by the Ijtimoy Fikr Centre, from 2016 to 2018 the level of corruption in some regions increased several times, although the country's indicators in international rankings are gradually improving. In Transparency International's Corruption Perception Index, Uzbekistan has improved its position every year since 2015, and in 2020 ranked 146th out of 180. It is one of the few countries which has showed a positive long-term trend.

Uzbekistan has just started to introduce standards on the declaration of assets of civil servants. From next year, civil servants, their spouses, and minor children will be required to declare their income and assets. At the same time, it will be necessary to confirm the source of origin of the goods, though this applies only to goods acquired after January 1, 2022. From October 1, 2021, anticorruption measures will be put in place in all organs and organisations of the state, including the regional khokimiyats Uzbekistan must pursue coherent measures to prevent and relentlessly fight against corruption, using advanced international standards. The recently created Anti-Corruption Agency (which is responsible for systematically identifying and analysing corruption risks, and eliminating the factors that give rise to them) should play an important role in this matter.

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Over the past decade, Uzbekistan’s economy has been negatively affected by the lack of regional integration. Improving integration could deliver many benefits. Foreign policy has become the most important element of Uzbekistan's new strategy. Tashkent has resumed close contact with all neighbouring countries with the aim of making Central Asia a region of stability and sustainable development. The results are impressive. Active diplomacy has led to increased trade between Uzbekistan and its neighbours. New transport links have been established between them, and new borders crossing are opening.

From the point of view of foreign policy, Uzbekistan is today more and more involved in international processes, participating with confidence in the formation of a global and regional agenda. Tashkent is already an important player, shaping the dynamics and agenda of regional development. Opening up to the world, Uzbekistan compels others to take a fresh look at Central Asia, to maximise the potential for regional cooperation. The most striking example is the initiative of the President of Uzbekistan to organise consultation meetings between regional leaders.

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SUMA CHAKRABART: "I EXPECT MORE REFORMS IN THE NEXT FIVE YEARS"

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uma Chakrabarti spoke in an interview with Dynamic Uzbekistan about his tasks as an adviser to the President of Uzbekistan on economic development, governance, and international cooperation, and about the importance of creating a common law jurisdiction in Uzbekistan. He also pointed out the need to accelerate the transformation of state-owned enterprises and the importance of public administration reform, which should increase the efficiency of the public sector.

– As President of the EBRD, you oversaw a new stage in the bank's cooperation with Uzbekistan. What factors contributed to the intensification of the bank's activities in the country? – The fundamental reason why EBRD was able to restart and have a new beginning with Uzbekistan was because Shavkat Mirziyoev came to power as President and embarked on economic reforms. He was very clear that part of his journey to the future of Uzbekistan was to open up regionally and with international organisations. Because of that push on reform, EBRD could restart. It is a very good restart. In the last few years, EBRD invested hugely in the development of Uzbekistan. – It will soon be one year since you became an adviser to the President of Uzbekistan. This period coincided with COVID-19 crisis. In your opinion, how effectively has Uzbekistan managed the crisis? – I think the measures have been very helpful. Let’s start with the health situation. If you look at the data, Uzbekistan managed the crisis pretty well compared to many other countries: 819 people have died so far. That's always a tragedy for families. But in comparison with many other countries, the number of deaths is much lower in Uzbekistan. I think over 130,000 people had COVID and 117,000 have already recovered. That's very good statistically. The key issue on the health side is vaccination. It is very important that the population get vaccinated. And this issue is not just in Uzbekistan; it is general for the entirety of Central Asia. It is important to explain to people that vaccination is in their interest and in the interest of the society as a whole. So, we really need to see more on vaccination and the government understands this. On the economic measures, the government did well with the anti-crisis fund, tried to strengthen the health system, supported state-owned enterprise workers, and helped businesses with liquidity, as well as supporting the process with subsidies and guarantees. All measures were absolutely necessary to keep businesses and jobs alive. Many other countries have done the same, including the UK. However, in medium and long-term, given limited resources, it is important to ask the question: for how long can and should the government keep those measures going? There is a risk that business might get addicted to government support and will not adapt to new realities. At some point, this support should be

removed carefully; it should not remain permanently. If it does, in the longer term, it will act against the interests of developing a market economy. Despite the pandemic, the government of Uzbekistan was still working on its key reforms. That was a hard task to pursue because it is difficult to get strategic investors to take notice during a pandemic. But, I think, pushing ahead with privatisation programme and public-private partnerships is very important in order not to lose the momentum of reform. Overall, Uzbekistan is doing a good job in a crisis. It is one of those few countries which showed positive growth last year. It definitely can be praised for its efforts. – You mentioned the privatisation program of state enterprises. Is there a danger of privatising too quickly? – Three things are important in the privatisation process: get the right balance, the right momentum, and do it well. In many countries, privatisation showed that the main challenge is defining what “well” means.

IN MEDIUM AND LONG-TERM, GIVEN LIMITED RESOURCES, IT IS IMPORTANT TO ASK THE QUESTION: FOR HOW LONG CAN AND SHOULD THE GOVERNMENT KEEP THOSE MEASURES GOING? THERE IS A RISK THAT BUSINESS MIGHT GET ADDICTED TO GOVERNMENT SUPPORT AND WILL NOT ADAPT TO NEW REALITIES Primarily, competition is an important part of privatisation. It makes no sense to privatise a stateowned monopoly and turn it into a private sector monopoly. Right competition practices need to be developed for each sector which will go through the privatisation process.

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Second, the implementation of corporate governance in these entities is important to make sure that they run business lines in a business-minded way, in order to make them fit for the market economy. The government understands this point. It is important because, if companies retain statist habits, they will not be able to compete after privatisation against the faster private sector competitors, and will quickly collapse. So, improving governance, improving the way decisions are made, and having the right strategies is very important for effective privatisation. The government is investing in that. But I would like to see more independent directors in these enterprises. I think 30% is low. It should be higher. Otherwise, we will not see the transformation in the mindset of the business leadership. At the same time, balancing the need to move forward with the need to get it right is important. The final thing I would say on privatisation is about state assets’ valuation. Many countries embarking on the privatisation process encountered this challenge and realised that market value is the right approach, not book value. We can pretend that these companies are worth their book value, but the reality is the market does not think so. And, I am afraid, the market is right, not the book! So, trying to sell at a book price that no one is willing to pay is ultimately just not worth it. If you can go back to the UK’s privatisation programme in the 1980s, it was a desire to create a market economy which drove this privatisation programme, and made it successful. The price-to-book value was not a criterion for its success, it was instead the market value. I am hopeful the government of Uzbekistan has heard me on this. – What are your main functions as an adviser to the President? – As an adviser to President I cover three broad areas. First, I advise on economic development strategy and economic reform. This includes issues relating to the

IF COMPANIES RETAIN STATIST HABITS, THEY WILL NOT BE ABLE TO COMPETE AFTER PRIVATISATION AGAINST THE FASTER PRIVATE SECTOR COMPETITORS, AND WILL QUICKLY COLLAPSE. SO, IMPROVING GOVERNANCE, IMPROVING THE WAY DECISIONS ARE MADE, AND HAVING THE RIGHT STRATEGIES IS VERY IMPORTANT FOR EFFECTIVE PRIVATISATION 14

investment climate, including privatisation and publicprivate partnerships (PPP), entrepreneurship, and creating a business culture to move forward. Within all of these, I've been pushing the idea of considering the creation of an English common law jurisdiction, because I think that would help give much greater confidence to the many foreign investors who would want to invest in Uzbekistan. Many foreign investors are now coming to Uzbekistan and insisting on the dispute resolution clauses in their contracts being in London under this common law. My point is, this dispute resolution should really happen in Uzbekistan, so we need to create an acceptable jurisdiction locally that is in line with international standards. That is what the creation of an English common law jurisdiction within Uzbekistan would do. I want to give praise to members of AmCham who helped a lot in the development of this first pillar of the roadmap. But also, to a lot of local entrepreneurs as well. So that's the first pillar, economic development strategy and economic reform. The second pillar is about public administration effectiveness. There is so much to do to improve public administration in Uzbekistan, both at the centre and in the regions. This is recognised by many who work in the public administration. First of all, the President wants more focus on public service outcomes, and less on processes, so the Uzbek people receive quality healthcare, education, and access to basic utilities. These things really matter across the regions of the country. Public administration reform should improve the efficiency of public sector employees by creating a system focused on the delivery of key outcomes. Part of the second pillar is simplification of the procedures of doing business within the government. Uzbekistan’s government inherited the Soviet structure. It is very vertical. When it comes to decision making, it takes much longer than it should to make a good decision. So, the simplification agenda should be applied to government work as well. There is also the issue of investing in the training of civil servants with high potential. Again, it's noticeable that very few civil servants want to take decisions; they are frightened of taking decisions. Decisions keep going upwards and are taken at a high level, which overloads ministers and causes further delays. The punishment culture is a problem. People are worried that they are going to be punished if they make a mistake, and so avoid taking decisions. That culture must be changed. It all requires more training in the public service. Exchange programmes, executive education, leadership, and management training should contribute to this. This has worked in many other emerging markets. Interestingly, some Uzbek private sector people have done this type of training at western universities. We need to offer this in the public sector, too. One other area I’m very keen to explore in this pillar of public administration is to improve the capability of some key ministries. I would propose “capability

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I'VE BEEN PUSHING THE IDEA OF CONSIDERING THE CREATION OF AN ENGLISH COMMON LAW JURISDICTION, BECAUSE I THINK THAT WOULD HELP GIVE MUCH GREATER CONFIDENCE TO THE MANY FOREIGN INVESTORS WHO WOULD WANT TO INVEST IN UZBEKISTAN reviews” of some ministries to see whether they really can be improved further, what they need to do, and the implementation of capability improvement action plans for ministries. There is a will from some ministries already to undergo this process. I also have high hopes that the new Agency for Strategic Development that the President approved a few days ago will make a decisive contribution to accelerating reform and showing how government business can be done more efficiently than is the case today. The President will chair the Council for the Agency and DPM Umurzakov will be the Deputy Chair, which is important for the business sector. I will be one of the members of the council. Lastly, the third pillar is advising the President on communications and branding. This includes government communication with the people. It should be two-way communication with feedback from the public, moving away over time from a top-down approach. This also includes talking with business,

and considering more closely what business is saying in consultations. We need to create a more open and frank dialogue between business and government, and here the Foreign Investors’ Council can play an important role, as well as AmCham and the associations representing local businesses. The final part of the third pillar is branding of the country. Uzbekistan’s brand has improved a lot in the last few years, mainly due to the change in the country’s leadership back in 2016, and the implementation of important reforms, especially in the areas of trade and exchange rate liberalisation. More reforms in economic and political spheres are important for Uzbekistan’s future branding. A new and younger generation representing Uzbekistan internationally could be a part of this international branding. – We are aware that you are developing the strategy for economic reform in Uzbekistan. Can you outline main principles of the strategy? – The road map was formally approved on 24 July and I can proudly say that from now on, it is not my road map anymore. The “Road map of Measures aimed at stimulating economic development, improving the efficiency of public administration and international cooperation” is now the responsibility of the state for its implementation. It clearly allocates required actions, responsible government officials, and a timeline. That is a success of placing accountability where it should rest. It starts with the need to design the National Development Strategy 2022-2026. It should be designed in consultation with central and local government, businesses and civil society, and international partners by October and approved by December 1, 2021.

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The implementation of Capital and Financial Markets Development Programme for 2021-2023, as per discussions with AmCham members, should be completed by the end of the next year (2022). It involves development of the draft law on capital markets, including the development of mechanisms of project realisation, i.e. privatisation, IPO, and SPO with participation IFIs. There will also be the development of a comprehensive industrial policy by March 2022 based on analysis of the competitive advantage of industrial sectors in the regions of Uzbekistan. This needs to be linked to an evaluation of the free and special economic zones. As far as I know, currently Uzbekistan is populated with 21 special zones. The obvious question, if there are as many as 21 zones, is what is special, then? I want both industrial policy and free economic zones to be reviewed, analysed, and modernised. Only when this is done, would foreign investors, including AmCham members, be more interested to invest. The government also needs to focus on the development of the programme, by April 2022, for small business and private entrepreneurship recovery after the pandemic period. The analysis of the influence of the taxation system and administrative barriers should be based on the huge experience of the OECD and IFIs in this sector, and in consultation with private sector

companies. We should expect a package of marketoriented measures for the SME sector to be developed by July 2022. Reform of the agricultural sector should be done by March 2022. Three component programmes includes analysis of the cluster system, digitalisation, and analysis of the water management system. Obviously, a lot of work is going into this sector. The government provides full support. I think it is time to look at the cluster system more thoroughly. Is it working? Is it not working? What needs to be improved? Some independent thinking is important here as well. Privatisation and the transformation of state enterprises are a big part of the roadmap. As was discussed before, with privatisation of the major strategic assets, we need to be absolutely sure that the process is transparent and clean. I recommended the creation of an independent committee consisting of non-regional foreign experts to validate the sale of large state assets. There should be a public report by such a committee after each major deal (sale). An important part of the process is the transformation and privatisation of the railways and airports. Generally saying, we need to accelerate the transformation of SOEs in the way I discussed earlier. The introduction of modern corporate governance is an important part of privatisation. In this sense, the capacity of the Ministry of Finance and SAMA needs to be enhanced, as they will have to do a huge amount of work given the large number of SOEs in the

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privatisation program. My concerns are capacity and capability, making sure there are enough resources to properly implement this. Other spheres include improvement of laws relating to public private partnership, the state budget, and public procurement. I cannot emphasise enough the importance of the fight against corruption. During our consultations with AmCham members earlier this year, corruption was mentioned as a huge obstacle to doing business in the country. People in the government also mentioned corruption as the biggest headache they face. I think AmCham and the government should cooperate in this sphere. The Anti-Corruption Agency has a mandate

UZBEKISTAN’S BRAND HAS IMPROVED A LOT IN THE LAST FEW YEARS, MAINLY DUE TO THE CHANGE IN THE COUNTRY’S LEADERSHIP BACK IN 2016, AND THE IMPLEMENTATION OF IMPORTANT REFORMS, ESPECIALLY IN THE AREAS OF TRADE AND EXCHANGE RATE LIBERALISATION. but the question is: does it have enough power? There are plenty of examples in other emerging markets with effective anti-corruption agencies that Uzbekistan could look at and learn from. I have already mentioned the importance of establishing an English Common Law jurisdiction in Uzbekistan. There is also the urgency of settling the several outstanding disputes of Uzbekistan with foreign investors. I would like to accelerate the resolution of those disputes. Within the government there needs to be a better understanding that foreign investors talk to each other, and they have choices. They do not have to come to Uzbekistan; they can go to somewhere else. If you leave disputes unresolved, it is not good for Uzbekistan’s reputation as an investment destination of choice. – Where are the risks that could affect the current trajectory of reforms? – It's accurate to say that 2017, 2018, and 2019 was a key period of reforms, mainly on the macroeconomic side - trade and foreign exchange side. Supply-side reforms have progressed more slowly, largely due to the pandemic. And there will be battles to fight with vested interests who wish to preserve the status quo as it suits them personally, even if it is not in the national interest. This is one of the classic problems in all emerging markets with liberalisation, where controls, licences,

and permits are in the hands of the few, not the many. It is also one of the issues that makes privatisation difficult in emerging markets. Vested interests will put a lot of effort into preventing competition in the privatisation process. I am confident, that if chosen for another term during the presidential election, President Mirziyoyev will want to see reforms speed up.. It is important for creating a transformed country. – What kind of relationship do you have with President Shavkat Mirziyoyev? – We have regular scheduled one-to-one meetings with just one interpreter. The meetings are long (usually 2-3 hours) and often over lunch, including one where I met the President’s family. During the meetings we talk about many things, not just government or policy, but also about family. My father recently died because of COVID. The President wrote to me, and the first thing he asked when he recently saw me in Tashkent was how my mother was doing. The President is very human; we have an empathetic relationship. It is important because we can discuss many things openly. I feel able to speak freely and frankly with him – that is a measure of the quality of our relationship from when we first met. But I am an adviser, not a decision-maker. So, it is important to understand that, while I am free to give my advice, I cannot and should not expect that he will always agree with everything I say, or that he might have to sequence decisions due to the political context. So, we have a very open and supportive relationship. I have to say, the personal warmth between us is very important. – Is there a link between the quality of public administration and the quality of reforms? – I would say pillar 2 – improving the effectiveness of public administration – is absolutely crucial to Uzbekistan’s progress. All the other reforms will not be implemented to a satisfactory standard if public administration does not improve. I mentioned earlier the Resolution on Creation of Agency of Strategic Development of Uzbekistan was signed (PD 6264 dated 19.07.2021). The agency was developed under the leadership of President Shavkat Mirziyoyev and it will be involved in every single action and work of Pillar 1. The agency will be creating expert platforms for interaction among state bodies, international organisations, and entrepreneurs in order to develop measures to solve the systemic problems of reforming economic sectors. The Council of the Strategic Development Agency will be chaired by the President of the Republic of Uzbekistan, Shavkat Mirziyoyev. The Deputy Prime Minister, Sardor Umurzakov, will be the Deputy Chairman. The agency will be headed by the General Director, appointed, and dismissed by the President of the Republic of Uzbekistan. The agency will have an accelerator of strategic initiatives. The purpose of the accelerator will be the prompt and effective solution of acute problems in the field of investment, and the mobilisation of resources of state bodies.

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It will take a few months to get started. I hope the agency will recruit the very best from both public and private sectors. This means the agency will have to pay a good salary, not the usual public sector salary, in order to get the most capable staff. I would love to see the agency involve private sector people as well: maybe private sector people will come for short-time assignments. I did something similar in 1999 in the UK. Private sector experts were seconded for six months to my agency within the UK Government. Their salary was paid by the private sector. For private sector companies there is a benefit in actually having someone inside the government, working on reforms of policy issues that are important for them. From the government side, it is good to have private sector people advising on policy development from the industry point of view. It is a winwin situation from public and private sector viewpoints. Let’s hope the new agency in Tashkent will be similar.

I AM CONFIDENT, THAT IF CHOSEN FOR ANOTHER TERM DURING THE PRESIDENTIAL ELECTION, PRESIDENT MIRZIYOYEV WILL WANT TO SEE REFORMS SPEED UP – In the light of recent changes in Uzbekistan, investment prospects in the country have significantly expanded. What industries do you recommend investors invest in? – Agriculture must be one of the exciting possibilities. It contributes a lot to the share of the country’s GDP. It employs a lot of the population. At the moment, the productivity in the agricultural sector is not high enough. This gives a lot of opportunities for foreign investors to improve the sector’s performance, including through better technology, improved process management, and building the supply chain. In general, this sector has competitive advantage on a global scale as the agricultural products of Uzbekistan are already very well-known in the CIS market. The tourism sector also gives a lot of opportunities to foreign investors. Uzbekistan has fantastic tourist sites like Samarkand, Bukhara, and Khiva, and also much less known but very authentic venues. Tashkent is also worth visiting for a day or two. Tourists really want to get to the regions, to see authentic Uzbek culture. Unfortunately, the quality of hotels in the regions is poor in all categories. Uzbekistan could attract many times more tourists compared to today through diversification of tourist products, improvement of infrastructure, and people’s capacity building in this sector. I am talking about attracting backpackers - a younger generation of tourists, and business tourists, in addition to the 65+

category, which is a most frequent tourist now. For that, an improvement of knowledge of English across the country, a more business-like mindset, and better quality of hotels in the regions are important. So, these are two sectors that should be very open to foreign investment, and AmCham members should be excited by those two sectors very much. – Despite efforts to diversify the economy, fuel, energy, and gold exports continue to play a key role. How can Uzbekistan make the transition to an export-oriented economy with high added value? – Despite the pandemic, Uzbekistan showed positive economic growth in 2020-2021. The forecast for the Uzbek economy in the medium term is positive as well. Development of the country, including diversification of the economy, will depend on the reform agenda, i.e. the continued privatisation programme, PPPs, capital market reform - all those things we have touched on. And those are fundamentally important to developing competition, a strong private sector, and the market economy. In addition to the two sectors I mentioned earlier (agriculture and tourism), industrial policy work mentioned in the roadmap is going to be an important thing. If the analysis is done well, it should clearly indicate other promising sectors for economic diversification. Coupled with other components of the roadmap, it should attract the attention of investors.

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Malika Kadirkhanova, Chairperson of the Senate Committee of the Oliy Majlis on Women and Gender Equality

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ON THE WAY TO GENDER PARITY T

he reforms carried out in Uzbekistan on gender policy are highly regarded by the international community. Experts at the UN and the Inter-Parliamentary Union (IPU) emphasise that Uzbekistan is in line with global processes of expanding the representation of women at the highest levels of government, eliminating gender inequality, and increasing the number of women in parliament, the government, and the judiciary. According to the IPU’s annual "Women in Politics" report and the data of UN Women, in January 2021 the proportion of women in parliament was more than a quarter for the first time in the history of Uzbekistan. Following parliamentary elections at the end of 2019, women accounted for 32% of the deputies of the legislative chamber of the Oliy Majlis, and 25% of the Senate. By this indicator, Uzbekistan entered the top 50 countries, taking 45th place (out of 190), ahead of almost all post-Soviet countries. In Uzbekistan, women make up 48% of the working-age population. This is about 17 million people. Now we see women in all spheres. The proportion of women in senior and managerial positions has reached 26.6%. These are women who, along with men, are able to solve problems and make rational decisions thanks to their hard work and professionalism. The number of women in senior roles is increasing: women are proving themselves as ministers, khokims, and judges, as the heads of industrial associations, banks and companies, and as senior law enforcement officers and as officers in the armed forces. To increase the representation of women in public administration, a reserve of about 16,000 active women has been identified, who are able to occupy leading positions in politics, economics, and public affairs.

IN UZBEKISTAN, WOMEN MAKE UP 48% OF THE WORKING-AGE POPULATION. THIS IS ABOUT 17 MILLION PEOPLE. NOW WE SEE WOMEN IN ALL SPHERES. THE PROPORTION OF WOMEN IN SENIOR AND MANAGERIAL POSITIONS HAS REACHED 26.6%.

Comprehensive work is being carried out to increase their potential and develop their leadership qualities. In May of this year, the Strategy for Achieving Gender Equality in Uzbekistan until 2030 was approved. In addition, the Action Plan for 2021-2022 was approved, which included more than 60 target indicators for achieving gender equality (for example, the proportion of women in leadership positions; the proportion of women judges; the proportion of women in leadership positions in political parties; the number of women with PhDs; the number of women entrepreneurs and farmers, etc.). How justified and appropriate are these quotas? Introducing a quota for women when nominating candidates for political parties, for example, is to increase the representation of women in parliament. More broadly, quotas help to attract more women to the political process, even if they do not take seats in the legislature. Since 2004, when a 30% quota was established for the nomination of female candidates by political parties, the number of women in number in parliament has grown from 9.4% to 16% in 2017, and to 32% today. To achieve gender equality, it is necessary to nominate qualified candidates not only to both chambers of parliament, but also to the local kengashes. We have seen recently how the kengashes’ deputies have been given greater powers, and their effective use by worthy people will contribute to the further democratic development of our country.

BREAKING DOWN STEREOTYPES The problem of gender inequality persists in many countries of the world. I cannot speak on the behalf of the government, but as a senator, I will try to give a parliamentary assessment and my personal opinion on the situation in Uzbekistan. Overcoming inequality is complex and systematic work which requires the active participation of absolutely all structures of the state. Gender issues are not limited

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to women's organisations, as some leaders sometimes think. This component must be deeply embedded in the system of every single organisation. In Uzbekistan, the relevance of ensuring gender equality is dictated by the gap between the principle of equality of rights and freedoms of both sexes enshrined in the constitution, and the actual situation in life. In such spheres as political activity, free access to employment, obtaining higher education, holding leadership positions, free choice of profession, protection of honour and dignity, protection of life and health, decision-making and economic independence, the participation of women is relatively low in comparison with men, despite the fact that the legislation of Uzbekistan is built on the principle of non-discrimination and equality. The stereotypical views that exist in society regarding the role of women in the family, in professional careers, or in politics are not only barriers to ensuring the well-being of the entire population, but also serious obstacles to the construction of an economically developed democratic state. Or another example: Uzbek families typically prefer to invest in the education of their sons, rather than their daughters. This leads to a situation where talented girls who want to study are often deprived of the opportunity for self-realisation. To overcome these systemic barriers and provide education opportunities for girls from socially vulnerable families, President Shavkat Mirziyoyev allocated quotas for their education. In 2020, this opportunity was presented to 950 girls, and this year, 2,000 more girls. I think this is a very important, practical step towards eliminating gender inequality. Since 2021, a system of incentives has also been introduced for women and girls who want to get a higher education, who have ability and knowledge, but due to fate are not able to fulfil their dream. In these cases, the costs for girls from low-income families, those who have lost one of their parents, and single women without a breadwinner, are covered by local authorities and the universities.

I have noted a number of systemic issues which require attention and resolution:

–①– Lack of educational programmes and scientific disciplines on gender equality in higher educational institutions, as well as a shortage of programmes and refresher courses for officials, lawyers, teachers, and journalists.

–②– Low levels of access to higher education, vocational training, and employment. This is largely due to stereotypes about women.

–③– Lack of a gender approach in the preparation and broadcasting of media materials, including films and advertising.

–④– The lack of education of young people when it comes to equal, fair, and responsible interpersonal relationships.

–⑤– Imperfect law enforcement system in the prevention and response to domestic violence. Violence against women is often concealed, which means it goes unpunished and fosters a sense of irresponsibility amongst abusers.

PARADIGM SHIFT The economy is, first of all, entrepreneurship in all its branches and directions. The state ensures equal rights and opportunities for women and men in implementing entrepreneurial activities. In terms of legislation, as I have already noted above, gender equality in the economy is ensured in Uzbekistan. That is, the procedures for registration, carrying out activities (obtaining a license, if a license is required), being a founder (participant), receiving dividends, and the distribution of income between the founders are the same for both men and women. Since May 1, 2019, the country has cancelled the list of "jobs with unfavourable working conditions, where the

full or partial use of female labour is prohibited." In the World Bank’s 2020 Women, Business and Law Index, Uzbekistan was included in a list of 27 countries which have implemented significant reforms in the field of women's rights and gender equality. The country rose five positions in the index, taking 134th place out of 190. Uzbekistan has introduced a system of entrepreneurship training and concessional lending to women entrepreneurs. In order to assist the development of women's entrepreneurship in the regions, women's entrepreneurship centres have been established. In 2020, these centres trained more

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THE MAIN ROOTS OF GENDER INEQUALITY LIE IN THE EXISTING

STEREOTYPES OF PEOPLE’S WORLDVIEW AND BEHAVIOR than 61,500 women through short-term professional courses. As a result, despite the pandemic, the number of women entrepreneurs increased by 2,744 to 172,700. The Women’s Notebook scheme also empowers women to solve women’s problems. Women over the age of 30 who are unemployed, disabled, homeless, or in need of medical or legal assistance can apply for help in the form of loans, one-time financial assistance, and rental housing. A lot of work still has to be done to increase the participation of women in economic processes, especially in the implementation of entrepreneurial activities. According to the International Labor Organization (ILO), 20% of wages depend on gender. Even a higher level of education does not provide women with the same monetary remuneration as men. In Uzbekistan, at the legislative level, there are no norms regarding the infringement of the labour rights of women, especially in matters of wages. But it is quite true that due to the predominant employment of

women in the education and healthcare systems, and in the service sector, their level of wages is generally low. I would like to emphasise two main points which will make a significant difference in the issue of employment. First, women are disproportionately employed in social spheres (education, health care, hotel business, public catering, etc.), and in agriculture and the service sector, rather than in industry. That is, they are employed in the less productive sectors of the economy. Secondly, women are more likely to be engaged in unpaid work (taking care of children and elderly relatives, watching over the household). Worldwide, women deliver about 75% of this type of work. If we imagine that this "invisible" labour were to be remunerated at the minimum wage, the amount would equal to about $10 trillion, or 13% of global GDP. It is logical that the more a woman is engaged in unpaid work, the less time she has for paid work. In my observation, the circumstances of a woman's life also affect their family. Daughters of mothers who had jobs are more likely to find work, earn higher wages, and hold higher positions than the daughters of housewives. In developed countries, women enter the labour market more often because they want financial independence. The difference in remuneration for men and women is explained by a variety of factors: the difference in education, experience (on average men work longer

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in the labour market), the choice of the industry and profession, and the positions held. The birth of children also affects the career and salary of women. It is not uncommon for women to look for part-time or flexible work opportunities after having a child in order to combine work with raising children, and because of this, they lose pay. There is also a gender gap in entrepreneurship: only about 35-40% of entrepreneurs are women. As a former entrepreneur, I can say that women have less access to investment and fewer assets to use as collateral. All this influences the opinions of lenders and investors. In the private sector labour market, preference is usually given to men. Sometimes this is due to the cost of paying for maternity and other provisions guaranteed by the Labour Code.

THE HIGHER THE POST, THE SMALLER THE NUMBER OF WOMEN EMPLOYED Women occupy fewer leadership positions than men, and the higher the position, the greater the gap. I think Uzbekistan is not alone here. This is very typical for all of our neighbours, and in general for most eastern countries. You can relate to the eastern mentality in different ways, but I believe that it determines the career trajectory of women in our countries However, as I said above, work in this direction has already begun in Uzbekistan. To ensure the targeted training of women for leadership positions, a project is underway to improve the qualifications and managerial potential of women who are willing

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and able to actively participate in state and public administration. We currently have more than 16,000 of them. The appearance on the horizon of women leaders who want to occupy high positions in public administration speaks not only of the level of their activation, but also of a change in the consciousness and outlook of people close to them, especially fathers and husbands. The professional community is a part of the whole society. Therefore, only by securing a worthy place for women in society can we talk about their professional growth. My opinion: a consistent and comprehensive solution to gender equality issues is the key to success.

IS SOCIETY READY FOR A WOMAN TO LEAD THE COUNTRY? The Constitution of the Republic of Uzbekistan does not establish gender restrictions for candidates.

Probably everyone remembers that in our country in 2007, a female candidate stood for the presidency. Personally, I do not exclude the likelihood of a woman candidate for the presidency in the upcoming elections. Moreover, the appearance of a woman candidate in the current political conditions in Uzbekistan would be quite logical. The radical changes taking place in the country in recent years, the policy of openness, and truly democratic reforms pursued by Shavkt Mirziyoyev, including in the field of ensuring gender equality, have radically changed and expanded women’s opportunities, unlocking the potential of women in the country. Personally, I think that for now, our society is not ready to see a woman as president. But if the government consistently follows the current course of political reforms and has successes in socioeconomic development, this will become a very feasible prospect.

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THE DIALOGUE BETWEEN THE GOVERNMENT AND INVESTORS Tatyana Bystrushkina, Executive Director, the American Chamber of Commerce in Uzbekistan

Policy dialogue between the government of Uzbekistan and foreign investors is one of the top improvements over the last few years. It is undoubtedly a breakthrough since the public-private relationship scarcely existed a few years ago. Currently, the dialogue exists at two levels: a working group level, and top level. An extensive reform agenda under leadership of President Mirziyoyev and guided by adviser Sir Suma Chakrabarti has enabled foreign investors to contribute to economic development and reform through the creation of the Uzbekistan Roadmap 2021-2025. Similarly, significant breakthroughs in the business and investment climate were implemented via regular consultations between key AmCham members and Sadyk Safoyev, First Deputy Chairman of the Senate. Working level consultations on specific sectoral legislative developments were instrumental in working out the new Labour Code and improvement to the tax legislation. Representatives of the AmCham HR Committee joined the Senate committee to give input on the new Labour Code, and 30% of

their recommendations were included in the draft. The Tax and Accounting Committee submitted recommendations on the administration and implementation of VAT, 35% of which were included in the new draft law. The Fast Moving Consumer Goods (FMCG) Committee raised more than 15 policy issues relating to legislation with different ministries and agencies. Despite the success in certain spheres, overall, the public private sector dialogue was fragmented, not structured, lacked coordination and in many cases was driven by the personal initiative of the government officials or advisers. This is a risk, as given the frequent rotation of government officials between ministries and agencies, many months of policy work could be lost with the main point of contact moves to another ministry. It also requires a lot of effort to push for the dialogue to be regular and consistent, so that there are tangible results (i.e. policy change), rather than just a one-off event. All these challenges are natural for the current, nascent stage of public-private sector dialogue. Therefore, borrowing the best practice of other

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PUBLIC-PRIVATE SECTOR DIALOGUE SHOULD BE INSTITUTIONALISED, REGULAR, AND CONSISTENT, AND CONDUCTED AT THE

HIGHEST LEVEL

countries (whilst considering local characteristics) would be an efficient way to pursue it. Public-private sector dialogue should be institutionalised, regular, and consistent, and conducted at the highest level. Policy dialogue platforms play a significant role. The most efficient policy dialogues are those which influence decision making at the highest level. Therefore, in Central Asia the most successful policy platforms involve the regular participation of the President or Prime Minister. During these meetings, business associations can get a political decision directly from decision maker, which is later implemented at working level. This dialogue is of mutual benefit as the government receives first-hand information on the situation in a particular sector from the biggest investors in the country.

A good example is AmCham in Kazakhstan, where the Prime Minister’s Council aimed to improve the investment climate. Initiated by Prime Minister Karim Massimov in 2012, this forum holds monthly meetings between an AmCham panel of leading investors and a panel of government ministers. It is chaired by the Prime Minister. There have been several initiatives to create policy dialogue platforms in Uzbekistan: The Foreign Investors’ Council (FIC) was created in 2019 to facilitate direct dialogue between the Government of Uzbekistan and investors, including international financial institutions. It was planned that the FIC would have two interim sessions a year, headed by the Deputy Prime Minister for Investments and Foreign Economic Affairs. Working groups on topics such as banking, corporate law, valuation and privatisation, and anti-corruption will further contribute to legislative developments. The first two sessions were held in April and November 2019, but unfortunately the FIC’s plenary session, chaired by President Mirziyoyev, is still pending to due to COVID-19. Business Ombudsman (Commissioner for Protection of Rights and Legitimate Interests of Entrepreneurs under the President of the Republic of Uzbekistan).

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The business ombudsman in Uzbekistan is a new institution, created in 2017. He or she is appointed directly by the President. While it is good that this post reports directly to the President and thus is independent of political and other influences, the issue of how best to make independent decisions persists. The institution of the business ombudsman is perceived as the most reliable platform by private business in Kyrgyzstan and Ukraine, because it is an independent body. The independent board of directors ( BoD) includes representatives of three parties: the government, business associations, and donors. To make a decision on a particular case, the three parties should agree unanimously. The business ombudsman is selected by the BoD. When the BoD sees systematic issues leading to problems, they develop policy recommendations. In addition, all business associations are members of the business ombudsman, and the largest associations are represented on the BoD. This utilises the expertise of the private sector, ensures their representations are heard, and builds trust. Civil society and the free press The third sector and media play an important role in lobbying for private sector interests. Uzbekistan

has made a break-through in liberalising civil society and the press, and strengthening their roles in the government’s decision making. Today, more than 300 associations are registered with the Ministry of Justice. These include both the representatives of multi-sectoral business interests(AmCham, Uzbek Chamber), and also sectorspecific groups, such as the associations of freight forwarders, beekeepers, silk producers, and others. Unfortunately, the involvement of these associations in regulatory and legislative process is still limited.

THE MOST EFFICIENT POLICY

DIALOGUES ARE THOSE WHICH INFLUENCE DECISION MAKING AT THE HIGHEST LEVEL. THEREFORE, IN CENTRAL ASIA THE MOST SUCCESSFUL POLICY PLATFORMS INVOLVE THE REGULAR PARTICIPATION OF THE PRESIDENT OR PRIME MINISTER

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Associations can join the regulatory and legislative process only at the public discussions level, when draft laws are being developed, and passed by the legislative chambers. It is counter-productive that these business associations are given just 3-5 days to provide comments on draft laws. Impact assessment from private sector players could have great value for the quality of legislative acts if more time were allocated for consultations and recommendations. For example, in some countries, interested parties are given 30 or more days to submit their recommendations for draft laws. A more transparent legislative process and a clear time framework for public consultations and hearings could be a solution. The involvement of industry (incuding business associations) in drafting legislation that will potentially impact subsequent regulations could be an effective way to escape pitfalls. Business associations could improve the efficiency of the law-making process as they could provide expertise from industry players who deal with relevant issues on a daily basis. The recent creation of the Agency of Strategic Development of Uzbekistan seemed like a serious

step to building expert platforms for interaction between state bodies, international organisations, and entrepreneurs and business association. The agency’s council will be chaired by President Mirziyoyev, and Deputy Prime Minister, Sardor Umurzakov, will be the deputy chairman. The agency will be headed by a general director, appointed and dismissed by the president. The agency will have an accelerator of strategic initiatives. The purpose of the accelerator is the prompt and effective solution of acute problems in the field of investment, and the mobilisation of resources of state bodies. As per the resolution, heads of all key ministries, advisers to the president, and the chairman of the Chamber of Commerce and Industry of Uzbekistan will all in involved. It will take few months to see how it will work, and the third sector has high hopes for the inclusion of independent voices of business in this high-level forum. If they are not included, the situation will echo the situation described in a famous saying by Dorothy Ann Richards, Governor of Texas: “If you are not at the table then you are on the menu.” It would end up as just another platform to for show.

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At the turn Where the global technological challenge will lead Central Asia? Rustam Makhmudov, Senior Lecturer, University of World Economy and Diplomacy

entral Asia is facing an increasingly clear challenge from the fourth industrial revolution, which cannot be ignored since it is aimed at a fundamental transformation of the technological and industrial paradigms, as well as the geopolitical, financial, and value balance of power in the world.

TECHNOLOGICAL TWILIGHT

its own and was forced to do so within the framework of projects of other actors.

The speed of transition to new technologies and methods of developmwwent of innovations and production is already such that it is gradually becoming a new watershed between the developed world and those who are forced to follow the catch-up development. It is obvious that Central Asia exists mainly in the format of technologies of previous industrial revolutions - inefficient from the point of view of consumption and unfriendly to the environment. Therefore, countries have an appropriate scientific and educational base, economic and value systems.

Will the region be able to take prompt action this time to take advantage of the opportunities presented by the transition to a new industrial revolution? The answer to this question is critical. The problem is that we have to find out which country is not just ready, but capable of accepting this challenge and becoming the engine of Central Asia in its transition to a new technological order.

At the same time, Central Asian intellectuals and politicians, analyzing the events taking place in the world, today more and more understand that the world is rapidly changing under the influence of technology, and in this regard, our region should in no case miss the «innovative express» rushing by at full steam and not waiting until Central Asia is ripe to jump into it. This is not the case when you have to adhere to the Hegelian rule that «Minerva’s owl flies out at dusk.» Technological twilight is almost insurmountable for those who arrive at the time of their onset. Similar twilight has already happened in the history of Central Asia when it was unable to enter the modern space on

This status can be claimed by Uzbekistan and Kazakhstan. Both countries have recently begun to take steps to introduce digital technologies within the framework of the adopted Strategy «Digital Uzbekistan - 2030» and the program «Digital Kazakhstan». Meanwhile, speaking about the programs and processes of digitalization in Uzbekistan and Kazakhstan, which can become the drivers of digitalization of the entire region, it is nevertheless necessary to clarify one important point. Are we talking in this case only about

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TECHNOLOGY RACE Technologies have been strategically important since ancient times, and leadership in them has provided many advantages. Therefore, they tried to maintain a monopoly on breakthrough technologies as long as possible. An example is the efforts of medieval China to maintain its monopoly on silk and porcelain production technologies, which allowed it to channel huge financial flows from foreign markets into its economy. At the same time, the ownership of a monopoly on a certain technology has always been a rather hectic business, since it caused the desire of competing powers to deprive the monopolist of its advantages, including through military force or industrial espionage. In the modern era, the phenomenon of obtaining and forming a monopoly on technology continues to remain relevant and is most clearly expressed in the form of a monopoly on the creation and management of its technological zone. According to the theory of Khazin-Grigoriev, the First and Second World Wars, as well as the Cold War, were nothing more than manifestations of the struggle of several European, North American, Japanese, and Soviet technological zones. It would seem that the Cold War ended in 1991 after the collapse of the USSR when there was only one technological zone - the American one, whose monopoly has lasted for 30 years and which includes Europe and Asian technology leaders. The United States has managed to build a complex system, in the center of which is the American post-industrial technological metropolis, which exercises technological re-equipment based on imported technologies, technological products, and knowledge, or is it still about creating our own center for generating innovations, ideas, and technologies? This is a fundamental point. If we are talking about the first option, then this is a completely feasible task. The current world technology leaders will gladly sell their products and help implement programs for digitalization and technological re-equipment of the economies of Central Asia, as well as assist in the subsequent maintenance of the sold high-tech products. The only question is the ability of countries to pay for goods and services. If the question is about creating country’s own center for generating innovations, ideas, and technologies, then the task seems to be much more complicated, which will give Uzbekistan and Kazakhstan the opportunity to take part in receiving dividends from the process of the new distribution of world wealth, that has begun. However, to achieve this goal, the purchase of technological products and digitalization alone will not be enough. It will be necessary to implement a more ambitious strategy that takes into account not only scientific and technological but also closely related geopolitical aspects.

OUR REGION SHOULD IN NO CASE MISS THE «INNOVATIVE EXPRESS» RUSHING BY AT FULL STEAM AND NOT WAITING UNTIL CENTRAL ASIA IS RIPE TO JUMP INTO IT control and retention of its technological zone through the instruments of financial, consumer, military, patent, and other types of influence. However, the technological end of the story appears to have been announced prematurely. Historical logic says that sooner or later someone will always try to challenge a monopoly. This time, China has volunteered for a similar role, aspiring to become the leader of the fourth industrial revolution.

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Beijing has decided to place a key stake on the Made in China 2025 program, which is part of its 2050 strategy of transforming China into a self-sufficient technological metropolis and conquering significant segments of the world market for innovations and solutions. The most important part of these ambitious tasks is the Belt and Road Initiative, which provides for the creation of transport communications and infrastructure through which Chinese goods can be quickly and easily supplied to sales markets, including those produced using new technologies. The combination of Made in China 2025 and the Belt and Road program should ultimately lead to the emergence of a global Chinese technology zone tied to the PRC’s technology metropolis. It was quite expected that the United States, which has a monopoly on the technology zone, would not just sit around and watch Beijing’s attempts to deprive them of their advantages. Washington began to take the most active steps during the administration of President Donald Trump when the increasing pressure began on Chinese technology companies and their

THE SPEED OF TRANSITION TO NEW TECHNOLOGIES AND METHODS

OF DEVELOPMWWENT OF INNOVATIONS AND PRODUCTION IS ALREADY SUCH THAT IT IS GRADUALLY BECOMING A NEW WATERSHED BETWEEN THE DEVELOPED WORLD AND THOSE WHO ARE FORCED TO FOLLOW THE CATCH-UP DEVELOPMENT. foreign partners, linked within the framework of shared value and supply chains. Among the measures taken by the White House, one can note the imposition of restrictions for investors from the PRC on access to the American market for innovations and knowledge, including the creation of constantly growing black

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lists of Chinese companies through which attempts can be made to gain access to breakthrough American technologies. The biggest pressure came from the leader of the Chinese IT industry - Huawei corporation and some of the Western countries cooperating with it in the implementation of 5G technologies. The US-China technological and geopolitical race is likely to continue unfolding in the foreseeable future, which could put Central Asia in a situation where it finds itself caught between two global projects - the established American and the emerging Chinese techno-zones. This, in turn, will generate both serious challenges and open a window of opportunity for the programs of the countries of the region to create their own scientific, educational, and production base of the fourth industrial revolution, ecosystems of startups and venture capital, and the development of the domestic market for the consumption of new generation goods. But whether the Central Asian countries will be able to take advantage of them will largely depend on a whole

range of factors, including the diplomatic skill of the region’s capitals and their ability to flexibly and quickly harmonize internal development programs with longterm trends.

INNOVATION FOR INTEGRATION The new regional course of Uzbekistan has suspended some of the indicated processes. But so far it is difficult to say what awaits the region in the future, despite the fact that it is not a “thing in itself”, but is under the constant influence of external processes. Some of these trends are already being generated or will be generated by the fourth industrial revolution. The disintegration was reflected both in the trade and economic sphere (for each of the Central Asian countries, foreign markets were more important than the regional market) and in the military-political sphere. Prerequisites for disintegration in the linguistic sphere have

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In both cases, the Central Asian countries will need to closely monitor the development of the economy of the fourth industrial revolution in China, the European Union and Russia, which today are their leading trade and economic partners, and in the case of the Russian Federation, also the leading importer of labor. How the Central Asian countries will behave under the increasing influence of the trends generated by the new industrial revolution and how this will affect the phenomenon of integration in the region is still an open question. If we assume that, for example, Uzbekistan or Kazakhstan will successfully enter a new technological order, and their neighbors will lag behind them in this process, then we can talk about the risk of new, even more, significant gaps within the region at the economic, scientific and technological level.

emerged, which is expressed in the gradual weakening of the Russian language as a factor of interethnic communication in the region, as well as in the sphere of shared values and world perception, as a result of the erosion of modern values and the rising post-secular revival. The remaining vacuum in the formulation of the key postulates of Central Asian supra-identity also contributes to the threat of disintegration. The new regional course of Uzbekistan has suspended some of the indicated processes. But so far it is difficult to say what awaits the region in the future, despite the fact that it is not a “thing in itself”, but is under the constant influence of external processes. Some of these trends are already being generated or will be generated by the fourth industrial revolution. The point is, first of all, that with the further development of knowledge-intensive industries and the reduction in the cost of their products, the role of cheap low-skilled labor, which was the engine of development of many countries in the XX century and the reason for the emergence of value-added chains under the previous model of globalization, is likely to decrease. This will mean that the rate of some Central Asian countries on cheap labor when attracting foreign manufacturing companies may lose its effectiveness in the long term. The rate on the export of cheap labor to generate foreign exchange flows may also suffer. Most likely, the role of suppliers of many types of raw materials may also decrease in the case of rapid development of the «green» economy and an increase in its share in the total volume of economic growth.

Gaps in the region can manifest themselves at the worldview and value levels since a change in the economic base invariably entails a transformation of values and perception of the world among significant masses of the population. This was clearly shown by the American historian Christopher Lash in his famous book «The Rise of the Elites», which shows the emergence of new elites in the United States, by which he understands the upper-middle class, whose worldview is multiculturalism due to the fact that representatives of the new elites receive their main income from participation in transnational economic processes. Potentially, gaps in the region could also manifest themselves in the area of security. Those countries that cannot fit into the new technological order run the risk of facing problems against the background of a general decrease in the need for cheap labor, as well as an outflow of qualified personnel. This may result in an increase in the potential of internal instability in them and, as a consequence, the emergence of a gap between them and more stable countries that are successfully entering the new technological order. Given the threat of such disintegration gaps, it already makes sense to think about how to prevent their appearance and to deploy the processes of the fourth industrial revolution in Central Asia in such a way that they move towards preserving the region as a single integrated phenomenon and space. And Uzbekistan and Kazakhstan could play a very significant role here. The possible impact of the fourth industrial revolution on the region is not limited to the identified challenges. Their range is very wide and their study is only at the initial stages of its formation. It is likely that the relevance of the issue of the influence of the new techno-order on the region will grow in the near future as the processes of introducing innovations in world economic centers accelerate, competition in the field of technological geopolitics intensifies, and new values and worldview forms are strengthened. For Central Asia, they will all be in the form of a challenge, and in some cases even a challenge to the existential, the formulation of an answer to which the countries of the region will have to in any case.

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THE ART OF

REFORM

zbekistan has been pursuing comprehensive reforms since 2017 to improve the livelihood of its citizens, create an enabling environment for private sector development, and facilitate trade and cooperation with neighbours. The reform agenda envisages modernising the economy and moving towards upper middle-income status. There are, however, significant challenges associated with public institutions, which are far from offering the most effective public services. Significant reforms in stateowned enterprises are warranted. Uzbekistan needs to improve its performance in governance, effectiveness, rule of law, and accountability, which are much needed for private sector development and competition. In addition, the current economic reforms put a significant strain on public finance. There is a need to mitigate the adverse effects of the reforms, such as price increases stemming from structural changes on lowincome households, and to avoid rising vulnerability and inequality. To address these challenges, ADB adopted its partnership strategy with Uzbekistan for 2019-2023 with the aim of supporting Uzbekistan in economic transformation. The strategic objective is to support the country’s movement towards a vibrant market economy, including transformation of the role of the state. The government’s ultimate objectives of improving the quality of peoples’ lives and creation of decent jobs can only be achieved by developing a robust private sector and reducing the state’s pervasive footprint in the economy. In this transition, ADB provides policy advice, investments, and capacity development in three strategic areas: (I) supporting private sector development; (II) reducing economic and social disparities; and (III) regional cooperation and integration.

The Country Partnership Strategy supports the government’s reform vision. It is also in line with ADB’s Strategy 2030, in particular, with its operational priorities on strengthening governance and institutional capacity; addressing remaining poverty and reducing inequalities; promoting rural development; making cities more liveable; and fostering regional cooperation and integration. The choice of ADB assistance areas during the strategy period is governed by the government’s readiness to pursue wide-ranging reforms, coordination with development partners, and ADB’s value-addition. ADB has a long presence in Uzbekistan and in Central Asia, vast experience in reforming former Soviet economies, and is seen as a trusted partner in regional issues. As a leading partner in infrastructure sectors, ADB has accumulated in-depth knowledge and experience, and is able to provide integrated solutions-combining multisector approaches and advanced technologies with finance, partnerships, and knowledge-specifically suited to Uzbekistan. To date, we are largely on track in achieving expected results of the strategy by 2023. COVID-19 is adversely hitting all countries and Uzbekistan is not an exception. Despite the pandemic, Uzbekistan pursues the reforms and ADB continues its planned operations and support to reforms.

Prepared by the ADB office in Uzbekistan

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PARTNERSHIP FOR PROSPERITY U

zbekistan plays a pivotal role in forging regional stability, prosperity, and security in Central Asia, including in neighbouring Afghanistan. Its natural resources, infrastructure, and reform-oriented government holds the potential to increase regional trade and bolster economic growth.

USAID’s partnership with Uzbekistan began soon after the country’s independence. Since 1993, the American people, through USAID, have provided over $500 million for programmes that support the development of a prosperous Uzbekistan. Agriculture in Uzbekistan employs 27 percent of the labor force and accounts for nearly 20 percent of Uzbekistan’s export earnings and about 17 percent of its GDP. Horticulture has considerable untapped economic potential. As the country adapts and diversifies its economy, the horticultural sector also calls for new approaches to effectively compete in global markets. From 2015 to 2020, USAID’s Agricultural Value Chain activity contributed to an increase in horticultural exports of 250 percent. USAID supported 510 organisations and businesses, linking Uzbek exporters and consolidators to global buyers ready to pay high prices for quality products. Since Uzbekistan is landlocked, transportation to key markets in Asia and Europe is one of the most significant barriers to increasing horticultural exports, especially for fresh fruits. To reduce the transportation and logistic barriers for Uzbek exporters eager to test new markets, USAID introduced pallet-ready technologies and market-specific packing materials to facilitate shipments.

USAID also conducted a people-centred study on buying preferences of consumers in international markets, increasing producers’ understanding of what drives the international consumer to buy fruit. Understanding consumer preferences and buying habits in Latvia, Dubai, and Hong Kong allowed Uzbek exporters to better package, brand, and market their products to fit the consumer culture of each location. Leveraging the gains made in advancing Uzbekistan’s exports through USAID’s Agricultural Value Chain activity, USAID will continue to harness the country’s export potential through its newly launched Agribusiness Development activity. In addition, USAID is providing technical assistance to help Uzbekistan to join and comply with World Trade Organization (WTO) procedures, enabling it to benefit from participation in the rules-based system of global trade. With USAID’s support, Uzbekistan has joined the International Plant Protection Convention (IPPC), which sets global pest management standards. The IPPC is an international treaty that applies to most nations involved with international trade in any commodity that could introduce a new plant pest into a new area; in other words, it is applicable to all trans-boundary movements of plants and plant products. Membership implies that Uzbekistan can

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play an active part in developing international standards which help to protect its exported and imported goods.

to develop flexible generation capacities and become a responsible member of a regional electricity market.

In the energy field, USAID is committed to helping Uzbekistan in liberalising the power sector to encourage greater private investment, rebuild a regional Central Asian power market, and generate low-cost energy using a diverse mix of energy resources, particularly wind, solar, and hydro.

Across Central Asia, USAID works to address water management challenges by helping crossborder communities to cooperate with their neighbours, while helping governments to better manage shared water resources.

USAID is helping to advance regional electricity connectivity through the Central Asia Regional Electricity Market, or CAREM. CAREM supports a regional electricity market which can deploy low-cost power from across Central Asian to meet the needs of each country in support of greater economic and social development. An integrated electricity market will save money, enhance energy security and economic stability, and facilitate commercial trade transactions and attract investments in the power sectors of all five Central Asian countries. Applying market-based mechanisms which drive down the costs of grid-connected renewable energy and improving system operations and energy efficiency of existing generation facilities, can increase deployment and integration of regional wind and solar energy to improve cross-border cooperation. USAID is providing Uzbek energy specialists and government policy makers with global best practices, technologies, and analysis to plan and build a national power grid which is capable of integrating high-levels of renewable energy, helping the country reach its clean energy goals through the Power the Future activity. In addition to stabilising the Uzbek grid, energy storage would allow the country

USAID’s work empowers communities to apply integrated water resources management principles and tools among various stakeholders. Our regional work on transboundary water resources management is aimed to promote stability, economic prosperity, and healthy ecosystems in Central Asia and Afghanistan. In Uzbekistan, USAID has helped to develop procedures for accounting, reporting, and monitoring of water resources and the arrangements for preparing safety declarations for hydro-technical infrastructure. Through the new USAID Regional Water and Vulnerable Environment activity, we will strengthen regional capacity to manage shared water resources and mitigate environmental risks in the Syr Darya and Amu Darya river basins. With the establishment of a bilateral mission in October 2020, USAID will continue programmes focused on improving economic growth, private sector development, agriculture, education, health, water resources management, and rule of law, as well as issues related to migration and people trafficking. The new mission will allow these programmes to be targeted effectively and will strengthen USAID’s relationships with an even wider range of local partners. Prepared by the USAID office in Uzbekistan

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BUILD BETTER INVESTMENTS Cassandra Colbert, IFC Regional Manager for Central Asia

ligned with the World Bank Group’s Country Partnership Framework, IFC focuses on a two-pronged approach to support private sector development in Uzbekistan. This includes a combination of investment and advisory services, which emphasises four pillars: i) making markets work with an emphasis on agribusiness, the financial sector, and the chemicals industry; ii) enhancing inclusion through better health care and access to finance; iii) improving connectivity through trade integration, private sector participation in transport infrastructure, and de-monopolisation in telecoms/information and communications technology sector; and iv) enhancing sustainability with a focus on energy and utilities. While the IFC-Uzbekistan partnership has grown and evolved over the years, as of May 1, 2021, IFC had US$160 million in investment commitments in Uzbekistan. Through our advisory programmes, we aim to help the government in preparing state-owned banks for privatisation, developing and diversifying the financial market, modernising the chemicals industry, and piloting public-private partnerships (PPPs) in the power and health sectors. In the banking sector, where the share of state-owned banks is still high, IFC is helping develop a competitive and well-capitalised private banking sector that will provide a wide range of lending services and muchneeded finance to businesses. Some of the examples below highlight the IFC’s recent and ongoing efforts to increase access to finance and promote inclusion in Uzbekistan: • Pre-privatisation advisory support to help the stateowned Ipoteka Bank transform into a commercially viable private bank, and a loan to expand its

• •

•

financing to small and medium enterprises (SMEs) in the country. A loan to Ipak Yuli Bank to better manage its currency risks and extend local-currency finance to SMEs. A loan to DAVR-BANK to expand financing for micro, small, and medium enterprises, as well as women-owned businesses, to help them grow and create jobs. Trade finance lines to Ipak Yuli Bank and Ipoteka Bank to boost cross-border trade, supporting Uzbekistan’s exporters and importers. Pre-privatisation advisory support to help transform Uzpromstroybank, assisting it to develop a strategic approach to financing SMEs and become the first bank in the Central Asia region with greenfinancing capabilities. Supporting the Central Bank of Uzbekistan to promote electronic financial services and financial literacy in Uzbekistan.

Long before COVID-19, the government initiated an ambitious and broadscale power sector reform plan. The ongoing pandemic further reiterates the need to increase the pace of implementation of these reforms. This is especially relevant because reliable electricity supply is even more critical for sustained medical services, working or studying remotely, among other aspects of our new normal. Since 2018, together with the World Bank, IFC has been advising the government on how to open up the power sector to private investment by implementing PPP projects that can attract foreign capital in an efficient and transparent manner. Below are a few examples that showcase IFC’s work in Uzbekistan’s power sector:

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• IFC helped the government with the first solar tender in Uzbekistan, which resulted in competitive renewable energy prices. IFC also provided longterm debt financing to this very first private-sector led 100 MW solar power plant, which is being built in the Navoi region. • IFC is advising the government on the implementation of two other PPP projects, which will lead to the creation of photovoltaic solar parks with a combined capacity of 400MW. • IFC is assisting the government to structure a transparent and competitive tender process to develop a 1,200-1,500 MW gas-fired power plant in the Syrdarya region. Uzbekistan, along with other Central Asian countries, is among the most vulnerable to climate change in Eurasia. With global climate warming expected to adversely affect the demand and supply of energy, IFC focuses on supporting environmentally sustainable projects. We are interested in financing solar, wind, clean energy generation from traditional sources, and other clean power solutions. The chemicals sector is a crucial sector for IFC in Uzbekistan as it has high development potential and is ready for modernisation. The growth of the sector has been thwarted by inefficiency, which explains why Uzbekistan’s economy is among the least energy-efficient globally. The modernisation of the chemicals sector will not only be critical for the country’s competitiveness, but also for improved energy efficiency. Some of our projects include: • Supporting JSC Indorama Kokand Fertilisers and Chemicals to finance the modernisation of its phosphate fertiliser plant in Kokand through a long-term loan and advisory work. The company

used our loan to improve resource efficiency in its production facilities. • Supporting the government in transforming the fertiliser industry, creating a level playing field and a conducive investment environment to encourage private sector participation. IFC is also committed to assisting the government in implementing health PPPs to improve the quality of health services, upgrade the country’s hospital infrastructure, and attract private investment in the health-care sector, all of which are particularly important given the COVID-19 crisis. We have been working on several projects with the government of Uzbekistan, as below: • As a transaction adviser, IFC is helping implement a first-ever PPP project in health to deliver the much-needed dialysis care for patients in the city of Tashkent, the Republic of Karakalpakstan, and the Khorezm region. • IFC is helping structure a PPP project to finance, construct, equip, and maintain a new multidisciplinary hospital, and a separate PPP project to finance, construct, equip, train medical staff, and provide radiotherapy services to cancer patients in three regions of Uzbekistan. Going forward, IFC will continue to support Uzbekistan’s economic transformation by helping the government strengthen the country’s private sector and implement pro-business reforms. We are also working to bring in expertise, know-how, and private investors in key sectors of the economy. We are confident that IFC’s concerted efforts, in sync with the government’s development vision, will help create jobs, eliminate poverty, and boost prosperity, while ensuring sustainable and inclusive growth in Uzbekistan.

INVESTMENTS

DYNAMIC UZBEKISTAN

DOES UZBEKISTAN NEED

ENGLISH LAW? Diana Baizakova Director of the Tashkent International Arbitration Center (TIAC) at the Chamber of Commerce and Industry of Uzbekistan

here is largely a consensus that parties to international or cross-border transactions and/or large infrastructure projects choose English law (which is technically the law of England and Wales) to govern their contractual relationship, even when there is no nexus with the UK (read: any link or connection to the UK in the contract, place of performance or the like), because of its predictability and transparency. For example, a construction contractor from Italy which won the tender to build a metro project in Qatar would most probably favour English law to govern its contractual relationship with its client. Likewise, the chances are that an Emirati company investing in a project in Uzbekistan would also insist on English law for its contractual relationship with Uzbek partners. We have seen the exponential expansion of the

“common law” enclaves, predominantly in the Middle East, over the past decades. As an example, the legal systems of Dubai and Abu Dhabi are premised on civil law concepts, but are also intricately intertwined with Sharia or Islamic law. The Dubai International Free Centre (DIFC) and the Abu Dhabi Global Markets (ADGM) have their own legal and regulatory framework, which is different from the UAE federal legislation, despite being located in the UAE. DIFC has its own Companies Law and Employment Law, amongst others, and so has the ADGM. Companies operating in the DIFC and ADGM are subject to their respective regulations, and so are the employees of those companies, and their assets and properties located within the DIFC and ADGM.

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Recently, the Astana International Financial Centre (AIFC), an economic free zone located in Nursultan, has become another home to hundreds of companies. Their operations are regulated by the AIFC’s unique legal framework, which is based on English law.

If the business community does need a separate economic zone, with its own financial, employment, and company regulations modelled on English law, there is a whole gamut of considerations. These must be carefully evaluated for it to work effectively, and alternative options might be suggested.

Does Uzbekistan need a similar free economic zone?

Firstly, the financial implications for the establishment of a free economic zone are serious. Substantial investment would be required to build the infrastructure, including both premises and the development of regulations or other legal infrastructure from scratch, with the involvement of external counsel. How long would it take to reap the benefit of such investment, to actually see a return or reach the breakeven point, where the revenues generated exceeds the expenses of building and running it? That is a question which must be carefully researched, consulting similar free economic zones elsewhere.

The answer to this question lies in the requirements of the business community. A clear distinction must be drawn between a desire to apply English law to their contracts or contractual relationships; or whether businesses want their companies/assets/ properties, operations, and labour resources to be subject to English law. If the business community wants the predictability of English law in their contracts, there is already robust infrastructure available to enforce contracts governed by English law. Indeed, a foreign company doing business in Uzbekistan may not only insert English law as a governing law of its contract with the local partner or a supplier, but also enforce an English law contract if a dispute arises. The Tashkent International Arbitration Centre (TIAC) at the Chamber of Commerce and Industry of Uzbekistan is already administering cases between foreign and local companies, where foreign laws (including English law) were chosen to interpret the contractual obligations of the parties and to decide who bears the liability to rectify the damage. With the decision of an arbitrator based on the interpretation of the English law, which is final and binding (subject to very narrow procedural grounds for challenge and appeal), the winning party may, as an example, freeze the assets and/or bank accounts of a defaulting party from Uzbekistan. However, there is a fundamental prerequisite for this to happen: parties shall include the dispute resolution clause in their contracts referring to TIAC Rules of Arbitration.

Secondly, there would be a substantial increase in the need for qualified legal practitioners trained in English law. While the TIAC did recently launch its English law educational wing to help local legal practitioners qualify as English law solicitors, time and effort would be required to raise the local talent qualified to provide such legal advice. And last but not least, the effective integration of the free economic zone’s new legislation modelled on English law (with its financial, insolvency, partnership, company, employment, property, and other regulations) into the existing legislation of Uzbekistan is key. This is a sensitive area with implications which would be felt in decades to come. How such integration could be conducted efficiently and in collaboration with the local court system (even if the new zone will have its own English courts) remains one of the most important questions to address.

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INVESTMENT ACTIVITY IN REPUBLIC OF UZBEKISTAN I

n this article, the authors review different ways to invest in Uzbekistan and the specifics which may be relevant for investors when they are considering investment opportunities in the country.

Investment activity in the Republic of Uzbekistan (RUZ) is regulated under specific regulations and can be carried out in the following ways: investment contract; private-public partnership; and privatisation. Below we have provided the specifics of each investment type, including general definitions, possible forms, source of financing, and potential preferences.

trademarks, utility models, industrial designs, trade names, know-how, and business reputation (goodwill), as well as trade and service items and the land on which they are located; • acquisition of the right to own and use land plots (including on a lease basis) and other natural resources.

INVESTMENT CONTRACT

According to the Investment Law, investments are defined as tangible and intangible assets and the rights to them, including rights to intellectual property, as well as reinvestments made by the investor on a risk-bearing basis in social facilities, entrepreneurial, scientific, and other activities in order to make a profit, which may include:

Definition, forms, and sources of financing In accordance with the law “On investments and investment activity” dated 25 December 2019 (“Investment law”), investments may be carried out through the following forms: • creation of legal entities or equity participation in their charter capitals, including through the acquisition of property and shares; • purchase of securities, including debt obligations, issued by residents of the RUZ; • acquisition of concessions, including concessions for exploration, development, extraction, or use of natural resources, as well as participation in a production sharing agreement; • acquisition of property rights, including ownership of intellectual property, copyrights, patents,

• funds, including monetary funds (including foreign currency), targeted bank deposits, units, shares, stocks, bonds, promissory notes, and other securities; • movable and immovable property (buildings, structures, equipment, machinery, and other material values); • intellectual property rights, including patented or non-patented (know-how) technical, technological, commercial, and other knowledge, formalised in the form of technical documentation, skills, and production experience necessary to organise a particular type of production, as well as other

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values, not prohibited by the legislation of the RUZ. • The Investment Law identifies direct private investments as the source of de-centralised investments, which are made at the expense of foreign investor, or from borrowed funds on a risk-bearing basis without government guarantees. Benefits and preferences Based on the amount of investments and the sphere of investment, a foreign investor can be provided with certain benefits and preferences, including: • transfer of state property objects or the property rights for them to the investor at a preferential or zero redemption value; • provision of tax and customs benefits; • subsidising interest rates on loans received by an investor for the implementation of an investment project.

of their resources for the implementation of a publicprivate partnership project. The implementation of a PPP project can be carried out in the following areas: • design, creation, and construction of real estate complexes and public infrastructure; • financing the construction and creation of real estate complexes and public infrastructure; • reconstruction and modernisation of real estate complexes and public infrastructure; • provision of certain public works and services; • delivery of certain goods, works (services), etc. PPP projects are financed at the expense of both the private partner (usually a foreign investor) and the public partner. They include state-owned immovable and movable property, as well as land plots.

Private-public partnership (PPP)

A PPP agreement is concluded for a period of not less than three years, and for no more than 49 years, and the partners may agree on an extension or reduction of the agreement term.

Definition, forms and sources of financing

Benefits and preferences

In accordance with the Law “On private-public partnership” dated 10 May 2019 (“Law on PPP”) PPP is a cooperation between a public partner and a private partner (including non-residents of RUZ), legally formalised for a certain period, based on the pooling

The RUZ, in order to protect the interests of a private partner and (or) a creditor (creditors) within the PPP agreement, may provide the following types of support:

DYNAMIC UZBEKISTAN

• subsidies, including those aimed at ensuring a guaranteed minimum income of a private partner from the implementation of a PPP project; • contributions in the form of assets and property necessary for the implementation of a PPP project; • budget funds allocated to pay for the consumption or use of a certain amount or part of goods (works, services) produced or supplied in the process of implementing a PPP project; • provision of budget loans, loans, grants, credit lines, and other types of financing; • additional guarantees by mutual agreement in order to ensure the fulfilment of obligations by investors; • tax incentives and preferences, as well as other benefits; • other guarantees and / or compensation.

PRIVATISATION Definition, forms and sources of financing In accordance with the Law “Denationalisation and Privatisation” dated 19 November 1991 (“Law on Privatisation”) privatisation is acquisition from the state by individuals and non-state legal entities of public property objects or shares of state joint-stock companies. The objects of full or partial privatisation are objects of public property of the RUZ. The public properties which cannot be subject to privatisation are listed in the Law on Privatization and include land, its subsoil, internal waters, air basin, flora and fauna, and others. Additional restrictions can be introduced at the decision of the President. Other types of property not included in these documents can be subject to privatisation.

Privatisation can be carried out in the following forms: • transformation of a state enterprise into a business partnership or joint-stock company; • sale of state property to non-state legal entities and individuals at a tender or an auction, as well as in other forms which do not contradict the legislation of the RUZ. Sources of financing for privatisation include personal funds of individuals, the funds of non-state legal entities, loans, and other financial assets acquired in ways which do not contradict the legislation of the RUZ. Funds allocated from the state budget cannot be used for the acquisition of state property. Benefits and preferences. The Law on Privatisation provides tax preferences for the transformed enterprises. According to the same law, benefits and preferences can be provided to employees of denationalised and privatised enterprises. Conclusion. The legislation of Uzbekistan is a rapidly developing sector of law. The government is trying to insert best practices to attract investors from all over the world. In some cases, authorised bodies do not issue supportive bylaws in time, which limits investment opportunities in the country, but generally, most authorities are open for communication and discussion on feasible projects. The current position of the government shows a bright future for the RUZ as a competitive destination for good investors. Prepared by Dariga Tokpayeva and Aziza Khalikova, Tax and Legal Department, Deloitte

Investment activity in Republic of Uzbekistan (stages of implementation).

1. Investment contract Stages of implementation:

2. Private-public partnership (PPP) Stages of implementation:

3. Privatization Stages of implementation:

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MERCY CORPS INVESTING IN THE NEXT GENERATION OF UZBEKISTAN Mercy Corps partners with the Ministry of Preschool Education to reach over 90,000 children in 445 preschools. Funded by the United States Department of Agriculture, the program invests over $21 million in early childhood development in Uzbekistan. In 2020, Uzbekistan welcomed 841,817 live births - the highest in its recorded history, according to the State Statistics Committee. In fact, the birthrate has increased by 25% the past 10 years. As the young population continues to grow, efforts to improve child health, education access and quality, are vital, particularly for children aged 3-7. Global studies have shown that investing in early childhood education and development yields high economic and social returns. A World Bank study found that 73% of adults in Uzbekistan aged 25-64 years who attended preschool were employed, compared to 58% of adults who did not. In 2019, approximately half of all eligible children across the country were enrolled in a preschool institution. Now - more than ever - it is vital that young children in Uzbekistan attend preschool. The Government of Uzbekistan has made great strides in reforming early childhood education in the past few years, most notably with the creation of the Ministry of Preschool Education in 2017. This Ministry has spearheaded reform of preschool education, working to ensure equal access and quality education for all eligible children. Now, Mercy Corps joins their efforts to achieve this vision through the McGovern-Dole International Food for Education and Child Nutrition Program in Uzbekistan, funded by the U.S. Department of Agriculture. To improve early childhood development and preschool education, Mercy Corps will support 90,000 children

with school meals, new reading materials, nutrition and hygiene education, and school renovations at over 400 preschools. The program also funds critical infrastructure improvements to kitchens and water systems at an additional 35 preschools. The program will also build capacity at every level; by training preschool teachers, cooks, nurses, and administrators, placing national standards and government educational policy at the forefront. These initiatives are particularly important in light of COVID-19 and the significant long-term impact the pandemic will have on young people’s education around the world. Mercy Corps is a global team of humanitarians working together on the front lines of today’s biggest crises to create a future of possibility, where everyone can prosper. Working in 40 countries around the world, we bring a comprehensive approach to every challenge, addressing problems from multiple angles. And we go beyond emergency aid, partnering with local governments, forward-thinking corporations, social entrepreneurs and people living in target communities to develop bold solutions that make lasting change possible. Resolution 3955 from September 2018, titled <<About measures for enhancement of management system preschool education>>, describes “preschool education as the most important link of a single system of lifelong education”. Mercy Corps is committed to securing this link for the children - and future - of Uzbekistan.

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OVERCOMING THE CHALLENGES OF THE PANDEMIC

ardly anyone would call 2020 a simple year. Most enterprises in the republic faced difficulties caused by the Covid-19 pandemic. Decreases in the volume of orders, delays in procurement and delivery, and partial loss of distribution channels: these are just some of the problems faced by small and medium-sized businesses. Despite this, there are enterprises which were able to quickly find new approaches, restructure their work, and achieve notable successes. One striking example is SAMFRUIT in Samarkand region. One of the cofounders and strategic investors of this company is the British company BAT Uzbekistan, part of the international group British American Tobacco. For

one of the world's largest tobacco manufacturers, the acquisition and development of non-core assets is not a priority. However, an exception was made for Uzbekistan. BAT’s business model is vertically integrated and the agricultural part plays a significant role in it: the cultivation and processing of tobacco leaves. Secondly, Uzbekistan’s rapid reforms, which had a significant impact on the country's investment climate, allowed BAT’s senior management to refocus from searching for currency for the purchase of raw materials and materials, to exploring additional investment opportunities in the country. Thus, it was decided to establish SAMFRUIT as a JSC and and develop an investment programme to expand production and exports.

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However, this enterprise did not escape the unpredictability of 2020 and the resulting quarantine difficulties. Denis Samarin, the co-founder of SAMFRUIT, says: “Despite the circumstances of a pandemic, and the temporary suspension of many branches of the processing industry, we simply could not stop for a single day. The spring day, as they say, feeds the year. The business faced a problem when revenues decreased significantly, while expenses (rent, utilities) remained practically unchanged. In addition, we had to organise the remote working or transportation of employees due to the movement restrictions which were imposed. There were problems with maintaining a customer base, supplying raw materials and equipment, and with all aspects of logistics. But, in my opinion, a manager should be able to orient himself and organise the work of the enterprise in any conditions, which is what we tried to do." It wasn’t always easy. Farhad Azizkhodzhaev, SAMFRUIT’s director of business development, explained: "In winter, due to the frosty weather, SAMFRUIT experienced serious difficulties with the drying complex’s energy resources, required for processing fruits and vegetables. This situation led to a temporary halt in production. Unfortunately, in 2020 we were not able to fully process and export purchased agricultural products … Later, due to quarantine restrictions, there were delays in planting crops for two to three weeks. But already in the spring-summer of 2020 and in 2021, having mobilised the efforts of its team, SAMFRUIT was able to restore the planned volumes of growing and processing of fruit and vegetable products.” The company’s growth figures attest to the hard work of Samarin, Azizkhodzhaev, and their teams. By the end of 2020, the the company’s exports had grown by 62%, equating to $ 2.4 million! As part of the investment programme for 2020-21, financially supported by a new shareholder, sprinkler irrigation systems were put into operation. This system, which is still very rarely seen in Uzbekistan, will increase the yield of agricultural products by 50% compared to traditional irrigation methods. It is also rationalises the use of water resources. For several years, SAMFRUIT has been selecting seeds for agricultural crops which were not previously grown in Uzbekistan but can be adapted to local climatic conditions. The result of this work is the cultivation of new crops such as green peas, chicory, and leeks. These products are exported for sale in the European Union, the USA, and Japan, and are in high demand in the markets of Europe and Asia.

were supplied from the Netherlands. The first crop was harvested in spring 2021. According to experts, the quality of this asparagus is comparable to that grown in European countries. The experiment continues with a focus on improving crop yields locally to maximise economic efficiency. This direction opens up great prospects for Uzbekistan, increasing the export potential and opening new sales markets. Visiting representatives from relevant ministries and departments were complimentary about the project’s success, and there are now plans to expand the cultivation of asparagus across Uzbekistan. In recent years, Uzbekistan has created the proper conditions for the development of organic production. In particular, Decree No. UP-5995 (dated 05/18/2020), which covers the production of organic agricultural and organic food products, is being implemented. It is great to note that almost all products grown, processed, and exported by SAMFRUIT are organic. This has been largely achieved through the introduction of the best agrotechnical measures. Global demand for organic produce is increasing every year, and SAMFRUIT’s products are certified according to EU Regulations No. 834/2007 and 889/2008 on organic agriculture. Samarin has ambitious plans for the future, but notes the importance of state support for businesses: “In the short term, we plan to introduce new production lines for processing and drying agricultural products, and to expand exports to new markets in Europe and Asia. This will create an additional 250 jobs for rural residents. But in circumstances when businesses are faced with difficulties, especially those associated with the coronavirus, the role of the local authorities is important. They may help in solving problems and promptly respond to requests from entrepreneurs. All medium and small businesses are hoping for their help.”

In 2019, the British company BATU joined the cofounders of SAMFRUIT and launched an investment programme worth $11.5 million to expand production capacities, including the purchase of modern hightech equipment for drying and packaging exportoriented products. These investments will increase the annual production capacity of SAMFRUIT from 700 to 4,000 tons of dried fruits, vegetables, berries, and herbs. Upon completion of the investment programme, it is forecast that SAMFRUIT's export earnings will grow several times, and that if now the company employs 50 people, then the expanded production will employ 100 permanent and 150 seasonal workers. Prepared by the UzBAT

This year, SAMFRUIT cultivated asparagus for the first time. It is a source of great pride for the company. During the quarantine period, asparagus seedlings

DYNAMIC UZBEKISTAN

AGENDA FOR

PRIVATIZATION Saltanat Sandykbayeva, Associate Director, Deal Advisory, KPMG Central Asia

Farrukh Abdullakhanov, Partner, Consulting, KPMG Uzbekistan

he development of Uzbekistan has been an actively discussed topic in recent years. After all, the country is one of only a few in the world in which direct state regulation of the economy is carried out. With the coming to power of the current president, Shavkat Mirziyoyev at the end of 2016, Uzbekistan set its sights on the strong revival of key sectors of the economy, liberalisation of markets, as well as the introduction of market principles in the economy. Recognising that the bulk of the current economy consists of state-owned enterprises, in December 2019 the current government announced a programme for large-scale privatisation. According to various sources, the government of Uzbekistan has stakes in more than 2,000 enterprises in the country.

– Drawing up the composition of financial statements in accordance with international standards and conducting independent external audits;

The creation of a separate department for the transformation of large enterprises under the Ministry of Finance testifies to the serious intention of the government in both attracting investments and improving the country's rating on the world stage. It is recognised and supported by international market players that the topics below are crucial to successful reforms:

– Publishing reports, including records on economic, social, and environmental issues (ESG), in accordance with the Global Reporting Initiative (GRI);

– Implementing corporate reporting disclosure standards in accordance with the requirements of the International Standards for Accounting and Reporting (ISAR); – Executing corporate reporting disclosure standards in accordance with the principles and Application of International Financial Reporting Standards (IFRS), as well as quarterly preparation and disclosure of financial statements by focus areas of activity or in substantive areas;

– Obtaining a corporate credit rating in cooperation with international rating agencies, financial and legal advisors;

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– Introducing minimum profitability requirements for sales, assets, and the turnover of assets and liabilities, as well as other indicators determined in accordance with international practice; – Realising an international system of accounting, classification, and management of hydrocarbons and their reserves in accordance with the requirements of the Petroleum Resources Management System (PRMS); – Conducting an audit of hydrocarbon reserves in accordance with international standards; – Attracting foreign investment by issuing and placing debt securities on international capital markets; – Developing and refining companies’ financial models considering new realities, development strategies, and target operating models, obtaining ratings (including international credit ones), and follow-up restructuring of enterprises' debts It is also worth noting Presidential Decree #6079 in 2020 UP-6079 10/05/2020, which approves the "Digital Uzbekistan - 2030" strategy developed by the Ministry of Information Technology and Communications Development The Government of Uzbekistan has carried out a lot of work on the inventory of state unitary enterprises, during which problems in management were identified. In particular, many enterprises were controlled by state structures. The President decided on two major strategic directions: transformation and privatisation. In October 2020, decree 6096 "On measures to accelerate reforms in the field of privatisation of state assets" was issued. The government has divided enterprises into four large groups depending on the plans: State enterprises and holding structures that are subject to transformation State enterprises that are subject to the implementation of corporate governance, financial audit, and increase in operational efficiency State-owned enterprises put up for open auctions within the framework of targeted programs for pre-privatisation preparation and increasing their investment attractiveness Companies in which state-owned shares are subject to full sale to private investors through public auctions

state-owned enterprises operating in economic sectors including construction, alcohol production, insurance, etc. It is worth mentioning the role of such state authorities as SAMA with its subsidiary UzAsssets, the State Commission for Tendering (hereinafter SCC). These state bodies are actively conducting the process, maintaining independence, and ensuring transparency, as well as involving international consultants who, together with the SAMA / UzAsset team, solve operational processes and attract investors. For the price base, the SCC takes one of the following: book, par value, quoted on the stock exchange, net asset value, or assessed value. State assets are subject to sale through an electronic trading platform (but this really does not apply to individual projects according to acts of the President and government). It should be noted separately that decree 6167 abolished the requirement for the mandatory establishment of a starting price based on the value recommended in the report of an appraisal organisation. The main barriers to the inflow of investment currently are the "classic problems" of the Central Asian countries: 1. Poor quality of financial information 2. Depreciation of equipment and fixed assets 3. Devaluation of the national currency 4. Political risks: in March, EIU assigned Uzbekistan a "C" rating, the red risk level 5. Affiliation with political structures and resulting corruption The country has a long way to go towards creating competitiveness and market relations, including work on removing the barriers above. Of course, it will not always be smooth, but it is definitely worth fighting for. The Economist magazine named Uzbekistan the country of the year in 2019, while Doing Business raised the country's rating by seven points and indicated an improvement in the business climate. In general, we see how the government, with the help of international financial institutions, is making huge efforts to reform the state administration system, education and health care, as well as such key sectors of the economy as energy, oil and gas, chemistry, banks and insurance, capital markets, transport, agriculture, IT, etc.

State-owned real estate objects to be disposed to private investors On February 11, 2021, the subsequent Decree 6167 was signed on improving the current privatisation reforms in the country. After this decree, two lists of state assets were approved for future sale. The first list consists of 11 large real estate objects, and the second list includes 18

BUSINESS

DYNAMIC UZBEKISTAN

INTELLECTUAL PROPERTY RIGHTS ENFORCEMENT ISSUES AFFECTING THE BUSINESS AND INVESTMENT CLIMATE IN UZBEKISTAN Madina Tursunova,

Patent Attorney, LLM in IP “Legalmax Central Asia” Law Firm

or several years, Uzbekistan has shown a substantial growth in FDI. The country has taken unprecedented measures to create a favourrable investment climate and improve its appeal to investors, which in turn contributes to the increased flow of foreign investment. Uzbekistan has improved its ranking in the World Bank’s Doing Business index. In 2020, Uzbekistan rose by seven positions to 69th place, which is one of the highest positions in Central Asia. In general, Uzbekistan’s intellectual property rights (IPR) legislation complies with international treaties and minimum standards. According to domestic legislation, the owner of IPR has an exclusive right to use its assets, as well as allow and prohibit its use by third parties. Unauthorised use of IPR, as well as the import, sale, and offering for sale of goods bearing the IPR, are considered as a violation of these exclusive rights. However, weak enforcement of IPR and unclear status of parallel importation creates market barriers to rights-owners and foreign and local investors.

Deficiencies in lawmaking: Lack of strict measures of restraint provided by Uzbek legislation Counterfeit products are goods produced in violation of the IPR of a certain person. Thus, the increase in the production of counterfeit products in Uzbekistan creates an unfavourable climate for doing business and attracting investment. Currently in Uzbekistan, only administrative liability is established for the the illegal use of someone else's trademark, the name of place of origin of goods, and brand names. Therefore, the maximum applicable fine is not high, varying from 2,500,000 to 5,000,000 Uzbek sums. However, if we observe the example of foreign countries, we can see that in the U.S. the production, sale, and transportation of counterfeit goods are criminalised . According to the U.S. Criminal Code, the punishment for such crime is a fine up to $250,000 or imprisonment for up to 20 years. Criminal liability is stipulated only for plagiarism and violation of the exclusive rights of the patent owner.

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Absence of punitive damages for production, sale, and importation of counterfeits Guaranteed compensation amounts for the violation of IPR are not stipulated in the legislation of Uzbekistan. According to Article 11 of the Civil Code, the main ways of protecting exclusive rights are compensation for damages and for moral harm. However, the exact amount of compensation for the violation of exclusive rights is not mentioned. So, the courts usually do not award compensation to the entity/person whose rights have been violated. Enforcement procedures are time-consuming and costly for any business. The absence of guarantees to recover damages, as well as legal fees, is one of the main obstacles preventing the market’s development. The absence of “ex-officio” powers of customs bodies and the burdensome obligations of the right holders to provide information about possible unauthorised importation In order to get customs protection from an unauthorised import of trademarked goods or counterfeited products, a trademark owner should register its trademarks with the Customs Intellectual Property Registry.

However, the customs committee does not yet have the power to identify and prevent potential violations of trademark holders' rights independently. In accordance with the Customs Code, the rights owner must apply with information about goods that violate his IPR; the manufacturer, exporter, importer, or consignee; the possible place and date of the movement of goods across the customs border; etc. Without this, the customs body cannot monitor the goods imported by third parties. The rights owner cannot possibly predict the grey importer's actions and provide such detailed information. Such burdensome obligations on IPR owners diminishes the effectiveness of existing border enforcement measures. Unclear status of the exhaustion of rights and parallel importation There is no legal definition for parallel imports in Uzbek legislation; therefore, it is neither permitted nor forbidden. However, if the trademarks are registered with the Customs Registry, trademark owners have a right to apply to customs authorities for securing their exclusive rights from parallel import, i.e., unauthorised importation resulting in violation of the exclusive rights.

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The principle of exhaustion of rights was introduced into the Uzbekistan’s legislation in the Law on Amendments and Additions to Certain Legislative Acts, dated 18 April, 2017. The latest amendments to the Civil Code and the Law on Trademarks and Appellations of Origin include new articles (Article 11071 and Article 26 respectively) on the exhaustion of exclusive rights, according to which: - use of the trademark by others in respect of goods that were legally put into civil circulation directly by the trademark owner or upon his consent does not constitute an infringement of exclusive rights to the trademark. Simple interpretation of the clause provides that exclusive right to trademark covers the goods that were put into civil circulation by the trademark owner of under his consent. Third parties importing the goods must provide evidence that the goods were put into civil circulation by the trademark owner or under its consent, otherwise such imports will be treated as unauthorised according to trademark law. However, a number of controversial court decisions have been made in relation to parallel importation in Uzbekistan. Inconsistent practice and the absence of a unified approach to parallel imports affects the business of all foreign trademark owners and diminishes the level of protection of their exclusive rights in Uzbekistan.

RECOMMENDATIONS To promote the enforcement of IPR in general, a number of amendments should be introduced to the legislation of Uzbekistan, namely:

-Amending the Trademark Law to clarify that the exhaustion of exclusive rights for trademarks occurs once the goods were put into civil circulation in Uzbekistan by the trademark owner, directly or with its consent; -Amending the Customs Code to grant customs authorities with ex-officio power to independently locate and seize infringing goods. Amendments should also oblige customs authorities to check the authority of a distributor to import goods by sending a notification to the legal owners, and remove the burdensome obligations imposed on the those owners to provide detailed information about possible imports; -Amending the Trademark Law to introduce a punitive damages system into the legislation, which would allow right owners to recover monetary relief from the infringing party, both legal entities and individuals; -Amending the Criminal Code and Code on Administrative Offence to introduce direct criminal and administrative liability for production, importation, sale, storage, and advertising of counterfeited goods, copycat products, and lookalikes, and impose fines based on the illegal revenue obtained by the infringing individual. The strict enforcement of IPR is the only way to develop an emerging market of intellectual property assets in Uzbekistan, and to foster a friendly environment for businesses of both local and foreign origin.

DYNAMIC UZBEKISTAN

FROM A SERVICE FOR GAMERS TO A UNICORN COMPANY O

son, the first e-money payment system in Uzbekistan, is making big plans to expand its business. The company, which had first stage investments of $6 million, expects to bring its capitalisation to $1 billion by 2025. This might well make it the first unicorn company in Uzbekistan. Oson’s founder, Farkhod Makhmudov, expects the company to grow at least threefold in transactions, turnover, and headcount in 2021.

ON THE CREST OF A NEW WAVE The Oson team are pioneers of electronic money in Uzbekistan. From the very beginning, they chose an untouched niche for themselves in the local market. The majority of users of the service are gamers (60%),

who now have the opportunity to open their e-wallets in Uzbekistan. The company pays close attention to the target audience for which Oson was originally created. “Oson was the first [company] to launch the funding of a digital wallet with foreign currency using Uzkard. When we launched, payment for foreign services was available only using loop holes. Gamers had to find someone to fill up their e-wallet, and it was the darkest side of the cash flow. Then everything became legal. At that time, this market was very inaccessible, but we achieved recognition from gaming services. Now we have 900,000 open wallets,” Makhmudov said. The company strives to study all the needs of users and, based on this, constantly adds new services. Thanks to

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this campaign, Oson was able to find its place in the market. At the same time, as Makhmudov notes, there are several main platforms on the market and each has its own niche. However, in Uzbekistan Oson has no competition yet, "because we have been working hard to improve services in our field, focusing on the generation of wallets and money transfers, and in parallel developing payment on the spot or for services." The number of users of the service has been growing exponentially for several years, and has already exceeded a million people. In 2019, the company had 135,000 users, and by the end of 2020, 750,000. Last year, the rate of transactions increased to 30 million per year. The gaming industry develops and grows every year; as a leading form of online entertainment, games have huge potential. There are gamers in Uzbekistan, but ecosystem solutions are poorly developed. Obviously, there is a very high demand for projects in the gaming industry. In addition, there is always room for expansion in foreign markets. GamesIndustry.biz has calculated that the global games market has grown by 20% over the past year and now it is valued at $174.9 billion. The international tech sector has become one of the main beneficiaries of the coronavirus crisis. This year, the founder of Oson expects results to surpass last year's figures. However, due to a directive from the Bank of Russia, no new service with Russian partners has been launched since the beginning of the year, which has affected the company's development. “The pandemic has done a lot of damage to the world, but online businesses have grown a lot. This has greatly developed the payments industry. After all, the future belongs to online commerce. It helps to create competition, which leads to rapid growth in any area. We continue to grow after tough quarantine restrictions. For the first half of the year, the growth rates remain the same as last year. I do not consider this as an adequate result, because I expected more,” said Makhmudov. This year, Oson launched the Inter Hub platform in Uzbekistan and the UAE, targetting the B2C segment. It is offered to banks and payment services. According to Makhmudov, there are still many barriers in the market. For example, it is not allowed to open accounts with foreign banks. To do this, you need to obtain a special permit from the Cabinet of Ministers. “If we want to develop industries, local companies need to be allowed to open accounts abroad. For example, with the Sberbank, our partnership stopped when we discovered that we do not have permission to open a correspondent account with them. If we had this opportunity, we would have launched a transaction flow in 2020, which would have given Oson greater opportunities for development,” Makhmudov noted. Another sore problem is remote customer identification. The document regulating this area was posted for public discussion, and as soon as it is adopted, many services will move online.

"OUR GOAL IS TO CREATE A UNICORN COMPANY" At the first stage, the founders of the company invested $6 million of their own funds. For the second round, negotiations are underway with foreign investors. The previous assessment of the company’s value is already out of date, as since then several new platforms and an office in the UAE were launched. The next step is to obtain a second license, with all the possibilities of banking transactions in the UAE. “The process of issuing the license takes a very long time, as everything is carefully checked. I think we are at the finishing stage. Not everyone can pass this level of verification. Our lawyers in the UAE say that only one in 10 can successfully pass such a test. By checking us, the local financial regulator helps us change for the better. After obtaining the license, we will begin to reassess the company,” said the founder of Oson. From investors, he said, the company expects not just money, but also some kind of participation in the development: “We are always open for discussion with investors, because our goal is to create a unicorn company. Investors we are confident in will become partners. We are looking for long-term money. It is not desirable for us to change an investor every year.” This year, the main task facing the Oson team is the full launch of an office in the UAE, obtaining a license, building a team, and introducing its platform in the Emirates. In 2022, market penetration of the Persian Gulf will begin,. “We did a lot of analysis. Initially we were aiming for the European market, but there is strong competition. As a matter of principle, I try not to enter a market where there are a lot of offers. Any businessman is looking for a market where there is a lot of demand. I saw it in the Gulf countries. I think we will be able to occupy our niche there,” Mahmudov said. According to him, to reach this goal, you need not just money, but "a good team that loves to play all-in." He added, “Our company had moments when we put everything on the line. Moreover, analytical data spoke of a 90% probability of failure. But it worked out. Well, that’s the interest when you believe in the success of your business.” “With such a large circle of partners, Oson can become a unicorn. Today, the company has a partner network throughout the CIS. We can bring any local vendor to any country of the Commonwealth. I think we have enough opportunities to grow like that. Oson is building a very big foundation now. Everything we have done so far has contributed to that strong foundation; it is already noticeable and many people know it. The construction of the upper floors has already begun in the UAE,” Makhmudov said with certainly. By 2025, he hopes to realise his plans.

DYNAMIC UZBEKISTAN

OSON FOUNDER FARKHOD MAKHMUDOV For seven months at the start, we could not connect to any vendor. We had an application, everything was ready, but it was impossible to enter the market. For example, we would go to a cellular company, and they would turn to us with a standard question: how many users do you have? I answered them that this is a new project, so let's agree a contract. I lost heart because I realised how difficult it is to launch a startup, because no one believes in you and people look at you as though you are yet another company that will definitely fail. Therefore, it is the stubborn ones who gain knowledge from each failure who ultimately win.

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WE BET ON RELIABILITY Oson created a separate software product to protect transactions from fraud. Its task is to study users, calculating how real the transactions are. Upon registration, artificial intelligence can identify a fraudster by 30%. If it notices something suspicious, it will be on the alert and block transactions as necessary. “When we launched cross-border payments, we felt that it was possible to conduct fraudulent transactions through us, and we began to develop an anti-fraud system. All self-respecting payment systems have such modules. We raised it to the level of artificial intelligence which works without human intervention. The system is working quite successfully, but we are constantly modifying it, because new fraudulent schemes appear every day,” Makhmudov said. Makhmudov believes that thanks to this, Oson was made safe for users. Instead of creating barriers, the company improves protection, opening up cross-border payments as much as possible. Every day, the security system denies registration to more than 250 accounts. The company claims that this is a lot.

According to Makhmudov, cryptocurrency was able to destroy "the old standards of the financial industry, destroy all myths, and create a very unique instrument which is developing strongly." “Many people are skeptical about cryptocurrency. We live in a world where everyone is trying to develop commerce and economy. If this tool helps with this, you need to give it the opportunity. The more they prohibit it, the more it gets worse. As the saying goes: the forbidden fruit is sweet. We need to regulate this market, legalise, it and make it transparent. In order to protect users, everything needs to be legalised, otherwise people will find another way. I respect cryptocurrency very much; this is the topic of the century,” he added. “In 2017, I bought Bitcoin not for investment purposes, but in order to understand how it works. I checked transactions. Some of them are still with me. Honestly, at one time I forgot about them, but when I opened the wallet I was very happy. How much is there? Let it remain a secret. I have accounts on all wallets in the world. As soon as something comes up, I will download and learn," concluded Makhmudov.

There are 2,000 to 2,500 downloads of the app per day, and when a user is registered, the module determines how real the account is. The company, according to Makhmudov, is confident in the quality of its clients. "All our users are real and verified." “When Oson was created, I could not be sure about the security of this wallet. At that time, I didn't understand how I could make it safe. It was then that the blockchain boom began, which I used partly to protect the Oson electronic wallet. This could give me confidence,” said Makhmudov. “If the data is simply stored on the platform, it can be changed, but if the data is linked with the previous chain, it cannot be changed easily. This made it possible to make our wallet secure. I cannot say that it is fully adapted for blockchain, but some of the technology was integrated into Oson, which made it much safer. Technically, the wallet cannot be hacked, as it is protected by previous transactions."

TALK OF THE CENTURY At the same time, Makhmudov advocates the legalisation of cryptocurrencies, arguing that they "need to be given the opportunity." However, the company itself has no plans to launch a crypto wallet yet. “For now, we won’t launch a crypto wallet, because we still have a lot of tasks ahead of us. We are currently working on the creation of a stable system; I do not think that the crypt is stable to some technological changes. We are now determined to create our own financial ecosystem which will open the door to limitless cross-border payments. We were able to occupy this niche in Uzbekistan, and we plan to go further along it,” the head of Oson said.

DYNAMIC UZBEKISTAN

RUSTAM RAKHMATOV: “IN THE FUTURE ISLAMIC BANKING WILL SUCCEED CONVENTIONAL BANKING”

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slamic finance in Uzbekistan is capable of occupying a significant niche in the market, but a lot of work remains to be done for this to happen. In an interview with Dynamic Uzbekistan, Rustam Rakhmatov, CEO of Iman, spoke about the obstacles to the development of Islamic banking and plans to become the locomotive of the industry. - How has the Islamic finance industry developed in the world? The industry is really under-developed. It is a system which has just begun to develop but is growing very rapidly. According to statistics, only 2.5% of the global financial system is legal (halal) in terms of Sharia principles. In Uzbekistan, this figure is 0%. It is sad, but it is an opportunity for us to revolutionise the industry with disruptive technology. This is one of the reasons why clients of traditional banks switch to our services, take deposits from banks in Uzbekistan and invest in us. The growth is expected to be quite significant, because we are in the "blue ocean" and in a market which is not yet available to any of the banks in Uzbekistan. Globally, the interest in Islamic fintech (financial technology) is huge. Therefore, despite the fact that there are more investor-friendly markets, even projects in Uzbekistan fall under the radar of institutional investors. I believe that the Islamic banking system has enough advantages over the conventional financial system for it to be accepted by all economies in the world. Bankers understand this, especially after the 2008 crisis. It is a system built on the principles of financing the creation of real assets, trade, and fair partnership, as opposed to the distribution of risks against the system of monetary transactions, the creation of non-existent assets, and financing with the transfer of 100% of the risks from one side to the other. Of course, the system must be built not only on the right principles, but also be competitive. By our example, we show that this is possible. Through technology, we maximise the convenience of using Iman’s services, and I see no reason why Islamic banking will not be able to defeat conventional banking in the future. I am inclined to believe that in 10 years time, this kind of ethical banking will prevail all over the world. - Some of the largest centres of Islamic finance are located in Malaysia, the Middle East, and Europe. What work needs to be done by the financial regulators of Uzbekistan to create their own financial centre in this country? Although the majority of populaion in Uzbekistan is muslim, there were no islamic finance instruments. Work on the introduction of Islamic finance in Uzbekistan is underway, but it is not progressing as quickly as we would like. There are several reasons for this. The first reason is the lack of specialists, without

whom it is impossible to develop this industry. It requires fundamental knowledge in both the general field of accounting and finance, and in the specialist fields of Islamic finance, Sharia accounting, and AAOIFI standards. Without specialists, it is impossible to reform the regulatory framework and make the necessary changes to the legislation. The second reason is that there is no particular company which would demonstrate its work and share real statistics. This inhibits the regulation of the Islamic finance industry because the regulator cannot use empirical data to regulate the market. Our company works in both these two directions, with a readiness to provide the necessary specialists, and in the provision of data for risk analysis and system monitoring processes. At this moment, we are the locomotive of the entire industry. We will work on this and raise issues which need to be revised in legislation and tax policy. This is what we are doing on our own so far, but in the near future we plan to fix it by attracting new market partners who also plan to develop Islamic finance. - Why hasn't Islamic banking been introduced in Uzbekistan over the years, despite the fact that the country is dominated by the Muslim population? F Firstly, most of the regulatory framework governing the banking system was created during the Soviet era, whose state policy was to promote atheism. Accordingly, religion and everything connected with it was not taken into account. 70 years of atheist propaganda led to the fact that even after 30 years of independence, many citizens of Uzbekistan (including the leaders of the banking and financial system) still have a poor idea of what Islamic finance is and how it works. Secondly, the bank is simply the operator of the korbank system [an automated banking system]. On the one hand, there is software which banks buy from an integrator, which, in turn, is written according to monetary relations with customers, i.e. according to the principles of traditional banking. On the other hand, there is a regulator which regulates banks according to monetary policy. Until the regulator provides new principles of relations with clients (for example, commodity-money relations), banks will not buy the software which allows them to work according to the principles of Islamic finance. At the same time, until the banks lead with initiatives and real projects operating on the market, the regulator will not create conditions for the development of the industry. It is chicken and egg problem, or Catch 22. - What are the advantages and disadvantages of Islamic banking compared to conventional instruments? When it comes to the principles of Islam, according to which we live, I cannot name a single shortcoming. Yes, Islamic banking is more difficult to develop, as from an administrative point of view, it is more expensive. Yes, there is also a lack of resources and interest in

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capital markets. However, there are undoubtedly more advantages in the long term, this is very noticeable if we look at the 100 year context At Iman, we plan 50 years ahead, and we are clearly aware that our principles lead us only to long-term success, not to failure and crises. What tools and products does Iman offer? Our goal is to become the first Islamic bank in Uzbekistan. Our company offers similar financial services to conventional banks. That is, we have two types of clients: buyers and investors.

GLOBALLY, THE INTEREST IN ISLAMIC FINTECH (FINANCIAL TECHNOLOGY) IS HUGE. THEREFORE, DESPITE THE FACT THAT THERE ARE MORE INVESTORFRIENDLY MARKETS, EVEN PROJECTS IN UZBEKISTAN FALL UNDER THE RADAR OF INSTITUTIONAL INVESTORS We provide customers with an instalment plan for consumer goods and services. Of the services today, we finance eye treatment and educational courses in IT and foreign languages. This gives our investors a sense of being involved in something more than finance. As for investments, anyone can become an investor by investing at least 2.5 million soums. By using a fairly low threshold for entry, we democratise access to investment. An investor is not only a person with access to capital. It should be a person with the same values as us, thinking of accumulation, not waste. At Iman, an investor has the opportunity to earn a legal profit of 20-50% per annum. - According to your observations, how familiar are people with the principles of Islamic banking? We understand that there is a huge gap in financial education in the market. Moreover, few people know what Islamic finance is and how it works. Financial education is strategic work with the market, government, and the regulator. Our target audience is youth, and you need to learn financial literacy from a young age. The Iman team plans to do educational projects, organise forums and free courses, and also involve local banks and universities in this. We hope that banks and universities will be able to act as locomotives in the field of financial education. What else has your first experience of working with clients shown? How do they react and perceive your service?

In the last year we studied the market and launched the service in test mode. The majority of views were very enthusiastic, but of course there were also negative comments from people to whom we were unable to convey the value of the product. Overall, though, 95% of the comments were positive, which only inspires us. We are glad to realise that our product is in demand in the market. - How much investment have you already been able to attract in the startup? In the first round, $2 million. I cannot yet disclose the appraisal of our company and the name of the American fund that invested in us. This is confidential information. I can say, though, that this fund, which has already invested in companies from Europe and Australia, manages $100 million and has made several exits from successful unicorn companies. This company did not have a mandate for Uzbekistan; we contacted them ourselves. The negotiations lasted about four months. Before encountering our startup, they did not consider this market; they did not even have a mandate for the CIS. When they arrived in Uzbekistan, they discovered a hidden gem. The fact that we negotiated competently was the key point. This is the merit of our team. First of all, it was necessary to sell the idea of Uzbekistan, the potential of the banking sector, and market prospects in Central Asia. - The Islamic economic model is based on Sharia law, which prohibits lending money at interest and investing in projects which do not meet certain criteria. How do you make money? An Islamic bank is actually the same commercial structure as ordinary banks, only with its own inviolable principles. The most important principle of conformity is riba (usury). This is a ban on the sale and purchase of money. Interest is not prohibited as a mathematical mechanism, but it is the transaction of selling money at interest that is prohibited. This is in terms of the difference between a loan and an instalment plan. Now let's compare deposits in an ordinary bank and investments in an Islamic bank. When a regular bank attracts deposits, it promises a 100% return guarantee. In Islam, this is prohibited, since only the Almighty can give a guarantee. Also, in order to make money in ethical business and fair relationships, you need to take risks. Although we can, we do not guarantee the refund. According to our business model, an investor cannot lose his money, he can only get a delay in making a profit. We share profit and risk with investors. If the client earns, the company earns. If a client loses, the company loses. This is a fair partnership. Our application is the transparency of your investments. The investor sees where each sum he invested is invested in. Islamic finance is the science of the fairness of money.

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ALTHOUGH THE MAJORITY OF POPULAION IN UZBEKISTAN IS MUSLIM, THERE WERE NO ISLAMIC FINANCE INSTRUMENTS

- What is the estimated value of the Islamic banking market in Uzbekistan? The volume of financial assets worldwide is about $ 100 trillion, and the volume of the financial market in Uzbekistan is about $ 100 billion. I would estimate the size of the Islamic finance market in Uzbekistan at $ 10 million, which cannot be compared with the size of even the smallest bank, i.e. approximately 0.1% of the total market volume. - What are your plans for business development and expansion to other markets? We have a mission: to influence emerging markets. The world needs funding. My goal is to develop ethical finance so that people around the world — not only Muslims — have access to it.

Islamic banking is in its infancy there, but Africa is a very interesting market. We are considering going abroad in a year, when there will be a second round of investments worth $ 5 million. As for the second block, namely investments, I would, firstly, focus on countries where Islamic banking is already developed and it is easier to attract capital (UAE, Saudi Arabia, Turkey). We can easily compete there with our investment products. We are also interested in regions of Russia with a predominantly Muslim population, and in developed markets such as the United States and United Kingdom. People will invest there not because of spiritual impulses, but because we offer very attractive rates that no other investment fund in the world offers.

Our plans to scale are targeting markets where there is huge demand: countries in Central and East Africa. We're looking at Sudan, Nigeria, and Senegal.

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ELECTRIC

CAR RACE

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he global auto industry is at the start of a major revolution: in a short time, sales of electric vehicles will very quickly catch up with sales of gasoline and diesel vehicles. The general trend is that all major automakers will sooner or later switch to producing electric cars. The rapid expansion represents an excellent opportunity for new players to become world leaders in the automotive field. The electric vehicle market is already growing exponentially. According to the International Energy Agency (IEA), the number of electric vehicles registered worldwide increased significantly in 2020. Thus, in the last year, global sales have skyrocketed, increasing by 43% to 3.2 million units, despite the fact that the total number of car sales fell by a fifth during the coronavirus pandemic. Experts expect institutional changes and technological breakthroughs in the market, which will lead to the industry moving from the growth stage to the rapid and massive transition stage. By the way, three of the 10 largest automakers by value only produce electric vehicles. The confident future of electric vehicles is also confirmed by the fact that automakers are adding more and more electric vehicles to their lineup every year. In addition, new companies created in recent years, which focus exclusively on the production of electric vehicles, are setting the tone. Automotive executives are being forced to transform their businesses to avoid being left behind in the race for electric vehicles. For this, billions of dollars are invested not only in the design and modelling of their cars, but also in promising startups. We can say that the fruits of these investments are already ripe. Famous Tesla, which in 2020 became the most expensive car manufacturer in the world, is considered the leader in the number of cars produced, but the growth rate of its closest competitors suggests more fierce competition in the future, which will increase the availability of electric vehicles. Countries' plans to completely ban the sale of new internal combustion engine (ICE) vehicles are having a major impact on the transformation of auto aid. So, for example, the European Commission has decided that in EU countries it will be impossible to buy a car with an ICE from 2013. After 2035, cars should be carbon neutral. Bans of cars with ICEs are also coming into force in Japan, Canada, and other countries.

It is worth noting the Chinese market for electric vehicles as it is the largest and one of the most dynamic. More than 400 companies are already registered there. These are both traditional car makers such as Geely, Dongfeng, and Chery, as well as newly formed and fast growing companies such as NIO, Li Auto, and XPeng. They have created serious competition and are conquering the market very quickly, just as the low-cost Japanese models did in the 1970s and ‘80s. The growth of the electric vehicle market has also been supported by car charging infrastructure. Competition for the future is pushing automakers to expand the electric vehicle segment. According to the latest forecast from investment bank UBS, 20% of all new cars sold worldwide will be electric by 2025. By 2030, this figure will rise to 40%, and by 2040, virtually all new cars sold around the world will be electric. At the same time, BCG predicts that in five years, electrified vehicles will account for more than half of global passenger vehicle sales. There are many different opinions, but one thing unites them: mankind is irrevocably moving towards the abandonment of cars with ICEs. Until now, electric vehicles have not been able to compete commercially with conventional vehicles, which is why the ICE has yet to leave the scene. The cost of an electric vehicle is generally higher than that of a gasoline vehicle. But in terms of operating costs, the electric car outperforms the fossil fuel car. When using a conventional car, you can spend a significant amount of money on maintenance. In the case of electric vehicles, these costs disappear due to the lack of ICEs. The greatest maintenance costs are incurred when replacing the battery pack. In most cases, however, the battery manufacturer's warranty covers the cost. In addition, buyers and owners of electric vehicles around the world are eligible for benefits.

CHARGE FOR THE FUTURE Although the market in Uzbekistan is still in its infancy, the country's authorities are planning to set up mass production of electric cars, as well as constructing the necessary charging infrastructure. The government's plans to transfer the auto industry to electric vehicles is a signal for investors to start

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investing in a new direction. However, there is no question of abandoning the ICE in Uzbekistan just yet. Uzbekistan's Energy Ministry predicts that by 2030, about a quarter of transport in Tashkent will fall under the category of electric vehicles. This will happen due to two factors - the development of infrastructure and the falling prices of the machines themselves. Some countries have introduced additional incentives to support sales. For example, Germany allocated 5 billion euros in 2020 to support electric cars and extended the premium payment programmes to their customers. In Uzbekistan, the import of electric vehicles is not subject to customs and excise duties. The maintenance of zero duty on the import of electric vehicles has not yet contributed significantly to the development of the internal market, but it creates the conditions for further growth. According to the National Statistics Committee, 13 electric cars were imported into the republic in 2018, 39 in 2019, and 131 in 2020. The main supplier is China.

The low sales are largely due to the fact that the market for electric vehicles in Uzbekistan is not yet supported by infrastructure, and the high cost of these vehicles limits their widespread use. There are no preconditions for the massive development of the market. Sooner or later, Uzbekistan will have to reorient its automobile industry towards the production of electric cars. The closest major partner will likely be GM, which is considering phasing out production of cars with ICEs altogether. This transition is expected to take place almost in parallel in Uzbekistan, since the main production facilities for the production of UzAuto Motors cars are based on GM's global platform. According to the calculations of the American company, by the end of 2025, 40% of the models it sells in the United States will be electric vehicles. GM is set to commit about $ 27 billion over the next five

years to develop electric and computer-controlled cars. However, in the medium term, one should not expect a big change in the development of electric vehicles in Uzbekistan. The experience of other countries shows that it is first necessary to create a network of charging stations, then to produce cars. Investing in the network will help manufacturers gain significant market share, as Tesla did in the United States. So far, the number of electric car charging stations in Uzbekistan, according to PlugShare, only just exceeds 20. Most of the are in Tashkent, where the electric transport infrastructure is not created by the state, but by private companies.

In addition, all service stations belonging to Uzbekneftegaz, the country's largest oil and gas company, are expected to be equipped with chargers for electric vehicles. A proposal is also in preparation to stimulate the attraction of private investment in the development of infrastructure for electric vehicles. The Ministry of Energy, in collaboration with the Ministry of Innovative Development, is carrying out a study to stimulate the creation of service stations for electric cars. Several manufacturers have already announced their intention to establish the production of electric vehicles in Uzbekistan. For example, the South Korean company Hyundai plans to produce up to 10,000 electric vehicles annually in Kokand. The estimated cost of the project is $300 million, and the production of the first mass-produced electric vehicle is expected by 2023.

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The International Solar Energy Institute in Uzbekistan cooperates with the Chinese company Henan Suda Electric Vehicles Technology Co., Ltd. to put modern electromobility technologies into practice. The parties agreed to organise a testing and certification centre in Uzbekistan, as well as a maintenance centre for electromotive technologies based on new energy sources; to install charging stations; to develop appropriate national standards based on international standards; and to conduct scientific, technical, and

coronavirus crisis, the administration of Tashkent announced its intention to purchase 20 electric buses and chargers for them, as well as to create the supporting infrastructure required. The United Nations Development Program and the Global Environment Facility will help speed up the process of introducing electric buses to Tashkent. The project, worth $3.9 million, includes the purchase of electric buses for public transport, as well as the establishment of a "green transport corridor" in the city as a pilot project. After that, this experience can be implemented in other cities across Uzbekistan. Once the infrastructure for charging stations begins to develop, evidence

marketing research. The company is considering the possibility of establishing an assembly plant for electric cars in Bukhara. The public transport and taxi sector can be a good platform for testing new technologies. One of the latest private business initiatives is the introduction of electric vehicles as taxis in Tashkent. In the near future, a new company is expected to appear in the capital, which will operate 500 vehicles manufactured by the Chinese BAIC Motor Corp. To maintain the cars, it plans to provide 10 special stations, which will allow the car to be recharged in 30 minutes.

from developed countries suggests that the number of electric vehicles on the road will increase even more rapidly. Battery prices, which represent a third of the cost of an electric vehicle, are falling every year. It is the fall in prices which will enable electric vehicles to become the major proportion of new car sales in the coming decades. It should not be forgotten that the fight for more energy efficient power plants continues every day. In the future, an electric car will travel much more than the 1 kilowatt that it does today. It will change the world view of people on transportation in general.

The metropolitan administration itself is working on several projects to introduce green technologies. For example, a large capacity Yutong bus was tested on the roads of the capital. Before the onset of the

DYNAMIC UZBEKISTAN

TRANSFER PRICING IN UZBEKISTAN:

ARE YOU TRADING AT ARM’S LENGTH? W

hat does the term “arm’s length” mean to you? The term is frequently used to describe the commercial and financial relationship between independent parties when they engage in trading activities, and it is usually synonymous with market conditions. The term does not only refer to price, but to all conditions related to the transaction. When companies forming part of the same multinational group enter intra-group transactions, the expectation would be that the commercial and financial conditions of the transactions are at arm’s length. In reality, however, the conditions of transaction often favour one of the parties above the other. Within limits,

this could be considered as effective tax planning. However, when transactions are structured to artificially reduce or increase the taxable profits of a specific group companies, it could potentially result in the conditions of the transaction being non-arm’s length. Even worse, it might be labelled as profit shifting. Transfer pricing, which historically received limited attention, has in recent years become a common word for most companies with a global footprint. A substantial increase in questionable business models and unprecedented public scrutiny over the tax practices of multinational enterprises (as was the case with Amazon, Google, Starbucks, etc. during 2012),

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resulted in transfer pricing becoming a focus area for tax authorities. This ultimately drove the rapid development of transfer pricing on a global scale. The ripples of this developments can also be seen in the Uzbekistan environment. Although transfer pricing is not in itself illegal, or necessarily abusive, the manipulation of intra-group pricing is in most cases frowned upon. To ensure that intra-group transactions are conducted under arm’s length conditions, countries would include anti avoidance or specific regulations into their laws and practices. Historically Uzbek tax legislation contained very limited provisions related to transfer pricing regulations. However, the new tax code released in 2019 contains detailed transfer pricing regulations to be effective as of 1 January, 2022. The Tax Code was developed by the Ministry of Finance and the State Tax Committee of the Republic of Uzbekistan in collaboration with the International Monetary Fund (IMF) and World Bank, as well as international and national experts. The applied transfer pricing methodology is generally based on the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations by Organization for Co-operation and Development (OECD Guidelines). The purpose of the OECD Guidelines is to provide recommendations to multinational enterprises entering intra-group transactions, for conducting their business in a responsible manner. This would allow for an allocation of appropriate tax base in each jurisdiction and the avoidance of double taxation. This in turn would result in minimising conflict between tax administrations and promoting international trade and investment. According to recent global developments, the OECD Guidelines are becoming an international pricing standard, despite being mostly recommendatory and non-binding in nature.

IS YOUR UZBEK BASED COMPANY SUBJECT TO THESE REGULATIONS? Uzbekistan resident companies could be subject to Uzbek transfer pricing regulations, regardless of the legal form or status within the group (i.e. parent, subsidiary, permanent establishment, representative office, etc.). These regulations would apply to both transactions between Uzbekistan residents, as well as cross-border intra-group transactions.

turnover between such parties exceeds UZS 5 bln. (approx. USD 472k) per calendar year. Local related party transactions may also be considered as controlled if the turnover exceeds a lower threshold of UZS 500 mln. (approx. USD 47k) and the following criteria is met: • one of the parties is a participant of a special economic zone/ uses special tax regime, or • at least one of the parties is exempt from taxation, or • subject of the concerned transaction is a mineral resource, envisaging ad valorem tax rate. As for cross-border transactions, the controlled transactions comprise operations between related parties, as well as operations (including those between non-related parties) involving: • goods traded on global commodity exchanges which fall within commodity groups such as non-ferrous metals, precious metals and stones, natural gas, mineral fertilisers, cotton fibre and yarn, or • transactions where one of the parties is registered in tax haven jurisdiction. Typically transfer pricing controlled transactions include, but are not limited to: buying and selling of goods, manufacturing activities, receiving and/ or provision of various intra-group services, (e.g. management services, financing and accounting services, information technology services, etc.), use of a group’s brand or trade name, inter-company loans, etc. Our experience from other territories shows that noncompliance with transfer pricing regulations can be costly for multinational companies, as it could lead to double taxation, interest on tax underpayment, and substantial penalties. It can also result in extended disputes with the tax authorities, including litigation. A first line of defence for a company would be putting in place a robust transfer pricing policy which is supported by a detailed transfer pricing document. If you are interested in additional information, please feel free to contact the PwC specialists listed below. PwC will be glad to share experience on some topics and provide some insights into recent developments in the Uzbekistan transfer pricing practice.

Generally, transactions between Uzbek resident related parties are viewed as controlled if the amount of annual

Abdulkhamid Muminov Managing Partner

Jamshid Juraev Director

Ben Pietersen Senior manager

Alisher Zufarov Senior manager

DYNAMIC UZBEKISTAN

ARTEL’S TRANSFORMATION: A FLAGSHIP UZBEK COMPANY DREAMS BIG Artel’s new CEO, Shohruh Ruzikulov, speaks to Dynamic Uzbekistan about the company's journey, and the steps to come.

zbekistan is rapidly opening up to the world. Recent reforms mean we are now welcoming tourists and attracting international investment.

Like our country, we at Artel are seizing the opportunity to transform ourselves from a domestic company, to a truly international one. Artel is a prime example of an Uzbek corporate success story. Uzbekistan’s 30th year of independence coincides with our 10th year of operations. From humble

beginnings in 2011 - with one factory and limited products - we have grown to become one of Central Asia’s most recognizable brands. We are also one of the country’s biggest employers, with a team of around 10,000 people working on our products throughout the country. Our wide range of appliances and electronics are a feature of every Uzbek home.

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This year, I took up the role of CEO of Artel. I have been intimately involved in our growth to date, having held various roles within the company over the last decade. I am now responsible for leading us through this period of accelerated change. So, what are we doing? As a major company with international ambitions, we have prioritized our corporate reorganization to align with global best practice. The 2019 tax reforms have been fundamental to these efforts, allowing us to restructure our holdings and operations to increase transparency and maximize efficiency. Earlier this year, we completed the consolidation of our previous corporate entities into one company, ‘Artel Electronics LLC’. Deloitte has audited our combined financial statements from the last three years in accordance with the IFRS, and our entire operations are now accounted for under one roof. We have also introduced a professional supervisory board to advise on and monitor our operations. Most recently, in June we obtained our first Fitch rating, and became Uzbekistan’s first private manufacturing company to be rated by one of the “Big Three” international credit rating agencies. Fitch’s acknowledgement of our strong profitability, leading domestic market position and successful cooperation with some of the world’s leading brands is affirmation of the strength of our business. As a globally recognized assessment of our creditworthiness, the rating will streamline discussions with lenders and potential partners. It is a sign of the progress we have made, and provides useful directions for further development. Each of these steps in our corporate transformation builds on the other to strengthen our business. They contribute to our resilience as we explore new opportunities for growth and investment, and as we look towards entering the international capital markets. Reforms are also supporting us in other areas. Externally, Artel is a flagship for Uzbek manufacturing abroad. Our products are now sold in over 20 countries and our exports are seeing exponential growth. A 2021

Presidential Decree providing measures that promote exports and help cover transportation costs will assist in this momentum, and increasing our competitiveness internationally. On innovation, as one of the leading investors in research in Uzbekistan we are well positioned to take advantage of reforms promoting Research & Development (R&D). The Government is introducing measures to increase the tax efficiency of R&D expenditure, making our outlay on innovation even more worthwhile. Our plans for R&D expansion are significant; we will add over 100 specialists to our teams in the coming years and to open up departments in robotics and automation. Our products will continue to develop to serve our customers in the best way possible. These are just a few examples of the changes currently taking place inside Artel. We are enhancing our processes and introducing new forms of communication. In ESG, alongside our attention to corporate governance, we are researching our impact on the environment and seeking ways to mitigate it. We are overhauling our HR strategies and bringing in processes to benefit our employees. We are reviewing and standardizing our sales and procurement procedures to optimize our operations and to increase our efficiency. Yet this transformation is not without its challenges. For a company of our scale, we must critically assess all of our current processes and judge their suitability for where we want to be. There is a long road ahead. But we are up to the challenge. We have a strong team that is working tirelessly towards our ambitions. Together, in this continued business-friendly environment, we know we can achieve our goals and be a beacon of Uzbek private business internationally. As a proud Uzbek company, we are delighted to congratulate our country on 30 years of independence. We look forward to celebrating another 30 years of growth and prosperity together.

SOCIETY AND ENVIRONMENT

DYNAMIC UZBEKISTAN

GENDER EQUALITY: UNTAPPED POTENTIAL FOR LOCAL DEVELOPMENT

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n an interview with Dynamic Uzbekistan, Mavlyuda Shirinova, Director of the Sabr Centre for Socio-Economic Development, spoke about the need for gender education of youth, and instilling professional skills in women and girls from poor families. The centre’s main strategy for the coming years is to develop the potential of women in rural areas.

— For a quarter of a century you have been dealing with issues relating to the social protection and economic development of women in Uzbekistan. Does the country deliver opportunities for selfrealisation of girls and women? Or are there still outdated prejudices or other obstacles?

employment. The state is creating rehabilitation centres and shelters for women and children who have suffered from domestic violence. We dreamed about this for many years, tried to open and organise their work, but due to the lack of government support, these shelters were forced to close.

— 26 years ago, I first visited the UK and learned about the existence of centres to assist the female victims of domestic violence, about women's non-governmental organisations (NGOs). If you consider my path from the deputy khokim in charge of women and families, to the founder and director of an NGO, then I have already overcome many difficulties on this path. In our country, as in the whole world, there are problems of violence against women, problems related to gender equality, but the President and state structures are beginning to fully recognise these problems and support the country's activities dealing with the problems of violence, gender inequality, poverty, etc.

Never before at the state level has there been such a large-scale attention to women, youth, and vulnerable groups of the population.

For over 18 years, I, along with my colleagues from other women's NGOs, have promoted and lobbied for measures against violence and gender equality. There was a time when we were not allowed to say the words “domestic violence”, “gender”, “woman leader”. But after a long period, with the arrival of the new leader Shavkat Mirziyoyev, everything has changed dramatically. And now, with the adoption of two laws "On guarantees of equal rights and opportunities for women and men" and "On the protection of women from oppression and violence", we can say that the country is developing a clear system for the support and self-realisation of women and girls in all spheres. In Uzbekistan, a large-scale program is being implemented to protect the rights of women and increase their role in society, as well as to implement a strong social policy, targeted measures to provide women in need with housing and work, and to provide them with targeted grants and loans to ensure

THE STATE IS CREATING REHABILITATION CENTRES AND SHELTERS FOR WOMEN AND CHILDREN WHO HAVE SUFFERED FROM DOMESTIC VIOLENCE. WE DREAMED ABOUT THIS FOR MANY YEARS

— Our people are rightfully proud of their cultural heritage, family foundations and traditions. How can these important values be reconciled with the urgent need to ensure that girls and women have the right to full employment, education, and other activities? After all, it is obvious that technological progress cannot be a purely male occupation. — I studied at a Russian-language school in Uzbekistan, and after receiving higher education in St. Petersburg and Moscow, I can sincerely admit to you that if it were not for my spouse's insistence on winning my heart, I probably would never have married. My traditional Uzbek upbringing, with all the foundations and traditions of an Eastern family, fought within me against the education that I received in Russia. And I am more than sure that such thoughts, how to overcome them or find a niche which combined service to the family and the desire to achieve something in a career, were probably shared by many Uzbek girls. I believe that the essence of gender education is to help children of both sexes develop their individual qualities, regardless of social expectations about the role of men and women in society. In other words, so that my grandchildren Sofia and Nursultan see themselves in the future not only as a good housewife and, accordingly, a defender of the weak, but also as a woman leader and as a gentle father. Society is responsible for this, but above all, the family is responsible. Children brought up in the spirit of equal rights get more opportunities for self-realisation in adult life, because they are primarily guided by their personal qualities and abilities, and not by the fate prepared for men and women. Gender stereotypes and some archaic national attitudes towards girls in many of our families limit life choices and social roles. There is a strict attachment to age-old traditions, as well as a lack of flexibility in responding to the new social roles of men and women in the modern world. There are plenty of examples of this today. Stereotypes about real men and real women

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are created by people, which means that we ourselves can change them. The images of Margaret Thatcher, Benazir Bhutto, and Angela Merkel show that there are no reference men and women.

development of women's business activity. Are the institutions of civil society in Uzbekistan coping with this task? Do they need additional support from the state and other structures?

Visiting the most remote villages of the country from Muynak in Karakalpakstan to Mirzachul in the Jizzakh region, I can say that in recent years it has become easier for women to obtain loans, create their own business, acquire professional skills, and get medical support. I cannot say that everything is equally good everywhere, but the fact that the majority of women can now openly express their opinion, receive concrete practical help in the Single Window of Public Services, or that thousands of women with disabilities, with sick

Since 2011 in rural areas of Samarkand region, and since 2019 in nine regions of the country, we have created local development centres to instil professional skills in women and girls from poor families. Opening these centres, as well as conducting training for them on improving self-esteem, gender equality, resolving conflicts in the family, the basics of doing business, financial and legal literacy, and providing microloans to start a business, is one of Sabr's best and most demanded activities.

I BELIEVE THAT THE ESSENCE OF GENDER EDUCATION IS TO HELP CHILDREN OF BOTH SEXES DEVELOP THEIR INDIVIDUAL QUALITIES, REGARDLESS OF SOCIAL EXPECTATIONS ABOUT THE ROLE OF MEN AND WOMEN IN SOCIETY children, have received new housing with the support of the state is today's reality. In our country, a whole team of bloggers, independent journalists, and even parliamentarians have appeared. They bring attention to the most acute problems concerning women and children, and it is a well known fact that freedom of thought is one of the main attributes of democratic development. It cannot be said that all these processes are perceived and supported by all strata of society, especially its conservative part. Not only civil society institutions, but all people still have a lot of work to do. Conservative views and methods of upbringing, where the main role of an Uzbek woman is to give birth to children, to serve her husband, family and all her husband's relatives, to be always one step lower, cannot be changed immediately by laws or orders. Very painstaking and long work needs to be done in order to change the stereotypes and thinking of the conservative part of the population. It seems to me that many state programmes are now aimed precisely at supporting the creative ideas of both girls and boys. Creative economy, the fourth industrial revolution: these are new terms, the essence of which is not entirely clear to many, especially the women from low-income rural families with whom Sabr has been working for 25 years. And our strategy for the coming years is to develop the potential of rural women, increase their computer literacy, attract and support gifted girls from low-income families to master IT technologies, and develop creative thinking among women and youth. — One of the key interests of Sabr has always been training and practical programmes for the

The combination of a socio-economic approach within the framework of the Global Strategy for Lifelong Learning helps the target group find ways to improve the well-being of not only themselves, but also other family members. Meetings with young girls and women in rural areas who have acquired professional skills and started their own business show that their empowerment (increasing influence) is important not only within their families, but also in their community. I believe that when there is political will on the part of the state, and conditions are created for the development of civil society institutions, the priorities and work that the authorities have set for themselves remain to be determined. But the main goal of NGOs is to protect, promote and defend the interests of the population. —Taking into account your experience, what is the potential for more effective interaction of civil society institutions like Sabr with the business community? —An interesting trend has been observed in recent years. Microfinance organisations (MCOs) from Russia, Kazakhstan, and Kyrgyzstan want to enter the Uzbek market. Despite the fact that we are a socially-oriented MCO and we use the income to expand the microcredit portfolio and fulfil statutory goals, there are potential investors who want to buy our microcredit organisation together with our customers and service regions. This may be a good idea for some, but for us the primary goal is to improve the situation of the poor, not to make a big profit. The average size of the microloans issued by us is $ 380. This figure speaks for itself, but in spite of the small size of micro loans, this activity is profitable and allows us to assist more women to grow their businesses. We, the teams of the Sabr NGO and the Sabr MCO, provide real socio-economic support to poor women

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and youth from rural regions. Our strategy is based on changing the quality of life of our clients through training, increasing self-esteem, and instilling professional skills. One example: on March 15, 2020, quarantine was declared due to COVID-19 and our activities for issuing and collecting micro loans were suspended. Almost all of our micro-credit portfolio remained in the hands of our clients. We were all in shock and could not do anything about it. However, after the quarantine was lifted, our clients quietly began to return the loans they received, and by the end of December, our portfolio was restored by 95%, despite the fact that our clients are mainly from the poor. This fact confirmed that we are on the right track and we have mutual understanding and mutual trust with our cluents. This is worth a lot. We believe that an integrated, socio-economic approach to supporting the poor leads to change and transformation within the target group and the community as a whole. The majority of our women are engaged in manufacturing and marketing of handicrafts products: gold embroidery, suzanis, carpet weaving, and the production of national clothes and chapans. Residents of rural regions, especially women and youth, are very creative, but their creative ideas remain in the shadow. In recognition of this, Sabr’s next strategy will be aimed at creating conditions for creative ideas to flourish. It will concentrate not only on the internal market but also the external market. Combined with he flow of internal and external tourism, this creative component could be capitalised and visible across the regional and national economy.

When Sabr began its programmes in the villages of Urgut district in Samarkand region in 2000, we began to conduct training on needs and needs assessment using the Participatory Rural Appraisal (PRA) method. In this method, community members participate in identifying their needs. This method helped our target groups to prioritise and decide for themselves what they can do and what they need to develop. Today, in 13 villages of Urgut, we have entire mahallas in which residents have created their own clusters for the manufacture of Urgut gold embroidery products, suzanis and chapans, and the cultivation of agricultural products. The creation of infrastructure, including creative clusters and business incubators, is of great importance for the development of creative industries. And the most important component in this matter is the training of women and youth, their career guidance, access to resources, IT technologies, the search for new methods for selling products, and self-realisation. These are the things we want to work on in the near future. Development realities in the world today show that the demand for services in the creative economy will grow. In this regard, creativity and ideas become good commodities. In the modern world, from East to West, the structure of consumption is changing: now goods’ artistic and aesthetic components have a price and meaning. Our goal is to educate creative women and young people from low-income families to promote their products through digital platforms, because the creative industry is a huge, fast growing segment of the economy, which belongs to the future.

DYNAMIC UZBEKISTAN

ENVISIONING CENTRAL ASIA’S GREEN RECOVERY

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Anna Bjerde Vice President for Europe and Central Asia at the World Bank

nyone who has been to Central Asia can attest to the region’s vast natural beauty, broad and diverse cultural history, and generous and hospitable people. You are met with kindness and warmth at every turn. Such was my experience last month during my first official trip to the region as the World Bank’s Vice President for Europe and Central Asia. I wanted to hear first-hand about the development challenges countries in the region are facing, and to learn more about their goals in a post-pandemic future.

help protect lives and livelihoods, including through their vaccination efforts, while also continuing to support their medium-term reform agendas. In Central Asia, as around the world, we are working closely with countries to support their COVID-19 responses through a three stage approach: relief – with an initial emergency response in the health sector; restructuring – helping people, firms and institutions regain a solid footing; and resilient recovery – helping countries build a more sustainable, inclusive, and resilient future.

Visiting four countries – Kazakhstan, the Kyrgyz Republic, Tajikistan, and Uzbekistan – I met with government leaders, private sector representatives, parliamentarians, and representatives from civil society and development organisations, as well as ordinary citizens. We discussed a wide range of key issues including growth and jobs, poverty reduction, regional development, connectivity, trade, decarbonisation, energy efficiency, private sector growth, disaster risk management, and climate change. Our conversations inevitably led to imagining a world after COVID-19.

I was asked how Central Asian countries can ensure a resilient recovery in the face of existential threats like climate change.

The Central Asia region has been hit hard by the pandemic. In addition to the significant health and economic impacts, around 1.6 million people slipped into poverty in 2020. No country or province has been left unscathed. Households already struggling to make ends meet, and those heavily reliant on remittances from abroad, faced the greatest hardship.

Central Asia’s economies are also heavily reliant on carbon-based energy sources – the region is home to some of the world’s most carbon-intensive economies. Bishkek, the capital of the Kyrgyz Republic, recently earned the inauspicious title of most polluted city in the world based on international air quality ratings for several days in December 2020.

As such, governments in the region are tackling significant challenges, and I reiterated the World Bank’s commitment to providing them with rapid support to

A resilient recovery will therefore require actions and policies which benefit both people and planet, and which put green growth at the centre of future

Climate change has enormous significance for Central Asia, a region already highly vulnerable to natural disasters – climate-related and unrelated – such as droughts, floods, earthquakes, and mudslides. In the past three decades alone, the region has experienced 500 floods and earthquakes, impacting 25 million people, and causing $80 billion in damages.

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THE REGION HAS A UNIQUE OPPORTUNITY TO SUPPORT SUSTAINABLE GROWTH AND JOB CREATION THROUGH GREEN INVESTMENTS, SUCH AS CLEANER ENERGY AND ENERGY EFFICIENCY, NATURAL CAPITAL RESTORATION, AND SUSTAINABLE AGRICULTURE

development goals. It will also require substantial political and public will to make this happen within a very tight implementation timeline. For our part, we have committed that over the next five years, 35 percent of World Bank financing globally will deliver climate co-benefits in our projects, and at least 50 percent of our total climate finance will support investments in adaptation. To translate this commitment to our operations in Central Asia, we are prioritising investments which will facilitate a green, climate-smart economic transition; strengthen, preserve, and leverage agriculture and natural capital for climate resilience; accelerate sustainable, integrated spatial development aligned to a green economy; and address fragility and exclusion so that the transition works for everyone.

The region has a unique opportunity to support sustainable growth and job creation through green investments, such as cleaner energy and energy efficiency, natural capital restoration, and sustainable agriculture. I was inspired to see that a lot of this is already happening, moving economies along a path of green, resilient and inclusive development. For example, the Kyrgyz Republic, Tajikistan, and Uzbekistan have identified the need to build resilience and address climate vulnerabilities in their nationally determined contributions. Kazakhstan has pledged to achieve carbon neutrality by 2060, and is the first country in Central Asia to establish an emissions trading scheme. Uzbekistan has also adopted several key policy reforms since 2019, including a plan to modernise and diversify agriculture, invest more in climate adaptation, and expand the use of renewable energy.

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The World Bank is also partnering with countries in several ways. For example, we are helping Kazakhstan ensure the environmental sustainability of exportoriented beef production and mitigate the industry’s climate impacts. In the Kyrgyz Republic, thousands of families are improving their nutrition and seeing higher incomes from agricultural activities in a way which does not harm the environment. In Tajikistan, we are helping to rehabilitate and restore the outdated Nurek Hydropower Plant, which will lead to a reduction in CO2 emissions by 68 million tons – equivalent to powering 12 million homes with electricity for an entire year. In Uzbekistan, we helped launch the construction of the country’s first large-scale, privately developed and operated solar power plant, which will produce 270 GWh of electricity per year – enough to power more than 31,000 households and prevent the release of 156,000 tons of CO2 emissions annually.

A RESILIENT RECOVERY WILL

The countries of Central Asia have already taken important steps toward a more resilient and inclusive growth model. By continuing to balance short- and medium-term priorities and taking advantage of new technologies, innovation, and green financing, Central Asia can both recover more quickly from the pandemic and come off the list of the world’s most carbonintensive economies. As we look to the future, the World Bank will continue supporting Central Asian countries in achieving a green, resilient, and inclusive recovery – one that opens up greater opportunities for prosperity, benefits all people, and leaves no one behind. Because that is truly the way forward.

THEREFORE REQUIRE ACTIONS AND POLICIES WHICH BENEFIT BOTH PEOPLE AND PLANET, AND WHICH PUT GREEN GROWTH AT THE CENTRE OF FUTURE DEVELOPMENT GOALS

DYNAMIC UZBEKISTAN

“ALL ENVIRONMENTAL PROBLEMS ARE ASSOCIATED WITH THE OVERALL ECONOMIC DEVELOPMENT”” DEVELOPMENT

lexey Volkov, national coordinator of the UNDP Global Environment Program, spoke in an interview with Dynamic Uzbekistan about the factors which fundamentally affect the environmental situation in Uzbekistan.

the felling of trees. In fact, these problems are not just environmental, but because the use of natural resources in Uzbekistan is very widespread, I will name a few. The first big problem is energy. Our energy sector is now fully adapted to the use of hydrocarbons. Many people know that we have a significant energy deficit, which is why gas and electricity are often cut. These problems do not appear to be environmental. In fact, the urgent task before us is to reform the energy sector. The government is engaged in the construction of a nuclear power plant. I will not comment on this, but I will say that the energy of this plant can give a big boost to the economy of Uzbekistan.

THE ORIGIN OF THE PROBLEM There are currently many environmental problems in Uzbekistan. But the point is, people don't pay much attention to them, because we have an offbeat understanding of what constitutes an environmental issues People used to think of ecology as simply recycling and waste management. Now there is another acute problem which everyone has heard about. It is

I would like to clarify that absolutely all environmental problems are directly related to the overall development of the economy of Uzbekistan. One thing depends on another. For example, the development of almost all economic sectors depends on the availability of energy. Energy is a natural monopoly; it cannot guarantee a stable energy supply. One of the options for reforming the energy sector is decentralisation. We need to develop the private energy sector as much as possible, and there are opportunities for this in Uzbekistan.

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Wind power and small hydro plants are hardly developed at all in our country. There are tens of thousands of kilometres of irrigation and collection canals, which offer enormous potential for the development of micro-hydropower. What does it mean? First of all, if we develop the independent power generation sector, it will boost the development of the whole economy. It should be noted that all this energy will be green, that is to say the development will be in the low-carbon energy sector. There is enormous potential here for reducing greenhouse gas emissions. This is an additional contribution from Uzbekistan to solving the problems of climate change. Another problem linked to the shortage of available energy is the degradation of forest vegetation. When people, especially in rural areas, do not have electricity in winter, they cut down any vegetation in the area. Since the energy shortages are so great, a tremendous amount of vegetation is cut down. In fact, we are killing the stability of the entire ecosystem, because the result of this degradation is that the soil dries up, and fertility decreases. The soil will be more susceptible to erosion, as the wind carries away the fertile layer. Thus, the lack of energy can affect our life: if there is no energy, vegetation is cut down, soil fertility decreases, and people lose sources of income. Further, the ecosystem will degrade more and more, because people are still trying to grow things on such soil, but greater water usage does not help. As a result, water is wasted, and downstream the entire ecosystem suffers from lack of water. People start to use water irrationally, and this leads to even greater environmental problems. I will give just a small example of how the problem of soil degradation can radically affect the entire ecosystem of the region. In Uzbekistan, the government has recently been stimulating the consumption of groundwater so that people can grow export-oriented products and develop agriculture. There is not enough water: the government understands this, and therefore we now have a very large, state programme for water conservation. This is a great programme and I welcome it. But on the other hand, the government allows people to drill wells and extract water with virtually no controls. People do not understand that the drilling of wells and the uncontrolled use of water can lead to an ecological catastrophe, since the so-called emergency reserve of a poorly studied underground system is being consumed. Within 5-10 years, this can lead to enormous environmental consequences. In India and the Middle East, they have discovered that in as little as five years, the level of groundwater can drop by hundreds of metres. This naturally leads to desertification and degradation of the terrestrial ecological system. This, of course, requires a very wise approach to the use of such natural resources.

"WE HAVE TO CHANGE PEOPLE’S MENTALITY" Uzbekistan has signed the Paris Agreement and made such modest commitments that the country doesn’t have to do anything to reduce its emissions. This is very bad because we are only thinking about how these commitments can hurt industry. No one considers how much income alternative energies can bring, or what losses caused by climate change can be mitigated. Already, Uzbekistan's agricultural sector is suffering huge losses due to climate change. Farmers do not associate the consequences of a poor harvest with weather conditions. What they’re thinking is: yes, this year there was too little precipitation or too much heat. But these are all consequences of climate change, and we are taking very modest measures in the fight against it. If every country responds to the effects of climate change in this way, the overall picture will not change. It will get worse and worse, because every country thinks: we don't need this, it will hinder the development of the economy, let others reduce their emissions. One of the most pressing problems for Uzbekistan is the loss of soil fertility. I would even list it first, because it threatens the country's food security. How, for how long, and with what efficiency can we grow the food needed by the population? Data already shows that in the past 50 years, Uzbekistan has lost a very large amount of fertile soil. Farmers invest mainly in commercial infrastructure: the purchase of machinery, construction of greenhouses, roads, etc. Almost no one invests in maintaining fertility. The problem of soil fertility is mostly linked to our basic cultivation practices. The technology is outdated and does not take into account the farmers’ needs. All over the world, people do not yet quantify climate in monetary terms. It is seen as a free breakfast somewhere in the hotel. The same goes for resources and energy, which are subsidised in Uzbekistan. People take all natural resources for granted, and this is the source of the problem. It is necessary to change the mentality of people in Uzbekistan. If a farmer wants his land to produce high yields in the long term, he must invest in maintaining soil fertility. To maintain fertility, it is very important to preserve the vegetation around the fields; that is, to plant a protective forest belt, and bio manures which the farmer should plant after harvest of the main harvest. But nobody does this in Uzbekistan.

DYNAMIC UZBEKISTAN

BECOME A PART OF OUR MAHALLA Mahalla by Shosh is a gastronomic delight with an Uzbek accent at Hilton Tashkent City

2021, #5

ocated on the summer terrace at Hilton Tashkent City, this new restaurant, Mahalla by Shosh, is an incredible find for those who want to hide from the summer heat in the centre of our modern megapolis. Here, residents and visitors to the capital can try traditional cuisine and experience the culture of this region. The restaurant menu reflects the variety and richness of traditional Uzbek cuisine, from world famous dishes such as plov, shashlik and somsa, to the lesser known (but no less delicious) shilpildok or Bukhara shalob. It is no secret that traditional Uzbek cuisine is mostly meat based; thus, those wishing to taste juicy, tender, and aromatic meat will be truly pleased. At Mahalla by Shosh, you will find a wide selection of beef, lamb, and poultry shashliks (kebabs). A must try are also the mouth-watering beef ribs or tovuksay (stir-fried chicken with vegetables). Moreover, if you order beef in creamy sauce, the chefs will organise a spectacular serving right in front of you. Even vegetarians will find something suitable for their dietary preferences, for example the vegetable barbecue, homemade potatoes, manty, and tandir samsa with pumpkin. Guests can also find a wide selection of salads, soups, and hot and cold appetisers. These, include the essence of the centuries-old heritage of Uzbekistan, as well as new iterations of national cuisine, like beef tongue salad with arugula. Here in the restaurant, as in a traditional chaykhona (teahouse), you will be offered fragrant tea such as Green Samarkand or the legendary Tea 95, which is widely loved by locals. For dessert, one can order pakhlava with honey and nuts; tender chak-chak; as well

as jams made from various fruits and berries. Mahalla by Shosh’s terrace is an ideal venue to host gatherings with friends or family. Guests can sit on a traditional tapchan or at a normal table. Warm lights, flowing adras fabrics, singing quails, and brightly painted ceramics by local craftsmen create a cosy and authentic atmosphere in the restaurant. The restaurant’s main piece of art is an arba (wooden cart), which dates back to early 20th century. The arba was brought specially from the Khorezm region. Entertainment at Mahalla by Shosh also mirrors local identity. Guests can play backgammon, and view locally made handicrafts and purchase the at the souvenir shop. On Fridays and Saturdays, a breath-taking tightrope show and beautiful traditional dances await guests. For convenience, valet parking is provided on a complimentary basis. The new venue is a cool green oasis where one can taste favourite Uzbek dishes and spend quality time with family, friends, and loved ones. See you at Mahalla by Shosh. Address: 2, Islam Karimov Str., Tashkent 1st Floor of the Hilton Tashkent City Hotel Phone: +99871 210 88 88 / +99894 940 10 18 Instagram: @MahallabyShosh Facebook: @MahallabyShosh Website:www.htrmeals.uz

DYNAMIC UZBEKISTAN

CAROLINE FOGIEL: EDUCATION IS MORE THAN JUST ACADEMIC KNOWLEDGE

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nvento International School has implemented a Swiss educational programme for children from two to seven years old. Its distinctive feature is the discovery of the creative abilities and individual skills of each child. Also, children receive academic skills in two languages. The academic director and coordinator of the international Baccalaureate programme for primary school students, Caroline Fogiel (Australia), spoke about this new generation of kindergartens.

– Early years education is important in ensuring the creativity and innovative thinking of future generations, thus making the foundation for individual development and economic progress. How does Invento sees its own role/mission in such efforts? – By implementing the PYP framework, Invento instills important skills in young learners, such as inquiry, communication, collaboration, and international mindedness. It will feed a life-long learning habit which will enable learners to adapt to the demands of our time in their local and global environment. At Invento, we see our mission as bringing international education standards to Uzbek families at a time where the country is at a crossroad in its history. There is currently a strong emphasis on improving educational institutions in Uzbekistan, and this is the perfect time to launch a school like ours. – How would you describe Invento’s unique approach to teaching? How does it differ from

other international schools and kindergartens in Uzbekistan? – The PYP promotes student-centred education rather than a teacher-centred approach. Our young learners are encouraged to be actively involved in their learning and to develop their individual interests in their learning. This is what we call “student’s agency” and “student’s voice”. From an early age and through the experimental process, our learners develop the possibility to make sense of the world by themselves, without depending solely on the teacher. It is very empowering and nurtures a sense of responsibility in the learning process. Our students are taught to question and to find out. As such, our kindergarten is unique. – Could you tell us more about Invento’s holistic programme? What is this concept about, and why it should be effective in Uzbekistan?

DYNAMIC UZBEKISTAN

– At Invento, we believe that education goes much further than just academia. Creativity must be valued and nurtured from a very young age. Music, pottery, and visual arts are offered to all our students as an intrinsic part of the school day. Physical education is equally important to the holistic development of an individual. We learn with and through our body as well. For young learners in particular, physical and hands-on activities are perfect opportunities to inquire, try, fail, and develop resilience. Arts, music, and sports are valued in Uzbek culture, and our parents are appreciative of the fact that our programmes encompass a comprehensive education.

programme. Hence, we meet the Uzbek demands in terms of content, which we deliver through an inquirybased and trans-disciplinary approach. We even extend our students as the PYP framework contains other learning objectives which we need to meet to become a PYP authorised school. I personally meet a lot of parents to explain how we monitor and evaluate students’ progress. My experience is that they understand that tests are not the most accurate way to evaluate learning, especially for very young learners. Instead, we monitor progress and collect numerous evidence of learning, in an ongoing manner, which provides us with much more accurate information about each student.

– How do (or don’t) you try to adapt the PYP framework to the culture and traditions of Uzbekistan? Do your teachers feel any difficulties in convincing parents of the long-term positive impact of your methods, given the fact that older generations used to see the kindergarten and primary school as “discipline and high marks demanding” educational institutions?

– Invento started functioning only a year ago. What have you already achieved/learned during this short period? How has the Covid-19 pandemic influenced your work?

– The PYP is a framework applied in more than 5,000 schools around the world, respecting the curriculum demands of national schools. Each PYP school is unique and reflects the local culture. It is a part of the international-mindedness component of the

– When I joined the school at the end of June 2020, there were 31 students and we have grown to 250 students as of today. During the lockdown, we continued to teach through Zoom, enabling our learners to remain engaged and active in their learning. We are very rigorous about hygiene and our campus is disinfected daily. Every day we realise the importance of school in children’ lives: they learn better with and from each other. Confinement has certainly had an

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impact on many of them and their families, and we, as a community, do our best to address individual learning needs. – Uzbekistan’s private education market has been steadily growing during recent years, with many schools and kindergartens opened in every big city. Would you agree that this sector is far from saturated and could be a magnet for investments, job creation, and overall development? Does Invento have ambition for further growth and opening branches in other regions of Uzbekistan? – Invento plans to open a primary school in Tashkent for the 2021-2022 academic year. Construction is underway, and recruitment and resourcing are taking place. There is much demand for holistic education and for international standards being implemented in Uzbek educational institutions. It is a great opportunity for local professionals to collaborate with international counterparts.

– At the same time, critics point to the low quality of some private schools and kindergartens, which are more aimed on profiteering, thus damaging the reputation of this sector. Others express concern that private education absorbs the best teachers and is better equipped than state establishments, benefiting only for those who can afford it and preventing social mobility. How, in your opinion, can we avoid or mitigate such risks? – At Invento, we put students’ interests at the core of our daily activities. All our conversations revolve around them. Naturally, we look to provide the best professionals, the best programme, the best food, and the best environment that we can. We are humbled by the trust put in us by the community and we all feel a strong sense of responsibility in our mission. In education in particular, trust between all stakeholders is crucial to ensure the best outcomes for our students. Our school fees reflect our mission, which is to offer quality education to wide range of families.

AMCHAM EVENTS & UPDATES

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New AmCham Members APEX INSURANCE LLC

Herbalife Nutrition (NYSE: HLF)

Foreign Enterprise “Azimuth Insurance Company” LLC AmCham Corporate Category: Non-resident AmCham Member Since: June 1, 2021

AmCham Corporate Category: Bronze AmCham Member Since: Company Description: APEX INSURANCE LLC Received a License to carry out insurance activities in compulsory and voluntary forms in insurance 17 classes. APEX INSURANCE was awarded a certificate of reliability on a national scale by the rating agency «uzA++». APEX INSURANCE has successfully passed an audit and received a certificate of compliance with DIN EN ISO 9001: 2015. License of the Ministry of Finance of the Republic of Uzbekistan Series SF No. 00241 dated 20.04.2019 Contact Information Name of the head of the company: Timur M. Saidov Contact person: Nodir Abrazimov Address: Tashkent, Buyuk Ipak Yoli str. 154-A Telephone: +998 (78) 203 08 08 Fax: None E-mail: info@apexinsurance.uz Website: apexinsurance.uz

AmCham Corporate Category: Gold AmCham Member Since: June 2021 Company Description: Azimuth Insurance Company ‘AIC’entered the insurance market of Uzbekistan as the first foreign enterprise. AIC is 100% owned by ICA Group Ltd, an investment of London-based investment firm InFrontier Ltd. The charter capital is formed 100% in cash in the amount of 38 billion som allowing AIC to write all types of nonlife insurance as well as inward reinsurance. ICA Group Ltd also operates the largest insurance company in Afghanistan (ICA) and supports regional growth of the insurance market. ICA Group and AIC are backed by A-rated reinsurance firms in London and the UAE. Our treaty reinsurance allows to take risks up to 36 million USD, with the possibility of increasing the reinsurance capacity up to $200 million. InFrontier is a UK based investment firm, authorised and regulated by the Financial Conduct Authority, investing in South and Central Asia growth opportunities.

Company Description: Herbalife Nutrition (NYSE: HLF) is a global company that has been changing people’s lives with great nutrition products and a proven business opportunity for its independent distributors since 1980. The Company offers high-quality, science-backed products, sold in over 90 countries by entrepreneurial distributors who provide one-onone coaching and a supportive community that inspires their customers to embrace a healthier, more active lifestyle. Through the Company’s global campaign to eradicate hunger, Herbalife Nutrition is also committed to bringing nutrition and education to communities around the world. Herbalife Nutrition supports the Herbalife Nutrition Foundation, a non-profit organization that assists community organizations focused on providing good nutrition. Herbalife Nutrition is also proud to sponsor more than 190 world-class athletes, teams and events around the globe. Herbalife Nutrition has more than 8,300 employees worldwide. To learn more, visit IAmHerbalife.com.

Contact Information Name of the head of the company: Oybek Nosirovich Khalilov, General Director Contact person: Adelya Babikova, Chief Accountant Address: 8, Tarakkiyot street, 2nd Passage, Tashkent 100047, Uzbekistan Telephone: +998 (97) 774 00 13, +998 (97) 734 00 13 E-mail: Adelya.babikova@aicuz.com Website: www.aicuz.co

Contact Information Chief Executive in Kazakhstan: Elvira Bolotova (General Director) Contact Person: Dmitriy Miklin (Government Affairs Director) Address: Kazakhstan, A15E2T6, Almaty, Al-Farabi avenue, 19/1, BC «Nurly Tau», block 3B, floor 8 Telephone: 7 (727) 275 90 40 Fax: 7 (727) 275 90 35 Email: elvirabo@herbalife.com Website: https://herbalifeuzbekistan.com/ru/

2020, #5

LeBazar

LLC Darvoza Savdo ( Makro)

AmCham Corporate Category: Bronze Member AmCham Member Since: February 1, 2021

AmCham Corporate Category: Platinum AmCham Member Since: November 1, 2020

Company Description: Lean Trade Solutions LLC, headquartered at Tashkent city, Uzbekistan, is an e-commerce business that focuses on delivering grocery products. It operates under the brand name Lebazar. The company operates in partnership with korzinka.uz supermarkets and delivers products from its chains. To increase the product category offered, LeBazar is collaborating with other vendors, such as Erkatoy, kanstik.uz, Willmoda and others. The Lebazar is leading e-commerce company in the region in terms of hsales.

Company Description: The Makro chain of supermarkets and hypermarkets was created in 2010 in Tashkent when the first Makro store was opened in Megaplanet Mall which in turn was also operated by Orient Group of Companies.

Contact Information Address: 6, CHILANZAR-1, TASHKENT, UZBEKISTAN 100115 Telephone: +998 (71) 230 70 86, +998 (90) 033 26 66 Fax: None E-mail: INFO@LEBAZAR.UZ ZOKHID.ULM@LEBAZAR.UZ Website: WWW.LEBAZAR.UZ Name of the head of the company: Zokhid Ulmasbaev Contact person: Durdona Akhmadjonova

Makro chain is the largest scale food retail distributor in Uzbekistan with 108 stores mainly located in the capital of Uzbekistan, in Tashkent. Nowadays, Makro expands to the main regions such as Fergana, Andijan, and Namangan regions, namely to Fergana, Kokand, Asaka, Shahrikhan, and Namangan cities. We strongly believe in the impetuous development of the chain as Uzbek consumer behaviors and daily grocery shopping habits are evolving from bazaars to supermarkets as happened in neighboring countries such as Russia and Kazakhstan. Supermarkets and hypermarkets offer comfortable shopping in a favorable environment with safe and good quality products and the opportunity to pay by credit card. Today, Makro (“Darvoza Savdo” LLC) successfully completed the transformation process to IFRS and implemented the ISO standards ( 9001/22000) in all stores and distribution centers. Recently, Makro has been awarded by Retail Asia Awards 2021 (Singapore) as Domestic Retailer of the Year and Convenience Store of the Year Contact Information Address: 191 Furkat st,

Chilanzar District, Tashkent 1000066, Uzbekistan Telephone: +998 (78) 147 11 99 Fax: +998 (78) 147 11 99 Email: info@msmarket.uz Website: makromarket.uz Name of the head of the company: Roman Sayfulin Contact person: Dilafruz Erkabaeva +998 (97) 707 80 07 Mercy Corps

AmCham Corporate Category: Nonprofit organization AmCham Member Since: May 1, 2021 Company Description: Mercy Corps exists to alleviate suffering, poverty and oppression by helping people build secure, productive and just communities. In more than 40 countries, we partner with local communities to put bold solutions into action, helping people triumph over adversity and grow stronger from within. For the mother who wants a healthy future for her children, for the refugee who dreams of returning home – for millions of people filled with the power of possibility – Mercy Corps provides the tools to build a better, stronger world. Contact Information Address: 26, Bogsaroy street, Yakkasaray district, Tashkent, 100031 Telephone: TBD Fax: None E-mail: uz-contact@mercycorps.org Website: https://www.mercycorps.org/ Name of the head of the company: Elena Buryan Contact person: Rano Dultaeva

DYNAMIC UZBEKISTAN

MONBAT AD

AmCham Corporate Category: Non-resident AmCham Member Since: May 1, 2021 Company Description: MONBAT GROUP is a fast growing company which manufactures lead-acid batteries and high energy Lithium-ion cells for a large assortment of applications. MONBAT GROUP operates seven plants – two factories for lead-acid batteries located in Bulgaria, one factory for production of high energy lithium-ion cells in Nordhausen, Germany and four recycling plants for used lead-acid batteries located in Bulgaria, Romania, Serbia and Italy. The products of our company have been present on the international market for more than 60 years. The wide product range includes starter batteries, leisure & marine, solar, stationary AGM batteries and special batteries for military applications. Our production facilities are equipped with state-of-the-art equipment and machines using the latest technologies, granting high quality products and reaching an annual volume of over 4M batteries. Contact Information Address: 32A, Cherni vrah Blvd. 1407 Sofia, Bulgaria Telephone:+359 2 9621150 Fax: +359 2 9621146 E-mail: contact@monbat.com Website: www.monbatgroup.com Name of the head of the company: Mr. Chavdar Danev Contact person: Ms Elina Zhimomi

Oriflame

AmCham Corporate Category: Platinum AmCham Member Since: January 1, 2021 Company Description: Oriflame is a leading beauty company selling direct. We are present in more than 60 countries, of which we are the market leader in more than a half. Oriflame has its origin in Sweden with corporate offices in Switzerland. We offer a wide range of high-quality beauty products as well as a unique opportunity to join our sales force and start your own business. For over 50 years we have enabled people from all over the world to celebrate their personal beauty and fulfil their dreams. We create and offer high quality, safe, trend-driven products to beauty lovers and the unique possibility to become part of a global beauty community. As a Swedish beauty brand we believe that when you look and feel good you have the opportunity to reach your full potential. And together with a passionate and supportive global community anything is possible. That’s beauty from a Swedish perspective. Contact Information Name of the head of the company: Mamedova Ekaterina Pavlovna Contact person: Mokhira Isaeva, Irina Tikhonova Address: Uzbekistan, Tashkent, Amir Timur Avenue, 88A Telephone: +998 (71) 205 00 88 Fax: +998 (71) 205 00 88 E-mail: Mokhira.isaeva@oriflame.com, Irina.tikhonova@oriflame.com Website: https://uz.oriflame.com/

RBC Group Solutions Ltd

AmCham Corporate Category: Bronze AmCham Member Since: 2020 Company Description: RBC Group – is a technology integrator delivering complex software solutions for the automation and improvement of business processes at enterprises and banks based on implementation of digital solutions from the best United States vendors. We provide comprehensive enterprise management tools that enable realtime monitoring and control of the current state of the enterprise, as well as to plan and forecast its future development. Since 1991, our company accumulates experience and knowledge that is effectively used by our specialists at our offices in Latvia, Russia, Ukraine, Kazakhstan and Uzbekistan. At present, RBC Group has more than 600 successfully realized projects on enterprise automation. RBC Group professionals have developed a number of unique integrated industry-specific solutions that enable business companies to enhance performance and improve competitive advantage, significantly reduce costs and increase profits, improve the manageability of the enterprise and productivity. Contact Information Name of the head of the company: Azimiddin Rakhmatov Contact person: Oleg Bibik Address: BC Bastion 56B Mirzo-Ulugbek str. Tashkent Telephone: +998 (97) 734 64 61 Fax: None E-mail: info@rbc-group.uz Website: www.rbc-group.uz

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FE “SGS Tashkent LTD” LLC (SGS Group)

AmCham Corporate Category: Gold AmCham Member Since: March 01, 2021 Company Description: Established in 1878, SGS is the world’s leading inspection, verification, testing and certification company. With over 94 000 employees strategically located around the world, SGS works across 11 industries and throughout the supply chains providing specialized business solutions that improve quality, safety, productivity and reduce risk. Our network of over 2 600 offices and laboratories help customers navigate an increasingly regulated world by offering local expertise on a global scale. Today, we are: ● The world’s leading inspection, verification, testing and certification company. ● The leading provider of competitive advantage, driving sustainability and delivering trust. ● The globally recognized benchmark for quality and integrity. ● We continue to push ourselves to deliver innovative services and solutions that help our customers move their businesses forward AND we aim to remain in this position. Contact Information Name of the head of the company: Atabek Alimdjanov Contact person: TBA Address: 12th floor, Business Center Poytaht 16, Sharaf Rashidov Street, Tashkent, Uzbekistan, 100017 Telephone: +998 (78) 120 68 31, +998 (78) 120 63 86 Fax: + 998 (78) 120 63 93 E-mail: sgs.tashkent@sgs.com Website: www.sgs-caspian.com

DNA

AmCham Corporate Category: Gold AmCham Member Since: August 1, 2021 Company Description: DNA is the first integrated communications agency in Uzbekistan, combining corporate communications advisory with capabilities in branding, publishing, and event management. As the country embarks on an ambitious reform agenda, Uzbek enterprises and government agencies-and their foreign partners-need better tools to take advantage of trade and investment opportunities efficiently and effectively. DNA works with leading Uzbek and international companies and organisations. Clients include the State Assets Management Agency o the Republic of Uzbekistan, the World Bank, the Islamic Development Bank, the European External Action Service, the British Council, and TBC Bank, among others. Founded by Esfandyar Batmanghelidj, an American expert in international strategic communications, and Dinara Dultaeva, a pioneer of public relations in Uzbekistan, the company is a unique joint venture with a young and talented team. Contact Information Name of the head of the company: Esfandyar Batmanghelidj Contact person: Dinara Dultaeva Address: Tashkent, St. Taras Shevchenko, 21А Telephone: +99893 390 0098, +99893 500 55 65 E-mail: team@dna-uzbekistan.com, yar@dna-uzbekistan.com Website: wwww.dna-uzbekistan.com 99

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Welcome to the AmCham family! Mikaela Meredith, USAID Uzbekistan Mission Director Ms. Mikaela Meredith assumed her duties as the first Mission Director of the United States Agency for International Development (USAID) Mission in Uzbekistan on June 10, 2021. Ms. Meredith has almost 30 years of development experience with USAID. Prior to her new role, she served as USAID’s Country Representative in Albania from 2018-2021 and USAID Mission Director in Azerbaijan from 2015-2018. She has also served in Yemen, Nigeria, the Democratic Republic of Congo, and Washington, DC. She holds a Master’s Degree from Columbia University’s School of International Affairs in New York. “I am thrilled to be the first Mission Director of the USAID bilateral mission in Uzbekistan. It is an exciting time for our relationship with the Government of Uzbekistan, its people, and the private sector here. As we embark upon increased bilateral efforts through our new Mission, USAID seeks to engage more with Uzbekistan’s private sector as a dynamic source of ideas, innovation, expertise, shared advocacy, investment, and resources. To this end, USAID is looking to develop a closer collaboration with AmCham and its members,” said Ms. Meredith. Building on a strong foundation of existing partnerships, USAID in Uzbekistan supports initiatives focused on

improving economic growth, trade, and bolstering the private sector. Other priority areas include education, water management, health, and good governance as well as responding to challenges related to renewable energy, safe migration, and countering trafficking in persons.

Aleksandr Bakanov, General Manager, Courtyard by Marriott Tashkent Mr. Aleksandr Bakanov is the current General Manager at Courtyard by Marriot Tashkent. The Marriott hotel chain is by far the largest hotel chain in the world, with more than 7,000 hotels in 131 countries. Mr. Bakanov studied at the Pyatigorsk State Linguistic University, at the Faculty of Translation for German and English languages. As a student, he travelled and worked inGermany and then in the USA. With overseas experience and bilingualism, in addition to perseverance and diligence, he rose to a managerial position in the Front Office Division. During this period, the hotel where Mr. Bakanov worked underwent changes, and became part of a wellknown hotel chain. He won a training place at the hotel chain’s corporate university to become a General Manager, and got into one of the largest hotels in Russia. A few years later, as General Manager, Mr. Bakanov opened several hotels in Moscow. In 2013, he was invited to work in the world’s largest international hotel chain. When he was offered the opportunity to move to Uzbekistan to

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manage this new hotel, he agreed without hesitation: it is in modernand beautiful city of Tashkent, and has a comfortable warm climate and hospitable, helpful people. In 2019, Mr. Bakanov moved to Tashkent and joined the Courtyard by Marriott project before it opened.

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Alemka Berliner, Executive Director of Tashkent International Clinic Ms Alemka Berliner is the new, and also returning, Executive Director of Tashkent International Clinic. As a part of the clinic team, she will support high quality medical services and effective management of the clinic’s operations while seeking new projects which will help identify and address the healthcare needs of the expat community in Uzbekistan. Ms. Berliner worked as an internationalisation and localisation manager at Computer Vision and Parametric Technology Corporations in Massachusetts, where she managed teams in the US, India, Japan, and Germany. After obtaining a graduate degree, Ms. Berliner continued her work internationally in Croatia, Uzbekistan, the Republic of Georgia, and Belgium. Her work was in both clinical and educational settings, acting as a counsellor, teacher, manager, coach/organisational effectiveness consultant, and director. She developed and conducted workshops on a number of topics, such as conflict management, quality processes and procedures, communication in clinical settings, and customer service. Ms. Berliner served as the Executive Director of Tashkent International Clinic for four years (2009-2012), and in subsequent years returned to Uzbekistan several times as a consultant providing TIC and TIHES Board orientations and the clinic’s staff training. Ms. Berliner earned her MA in Counselling and Personnel

Services from University of Maryland, College Park, and obtained certification in Cognitive Behavioural Therapy from the Academy of Cognitive Therapy. She is a Licensed Professional Therapist in Virginia and Missouri. Ms. Berliner speaks fluent English and Croatian/Serbian and has very good working proficiency in Russian.

Kirill Stashkov Head of Legal and External Affairs at BAT Uzbekistan Mr. Kiril Stashkov has 15 years of experience in legal, corporate affairs, security, and internal and external communications, both in business at British American Tobacco (BAT), and in academia as a lecturer at Criminal Law Department of the Belarussian State University. Since joining BAT in 2007, Mr. Stashkov has held various roles in the company’s legal, anti-illicit trade, and external affairs departments in Belarus and Ukraine. He became the Head of Legal and External Affairs in BAT subsidiaries in Belarus in 2015, and in the Islamic Republic of Iran in 2017. He was appointed as the Head of Legal and External Affairs at BAT Uzbekistan in November 2020.

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management of the company during a pandemic, while keeping the main indicators unchanged. Under Mr. Malinowski’s management, the company has developed into a self-sustaining, cash-generating organisation with reliable financial indicators. Prior to joining VEON, Mr. Malinowski was the CEO of Lamoda.ua, a leading Ukrainian internet retailer. Under his leadership, the company was awarded a number of prestigious awards in the field of e-commerce in Ukraine, including Discovery of the Year (2013), Consumer Choice (2014), and Best in Class (20140. Lamoda.ua has become the number one online shopping centre in the country, with a stable NPS of 85%, the lowest RRR among Lamoda Group countries (Russia, Belarus, and Kazakhstan) and more than double the rate of revenue growth compared to the same period last year.

Andrzej Malinowski Chief Executive Officer of Unitel LLC Mr. Andrzej Malinowski is the CEO of Unitel LLC (Beeline brand), a telecommunications company belonging to the VEON group, a global communications and Internet services provider registered on the NASDAQ and Euronext Amsterdam stock markets. VEON operates in different markets worldwide and serves 213.5 million clients. Mr. Malinowski became the head of Beeline Uzbekistan in May 2021. Mr. Malinowski joined VEON Georgia in April 2017 and spearheaded a number of cutting-edge projects, including the implementation of a unified billing system, digitalisation of core services, transformation of the company into a cost-effective organisation, and

Mr. Malinowski managed to change the business model from traditional import to tax-free postage with no negative effect on the product delivery time. He successfully expanded the product portfolio, and outsourced logistics, processing returns, and the transfers of funds. Over the years, Mr. Malinowski held various management positions in companies such as W. Kruk S.A (Poland), Unilever Polska S.A / Unilever CEE Food Division Poland, and Schoeller Foods (Poland). He has a diploma in business studies from University College Galway (Ireland) and a degree in financial law from the University of Wroclaw (Poland).He speaks four languages: Polish, English, Russian, and Ukrainian.

Spartak Tetrashvili TBC bank Uzbekistan (Georgia) Mr. Spartak Tetrashvili assumed his position of Chairman of the Board of TBC Bank Uzbekistan in December 2020. TBC Bank Uzbekistan is a member of the London-based Financial Group, which has more than 27 years of experience. Mr. Tetrashvili has an ambitious task in Uzbekistan: toset up the operation of TBC Bank Uzbekistan, the first fully-digital bank in the country, which opened a few months. There is not a person behind any of the processes: all services are accessed through an application, just like in payment systems. Mr. Tetrashvili believes that the philosophy of the TBC brand is to create bold, transparent, and accessible solutions. This also defines the work style of the managers and each employee. 102

“I’ve been with TBC for seven years. If we talk about work style, at TBC we are one team. We work in a nonmainstream style, and there is no division into job categories. Each team member can take initiative and come up with a question, an idea, a suggestion, and I am ready to listen to everyone’s opinion. Not putting up barriers: that’s what’s important.’ Mr. Tetrashvili believes that an employee’s sense of responsibility develops when he understands why he is doing his job and what value he is creating, rather than doing it just because he has been given a task. Mr. Tetrashvili has more than 20 years of professional experience in banking. He studied at the Procredit Academy in Fürth, Germany, and at the Procredit Regional Academy in Veles, North Macedonia. He holds a BA from the European School of Management (ESM) in Tbilisi and an MBA from IE Business School in Madrid.

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Andrey Safronyuk CEO, Orient Group Management Andrey Safronyuk is the CEO of Orient Group Management. Before joining the company, he held leadership roles in enterprises in FMCG, telecommunications, and consumer businesses across the CIS. Mr. Safronyuk was born in Kishinev in 1976. He graduated from the Siberian Transport University in the Railway Transportation Management Faculty. He started his career at Dendy Distribution and then moved to Liggett Dukat, where he rose from sales representative to regional sales manager, opening three new branches in two years. Under his leadership, the region showed significant sales growth, and the company greatly expanded its regional market share. In 2003, Mr. Safronyuk joined the global brewing company SUN Interbrew as a regional sales manager in Western Siberia. In two years, SUN Interbrew became the absolute sales leader in Novosibirsk, and significantly strengthened its position in the largest cities of the Altai. In 2005, Mr. Safronyuk moved to the North-West region, where as regional sales director he achieved sustainable growth of the company in the competitive markets of St.Petersburg, Yaroslavl, Kursk, and other cities. With his active participation, several brands were successfully launched. In 2009, Mr. Safronyuk became the Sales Director for thee Western Region of Russia. He improved a number of financial results, and regained lost market share in many large cities of the region. He was involved in the successful launch of the Bud global brand throughout Western Russia.

In June 2010, VimpelCom Group announced that Mr. Safronyuk had joined the Beeline Uzbekistan team. Under his leadership, Unitel LLC became the largest telecommunications operator and the leader of the telecom industry in the country. As a result of Mr. Safronyuk's leadership, Beeline's network significantly expanded. The pilot launch of advanced LTE technology was carried out, and 3G services appeared in all regions of the country. In January 2014, Mr. Safronyuk decided to continue his career outside telecommunications, taking the position of CEO at Russia's largest movie theatre chain, Cinema Park. In November 2020, Mr. Safronyuk became CEO of Orient Group Management, an organisation which aims to consolidate the commercial and manufacturing business assets of the Orient Group, one of the largest conglomerates in Uzbekistan. The top manager has a goal of comprehensive transformation of processes and implementation of corporate governance principles, as well as the growth of transparency and business efficiency.

Esfandyar Batmanghelidj Co-Founder and Chief Strategy Officer for DNA Esfandyar Batmanghelidj is the Co-Founder and Chief Strategy Officer for DNA, Uzbekistan's first integrated communications agency. The company was founded in 2020 alongside Dinara Dultaeva, a pioneer in the communications sector in Uzbekistan. With its young and ambitious team, DNA supports Uzbek companies, government agencies, and international organisations in media relations, event management, and branding and marketing. Esfandyar's interest in Uzbekistan stems from a decade of work in economic development and economic diplomacy in the Middle East and Central Asia. He is the founder of the Bourse & Bazaar Foundation, an economic think tank focused on the region. He is also a Visiting Fellow at the European Council on Foreign Relations. Born and raised in Northern Virginia, Esfandyar attended Columbia University where he studied international political economy. 103

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Environment protection, education, and charity are the main priorities for committee work in 2021

Did you know that every day 2.5 tonnes of waste is taken out of Tashkent city to be burned in the polygons? AmCham in Uzbekistan’s CSR Committee partnered with Mahsustrans, a State Unitary Enterprise under the Hokimiyat of Tashkent city, to organize series of events called “Tashkent Green”. The aim of the campaign is to raise awareness of the problems of solid waste management and waste recycling among the younger population. The official launch of the programme was held on March 12, 2021 at Hyatt Regency Tashkent. Students of the British School and Cambridge School spoke about green practices in their schools. The first event took place on April 17, 2021 with over 70 participants from member companies, including students of the British School of Tashkent, Tashkent International School, the Hyatt Regency Hotel, Courtyard by Marriott, Silverleafe,

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OSCE, Mercury, Beeline, and many others. Special thanks to volunteers.uz for helping during the event in Bolajon Park. Divided into teams, participants joined the plogging (jogging plus littler picking) competition. After the teams collected and weighed the waste, it was separated by category. The British School team took the first prize. Altogether, participants collected over 100 kg of waste within the 30 minutes. The event continued with a DJ, lunch boxes, and networking. Special thanks are due to the sponsors of the event, Tashkent International Clinic, Mercury, Courtyard by Marriott, and the Coozin project. Coozin helps unemployed women promote their culinary dishes, and thus start business without the need to attract investment. Their electronic platform enables women in the programme to supply the population with cheap, good quality home dishes without the need for intermediaries.

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ECONOMIC POLICY OPTIONS FOR COVID-19 AND BEYOND IN CENTRAL ASIA AND UZBEKISTAN “Avoiding complete lockdown is essential for keeping economies open, particularly in those countries with limited fiscal space”. With the help of the Economist Intelligence Unit (EIU) and supported by USAID’s Future Growth Initiative (FGI), AmCham organised the first of its kind policy webinar, Economic Policy Options for Covid-19 and Beyond inUzbekistan, on 4 February, 2021. The event presented some up-to-date recommendations for post COVID economic solutions, as well as some global trade and investment outlooks impacting the Central Asia region. Keynote speakers included Mr. John Ferguson, Head of Globalisation, Trade, and Finance practice at EIU; and Mr. Matus Samel, Public Policy Manager, Globalisation, Trade, and Finance, also from EIU. The COVID-19 pandemic and economic crisis have underlined the need for many countries to tackle new economic realities. As Uzbekistan, like many other economies, emerges from the pandemic, policymakers and the private sector must move decisively to expand Uzbekistan’s economic potential and create the conditions for long-term growth and prosperity. Building a more prosperous future will require actions from both sides by securing an open and efficient public-private dialogue for sustained economic recovery. “The coronavirus pandemic has weakened the economic outlook for every region in the world but in different magnitudes and through different channels,” revealed Mr. Samel. He shared the GDP growth statistics for January

2020, which were sharply different from the figures in October 2020. According to the EIU research paper, the region's economies will all be strongly affected, with the GDP of all countries expected to fall this year by up to 5%. Regional Export Market Issues • Regional share of trade turnover to GOP averages 65% • At least 60% of countries' export earnings come from commodities such as oil, gas, minerals, metal, and cotton • Exports are concentrated in a few key markets, mainly China, Russia, and Western Europe, whose economies have also been hit hard by the COVID-19 outbreak Following Mr. Samel’s presentation, Mr. Ferguson further deliberated on the global trade outlook and shared some trends which should be closely looked at in the future: • Emerging focus on trade in services • Supply chain reconfigurations • US and China relations • China's Belt and Road Initiative A lively discussion began immediately after Mr. Ferguson’s presentation, where participants could share their thoughts. The final stage of the webinar was a Q&A session, where everyone could get answers to their questions. The main goal of this webinar was to provide an overview of the good practices and recommendations for post-

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AmCham HR Committee HR School The AmCham Human Resources Committee held five sessions for third- and fourth-year students at Westminster International University in Tashkent. Human resources directors and managers of the main multinational companies in Uzbekistan from the telecommunications, retail, real estate, FMCG, and recruitment sectors held five half-day sessions with the university's students. The covered topics were of great interest to the students as they were relevant for their future employment. Starting with corporate training and development, Sofia Gaynutdinova, Chief HR and OD officer at Veon Group (Beeline Uzbekistan),covered a key subject: the interaction between employees and employers in large corporations. "Currently, Orient Group Management projects employ more than 25,000 people," began Venera Erzina, Chief HR Officer at Orient Group and Head of AmCham's HR Committee. Venera gave a presentation about career development in human resources management. Victoria Tokova, Head of T&D at Orient Group Management, followed up with a presentation discussing the skills you need to develop to get a career move in this group of companies.

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"Where will you get more reward, having worked in the same company for 15 years, or changing jobs constantly?” This is how Danil Krivosheev, Country Director of Antal Recruiting Agency in Uzbekistan and Deputy head of HR Committee of AmCham opened his presentation. During this 2.5 hour session, Mr. Krivosheev shared his recommendations on career opportunities, company choice, hard and soft skills development, and career paths. A separate day was dedicated to labour regulations, rights, and obligations. The session was held by Ruslan Udras, Head of the Legal Department, at The Tower MMG. Employee engagement and motivation is an important part of the HR function. The last session this day was dedicated to this important topic, and conducted by Oybek Khaitbaev, Director for Organisation and Corporate HR in Central Eurasia and Belarus at MARS Inc. More than 60 students from Westminster International University in Tashkent were awarded certificates on completing the course. The AmCham HR Committee unites HR professionals and executives among multinational and local companies, in order to develop, share and implement best HR practices.

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Annual General Assembly of the Chamber AmCham held its Annual General Assembly on April 18, 2021. The aim of the event was to report on activities in 2020 and to elect the AmCham board of directors for 2021. Despite the COVID-19 situation in Uzbekistan, the chamber organised over 60 online events, with participation from leading government ministries and agencies. The speakers included Senator Safaev; Dilshod Sultanov, Deputy Minister of Finance; Ulugbek Azamov, Deputy Chairman of the Ministry of Tourism and Sports; Dilmurod Kasimov,

Director of the Business Ombudsman; Laziz Kudratov, Deputy Minister at the Ministry of Investment and Foreign Trade; and representatives of ADB, the WB, EBRD, and IMF. Indeed, policy dialogue significantly improved in 2021. Platinum members discussed trade and investment bottlenecks with Sir Suma Chakrabarti, Adviser to the President of Uzbekistan on economic issues. As a result, their feedback will be added to the country’s strategy for 2022-2025.

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The executive team actively advocated the individual cases of platinum and gold members directly with MIFT and the senate. However, the most successful policy dialogue was reached via the extensive system of 11 AmCham committees. The chairs of AmCham committees reported on their activities in 2020 and shared their plans for 2021. The most successful of those are: Two HR Committee representatives joined the senate (Oliy Majlis) group for the Draft New Labour Code The Fast Moving Consumer Goods (FMCG) Committee raised over 15 policy issues and joined the working groups in the Ministry of Health, the Ministry of Finance, UzStandart, and the Agency for Ecology The Tax and Accounting

Committee joined the reform of the administration of VAT- working group meeting with the Republican Tax Committee AmCham’s membership grew in 2020 despite the COVID-19 situation. The new system of membership benefits encouraged members to join as voting members. Thus, big multinationals like Nestle, P&G, Air Products, Balton Trading, Wings Distribution, Unilever, and others joined in voting categories in 2020. The event was concluded by the election of the board of directors for 2021. As a result, nine BoD members were selected.

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BOARD OF DIRECTORS 2021 President Shadab Khan Coca-Cola Uzbekistan

Vice-President Vera Bell Crowe TAC

Treasurer Abdulkhamid Muminov PWC

Secretary Atabek Alimdjanov, SGS Group

Joel Benjamin Kinstellar LLC

Anvar Azamov Ernst & Young

Puneet Tandon Hyatt Regency Tashkent

Tatyana Bystrushkina Executive Director

Eric Salzman Ex-Officio BOD member US Embassy in Tashkent

Donald Nicholson II President Emeritus SEAF-SME Investment Management

Hugo Minderhoud Senior Advisor to the BoD

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Chairs of AmCham Committees 2021 Shadab Khan, The Coca-Cola Company Membership Committee, Fast Moving Consumer Goods Committee

Olessya Kirilovskaya, Deloitte Legal Committee

Anvar Azamov, Ernst & Young LLC Legal Committee

Venera Erzina, Orient Group Human Resource Committee

Nikolay Yarmov, AmCham Advisor Digital Transformation Committee

Trade & Investment Committee

Atabek Alimdjanov, SGS Tashkent LTD Digital Transformation Committee

Pavel Salikhov, Mars Wrigley Fast Moving Consumer Goods Committee

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Chairs of AmCham Committees 2021 Abdulkhamid Muminov, PwC Corporate Governance Committee

Vera Bell, Crowe TAC Tax & Accounting Committee

Mukhammadali Makhmudov, Legalmax Intellectual Property Rights Committee

Farrukh Abdullakhanov, KPMG Corporate Governance Committee

Puneet Tandon, Hyatt Regency Tashkent Tourism & Hospitality Industry Committee

Nodira Yadgarova, TIHES Corporate & Social Responsibility Committee

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PLATINUM MEMBER Air Products Central Asia Group LLC (APCAG) Vaclav Harant 71 205-16-55 Artel Electronics LLC Eleanor Kramers 78 148 88 88 British American Tobacco Uzbekistan Temur Gataybaev 78 120-55-55 CNH Industrial France Alisher Tangribergenov 78 120-74-50 Coca-Cola Mes. Paz. Dan. San. Ve. Tic. A.S. Shadab Khan 90 174-78-98 “Darvoza Savdo” LLC Takhirdjan Gafurov 78 147-11-99 Ernst & Young Anvarkhon Azamov 78 140-64-82 FE LLC Anglesey Food Hugo Minderhoud 71 252 24 02 General Motors International Janos Jendruszak 71 280-64-33 Hilton Tashkent City Rezida Fatkalislamova 97 130-41-56 Hyatt Regency Tashkent Puneet Tandon 71 207-12-34 Oriflame FE LLC Ekaterina Mamedova 71 205-08-88 PwC Abdulkhamid Muminov 78 120-68-23 78 120-61-01 Sky Power Services Central Asia LLC Pavel Makarov 71 238-99-20 UNITEL LLC Sergey Afonin GOLD MEMBER “AZIMUTH INSURANCE COMPANY” LLC Khalilov Oybek 97 774-00-13 Balton Trading Asia Philipp Gorbunov 78 120-00-48 BNZ Industrial Support LLC Brian Quigley 71-254-41-28 Bureau Veritas Turgay Karaagac 78-129-19-29 Central Asia Seed Company Azizkhan Akhmedov 71 299-59-99 Courtyard bу Marriott Tashkent Artur Shadibaev 71 203-23-33 Crowe TAC Vera Bell 71-235-92-45 DNA Dinara Dultaeva 93 500-55-65 Epsilon Development Company LLC Harry F.Eustace 71-231-00-54/59 FE «SGS Tashkent LTD» LLC Atabek Alimdjanov 78 120-68-31 Global Logistics Systems LLC (DHL) Jamshid Madjidov 78-120-55-25 Hotel Radisson Blu Tashkent Akmal Muratkulov 78-120-49-00 Infranet Asia LLC Lenur Mambetov 71-244-08-03 Kafolat Valentina Gribanova 71-202-88-22 «KPMG Audit» LLC Sanjarbek Saidov 78-147-77-44 Kinstellar LLC Joel Benjamin 78-150-62-21 «MAXAM Corp International, S.L.» Manuel Puertas Cano 78-140-57-11 OLSOFT Evgeniy Olevskiy 71-256-32-91 Olmaliq Metall Konstruksiya Ilkhom Zakirov 71 255-91-26 S.Verenin’s Legal Group Sergey Verenin 78-150-15-06 Transcontinental JV LLC Janna Popkova 78-120-38-38 «Wings Distribution Company» LLC Jamshed Kakhorov 78 147-18-88 WCH Service Bureau Bakhtiyar Khodjimatov 71-254-36-21 ZARBULOQ INJINIRING LTD. Doniyor Yusupov 97-722-17-93

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SILVER MEMBER Brunel UBK LLC Andrea Lucchin 71-205-12-04 CIS International School Cari Bates 71-209-66-69 Centil Law Firm Dmitriy Mitrofanov 78-120-47-78 Deloitte va Touche LLC Erkin Ayupov 78-120-44-45 Dentons Tashkent Eldor Mannopov 78 150-31-05 PEPSICO Aidar Turmukhamedov 71-281-46-09 PromoStock Murad Mamed-zada 93 114-40-00 «Grata» International Law Firm Bakhodir Jabborov 71-230-24-22 General Electric Company Yuliya Sarkisyan 71-205-02-81 Ingo-Uzbekistan Insurance Company Bakhtiyor Gaybullaev 78-150-99-99 JP Morgan Chase Bank N.A. Uzbekistan Tokhir Sultanov 90 949-47-45 JSC “ TBC Bank” Sandro Rtveladze 78-777-27-27 JV Indorama Kokand Textile LLC Deepak Raina 71 233-22-64 JV «Samarqand Airways» Ltd Elena Volodina 78 120-30-46 Nestle Food LLC Sergey Tratsevsky 78 120-42-26 Silverleafe International LLC Dan Patterson 93 940-88-56 Winncom Technologies Khurshidkhudja Isokhudjaev 78-150-39-39 BRONZE MEMBER Action Group LLC Edu-Action Umid Ishmukhamedov 78-148-86-86 AFS-Research Company Yuliya Bakhmatch 78-120-96-11 Agrico BV NL Feruza Tatybaeva 71-256-84-84 «Antal International Tashkent Xususiy Bandlik Agentligi» LLC Mailka Nurmukhamedova 93-700-06-18 APEX INSURANCE LLC Timur Saidov 71-203-08-08 Davinci Solutions LLC Anna Efimova 71-113-23-90 Comfort Technologies Office Zukhra Nazhmetdinova 90-996-41-16 Education Standard Consulting Group Elena Sergeeva 71-207-14-14 Global Translation Service Ruslan Daminov 78-120-95-23 GOR Investment LTD Martin Dunkan Burgess 78 113-45-55 Grant Thornton Nematulla Karimov 71-230-45-43 Holos Ltd. Khalmurat Manaev 71-252-71-85/86 Legalmax Law Firm Mukhammadali Makhmudov 78-150-83-60 LEGATE law firm Nigora Avazmukhamedova 71-244-00-20 Lean Trade Solutions LLC Zokhid Ulmasbaev 71 200-11-12 Medical Online Services LLC Farkhod Abdullaev 71-276-62-53 Mercury Service Events & Travel Management LLC Murod Makhmudov 71-235-77-71 Move One Logistics Timur Chutbaev 71-235-18-43 «MULTIVAC EXPORT AG» Mirzakhid Mirzaitdinov 71-237-57-02

Oasis FES LLC Dale Henry 95-142-82-40 OLSOFT Evgeniy Olevskiy 94 698-24-04 PETOŠEVIĆ LLC Djakhangir Aripov 78-120-65-14 Prae Legal Uzbekistan Davron Ahmatov 71 254-59-99 Pro Logistic Services SIA Natalya Gorodetskaya 78 150-08-33 RBC Group Solutions Ltd Azimiddin Rakhmatov 97 734-64-61 SAMARKAND BEAUTY SOAP Khwaja Zia Ahmed 71 262-00-12 UHY Tashkent LLC Audit organization Sarvarkhon Karimov 71 209-22-47 NON-PROFIT NON-VOTING American Councils for International Education William O’Roark 78 150 71 50 Association of Private Тоurism Agencies of Uzbekistan Gulchekhra Israilova 95 145-51-78 The British School of Tashkent Andre Nel (71) 262-60-20 Canadian Consulate Eldor Mannopov 78 150-31-13 OSCE Hans-Ullrich Ihm 140-04 69/70/71/72 Tashkent International Clinic Matthew Kuschel 71-291-01-42 Tashkent International School Bill Kralovec 71-291-96-70/71/72 HONORARY MEMBERS ADB Cindy Malvicini 78-140-19-20 IMF Resident Representative Office Galina Kostina 71-233-42-43 UNDP Helena Fraser 78-120-34-50, 120-34-51 World Bank Country Office / IFC Marco Mantovanelli 71-238-59-50, 71-238-59-28 IFC Zafar Khashimov 78-120-24-54, 78-120-24-45 NON-RESIDENT Aggreko Eurasia Limited Liability Company «Besan Besin Sanayi ve Ticaret Anonim Sirketi” Branch in Azerbaijan Republic Cantekin Ünlü +99412 488 10 42 TOO “DANONE BERKUT” Dinmukhamed Aisoutov Dow Europe GmbH Representative office Arthur Eritspokhov +7 495 663 7984 Herbalife Kazakhstan Miklin Dmitry +7 727 275 90 75 Mars Kazakhstan LLP Mikhail Bazanov +7 727 258 80 05 Oracle Nederland B.V. Stanislav Nikishkin +7 495 641 14 00 Philip Morris Arman Abikenov +7 727 258 56 56 Procter & Gamble Turkey, Caucasus, and Central Asia Tankut Turnaoglu +90 216 463 80 00 TOO “DANONE BERKUT” Gilles Bourlot Non-resident – Non – Profit Dr. Gregory Gleason George C. Marshall European Center for Security Studies 49-88-21 750- 25-26 INDIVIDUAL Benjamin Schneider

2020, #5

APPLICATION FOR CHAMBER MEMBERSHIP Chamber Membership Categories

Qualifications

Annual Dues

PLATINUM

Annual worldwide revenues of $100m and above

USD 4,000

Annual worldwide revenues less than $100m and more than $5m

USD 3,000

Annual worldwide revenues less than $5m

USD 1,500

SILVER

Annual worldwide revenues less than $100m

USD 1,000

BRONZE

Annual worldwide revenues less than $5m

USD 800

NON-PROFIT

Registered as a non-profit organization

USD 800

NON-RESIDENT

Organization with no local representation/registration in Uzbekistan

USD 1,500

Non-voting members

Voting Members

Membership Category

GOLD

All categories give the member access to a full range of services and benefits including business development function, the committee network, and all publications. Non-voting members may not vote or sit on the Board of Directors. 1. Please indicate the category of membership for which you are applying: Membership is per calendar year. Enrollment is prorated by the number of months remaining in the calendar year. Type of membership  Platinum  Gold  Gold  Silver

Annual Dues USD 4,000 USD 3,000 USD 1,500 USD 1,000

Type of membership  Bronze  Non-profit  Non-resident

Annual Dues USD 800 USD 800 USD 1,500

2. I/We agree, if accepted, to be bound by the Chamber’s rules and regulations, and to pay the appropriate annual dues: Name of company Address Tel.

Fax

E-mail

Head of firm in Uzbekistan: Name

Title / Position 113

Representatives (voting if American Company) (first alternate) (second alternate) 3. Nationality of parent company:  US

 Uzbekistan



Other (please specify)



Service facility



Other (please specify)

Place and Date of Incorporation 4. Type of company in Uzbekistan:  

Manufacturing facility Sales/Representative office

Brief description of activity: Addresses of branches or other offices in Uzbekistan: Specify relationship with firm in the USA (if any): branch, subsidiary, affiliate, joint venture, sales offices. Give US name, complete address, telephone and fax number: 5. Annual revenue: 

less than USD 100,000

Prepared by



USD 100,000–500,000



USD 500,000–1,000,000

Date

Signature of applicant Important notice: Information found on this application is for internal AmCham use only and will be handled as business confidential.

2020, #5

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DYNAMIC UZBEKISTAN

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