Uzbekistan Special Edition May 2016

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Uzbekistan Special Edition Report of the President of the Republic of Uzbekistan Interview of Ambassador of Uzbekistan to Italy

Free Press trimestrale Maggio/Luglio 2016

Interview to President of the Chamber of Commerce Italy - Uzbekistan

Editorial by Mrs. Barbara Ganetti

The Progress Time is on line journalistic medium addressed to Italians and to the international diplomatic audience. The main purpose is to disseminate and to approach worldwide cultures, in fact, the magazine provides geo-environmental maps of micro territories in order to deepen knowledge at a macro level, whereby the contribution of different economic and commercial viewpoints. In this issue Uzbekistan Special Edition, for courtesy, you may find below a very detailed report of Mr. Islam Karimov, President of the Republic of Uzbekistan, about the developing and the structural reforms applied by the government to get an increase both commercial and social for the country. Besides, in collaboration with the Italian Embassy of Uzbekistan and the Chamber of Commerce Italy-Uzbekistan, we will linger on the cultural and commercial relationship with Italy. Enjoy the read.

Sommary 8

Report of the President of the Republic of Uzbekistan


Interview to CEO of GsAir, Mr. Gastone Nardoni


Interview with he Mr Ravshan Usmanov, Ambassador of Uzbekistan to Italy


Matrix to success


Interview to President of the Chamber of Commerce Italy - Uzbekistan, Mr. Luigi Iperti


Trips of Uzbekistan are joyfull and interesting




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THE PROGRESS TIME Free Press on line trimestrale Maggio/Luglio 2016 Aut.Trib. di Arezzo n. 4/13RS del23/07/2013 Aut. Modifiche dal Tribunale di Arezzo del 02/07/2015 EDITORE Ivan De Stefano DIRETTORE RESPONSABILE Barbara Ganetti REDATTRICE Barbara Ganetti WEB EDITOR Dario Migliaccio GRAPHIC DESIGNER Dario Migliaccio TRADUZIONI IN QUESTO NUMERO A CURA DI Giusy Muoio - Shahido Tosi QUESTO NUMERO È STATO FINITO DI IMPAGINARE IL 12/05/2016 Concessionaria per la Pubblicità D.G.M. Marketing and Advertising CONTATTI -

Ambasciata della Repubblicadell’Uzbekistan in Italia

Report of the President of the Republic of Uzbekistan

President of the Republic of Uzbekistan Mr. Islam Karimov

Uzbekistan establish itself in the world as a country rich of natural resources, with a strong remark on modernization and attainment of new technologies, in addiction of a geo-environmental and cultural asset of highest ranks. One of the basic feature in Uzbekistan’s welfare is its resources: copper, uranium, gold, cotton and natural gas, (whose stocks, according BP’s estimation, are over 1580 billions of cubic meters) and in the laboriousness of its people. Oil and Gas industries attracted more than the 60% of foreign investments. The country politics are targeted to the creation of join-ventures, in oil and gas segments, in petrochemistry and, particularly, in fertiliser production. The most important foreign investors are Lukoil and Gazprom from Russian Federation, the Chinese CNPC, the Korean National Oil and Gas Corporation (KoGas) and the Malaysian Petronas Charigali. Uzbekistan produces almost 300.000 cars with its partner General Motors, and also the engines, about 350.000 per year, are built in the country. The main machineries, highly automated, are been provided by Comau. The government’s action pro industrialization stimulate a change in the structure of Uzbekistan’s economy. While service industry is still dominating economy, with a 53% quote, the one of industries increased, in the last 10 years, about the 10% in the national GDP, reaching a quote of 24,2% nowadays and bypassing agriculture’s quote (17,6%). Uzbekistan is one of the main producers of cotton in the world, 3,35 millions of tons, of which only the 25-30% is refined inside the country. At the moment the government is busy to promote big investments in the local textile industry, heading to improve the cotton utilization.

It is a Country very careful about education at all levels of schooling, on this subject there are at least 3 University with foreign partners, like the Turin University, which offers engineering courses in English and have as partner Turin’s Polytechnic. In this Special Uzbekistan, for courtesy, you may find below a very detailed report of Mr. Islam Karimov, President of the Republic of Uzbekistan, about the developing and the structural reforms applied by the government to get an increase both commercial and social for the country. Besides, in collaboration with the Italian Embassy of Uzbekistan and the Chamber of Commerce Italy-Uzbekistan, we will linger on the cultural and commercial relationship with Italy. Report of the President of the Republic of Uzbekistan Islam Karimov at the enlarged meeting of the Cabinet of Ministers dedicated to the socio-economic development in 2015 and the most important priorities of economic program for 2016. Our main goal, despite the difficulties, to go forward decidedly, consistently continuing ongoing reforms, structural transformations in economy, creating even more opportunities for

development of private property, entrepreneurship and small business. Dear participants of the meeting!The agenda of today's enlarged meeting of the Cabinet of Ministers includes the results of economic and social development of the country for the past 2015 and approval of the most important priorities of country's economic development in 2016. Analyzing progressive advancement of the country on path of democratic reforms and sustainable development, we have all grounds to state that in the past year we have taken decisive steps in implementation of fundamentally important reforms aimed at achieving our main goal - to reach the level of developed democratic countries in the world with a strong social oriented economy, providing a decent standards and quality of life of our people.It is primarily an issue of implementation of fully thought-out programs aimed at providing deep structural changes, reliable protection of interests of private entrepreneurship and small businesses, and that it is crucial - in legislative, regulatory and practical ensuring of prioritizing the role of the private property, as provided for in our Constitution, progressive reduction of state presence in Uzbekistan's economy.At this stage of our development it was deemed expedient to retain under direct con-

trol of state only those companies who engaged in extraction and processing of hydrocarbon raw materials, precious and base metals, uranium, as well as strategic infrastructure industries of natural monopolies - railways and road network, air transport, power generation, electrical and utilities networks.The task was to create conditions for mass sale of state assets, especially to foreign investors. Thus, 506 property complexes with acceptance of investment obligations by investors, as well as creation of 22 thousand new jobs, in the amount of nearly1 trillion soums and 40 million US dollars has been realized to new investors on "zero" redemption value on a competitive basis.245 low-profit and inactive organizations have been completely eliminated.Under the program of privatization 353 unused and unfinished construction objects of state property have been demolished. As a result, there was released 120 acres of land, 80 of which are reserved for the owners of production and services.Stock-taking has been completed and 319 unused state property has been put up for sale for entire privatizaton, 102 of them last year were sold to new owners. State shares in 378 joint stock companies has been evaluated and put up for public auction for their realization to strategic foreign investors. It should be emphasized that state shares in such rather successful, growing companies as joint-stock companies "Navoiazot", "Ferghanaazot", "Urgench excavator", "Kyzylkumcement", "Jizzakh Battery Plant", "Aloqabank" "Turonbank", insurance company "Uzagrosugurta" and others are put for sale. State shares of 52 joint-stock companies, out of those offered for sale, have already been implemented in the private ownership. In particular, shares of JSC "Kokand Yog'-moy", state-owned, sold in amount of 2.5 million US dollars.This is only the beginning of a large-scale work on a radical change in the ownership structure.Adoption of number of relevant laws and regulations became crucial in establishment of proper order and responsibility of heads and officials of law enforcement, regulatory and administrative bodies for illegal interference in entrepreneurial activity.The principle of priority of entrepreneurs rights for their relations with government, law enforcement and regulatory authorities has been introduced.More than 40 legal acts have been amended and supplemented in order to simplify and facilitate creation and implementa-

tion of business activities. In particular, introduction of a new order, according to which the criminal case is not excited and the person is released from liability if he has committed a crime provided for in the case of tax evasion and other mandatory payments, but completely compensated caused damage to the state within 30 days after detection of offense.The issues of consolidation of safeguards and protection of legitimate rights of private property owners and entrepreneurs paramount importance is attached to strengthening the role of judicial bodies. Courts entitled to suspend execution of decision of supervisory authority, contested by business entity for period of consideration of the relevant claim.The legislation introduced the rule that business entities in connection with violation of tax and customs legislation could be dispossessed of their property only by court's decision. Complaint processing time has been significantly reduced.Now the inspection of activities of small businesses and farmer enterprises will be carried out in a planned manner no more than once in every four years, and other economic entities no more than once in every three years and only by decision of National Council for Coordination of Controlling Bodies. Thus, the period of scheduled inspections not related with financial and economic activity, reduced from 30 to 10 calendar days. It is important to note that these standards are also set for private banking and financial institutions.

We have came down hard on administrative responsibility for violation of order of inspections and audits of financial and economic activity by law enforcement and regulatory authorities, violation of public services provision order, illegal suspension of activities of economic entities and transactions on their bank accounts, unjustified reclamation of information on the availability of funds in their accounts, actions to force businessmen for charity and other activities related to the diversion of funds and others.In addition, the law introduced mechanism of full compensation, including lost profit, harm caused to subject of business as result of unlawful decisions of state bodies, local authorities or action (inaction) of their officials.Those officials of regulatory, law enforcement and other state bodies, who repeatedly violated the law in protecting freedom of business, to face criminal sanctions. The relevant rules have already been made to the Criminal Code of the Republic of Uzbekistan.Over the year, based on a single call center "Uzbektelecom" and "helpline" of Prosecutor General's Office implemented the system around the clock receiving requests of businesses on their undue interference in activity of state, law enforcement and regulatory agencies, obstruction of business and violation of rights of

owners. Only half a year since the introduction of this system, Prosecutor's Office filed more than 1.5 thousand entrepreneurs. Most importantly, about a third of all appeals were decided in their favor. Thanks to the introduction of electronic forms of relationships between government and business entities in 2015, 42.8 thousand business entities registered via Internet on a single portal of interactive government services, providing access to 260 different types of interactive services. If in 20132014 entrepreneurs and citizens were rendered nearly102 thousand services, then only in 2015 their number exceeded 420 thousand.Today, 100% of the tax and statistical reports sent electronically via Internet.Since January 1 of this year, single center for provision of public services to businesses on principle of "one window" began to operate in all regions of the country; they have introduced a completely new mechanism of connection of businesses to engineering and communication networks, providing for the transfer of territorial enterprises operating agencies the authority to implement all procedures on a "turnkey" - from receipt of technical conditions to connect to engineering and communication networks.Dear friends!I would like to note with satisfaction that work carried out by us to improve the business climate is

reflected in positive business environment rankings of international economic organizations. In October last year, the World Bank published the rating of "Doing Business", with the fact that Uzbekistan in just one year has risen on 16 positions and took 87 th place. Of particular note is that according to criteria such as "support for new business," Uzbekistan is currently ranked 42nd in the world, enforcement of contracts concluded - 32nd, on the effectiveness of the bankruptcy of insolvent enterprises - 75th. According to the indicator "loans to small businesses," Uzbekistan for the past three years rose from 154th to 42nd place improving only over the past year its ranking by 63 positions.As noted in the World Bank report, Uzbekistan is currently among the top ten countries in the world, which in the last year achieved the best results in improving the business environment for business.I would like to note that thanks to the measures taken the share of small business and private entrepreneurship in gross domestic product has risen from 31% in 2000 to 56.7% at the moment, or 1.8 times. In this area now produces a third of 98% of industrial and agricultural prod-

ucts. It employs more than 77% of the total employed population.Dear participants of the meeting!In 2015, a lot of work for a radical change in principles and approaches to corporate governance, giving it a truly market-driven character.A complete inventory of all the activities of jointstock companies on the basis of which 462 companies, or 43% of the total, the decision on their liquidation or conversion into other organizational and legal forms.On the basis of the best international practices of corporate governance enterprises has been developed and approved a new standard structure of the company. At its base, taking into account modern approaches to corporate governance is developed and approved a new classifier positions and professions, with the inclusion of 566 new categories, corresponding to the requirements of a market economy.On the basis of this classifier were certified managerial personnel for their knowledge of modern methods and principles of corporate governance, management and marketing. According to the results of certification of 721 executives, subject to certification, only less than half, or 49%, are verified every third -

conditionally certified, and 20 per cent, or one in five head, declared unsuitable for office. These figures speak for themselves and once again confirm how timely we began to radically change the structure of management of the company.Young, well-educated specialists, who use techniques of modern management and marketing in practice, came on freed managerial positions.For systematic organization of training and retraining of executives and specialists of joint stock companies, acquisition of modern methods of corporate management with the active participation of the European School of Management and Technology (Germany) the Scientific and Educational Center of Corporate Governance has been established.Already in the last year with broad involvement of professors and teaching staff of the leading educational institutions in Germany and other industrialized countries, was organized training in corporate governance, more than 160 heads of jointstock companies, banks, large enterprises of the country, half of which has passed training in German companies.Dear friends!The most serious attention should be paid to attraction of inward investment in implementation of projects on modernization, technical and technological renewal of industry, structural change in economy. To this end, in 2015, investments from all sources of financing in the equivalent of 15.8 billion US dollars were drawn and used, or increase against 2014 by 9.5%. With more than 3.3 billion US dollars, or over 21% of all investments contain foreign investment, of which 73% are foreign direct investments.67.1% of all investments are directed at industrial construction. This allowed in 2015 to complete the construction and to provide putting into operation of 158 ??large production facilities with a total value of 7.4 billion US dollars.Among them - construction of combined-cycle plant with a capacity of 370 MW at Tashkent thermal power plant, modernization of hydrogenerators at Charvak hydropower plant, expansion of production of soda ash at Kungrad soda plant, organization of production of new complex fertilizers at JSC "Samarkandkimyo" with a capacity of 240 thousand tons, tractor-trailers, including increased capacity, components for home appliances based on idle production premises of JSC "Motor Plant" and others.Among facilities put into operation I would like to mention especially the of Ustyurt Gas Chemical Complex at Surgil deposit built

jointly with South Korean investors and experts. This complex is worth more than 4 billion US dollars is one of the most modern high-tech and large industries in the world. Its commissioning will allow to receive annually 83 thousand tons of polypropylene, which had previously been imported to the republic, to increase polyethylene production by 3.1 times, to employ more than one thousand of highly qualified specialists.JSC "GM Uzbekistan" in Khorezm region has launched serial production of mini-truck "Chevrolet Labo", overall cost of project totals approximately 6 million US dollars, and annual capacity is 5000 machines necessary for farmers and entrepreneurs. It should be noted that this is the third model produced at the new plant "Khorezm Auto", which has already launched production of cars "Damas" and "Orlando".In the Pap district of Namangan region a solar photovoltaic power plant of 130 kW has been put into operation. So far this project is in test regime, but by 2020 the country plans to put into operation three more solar power plants of 100 MW each.High-speed passenger trains on railway lines to Samarkand and Karshi are opened, allowing to organize the running of highspeed trains "Afrosiyob" from Tashkent to Karshi.

As a result the carriage of passengers from the capital to Kashkadarya and back reduced twice.The profound structural changes are taking place in agriculture. Through hard work and skills of farmers despite the difficult weather conditions in the country grown and harvested a rich crop of agricultural products - produced more than 7.5 million tons of grain, more than 3.35 million tons of cotton.It should be noted that high yields are provided mainly due to intensification of agricultural production, improvement of selection and implementation of recognized varieties of cotton and grain crops, the development of modern agricultural technologies.The average yield of wheat in country reached 55 quintals per hectare, and in some areas reached 60-77 quintals per hectare, which is a great achievement of our farmers.In addition, the rapidly developing sectors of agriculture such as horticulture, horticulture, viticulture and cattle breeding. Last year, 12.592 million tons of vegetables, including potatoes, 1.85 million tonnes of melons, 1.556 million tons of grapes, 2.731 million tons of fruits has been harvested.We attach exceptional importance to deepening of industrial processing of agricultural raw materials, the development of storage infrastructure grown produce. In the past year created and upgraded 230 enter-

prises in the industrial processing of agricultural products, developed and modernized 114 new cold stores with a capacity of 77.8 thousand tons. The total storage capacity of fruits and vegetables in the country increased to 832 thousand tons, which allows in the course of year without interruption and without sharp seasonal price spikes to provide country's population with main types of agricultural products, to expand its exports, to maintain price stability.All of this is the result of selfless labor of our farmers and all rural workers.It gives me great pleasure to express our sincere gratitude.In the past year, we continued systematic work to achieve dynamic development of the sphere of services as one of the most important factors and directions to deepen structural reforms and diversify economy, increasing employment, income and quality of life.In 2015, the service sector has provided more than half of gross domestic product. Currently, its share in GDP reached 54.5% compared to 49% in 2010. In this area has more than half of the total employed population.The company strives to develop banking, insurance, leasing, consulting and other kinds of market services contributing to the development of the private sector and small business in country. In this industry, there are 80.4 thousand small businesses, accounting for more

than 80% of the total number of service industries.Particular attention is paid to development of this sphere in rural areas. As part of the program to accelerate development of service sector in rural areas over the past three years in rural areas more than 22.8 thousand projects have been realized, the volume of services increased by 1.6 times, and their consumption per rural resident rose by 1.5 times.Dear participants of the meeting!Summarizing every effort made over the past 2015, now we have every reason to say - we carried a huge scale and depth of work on renewal and reform of country, achieving stability and sustainable growth and macroeconomic balance of economy.Despite the ongoing global financial and economic crisis in reporting year, GDP grew by 8%, industrial output - by 8%, agricultural production - by almost 7%, construction and installation works - almost by 18%.The annual budget is executed with a surplus of 0.1% of GDP. The inflation rate was at 5.6%, that is, within the forecasted parameters.According to the rating of authoritative World Economic Forum, Uzbekistan is among 5 countries with the fastest growing economy in the world by the end of 2014-2015 and forecasts of growth for 2016-

2017.In addition, in 2015, Uzbekistan became one of 14 countries that have received awards for achievement of Millennium Development Goals in shere of ??food security by Member States of Food and Agriculture Organization (FAO).In 2015, the banking system was further strengthened by increasing level of capitalization and expansion of investment activity of banks. The total capital of banking system increased in comparison with 2014 year by 23.3% and reached 7.8 trillion soums. Over the past 5 years, this figure increased by 2.4 times. The capital adequacy ratio of our banking system is almost 24%, which is 3 times higher than generally accepted international standards, and its liquidity - 2 times higher than the highest indicator estimates.Despite the significant slowdown in the world trade and reduction of external demand, decline in world prices for major export commodities, we have managed to achieve a positive balance in foreign trade, which allowed for growth of state reserves.The results achieved and the strengthening of macroeconomic stability in the country shows a low level of public debt that does not exceed 18.5% of GDP.Dear compatriots!Persistently high economic growth rates and ser-

vices have created necessary conditions for realization of important priorities - providing employment, particularly employment of graduates of professional colleges and higher educational institutions.In 2015, more than 980 thousand jobs were created, including more than 60% - in rural areas.More than 480 thousand college graduates have been employed. Commercial banks have given soft loans for organizing own business in the amount of about 280 billion soums, which exceeds this indicator of 2014 by 1.3 times.In 2015, we achieved sustained high rates of economic growth that created a solid basis for further income growth, improving living standards and quality of our people's life.Salaries of employees of budgetary institutions, pensions and scholarships were increased by 21.9%, and the real aggregate income per capita increased by 9.6%.It should be noted that the share of income from business activity rose to 52% compared to 47.1% in 2010, significantly higher than in the CIS countries.In our country, we are focusing on reduction of social stratification. The income ratio of 10% of the richest population and 10% of the least well-off population - the so-called "decile coefficient" moves downward steadily, and in 2015 indicated 7.7, compared to 8.5 in 2010.International indicator of the separation of income Gini index in 2015 was established at 0.280 against 0.390 in 2000, and its level is much lower than in many developed and developing countries.Income growth contributed to increased domestic consumer demand. Retail turnover increased over the year by more than 15%, and paid services - by 10.8%.

Qualitative changes have taken place in level and structure of availability of durable goods, most of which are now produced in our country. In particular, provision of families with cars has reached 42 out of 100 families, which is 1.5 times more than five years ago, the personal computers - 47 with the growth during this period 3.9 times, air-conditioners - 31 or, respectively, 1, 7 times, mobile phones - 234, or 1.6 times.I am pleased to note that in 2015 conducted under the auspices of United Nations with the participation of a group of independent organizations and international experts estimated the rating of 158 world's countries on such parameter as "happiness index", which characterizes the ability of a country to provide its residents a happy life, Uzbekistan took the 44th place against 60th position in 2013.Our focus over the past year was laid on the issues of further reforming and improving education. Annual spending on education in Uzbekistan make up about 10-12% of GDP, which is almost 2 times higher than the relevant recommendations of UNESCO (6-7%) the size of investment in education needed to ensure sustainable development of the country.In 2015, further development and strengthening of material and technical base of 384 educational facilities was carried out totaling 423 billion soums, including those built on standard projects 29 new schools, 219 schools were renovated and 136 schools were repaired.The Uzbek State World Languages ??University built a new modern educational building for 2.2 thousand training places, a sports complex and hotel to attract foreign specialists. The con-

struction of a new academic unit in Navoi State Mining Institute.In higher education, implemented a radically new, improved system of regular training of the teaching staff of universities. The 15 basic high schools organized refresher courses and advanced training for managers and teaching staff of universities that already have been retrained about 2.7 thousand teachers.In 2015, has been spent about 500 billion soums for construction, reconstruction, renovation and equipment of 141 health facilities. National Children's bone-tuberculosis sanatorium, Urgench branch of the Tashkent Medical Academy, regional diversified medical centers in Andijan and Bukhara, regional children's multipurpose medical centers in Karshi and Samarkand, medical associations in a number of regions of the republic were reconstructed and put into operation. Optimization of rural medical centers has been completed, equipping them with modern diagnostic and medical equipment.As a result of the measures implemented over the past five years maternal mortality per 100 thousand live births dropped from 23.1 to 19 cases, the mortality rate of children under 5 years - from 14.8 to 13.9 and infant mortality - from 11 to 10.7. According to these indicators, our country has fully achieved relevant Millennium Development Goals.Particular attention is paid in our country the development of physical culture and sports, which are an important and effective factor in health promotion. In 2015, as part of the address program of construction and reconstruction of sports facilities for children at the expense of the Children's Sports Development Fund commissioned 35 standard sports facilities, 12 swimming pools, 174 school gyms, totaling more than 225 billion soums.In 2015, the Uzbek athletes at the world championships, Asian

and other international tournaments, won more than 860 medals, including 311 gold, 274 silver and 276 bronze. Especially our athletes successfully perform in sports such as athletics, gymnastics, boxing, wrestling, judo, taekwondo, equestrian sports.Our focus over the past year was to ensure polnoyrealizatsii adopted State program "Year of attention and care for the older generation."The implementation of the program has involved all ministries and departments, enterprises and organizations of all sectors of the economy, social structures, primarily funds "Nuroniy" and "Mahalla", that no sphere of life of the older generation either remained without due care and attention.More than 215 thousand elderly people in the past year have passed free medical examination. Needy persons with disabilities have the opportunity to receive more than 11,000 prosthetic and orthopedic products and technical means of rehabilitation of high quality. About 70 thousand veterans were covered by the medical examination in hospital and health recreation and spa facilities. All centenarians Uzbekistan who have reached the age of 100 years, received special allowance of one minimum wage added to pension.In addition, on September 1, last year introduced a new list of basic food and hygiene products to ensure the free monthly lonely elderly and disabled in need of constant care.Total for the implementation of measures envisaged in the State Program "Year of attention and care for the older generation," 2 trillion 246 billion soums and more than 225 million US dollars has been spent from all sources.Dear participants of the meeting!In defining key priorities of socio-economic development of our country for 2016, we can not ignore the serious problems arising in connection with the ongoing global crisis, a

sharp decline in demand, uncertainty and significantly increased the fierce competition in the global markets, fall in output growth, and all the attendant consequences, touching majority of states in the world.In this regard, difficult problems facing us in 2016, dictate need for a complete renunciation of outdated methods of predicting inertia of achieved level, relying on average development.Our main objective must be continuous technological and technical renewal of production, as well as constant search for internal reserves, implementation of deep structural reforms in economy, modernization and diversification of industry.The major direction of implementation of our internal resources and capabilities should be a gradual increase in depth of processing of local raw materials of mineral and plant origin, which is rich in our land, as well as expanding volume and range of products with high added value.In other words, time itself needs to move to successive 3-4-stage processing of raw materials cycles in demand on world market under scheme: basic raw material - primary processing (semi) - finished materials for industrial production - finished products for final consumption.This raises need for development and implementation of programs to trace complete cycle of deep processing of each type of raw materials - semi-finished products up to final consumption.In short, you need to provide whole cycle forecasting organization of production - from raw materials to finished products with a substantiation of expediency and cost recovery.Calculations show that as a result of the release of products with high value-added petrochemical products production volumes can be increased with development of its new species in 2030 by 3.2 times, products from ferrous metals - by 2.2 times, of iron or steel - 2 3 times, chemical products, including fertilizers - 3.2 times.Deep processing of cotton fiber, fruits and vegetables using modern technologies will increase in 2030 production volumes demand on domestic and foreign markets environmentally friendly finished products textile and light industry by 5.6 times, fruits and vegetables - by 5.7 times. This list can be continued.Along with this increase in the production of modern finished products with high added value, demand in foreign markets, will be basis of sustained high growth rate of its exports.I must say that this work has already begun in the country. However, it requires a radically new software integrated approach with a view to the per-

spective view of each raw material and semi-finished products with high potential, have a specific program of deep processing, calculated for 2020, 2025, 2030.We now have good reason, based on deep analysis of trends in global economy and realistic assessment of our resources and capabilities, to set a target - not less than 2-fold increase in 2030 GDP of our country. Due to drastic structural reforms - to achieve accelerated growth of industry and bring its share in GDP to 40% against 33.5% in 2015, while share of agriculture has fallen from 16.6% to 10.8%, to reduce energy intensity of GDP is about 2 times as a result of the widespread introduction of energy saving technologies.The reality of the task can be judged based on the following calculations. In order to achieve the growth of GDP for the years 2016-2030 2 times, enough to provide average annual growth rate of 4.8%, while over the past 11 years the average GDP growth rate in the country amounted to level no less than 8%.Dear compatriots! The most important priority envisaged for 2016 economic program should be unconditional continued initiated system of democratic reforms and modernization of the country, deep structural changes in the economy, especially in industry and agriculture, advanced development and protection of private property, entrepreneurship and small business, ensuring macroeconomic balance. We have set ourselves the task to ensure this year's GDP growth at 7.8%, the volume of industrial production - 8.2%, agriculture - 6.1, retail trade - 14 and services - 17.4%, maintain inflation in the range of 5.56.5%, ensure the growth of real incomes by 9.5%, the average wages, pensions, scholarships and grants, taking into account the tax benefits provided by the - by 15%.A crucial role in the realization of these objectives belongs to investment program for 2016 as an essential instrument of structural transformation of industry and economy as a whole. We should take urgent measures to ensure the unconditional entry within the terms provided for 2016, 164 major investment projects worth more than 5 billion US dollars.First of all, completion of high-speed train "Afrosiyob" to Bukhara, two steam and gas turbines of 450 MW each at Talimarjan TPP, power unit of 150 MW at the Angren TPP, three blocks of desulfurization capacity of 6 billion cubic meters of gas at the Mubarek Gas Processing Plant, a new smelter capacity of 70 thousand tons of copper at the Almalyk MMC, capacity expand of cement plant

in Jizzakh region to 1 million tons of Portland cement, development of production of new models of cars, "Aveo" (T-250) at JSC "GM Uzbekistan".In 2016, its planned to build in rural areas 13 thousand houses with a total area of ??more than 1 million 800 thousand square meters, as well as to pave 900 kilometers of water networks, gas and electricity, 325 kilometers of access roads.In general, in 2016 its planned to direct investments for development, modernization and structural adjustment in the equivalent 17.3 billion US dollars with a growth rate of 109.3%, of which more than 4 billion US dollars contain foreign investment with an increase against 2015 by 20.8%.I would like to emphasize especially the need to improve the accountability of officials, regardless of their affiliation with the delivery and installation of machinery and equipment that meets all modern requirements.To this end, last year the Cabinet of Ministers of the Republic of Uzbekistan Agency on expert assessment of feasibility studies of projects newly constructed and reconstructed production facilities, equipment and technology was established. It is the organization, first of all, that will be strictly responsible for the unconditional fulfillment of all requirements by customers.A recent study by a special commission of the Cabinet of Ministers to study the state of problem at enterprises of light and textile industry revealed a number of serious flaws in this case. Such inspections should be continued.Along with this specific articles to strengthen the responsibility of the customer for the delivery and commissioning of outdated equipment must be added to the Administrative Responsibility Code and the Criminal Code.An important task is to continue in 2016 started work on unconditional implementation of major provisions of Program of development and modernization of engineering and communication and road infrastructure in 2015-2019.The focus should be laid on issues to complete modernization of Uzbek national highway, about 513 kilometers of roads of which this year to be constructed and reconstructed.In the area of ??rail transport a key focus will be the further development of the railway network, providing electrification of railways section Samarkand-Bukhara and continued work on electrification of Karshi-Termez section. An important event of the year will be the completion of the 19-kilometer rail tunnel through on pass Kamchik and opening of railway traffic on Angren-Pap section, which will

provide cargo transportation by rail between Ferghana Valley and other regions of the country.Once again I want to emphasize that it is vital for us, this promising project, which has not only a strategic and economic importance, but also characterized by an increased level of progress we have made in the field of communications and transport.Dear participants of the meeting!Fundamentally important priorities of economic program for 2016 and near future is the further deepening of reforms and structural changes in agriculture, efficient use of land and water resources.I must say that transition to a system of farm management the issue of optimization of land areas size, which provides each farmer enterprise the right for rental property, remains relevant.This is primarily due to the fact that in conditions of irrigated agriculture, water scarcity and high salinity of almost all arable territory of the Republic of Karakalpakstan, regions and rural areas, there is a great variety of land fertility and yield class.It took hard systemic work to reach rational and optimal provision of land areas, taking into ac-

count experience of development, efficiency and profitability of farms established in various regions.At the same time an effective factor in avoiding and preventing subjective approach in determining size of areas is that all of this extremely important work was entrusted to deputy corps, advising farmers and rural community.As a result of further optimization of land created over 17.5 thousand farms and more than 250 thousand new jobs. The largest number of farms established in Tashkent, Jizzakh, Namangan, Samarkand, Kashkadarya, Ferghana, Andijan regions and Karakalpakstan.A new mechanism for granting and withdrawal of land for farms, when the decision is made not by hokim of district, but the district Council of deputies on conclusion of territorial councils and commissions of farmers to address issues of land areas provision.Especially I would like to dwell on the issue of fundamental importance to quality of structural changes in agriculture and development of economy as a whole.We are talking about a phased reduction of the volume of production and state purchases of cotton from 3.35 million tons to 3 million tons up to 2020.Calculations show that the volume of produced cotton will allow, on the one hand, to fully meet the needs of, first of all, textile and light industry, raw material, given its deep processing, and on the other hand -

to keep a strong position of our country as a supplier of cotton fiber and its derivatives to world markets.I must say that by reducing the production of raw cotton by 350 thousand tons released about 170.5 thousand hectares of irrigated land. Thus, as a rule, released land with low yield class where cotton yield do not exceed 12-15 quintals per hectare - with the average achieved in the country yields 26.1 centners per hectare. Released mainly saline land and land in the foothill areas unsuitable for growing cotton.The fact that in recent years has been a sharp fall in prices and demand for cotton in world market is equally important.The cultivation area, exempt from cotton in turn to be sown with vegetables, including potatoes, fodder, oilseeds, established orchards and vineyards.As a result of optimization of crop areas and introduction of modern agricultural technologies by 2020 its provided for to bring production volumes of cereal crops up to 8.5 million tons with an increase of 16.4%, increase of potato production by 35%, other vegetables - 30%, fruit and grapes - 21.5%, meat - by 26.2%, milk - by 47.3%, eggs - by 74.5%, fish - by 2.5 times.We should take into account that exports of these types of food will be substantially increased.As before, our focus remains on issues related to development of social sector, further improvement of level and quality of life.The social

sector in 2016 will be allocated 59.1% of total expenditure from State budget, that surpasses last year's indicator, including on education - 33.7%, on healthcare - 14%. At the same time costs for maintenance and development of education will increase against the previous year by 16.3%, healthcare - 16%.I would especially like to note the growing volume of funds allocated for development of material-technical base of higher educational institutions (HEIs) of our country. It is envisaged to allocate 355 billion soums to construction and reconstruction of 13 HEIs, including Karakalpakstan, Bukhara and Samarkand State University, Fergana Polytechnic Institute. Also a complex of buildings of the Tashkent State Institute of Dentistry, new academic buildings branches Inha University and Singapore Institute of Management Development will be built.The most important task for us is to ensure employment of the population - in 2016 provides for the creation of about 990 thousand new jobs, including by accelerating the development of small business and private entrepreneurship, services will be organized more than 660 thousand jobs. In 2016, we will ensure employment of more than 510 thousand graduates of universities, high schools and colleges.Once again I would like to remind the heads of district, city and regional administrations about their personal responsibility for this area of ??work, bearing in mind that the solution to problem of employment of young people, our children, especially in rural areas, continues to be for us one of most urgent tasks.It is extremely important in shaping annual plan of admission to professional colleges and academic lyceums mainstream, what new facilities will be commissioned in 3-4 years in the district, city, area, some footage of how they need to function, and on this basis make appropriate adjustments to reception.In the context of increasingly tough competition in world markets becomes fundamental priority improving competitiveness of our economy, increasing support for export enterprises, promotion of full participation in export of farms, small businesses and private entrepreneurship.In these areas there is a huge, yet untapped potential. It should be borne in mind that, unlike the industrial exporting enterprises, small businesses and farmers are exempt from the mandatory sale of banks to 50% of foreign exchange earnings from the export of their products

themselves should be interested in promoting their products for export.First of all, we should critically review the system of benefits provided to exporters to take additional measures to further simplify customs procedures, reduce time of implementation and tariffs on carrying out foreign trade operations. Its essential to broader introduce the electronic form of registration of all documents and licensing procedures, export-related products. Serious responsibility for resolution of all these issues rests with structure of transformed Ministry of Foreign Economic Relations, Investments and Trade.Today they are fully responsible for coordination of export and involvement of new members in export activities, expanding supply of our products for export, development of new markets.The most serious attention should be paid to experience of Fund for export support for small business and private enterprises, established in 2013 under the National Bank for Foreign Economic Activities. This is a unique structure that is intended to provide legal, financial and organizational services to businesses to promote their products and services to foreign markets.In this connection, I consider it necessary to consolidate financial capacity of this Fund due to an increase in current year of the size of its share capital at least twice, as well as to expand its powers, functions, and a list provided them with financial services, to consider the establishment in the regions of its business units.In modern conditions, in the era of the Internet and electronic wide introduction of modern information and communication technologies in the fields of economy, a radical acceleration of the creation of the "Electronic Government" is of priority importance.The whole world experience shows that in current global economy the role and importance of information and communication technologies is increasing, including manufacturing of computer and telecommunications technology, software development and provision of on their basis a wide range of interactive services. We should not forget that the development of ICT has a direct impact on level of competitiveness of country, allows to collect and summarize vast amounts of information, offers great opportunities for management at strategic level.I must say that today ICT accounts for about 5.5% of world GDP, and according to authoritative international experts estimates by 2020 this figure will exceed 9%.For example, in Repub-

lic of Korea share of the ICT sector in the country's GDP totals more than 11.8%, in Sweden - 7%, in United States of America - 6.8%.Despite the fact that in recent years, this sector of our economy developing rapidly, we must recognize that we are only at the initial stage - the share of ICT accounts for only about 2% of GDP.At the same time, we have all the necessary resources and opportunities for more rapid development of the sector, with a view to growing up professional staff in the country where those active in Tashkent foreign universities South Korean Inha and universities of our country prepare such a staff.On the eve of the new year we all decided to name 2016 as the Year of Healthy Mother and Child. In accordance with the centuries-old traditions of our people, we firmly believe that a healthy mother and healthy child are the key to keep a happy family, in turn, happy family is the basis of a prosperous society.We have a huge large-scale work on implementation of program, in which special attention is paid to such issues as further strengthening of protection of family, motherhood and childhood, formation and consolidation of material and technical base, personnel potential perinatal and screening centers, nursing services , increase level and quality of care for young mothers and children, creation of healthy spiritual environment in families, formation of girls' physical health and intellectual development of compulsory education in academic lyceums and professional colleges, their regular exercise.At the same time we must bear in mind that further strengthening of physical and moral health of our children, mothers, all our people undoubtedly depends on our constant attention to these problems.Dear compatriots!Today we have every reason to be proud of what has been done and executed by us in past 2015.We have entered into an anniversary for our country - the year of 25th anniversary of Uzbekistan's independence. I will not be mistaken if I say that for every citizen of Uzbekistan, a matter of honor - to make a significant contribution to the fact that 2016 has become for us worthy of this great date. Of course, the coming year will not be easy, but I am convinced that all the parameters and indicators will surpass last 2015's ones. There is no doubt.I wish you all good luck and success in achieving these noble objectives.

PRESIDENCY OF THE REPUBLIC OF UZBEKISTAN IN THE SHANGHAI COOPERATION ORGANIZATION (2015-2016) SCO makes a commendable input to consolidation of peace and stability in the region The international prestige of Uzbekistan has been continuously rising due to the dynamic progress in all spheres, peaceful policy of the state and consistent efforts to achieve security and stability in the region.A strategic mechanism for achieving the high goals of

joining the ranks of the developed states of the world has been developed in our country, steadily going under the leadership of President Islam Karimov on its own path of development. In this process, Uzbekistan pays special attention to the development of international cooperation, including in the framework of the influential international organizations, one of which is the Shanghai Cooperation Organization (SCO).The Shanghai Cooperation Organization, founded on June 15, 2001 in the Chinese city of Shanghai, has become a significant international organization with a solid position, effective approaches and specific objectives. The growing impact and authority of this organization in resolving urgent problems of global socio-economic and international consequence, ensuring security, stability and sustainable development in the world reasonably triggers the growing interest of many states in obtaining the status of full members, observers or dialogue partners of the SCO.Uzbekistan, Kazakhstan, China, Kyrgyzstan, Russia and Tajikistan have been members of the SCO since its establishment. India, Pakistan, Afghanistan, Iran, Mongolia and Belar-

us take part in the activities of the SCO as observers, while Turkey, Sri Lanka, Azerbaijan, Armenia, Cambodia and Nepal have the status of dialogue partners. After last year’s Ufa summit, the process of admitting India and Pakistan to the SCO as full members have started.Over the past period, the SCO member states have carried out significant activities on reinforcing relations, based on trust and good-neighborliness and developing bilateral and multilateral effective partnership in trade, economic, socio-political, scientific and technical, cultural and humanitarian spheres, strengthening peace and tranquility, providing safety and stability.The principles of mutual trust and commitment, equality, collegiality, respect for cultural diversity, common aspiration for development are strictly adhered to in the SCO activities.SCO attaches priority importance to support and promote regional economic cooperation, fund joint projects, intensify direct contacts between businesspeople and financial institutions, development of cooperation in such areas as transport, infrastructure, information technology and telecommunications, banking and financial sectors. Solidification of bilateral and multilateral relations in the spheres of science, education, innovation, health, agriculture, environment and security is also one of the most important tasks of this international organization.Two permanent bodies of the SCO the Secretariat with headquarters in Beijing and the Regional Antiterrorist Structure with headquarters in Tashkent, have been effectively functioning. The Secretariat is the executive body of the SCO, providing organizational, technical and information support to activities, carried out within the organization. The main objectives of the Regional anti-terrorist structure are developing measures to strengthen the joint counteraction to terrorism, extremism and separatism, trafficking of drugs and weapons, the proliferation of weapons of mass destruction, as well as the prevention of threats to international and regional security.In today’s rapidly changing world, no global problem can be solved by the efforts of a single state. Likewise, environmental and safety problems require international cooperation. It is also worth noting that in April 2010, the year of the Republic of Uzbekistan’s chairmanship in the Shanghai Cooperation Organization, an important historical event in the activity of the SCO took place. During the visit of the the Secretary-General of the United Nations to our country, a Joint Declaration on cooperation was signed between the Secretariats of the UN and SCO in Tashkent.The adoption of this important document, which marked the beginning of the official UN-SCO cooperation, has created a sol-

id basis for joint efforts in addressing urgent issues. According to the norms and rules of the Shanghai Cooperation Organization, SCO chairmanship passes to one of the Member States annually. Starting 11 July 2015 the Republic of Uzbekistan has taken on the SCO chairmanship.It should be noted that Uzbekistan is one of the founder-states of the SCO. Our country has to date twice chaired the organization - in 20032004 and in 2009-2010. During these periods important documents and decisions on the improvement of the activity of the SCO, further expanding its cooperation in different directions were adopted.This years chairmanship in the organization, celebrating its 15th anniversary, further increases the responsibility for the successful implementation of the envisaged plans for the future.In accordance with the President Islam Karimov’s decree on the preparation and conduct of the meeting of the Council of heads of the state of the Shanghai Cooperation Organization in Tashkent, as well as other activities within the chairmanship of of the Republic of Uzbekistan in the SCO, dated from of January 21, 2016 active preparation for this major event has been carried out in our country. Following the existing tradition, during its chairmanship period, Uzbekistan strictly adheres to and abides by the principles of consistent expansion and development of constructive and lasting cooperation, meeting the interests of the Member States, ensuring the steady growth of the authority of the organization in the international arena.Our country, within its chairmanship of the SCO, has been making a worthy contribution to the effectiveness of the organization through the development and implementation of initiatives, related to advancement of international ties, strengthening its regulatory framework, ensuring security and stability in accordance with the goals, objectives and principles, reflected in the SCO Charter.


Ambassador of Uzbekistan to Italy - Mr Ravshan Usmanov

Interview with he Mr Ravshan Usmanov, Ambassador of Uzbekistan to Italy by Mr. Ivan De Stefano

What could you say about the path of your country’s development over the period of time since it became an independent state? Since gaining its independence in 1991, Uzbekistan carried out large-scale reforms aimed at building a democratic state with the socially oriented market economy and a strong civil society. We have chosen our own path of transition and development, known as the Uzbek Model, which is based on five key principles outlined by President Islam Karimov right at the outset of our nation’s independent development. These are the priority of economy over politics; the state is the main reformer; ensuring the rule of law in all areas of society’s life; the implementation of a strong social policy; as well as the gradual nature of political and economic reforms. The Uzbek government has set a number of major objectives, which include joining the ranks of developed democratic nations, building civil society, modernising and diversifying the country’s economy. Over the relatively short period of time our country has managed to score major successes on its path towards these important goals, and these achievements have gained broad international recognition.Today Uzbekistan is a country with a stable and dynamically

developing political system, robust economy with an annual gross domestic product growth rate of 8 per cent, as well as a strong and highly-ranked education system.Our nation is now going through the third phase of its development. Its priorities were outlined by President Islam Karimov in the Blueprint for the country’s development beyond 2010. This document focuses on such areas as the democratization of state power, legal system reforms, developing the electoral legislation, ensuring freedom of speech, boosting the role of civil society institutions, speeding up market reforms and the process of the liberalization of economy. Based on the priorities outlined in the blueprint, in March 2011 the parliament passed a law introducing constitutional amendments aimed at ensuring a more balanced distribution of powers between the branches of state authority, as well as boosting the role and influence of political parties in the country’s public and political life. Under the new law, some presidential powers were transferred to the Senate, while the powers of the prime minister were also enhanced. Over the years of independence, Uzbekistan has also made a significant progress in developing its election system on a multiparty basis and ensuring citizens’ rights to vote and be elected. The high voter turnout in recent presi-

dential and parliamentary elections bears witness to people’s commitment to the democratic and economic reforms being effected in the country and how seriously they take their role in these reforms. The country has also made a great leap forward in reforming and liberalising its legal system with a major focus on ensuring the independence of the judiciary. For instance, appeals procedures were reformed, the institute of reconciliation was established; legal mechanisms ensuring the equality of parties at all stages of the legal process were strengthened. The courts have been empowered to issue sanctions for arrest (institute of "Habeas Corpus"). As part of the implementation of the articles of the Constitution saying that the right to life is an inalienable natural right of every person, as of 1 January 2008 death penalty was abolished in the country.Significant progress has been made in ensuring human rights and freedoms. Based on the norms of the Universal Declaration of Human Rights, the system of national institutions was created to promote the rule of law and protect the personal, political, economic, social and cultural rights of citizens. Much focus is being placed on educational programmes on human rights and freedoms at schools, universities and colleges so as to broaden people’s knowledge of their fundamental rights and freedoms. Civil society bodies are playing an increasingly important role. There are over 8,240 NGOs operating in various spheres. They enjoy significant state support in the form of subsidies and grants.Comprehensive work is being carried out in order to develop free and independent media. In the past ten years the number of print media in the country has increased 1.5-fold, while the number of electronic media outlets has increased seven-fold. Today there are more than 1,200 media outlets in Uzbekistan, with non-state media accounting for nearly 80 per cent of all media in the country. Another important thing worth mentioning here is that local broadcast and print media operate in seven languages of ethnic groups living in the country. Uzbekistan is home to representatives of 130 ethnic groups, and one of the major achievements during the years of independence is that we have succeeded in maintaining peace and stability, interethnic and interfaith accord in the country. It is a direct result of the government’s consistent efforts to ensure the strict observance of the constitutional principle of respect for the languages, customs and traditions of ethnic minority groups living in the country.

Could you give us a brief overview of economic reforms effected in Uzbekistan over the past few years? Since gaining independence, Uzbekistan has made considerable progress in its socio-economic development, and today the country is an integral part of world community and global financial-economic market. As is well-known, prior to independence, under the centrally-planed Soviet economy, Uzbekistan worked as reservoir of raw material and it inherited devastated economic situation from the Soviet Union. Thanks to President Islam Karimov’s model of economic development, within a relatively short period of time Uzbekistan has made a successful transformation from centrally commanded economy to the market-driven robust economy with a rapidly growing industrial sector. As mentioned in the World Bank report, “since the mid-2000s, Uzbekistan has enjoyed robust GDP growth, thanks to favorable trade terms for its key export commodities like copper, gold, natural gas, cotton, the government’s macro-economic management, and limited exposure to international financial markets that protected it from the economic downturn.” The International Monetary Fund stresses that “despite the deterioration in the global environment, the economy of Uzbekistan continued to grow rapidly. Strong fiscal and external positions, a stable banking system, and low public debt continue contributing to robust macroeconomic performance”. I would like to cite here some figures to provide you with a better picture of the scale of the economic achievements scored by our nation over the years of independent development. Over the past 24 years Uzbekistan’s economy has grown five-fold, and in per capita terms it multiplied at least threefold. We should also bear in mind that over the same period of time the country’s populace increased by nearly 12 million, reaching the current population of 31.5 million people. The country has established and developed its own car manufacturing, home appliances production, hydrocarbon-chemical production, pharmaceuticals industries, while food and consumer goods production industries, chemical industry, construction materials manufacturing and other sectors have undergone complete modernization and reorientation to ensure the production of competitive goods with a higher added value.The country has achieved substantial changes in the dynamics and structure of economy,

development of production and export capacity, social sector, the level and quality of life. For instance, between 1990 and 2015 the country‘s GDP at purchasing power parity has surged over six-fold – from 27.1 billion to 171.416 billion US dollars, and its growth rates over the past 11 years remain at around 8%.The proportion of industries and services has consistently increased in the structure of GDP. These indicators stood at 17.6% and 33.8% respectively in 1990, and reached 33.5% and 54.5% in 2015. Through the optimization of the structure of sown areas and increase in their productivity, the efficient use of modern equipment and technology in agriculture, the share of the agricultural sector gradually decreased from 33.4% in 1991 to 16.6% in 2015. At the same time, the country has achieved enormous progress in the area of food security. Today, the republic's agriculture not only covers domestic demand for food products, but also provides significant expansion of export capacity.In 2016, Uzbekistan is planning to channel more than $17.3 billion - 23.5% of which are foreign investment - in the development of its economy. Moreover, plans are afoot to put into operation 164 big production

facilities worth $5.5 billion. As a result, the economy is expected to grow by 7.8%, real income per capita - by 9.5%, wages, pensions, stipends and allowances from all sources – by 15% by the end of the current year. At a recent government meeting President Karimov stressed the importance of changing the approaches to corporate governance in Uzbekistan in order to establish a truly market-based system in determining corporate policies. Could you please elaborate on the main priorities of these reforms? At present Uzbekistan is implementing the program on the structural transformation and diversification of economy in 2015-2019. Its priorities include ensuring the reliable protection of interests of private entrepreneurship and small businesses, increasing the role of private property while reducing the presence of the state in the economy. In this context, it is of paramount importance to ensure the introduction of modern methods of corporate management (Corporate Governance, CG) to help improve

the efficiency of joint-stock companies and speed up the privatization processes.With a view to speeding up reforms in this area, the government adopted special resolutions on measures to be taken to introduce modern methods of corporate governance in joint-stock companies and to attract foreign investors in these companies. Following a complete inventory of the activities of all JSCs working in the country in 2015, their new standard structure has been developed and approved. The main goal of these reforms is to boost the role of foreign investors in economic entities, create more favorable conditions for their active participation in corporate governance, modernize production by replacing or upgrading production equipment and technology.The government has approved a list of 68 joint-stock companies, at least 15% of state stakes in which are being sold to foreign investors. There are also plans to put on sale shares of five Uzbek banks. At present, over 4,500 enterprises with foreign investments, including from world famous trans-national companies operate on Uzbek market. Among them are General Motors, MAN, Isuzu Motors, CNPC, LG, Lukoil, Nestle, Coca-Cola, British-American Tobacco and many others. What are the main factors which make the Uzbek economy attractive to Italian investors and entrepreneurs? This is a very important question. The formation of a favourable investment climate and business environment has always been among the Uzbek government’s major priorities.Based on the experience of developed countries as well as entrepreneurship and handicrafts traditions inherent in our people, the government is focusing on the development of small businesses and private entrepreneurship. This rapidly developing sector, which in 2015 ensured the production of 56.7% of GDP, is playing a leading role in the dynamic development of Uzbekistan.In 2015 the amount of investments from all financing sources added up to 15.8 billion US dollars, which is an increase of 9.5% against 2014. At the same time more than 3.3 billion US dollars, or over 21% of all investments – were foreign investments, of which foreign direct investments amounted to 73%.Uzbekistan has very favourable conditions for foreign investments. I would like to list below some of them.- Political

and macroeconomic stability. Despite the grave repercussions of the ongoing global financial and economic downturn, the annual growth of GDP has exceeded 8 per cent in 2008-2015. A very few countries around the world have been able to boast similar economic growth rates in the past years. The real aggregate per capita incomes have grown nine-fold since the republic became an independent country. The public external debt does not exceed 16 percent of GDP, while the internal debt amounts to zero, amid the mounting volumes of exports and gold and currency reserves.- Rich resources of raw materials. The country has access to a wide range of raw materials which makes it possible to reduce production prices, provides opportunities to produce high value added products which are in high demand on external markets. Uzbekistan is among the top ten countries with the largest reserves of gold, natural gas, uranium, silver, copper, molybdenum and other rare metals. There are more than 1,644 deposits and 100 types of mineral resources;-Energy self-sufficiency. One of the most important advantages of Uzbekistan is that its economy is energy independent. Uzbekistan’s total natural energy resources are sufficient to meet the demands of the economy for more than 100 years. Uzbekistan not only fully covers the domestic needs for electricity, but also exports electricity to neighbouring countries. The cost of electricity in Uzbekistan is 4 times lower than the average price paid by the industrial consumers in developed countries. The cost of 1 kilowatt of electricity is about 4 cents, 1 ton of coal is about US$20 and 1,000 m3 of natural gas is US$55.-Advantageous geographical location in the centre of the largest regional markets, proximity to biggest markets and the developed transport infrastructure of Uzbekistan. Foreign companies investing in Uzbekistan get access to major growing markets of CIS countries, Asia and Europe. Agreements on Most Favoured Nations Treatment with 45 countries, including the USA, Japan, China, Korea, EU countries, and the Free trade agreement between CIS countries, allow enhancing the competitiveness of goods produced in Uzbekistan on external markets;-Diversified industrial base. Uzbekistan has the most diversified economy in the region. We produce a wide range of automobiles and trucks, high-quality agricultural machinery, chemical, textile, pharmaceutical, food products and building materials;-Scientific and intellectual

capacity of the country. Almost 100 per cent literacy, significant human and intellectual potential, the educational system meeting latest international standards. Branches of a number of leading European, Asian and Russian universities operate in Uzbekistan, such as Politechnico di Torino, Westminster International University, Singapore Institute of Management Development, Moscow State University and others;-Legislative framework and system of benefits for foreign investors. The investment legislation of Uzbekistan is one of the most advanced among CIS countries, and it incorporated major provisions of international investment laws, in particular, regulations on guarantees of the rights of foreign investors, certain preferences for investors and others. Importantly, foreign investments in Uzbekistan enjoy the national treatment which provides foreign investors with conditions no less favourable than the corresponding conditions for investments made by legal entities and private individuals of the Republic of Uzbekistan. The government continues taking steps by developing new laws to improve the investment climate as well as support and encourage foreign investors. The existing investment laws provide for fundamental guarantees and measures to protect foreign investors and their rights on the territory of Uzbekistan.- The Navoi Free Industrial Economic Zone, the Angren and Jizzak Special Industrial Zones aimed at establishing high-tech joint ventures connected to modern transport and logistics infrastructure which enable direct exports to the markets of the CIS, South and Southeast Asia, Middle East countries. The creation of these economic zones testify to the high priority role of foreign investments in the Uzbek government’s economic policy.The important aspect of the functioning of the Navoi, Angren and Jizzakh economic zones is that they offer a system of preferences and privileges to foreign investors. These include the exemption from almost all types of taxes and customs duties imposed in Uzbekistan.Since the launch of the Navoi industrial zone, enterprises worth over 121 million dollars have been put into operation on its territory as part of 22 investment projects. These companies specialize in manufacturing modems, TV set-top boxes, electronic energy meters, power cables, heating and hot water boilers, mobile and landline phones, pharmaceutical products etc. A good example of Italian investments in the Navoi industrial zone is the Landi-Renzo company, which produces gas-cylinder equipment working on compressed gas. Recently GM Uzbekistan started a serial production of Lacetti cars, and Landi-Renzo jointly with GM Korea carried out necessary tests to ensure the optimum performance of

the engine adapted to two-fuel system. Companies working in the Angren and Jizzakh industrial zones enjoy equally favourable conditions. Businesses working in the Angren and Jizzakh industrial zones include a sugar plant and 29 manufacturing facilities, worth approximately 500 million dollars which specialize in producing power-efficient LED lamps, copper pipes, leather goods, mobile phones, PC tablets and other high value-added products.

Every year the Uzbek government adopts special programs in order to address specific social and economic objectives. 2016 was declared by the President of Uzbekistan as “The Year of a Healthy Mother and Child”. Could you please brief us on the main highlights of the government programme in this respect? The State Program “The year of a healthy mother and child” addresses a wide range of important issues related to the healthcare and education sectors. A total of 194 million dollars have been earmarked for the implementation of the state programme, which provides for the protection of women’s rights, ensuring better access to comprehensive healthcare services for women, especially those living in rural areas, building new modern houses and social infrastructure facilities in rural areas, provision of better quality drinking water, as well as improving the overall quality of services provided for rural population.Priority attention is being paid to the modernisation of perinatal and screening centers, providing them with latest, state-of-the-art facilities, raising awareness of health issues, arranging regular training for health workers to improve their practical knowledge and keep them up-to-date with the latest developments in their areas of specialization,

promoting healthy lifestyle among young people, building sports centres in rural areas. The programme also provides for the development of a network of pre-school educational establishments, as well as the introduction of the latest teaching methods and information and communication technology at primary schools. Measures are being taken to increase employment opportunities for college graduates, promote gender equality in the workplace, raise the volumes of loans allocated to young people starting their own businesses, as well as mortgage and consumer loans for young families. How would you assess the current level of the Italian-Uzbek bilateral relations in the political, economic, trade and cultural spheres? Italy is an important and reliable partner of Uzbekistan. We have long-term, traditionally strong and close ties.Diplomatic relations between our countries were established in March 1992 and the Italian embassy in Tashkent started working in September the same year. Uzbekistan opened its embassy in Rome in 1998. Uzbek President Islam Karimov’s visits to Italy in June 1996 and November 2000, Italian President Oscar Luigi’s visit to Uzbekistan in May 1997 marked watershed moments in the development of bilateral ties between our countries.The two countries maintain a regular dialogue at the foreign ministries level. The fifth round of political consultations was held in Tashkent in November 2015 during the visit of the former Secretary General of the Italian Ministry of Foreign Affairs and International Cooperation Mr. Michele Valensise. Uzbek and Italian Foreign Ministers Abdulaziz Kamilov and Paolo Gentiloni held bilateral talks during the Summit on Sustainable Development in New York in September 2015.The inter-parliamentary ties are developing consistently. The Uzbekistan-Italy Inter-Parliamentary Cooperation Group has been working within the Uzbek parliament since 2011. The Italy-Uzbekistan Association of Friendship and Cooperation was established at the initiative of the Italian Parliament in 2005. In 2014, The Italy-Uz-

bekistan All Party Group of Friendship was set up.The Memorandum on Cooperation between the Legislative Chamber of the Uzbek parliament and the Chamber of Deputies of the Italian Parliament was signed during an Italian parliamentary delegation’s visit to Uzbekistan in June 2012.Uzbekistan attaches great importance to the development and boosting of mutually beneficial cooperation with Italy in the trade, economic, investment, financial and technical spheres.The Italian Republic is among Uzbekistan’s five largest trade partners in the EU. The volume of bilateral trade in 2014 increased and reached 188 million dollars. In January-October 2015 the trade turnover between the two countries amounted to 136.6 million US dollars. A total of 29 enterprises with Italian investments operate successfully in Uzbekistan. We continue implementing important joint projects in the energy sector, chemical industry, transport, financial and technical cooperation, tourism and education.In June 2015, at the invitation of the Italian Government, Uzbek Minister of Agriculture and Water Resources Shukhrat Teshaev took part in the Forum "From Expo Milano 2015 to the future agriculture to feed the world".The Italian-Uzbek cultural cooperation programme for 2012-2016 is aimed at boosting cooperation in the areas of higher and school education, culture, art, tourism, etc.An Uzbek delegation led by the Chairman of the Association of Fashion Designers of Uzbekistan "Osiyo Ramzi" Khalida Kamilova visited Italy in April and September 2015 in an effort to attract leading Italian designers and clothing companies to create clothing lines in Uzbekistan. In January 2013 the Samarkand city administration and the Administration of Florence signed an Agreement on Friendship and Cooperation.For the first time in Central Asia, one of the largest music competitions in the world - Competizione dell'Opera was held in Tashkent in November 2014.The founding of Italy’s National Kurash Association in December 2014 has been a very important event in sports.The Turin Polytechnic University in Tashkent, founded in 2009, is one of the country’s top ranked universities thanks to its academic prestige and scholarly excellence.

Matrix of Success Uzbekistan has been working on its own formula for overcoming the global crisisExperts warn that 2016 may come with big challenges for the global economy. Plunging oil prices, economic downturn in China, uncertainty in global commodity markets and other factors are capable of slowing down the development of many countries. Being a part of the global market, Uzbekistan will also have to overcome the impact of these challenges. Uzbekistan Today reporters have made an attempt to find out how we are going to handle them.2015 was a time of serious reconsideration for many industries. The time of unrestrained growth, lending and irrepressible consumption is over. Today, new trends like efficient performance, energy efficiency and moderation in demands come to the fore. Previously, investors were ready to invest and absorb resources to just stake a claim for a niche in the market, while today everybody realizes that it is time for targeted and well-thought-out projects. In this regard, Uzbekistan, it appears, is riding high. The country has always selected specific investors for its projects, who would not just purchase existing facilities or build new ones, but would also ensure the introduction of modern

technologies, have a specific program of development for the future, and create new jobs. The government provided strategic partners with a serious package of privileges and preferences, and built the entire engineering and communication infrastructure they needed at its own expense. As a result, dozens of modern manufactures have sprung up in all regions of the country in a short span of time. Today, they are actively making a presence in the national and foreign markets.The national automotive industry appears most clearly in this context. Despite the challening situation in the major export market of Russia, GM Uzbekistan has rebranded itself into Ravon to promote the brand, and is currently getting prepared for several premieres.Ravon in Uzbek means ‘easy way, open road’. Perhaps, the company’s objectives for the current year can be described this very way, as suggested by the company’s new slogan in export markets – ‘Tested by time, created from scratch’. That is, the domestic auto manufacturer is ready to grow and increase its presence in foreign markets despite the crisis, focusing on quality and low prices through the introduction of effective equipment, reducing costs and streamlining the marketing

component. There is a good reason behing the strategy. GM experts have been studying the leading export markets and consumer preferences over the last two years, coming to the conclusion that Uzbek cars are appreciated for proven quality and affordability.The launch of a new car Chevrolet Aveo (Nexia R3) this year is expected to be a symbolic present for the 20th anniversary of the domestic automotive industry. The total cost of the project on the development of its production exceeded 264 billion soums. Secured by new designs, the company is planning to win at least 5% of the Russian market by 2020. Debuted last year under the Ravon brand, Matiz and Gentra will be added with Ravon R2 (a new model of the compact A-class Chevrolet Spark - 2010), Ravon Nexia R3 (B-class bestseller Chevrolet Aveo), Ravon R4 (a new model of B/C intermediate class Chevrolet Cobalt) in 2016. In the future, the company is planning to develop a few more C-Class vehicles (so-called ‘European middle class’) and a compact SUV (crossover or SUV).The launch of the manufacture of MAN-branded buses running on compressed natural gas in Samarkand is another interesting novelty. Assembled in Uzbekistan for the first time, the new models will roll-off the production line of

the Uzbek-German JV MAN Auto-Uzbekistan in February 2016.At the initial stage, the project envisages an SKD assembly on the finished chassis. A prototype has been already produced at MAN facilities in Malaysia, and the gas-cylinder equipment was installed on it in Uzbekistan. It is currently undergoing operational testing in Tashkent. The first batch of locally assembled buses will amount to about 50 items.Designed for 90 people, the bus is equipped with a 310-liter engine in line with Euro 5 standards. The company has developed a phased program of localization of its components. It is planned to develop the production of fiberglass parts, windscreen and side windows, seats, stretchers and brackets by the end of 2018. The production of headlights, electrical harnesses, mirrors, flooring and external cladding, doors, locks, handrails and fixtures will be developed by 2020, and aluminum profiles – by 2022.Two big infrastructure projects will be implemented by the National rail carrier Uzbekistan Railways. The launch of the working motion on the Angren-Pap electrified railway line is scheduled for the second quarter of 2016. Exceptionally freight trains will run on the line in the beginning, and the passenger train traffic will be commissioned in September 2016.

The construction of the 123.1 km line was started in mid-2013. It is unique for passing through a pass Kamchik in mountains at the height of more than 2,200 meters. In order to overcome the barrier, the China Railway Tunnel Group is currently completing the construction of a 19-kilometer tunnel totaling over $455 million. Meanwhile, 285 support facilities, 22 bridges, six railway stations and two depots have been already built.The launch of the new line will complete the international transit railway corridor China Central Asia - Europe. Experts have estimated that in the first year of operation the new line will transport about 600,000 passengers and 4.6 million tons of cargo. The total cost of the project exceeded $1.6 billion, more than $1.08 billion of which was invested by Uzbekistan Railways, the Fund for Reconstruction and Development of Uzbekistan and the national budget. Another $350 million was allocated by the Chinese Eximbank and $195 million – by the World Bank in loans.The country’s second high-speed railway line Tashkent-Bukhara will be commissioned in September. Its construction is estimated at more than $400 million. It will reduce the time for delivery of passengers and cargo by almost two hours, and cut operating costs by 30%. As part of maintenance of the new road, the national rail carrier of Uzbekistan signed a contract with the Spanish company Talgo for the purchase of two high-speed trains during the International Investment Forum in Tashkent.“Unlike previous trains, the new ones will have two more passenger cars”, says the head of the Uzbekistan Railways Department for Traffic and Operation of High-Speed Passenger Trains Olim Kurbonov. “Comprising two locomotives, 10 cars and a dining car, the new train will carry 287 passengers. Expansion of railway electrification and number of high-speed trains will allow organizing the high-level passenger traffic not only in Tashkent, Samarkand and Karshi, but also in other regions.Small business and private entrepreneurship will be undoubtedly attached special importance in 2016 as a basis of the domes-

tic economy. For instance, it is planned to create dozens of new small industrial zones.Today, there are 63 small industrial zones in the country, established in August 2014. Over 500 small businesses have started operation over the past years. They have not just handled the production of goods for the domestic market, but have been actively entering the neighboring markets.The performance has been noticed, so it was decided to create new similar zones. They will be established on the basis of unfinished and idle industrial enterprises. There are more than 100 facilities of this kind throughout the country. There is a need to carefully study them and analyze the logistics and infrastructure. A special working group of representatives of the State Committee for Privatization, Demonopolization and Development of the Competition, State Committee for Architecture and Construction, State Committee for Land Resources, Geodesy, Cartography and State Cadastre, the Ministry of Economy and other institutions, who have been studying these objects, generates and summarizes the proposals on the creation of new industrial zones on their basis.Upon selection of the most promising objects, district and urban administrations will build all the utilities and infrastructure at their own expense and with the support of Uzbekenergo and Uztransgas.In order to get a territory in a new zone, entrepreneurs will need to submit their business plans to the commissions under the administrations. During the competitive selection, experts will identify the best projects, and their initiators will be allocated 0.2-0.3 hectares. Besides, entrepreneurs will have to assume investment obligations on the creation of new jobs.Areas in industrial zones will be leased by entrepreneurs for 10 years. In the future, the term may be extended in case of the timely and full implementation of the obligations under previously signed leases. Once a lease contract is concluded, the administration will assist entrepreneurs with design documentation processing, and with preparation of documents for concessional lending, if necessary.The national air carrier

of Uzbekistan is intending to put new planes Boeing-787 Dreamliner into operation this year. The liner is the first passenger aircraft of this size, and its fuselage is made entirely of composite materials.The purchase of the Dreamliner was conditioned by Uzbekistan Airways’ strategy to rank among the most competitive and popular airlines. After all, in addition to fuel efficiency, which is marked by almost 20 percent reduction of fuel consumption compared to its competiors, Boeing-787 differs with drastically new characteristics of passenger comfort.A range of continuous flight of 16 hours ranks among the key features of Boeing-787. Humidity is another important aspect of a comfortable flight. A person can not fly in the thin and dry air for a long time, as it leads to discomfort. The Dreamliner provides an opportunity of increasing the humidity by 20%, unlike the traditional aluminum aircraft. In fact, Boeing-787 fuselage is made of composite materials, which suggest that it is not subject to corrosion like other aircrafts, so high humidity would not damage it. Domestic aviators are currently constructing a

special hangar for the new aircrafts, and are planning to commission the CIS only center for the repair of structural elements of the aircrafts that consist of composite materials. In the future, the center will provide maintenance of new generation aircrafts of the national air carrier and foreign airlines.One of the real sector flagships - the Almalyk Mining and Smelting Plant - is going to commission a new melting furnace at the smelter in September. The $92 million project is funded through loans of the Fund for Reconstruction and Development of Uzbekistan and domestic banks, as well as AMSP own funds.The new furnace is convenient and efficient, consumes less energy, flue gases are recycled, thus improving the environment. Besides, it provides a higher copper recovery.This all is just a small part of hundreds of ongoing projects in all regions of the country. Most importantly, each of them implies a modern and competitive manufacture, new roads, transport infrastructure, new jobs, welfare, which empower the country to further move towards its strategic goal of joining the ranks of developed countries.

Trips to Uzbekistan are joyful and interesting Our country represents a rich world for tourists. A unique location at the crossroads of the Silk Road is an important factor in the dynamic development of this sector in Uzbekistan, as well as the fact that the country has more than 7,000 monuments of different epochs and civilizations, many of which are included in UNESCO World Heritage List. Only in one of Samarkand - the capital of the great state of Amir Temur - focused a lot of attractions, which are famous today around the world. Architectural ensemble Registan, Ulugbek observatory, famous mausoleum of Amir Temur, Bibi Khanum Mosque have become city's decoration. This mausoleum was built by the order of Amir Temur, who is considered one of the finest examples of medieval architecture of the East.Sacred Bukhara is not inferior to Samarkand's abundance and importance of historical monuments and places of worship Majestic minarets, mosques and madrassas, bazaars and shopping domes, havuz-pools and areas are witnessing 2500 year history of Bukhara. Along with it

Khiva, Shakhrisabz, Termez with equally rich centuries-old history and unique architectural masterpieces, has roused the admiration of ancestors and contemporaries. Since independence Uzbekistan has developed radically new principles of state policy in the sphere of tourism. Thus, July 27, 1992 according to Resolution of the President Islam Karimov, National Company "Uzbektourism" has been created. This company was entrusted with the task of implementing state policy in this direction, formation of a national model of tourism development.In 1999 the Law "On Tourism" was adopted. Its main purpose is legal regulation of relations in the field of hospitality sector and protection of the rights and legitimate interests of travelers and subjects of this sector.In subsequent years, more than 30 laws were adopted on the basis of this document.In addition, the country has accepted and executed sequentially target state and regional programs of development of the tourism industry. In particular, in the period of 1999-2005 the state program of

development of tourism in Uzbekistan was implemented. In recent years regional programs to support leisure industry in Tashkent, Kashkadarya, Khorezm and other regions were implemented successfully.Over the past period Uzbekistan gained image of the country with a dynamically developing modern tourist infrastructureIn the country many new luxury hotels have been built, including nation-wide network of type B&B, which can provide high level of service for foreign guests. Along with major hotels, providing services under the world-renowned brands such as Radisson, Lotte, Ramada, Wyndham, in the capital and regions of Uzbekistan created a network of private institutions for small groups and family tourists.Airports in Tashkent, Samarkand, Bukhara, Urgench, Navoi and Fergana have been modernized. Today there are 11 international air harbors in Uzbekistan. National air carrier "Uzbekistan Airways" has the most modern airliners, Boeing and Airbus, which carry out regular flights to over 50 cities of Europe, Asia, Middle East and North America. This year, National Airlines expects replenishment in its fleet with two new-generation airliners Boeing-787 Dreamliner, which will be an important step in raising the level of quality of travel services provided by our country.Tourists have the opportunity to get to attractions and means of rail transportIn 2011 between Tashkent and Samarkand started to run high-speed train Afrosiyob produced by Spanish company PATENTES TALGO S.L. In 2015 Afrosiyob started going to Karshi - administrative center of Kashkadarya region. Convenience and comfort of this train is noted both by foreign guests and local passengers.Uzbekistan has created favorable conditions for businesses involved in the provision of tourism services. According to 2015 data, there are 1279 tourist organizations in the country, in particular, 548 hotels, hostels and campgrounds, 731 travel companies.In recent years, new types of travel were introduced, including ecotourism, geotourism, extreme, health and cultural areas, as well as mountain climbing, rafting, fishing. In this process, the features and capabilities of each region are being taken into account. For example, in areas with few historic monuments develop ecotourism, geotourism, traveling off-road, in mountainous areas - extreme

tours. Implementing a project on restoration of objects of cultural heritage, construction and reconstruction of tourist facilities, the development of new routes of ancient monuments and picturesque places.The results of the reforms appear in a sequential increase in the number of travelers to the country. They delight not only the natural beauty of our region, its rich history, diverse culture and beautiful historical monuments, but also centuries-old traditions of Uzbek people, its warm hospitality, and of course, unrivaled cuisine.Domestic tourism is also developing increasingly due to the growth of incomes of population of Uzbekistan and improvement of infrastructure of leisure industry. Every year millions of our fellow citizens travel around the country, where convenient transport facilities, comfortable hotels and high level of service is created.In order to further increase the tourist flow, Uzbekistan is actively developing cooperation with many countries of the worldIn this context, intergovernmental and interagency agreements with a number of foreign countries have been signed. Cooperation with specialized international organizations in the field of tourism is no less important.In particular, since 1993, Uzbekistan is a member of the World Tourism Organization (UNWTO), which unites more than 150 countries. Since 2004, Regional Centre of UNWTO on Silk Road is located in Samarkand, which coordi-

nates support for tourism on this transcontinental highway. While acknowledging the merits of our country in the sphere of development of the industry, Member States of of this Organization has repeatedly elected the Republic of Uzbekistan to the governing body - Executive Council, 99th Session of which took place in 2014 in Samarkand. Holding this forum on Uzbek land became further evidence of international community's recognition of effectiveness of comprehensive measures for development of tourism industry.Speaking at the opening session, Secretary General Taleb Rifai said that our country is playing a leading role in strengthening international cooperation for further development of tourism on Silk Road- We see a lot of changes in Uzbekistan. Under the wise and far-sighted leadership of President Islam Karimov, who has paid much attention to the development of tourism, the country could become one of the major centers of tourism development, the Secretary General of the UNWTO said.An important role in ensuring the rapid development of the tourism sector of Uzbekistan at the present stage is occupied regularly held in the country, major events, which bring together representatives of the tourism industry from around the world to discuss the main trends of the industry dynamics and business linkages.Since 1995, in the fall Uzbekistan annually holds Tashkent International Tourism Fair (TITF). This forum is a good platform for a constructive dialogue of partners operating in this sphere. In the past year the twenty-first fair took place, within which a presentation of tourism opportunities of Uzbekistan was held.The project Hosted Buyers became the main innovation at TITF 2015.Hosted Buyers is a specialized pro-

gram of business meetings, for which special privileged buyer is pre-invited with a specific purpose that is to meet with interested partners and arrange for the sale of products, goods and services or implementation of a special joint program or project.Since 2013, every year in April International Exhibition "World of Rest" is held, which opens the spring and summer tourist season in Uzbekistan. The event has represented the brightness and originality of regions' culture, their tourism potential. The exhibition provides an opportunity for domestic and foreign tour operators to promote its products and services in the beginning of new season, to conclude contracts with large clients.It should be noted that within the framework of the exhibition "World of Rest-2015" an international scientific-practical conference of the World Tourism Organization on the theme "Gastronomic tourism as a factor of competitive product" was held. During the forum participants discussed development of this type of tourism in Uzbekistan, further expansion of international cooperation in this regard.Thus, Uzbekistan on its tourism potential takes one of the leading places in the world. Successes achieved in this area are the result of a comprehensive work on the further development of our country industry infrastructure, popularization of opportunities in of the country in this area.

Camera di CommercioItalia Uzbekistan

Interview to President of the Chamber of Commerce Italy - Uzbekistan, Mr. Luigi Iperti, by Mr. Ivan De Stefano

President of the Chamber of Commerce Italy Uzbekistan Mr. Luigi Iperti.

Dear Mr. President, as an expert the Uzbek territory, could you give us more information about Uzbekistan in general?I know Uzbekistan for about twenty years and that means, since the country has just gained its independence. Uzbekistan has a population of 31 million inhabitants, it is politically stable and has a long perspective of constant growth and development. In the last 10 years GDP has been increasing at the rate of 8% per year. Italy is connected to Uzbekistan by two direct weekly flights, one from Rome and one from Milan. The duration of the flight is a little bit more that 6 hours. Other daily flights connect Italy and Uzbekistan via Moscow and via Ankara. The leadership of the President Islam Karimov has also consolidated in the light of progress that the country is doing including significant improvements of living conditions of the population. On the 29 of March the Presidential elections were held and they concluded with the confirmation of the President Karimov. How does the Uzbek economy compare in global competitiveness? The Uzbek economy is constantly growing. Despite the global economic crisis, this young Republic continues to reveal growth tips of 8/8,5%, keeping the trend of the last six years. According to the International Monetary Fund, Uzbekistan has managed the crisis well and kept an active balance sheet and a low public debt (currently 18.5% of GDP).One of the basis of Uzbekistan’s prosperity is in its resources, copper, uranium, gold, cotton and natural gas, whose reserves, according the BP, exceed 1.580 billion of cubic meters and in industriousness of its people.The oil and gas industry has attracted more than 60% of foreign investments. The politics of the country is aimed to create joint ventures in oil and gas industry, the petrochemical industry and, in particular, in the production of fertilizers. The

main foreign investors are Lukoil and Gazprom from Russian Federation, Chinese CNPC, Korean National Oil and Gas Corporation (KoGas) and Malaysian Petronas Charigali. Uzbekistan produces almost 300.000 of cars. The partner is General Motors. What is more, last year 350.000 of motors were produced in Uzbekistan. The main machines, highly automated, were supplied by Comau.The actions of the government in favor of industrialization contribute to changes in the structure of Uzbek economy. While services continue to dominate the economy, with a 53 percent share, the industry’s share has increased in the last decade for about 10 percentage points of GDP, and now it is at 24.2 % surpassing the share of agriculture (17.6 %).Uzbekistan is one of the main producers of cotton (3,35 million tons) and just 25%-30% of it is transformed in the country. The government promoted important investments in local textile industry in order to increase the use of cotton. The system of education is carefully organized at all levels. There are at least three universities which collaborate with foreign partners like Turin University and have engineering courses in English. Structural transformations in Uzbekistan economy deserve particular attention: if in 2000, the share of production of small private enterprises in the for-

mation of the GDP of the country was the 31%, in the period from January to September 2014, this indicator has reached 56%. The growth of the construction industry reached 17.4% per year and services have shown an accelerated growth - 14.2% per year. Tourism industry is also very important as it can count on a number of interesting historical places, such as Samarkand, Bukhara, Khiva. About 60 percent of state expenditures are addressed to the social development of the population. 33,5 percent of them goes to education. The share of working women rose to 45.4 percent. The inflation rate in Uzbekistan is inferior to 10 percent per year. Inflation is also caused by the growth of the monetary base, because of the increase of wages and benefits by the government. The authorities still exert a strict control of prices of food and energy in order to limit the inflation. The depreciation of the local currency follows the government program in order to keep under control imported inflation. For several years the balance sheet of the state has shown a variable surplus between 0.15% (2013) and 0.4 of GDP. Revenues have increased in recent years as a result of the strong economic growth and reforms. The foreign debt does not constitute a risk factor as in 2015 it amounted to 18.5% of GDP. Monetary reserves are remarkable

and are growing: by the end of 2010 they amounted to 9.8 billion dollars of over 13.6 months of import. By the end of December 2013 they increased to 17 billion dollars and cover 13 months of import. Then there are about 15 billiondollars accumulated by The Uzbek Fund for Reconstruction and Development (FRDU), created in 2006. Which is the approach of Uzbekistan toward its natural resources and towards commercial intercourse? Uzbekistan is among the most important countries in the world as regards gas production and natural gas reserves. The gas production is about 67 billion cubic meters annually. It is estimated that Uzbekistan exports 16 billion cubic meters of gas per year, mainly to the Russian Federation but also to China. As for the exportations to Russia, Uzbekistan currently has obtained price conditions similar to those practiced by GAZPROM in European markets. The ongoing exploration program of Uzbekneftegaz (till 2020) mainly concerns gas fields located in the northwest of the country between the Aral Lake andthe Caspian Sea. In addition to agreements signed with the main Russian companies, like Gazprom and Lukoil, operating in this specific sector, the agreements for the exploration and the eventual exploitation of gas fields were also signed with Chinese, South Korean, Malaysian and many other companies. Uzbekistan has also oil reserves (about 600 million barrels), but at this moment they are insufficient to cover the domestic market. One of the most important natural resources of the country is uranium and new investments to increase its production and export are expected. According to independent sources, Uzbekistan has uranium deposits estimated at 116,000 tons, equivalent to 2% of world reserves. But according to the Uzbek government data, uranium reserves amount to 185.800 tons.Gold mining, as well as uranium mining and gas extraction, is one of many resources of the country and has a predominant role in export. Uzbekistan is the ninth world’s gold manufacturer and its reserves (the most important is Muruntau, in the Navoi region) are on the fourth place among the main deposits in the world. The annual gold production of the country was estimated at more than 80 tons. In 2014 Uzbekistan has exported 15.087 billion USD and has imported 13.8 billion USD. The main partner is Russia that covers 40% of trade, followed by China, Korea and Turkey. Germany is on the first place among Euro-

pean countries. Italian export has increased significantly in 2014 in comparison to 2013, rising from 90 million to 150 million. This export growth was confirmed in 2015, when in November our export reached 121 million. A part of Italian export is not mentioned in the ISTAT (The National Institute for Statistics) statistics because they enter through other countries like Dubai and Turkey. Italy mainly exports machinery (65%), clothes (10%), footwear (3.8%), medicines and pharmaceutical products (3%) and perfumery products (3%). Food products only make up 2% of export. Uzbek export is minimal: in 2014 it has increased to 35.5 million and in 2015 it has further decreased. As we have seen, commercial exchanges between the two countries are modest in comparison to prospects and, therefore, has an intense growth potential. Which are the growth prospects for the country and for the investments? GDP growth rate in 2016 is expected to maintain on the same level, even though slightly lower than last year. It is expected to be around 7,5%. This estimate takes into account a number of downside risks, like weak growth of other economies. In particular, Russian economic decline will have a negative impact on export and remittance flows, as Russia is the

main trading partner of Uzbekistan. Despite the decline in exports and in the flow of remittanvces, and despite the downward trend in main raw material prices that occurred in the second half of 2014 and in 2015, the basic scenery remains positive. The proof of it is than the government is adopting measures to support consumption, investment, export, and, thus, to promote economic growth. Among them there are development of investment program, further gold export, the increase of gas export and food export to China, wage increase, pensions and social benefits, increase in credit availability to small enterprises, excise duty reduction on the import of food products and improvement of investment climate. The main goals and political priorities are the following ones: to increase the infrastructure efficiency, especially concerning energy, transport, and irrigation; to improve the competitiveness of specific sectors, such as agricultural products processing, petrochemical and textile sector; to diversify the economy of the country and, therefore, to reduce its dependence on raw material export; to improve the access to education and its quality, as well as healthcare and

other social services. Foreign direct investments planned for 2016 are amounted to 2.80 billion in 85 projects, and 2.29 billion are amounted to 34 projects in the energy sector. In the medium term the World Bank considers structural reforms necessary to sustain high rate growth. The government aims to make Uzbekistan an industrialized country with medium-high revenue by 2050. Consequently it is pursuing a gradual transition to market-oriented economy. At the same time it aims to achieve reasonable distribution of growth between the regions and to provide the maintenance of good social services. Many targeted reforms were carried out in order to encourage investors to use modern technologies to increase productivity. What about the relations with Europe? Uzbekistan has regular relations with European Union. There is EU Embassy in Tashkent and there are also specific financing programs. Just to mention the two of them:- “An international project on modernization of agriculture sector with the introduction of latest knowhow, innovations and technologies� 10 million euro worth, acquired by

the German company GIZ, the French company Adecia, the Italian AIA and a Bulgarian company. The project is aimed to develop small and medium agricultural enterprises by modernization of conservation and storage systems and fruit and vegetable processing. Indeed, the Uzbek government has decided to reduce cotton production of 350.000 tons per year and to increase fruit, vegetable and grain production.- MTP Program, managed by a Greek company. This program finances a 2-4 week internship of young Uzbek managers in European companies. Italy is the country that had the biggest amount of internship requests from Uzbek companies. Which opportunities open to the Italian enterprises? Uzbeks love Italy and everything that is Italian, films, fashion, food and our machinery, because they know that it is of high quality and has competitive prices. Many investments in various sectors of our interest are expected; for instance, machinery for agricultural products processing, for automotive industry, for textile industry, for oil&gas industry, for the production of plastic articles. Small and medium enterprises industry is particularly important, because new Uzbek entrepreneurs in various sectors need exactly this knowledge, technologies and machines that Italian SME have. It is much harder to compete for huge

oil&gas and energy plants, for which Chinese and Korean companies offer shareholding and financing. Uzbekistan would like to develop its fashion industry and looks at Italian fashion system with great interest. Some agreements have been formalized. Food industry offers good prospects as well. Finmeccanica group companies, like Alenia Aermacchi and Selex Es, follow the Uzbek market. The country not only offers great opportunities for capital goods and consumer goods supply, but it is also particularly interesting for investments in SME in the manufacturing sector. Some Italian companies have their production units, as Ariston (small domestic boliers), Landi Renzo (automotive fuel systems and components), Toscana Nastri (conveyor and processing belts), CNH (machinery for agricultural industry). Even Italian universities are present, as we have already mentioned Turin University. Negotiations are underway: Italian operators are working to create production units in automotive and agricultural industry.The Uzbek Government is realizing a privatization program. It is looking for foreign partners, especially for the development of the medium industry. Uzbek authorities issued a list of more than 300 companies for which it is required a foreign investor. There are interesting prospects for Italian manufacturers who create production centers in the country and, therefore, intend to widen their market not only in Uzbekistan, but also in other Central Asian countries and in Russia, to which you can get access

from Uzbekistan with little or no customs duties. It is a potential market with 200 million inhabitants. Production centers need small investments as they can be limited to assembling with components shipped from Italy. One of the sectors which Uzbekistan would like to develop is pharmaceutical industry. Even here the initial activities of Uzbekistan can be limited: inconvenient for production in Uzbekistan pieces can be imported. Important tax incentives were provided for foreign investors, in addition to other interesting factors such as low man power and energy costs. These tax incentives are particularly interesting in the Free Economic Zone of Navoi, Djizac and Angren. What advantages will get an Italian company if it joins the Chamber of Commerce Italy Uzbekistan?

Our Chamber of Commerce has offices in Milan and Tashkent and has its own service company, ITALUZ, and together with Chamber of Commerce and Industry of Uzbekistan it has been present on the Uzbek market since 2002 and has good relations even on the institutional level. Our goal is to help the two countries’ businessmen to establish business relations. So, we are fully available to provide information, to help Italian entrepreneurs who want to approach to the Uzbek market. A further important mean of promotion is participation in specialized exhibitions and institutional meetings which are held every year and where the evolutions of opportunities of collaboration between the two countries get determined.


Interview to CEO of GsAir, Mr. Gastone Nardoni by Mrs. Barbara Ganetti

When was GS AIR founded? GS AIR is incorporated in June 1995, aiming to represent arilines and tourist entities of those countries willing to enter the Italian market. Celebrated the 20th anniversary in 2015.Philippine Airlines has been the GS AIR’s first client. The SEA carrier after having closed its own offices of Rome and Milan in 1994 decides to maintain the presence on the Italian market by appointing a General Sales Agency (GSA).Soon after Philippine Airlines other Carriers joined: Uzbekistan Airways, Air Moldova, AzerbaijanAirlines , Yemen airways and Vietnam Airlines How did your passion for the travel and tourism industry start?

CEO of GsAir Mr. Gastone Nardoni

Gastone Nardoni started his career by entering one of the world’s best airlines of the time, BEA, in 1963. He followed his passion for the aviation industry, passing on to Philippine Airlines as Southern Europe General Manager in 1966. During his time at Philippine Airlines, he held important positions, such as the Presidency of IBAR, the Association of Foreign Airlines in Italy. In 1995 he decided to break new ground by setting up his own general sales agent business. He recognized the signs of the times and successfully convinced airlines to cut costs by outsourcing sales and marketing services, while adding value. How many flag carriers do GS AIR represent? GS AIR currently represents 5 airlines in Italy and cooperate closely with a sixth. 1995: GS AIR is appointed General Sales Agent (GSA) of Philippine Airlines and of the Filipino Department of Tourism (DOT). 1997: GS AIR is appointed Preferential Sales Agent (PSA) of Uzbekistan Airways.

1999: GS AIR is appointed General Sales Agent (GSA) of Air Moldova. 2006: GS AIR is appointed Preferential Sales Agent (PSA) of Azerbaijan Airlines. 2011: GS AIR is appointed General Sales Agent (GSA) of Intas Destinations, one of the main incoming Tour Operators in the Philippines. 2011: GS AIR is appointed General Sales Agent (GSA) of Yemen Airways-Yemenia. 2013: GS AIR is appointed BSP Consolidator of Uzbekistan Airways for the Italian market 2014: GS AIR is appointed Preferential Sales Agent (PSA) of Vietnam Airlines. What are GS AIR commercial strengths and what is GS AIR annual turnover? GS AIR’s mission is to represent airlines and tourist destinations/entities that need an extensive presence across the Italian market and to enjoy direct contact with the main actors of the value chain, i.e. tour operators, travel agents and the public. GS AIR ensures efficient coverage of the market, all with variable

costs for the Principal directly linked to the results obtained. Moreover, thanks to the in-depth knowledge of the local market, GS AIR can carry out focused marketing activities customised on the client’s needs and with maximum return on investment. 2015 GS AIR turnover was roughly 10 million Euros. Can you detail the services GS AIR offer on the Italian market? GS AIR covers all areas of passenger and cargo sales representation across the Italian market. We offer our clients a wide range of services such as: Passenger GSA, Cargo GSA, destination marketing and promotion, Airport supervision services, Financial and administrative services, Legal services and support. Would the Astana 2017 International Expo have an impact on commercial opportunities and the enhancing of air traffic? Astana 2017 will be served by both carriers: Azerbaijan and Uzbekistan Airways using the strategic Hubs of Baku and and Tashkent with good connections from Italy.. Moreover Philippine Airlines is planning the reopening of direct flight Manila- Italy. Attualmente gli scambi commerciali tra i paesi che

rappresentate come compagnie aeree di bandiera sono molto forti, si può dire la stessa cosa a livello turistico? , e che nuove prospettive ci sono? The future activities involve deeply the East of the World and of those countries of Central Asia towards Europe specially Italy. It is most important that Italy adopts the necessary instruments to be ready to face the ever increasing demands of goods and services originating from those countries. One last question…as an Italian who deals with foreign countries, can you give us a comment on Italy’s situation in the context of the Europen economic crisis experienced in the

past years? Italy, as a member of the EU, can and must be one of the leading nations of economic recovery. It has potential to play a leading role in the fields of tourism, technology, agriculture, food industry and fashion. It would be beneficial if the Italian state would favour the synergy of all productive areas by simplyfing the many rules and laws which regulate them. GS AIR believes in these potentialities and will keep on pursuing, in all its activities, to contribute to the recovery and further development of this nation’s economy.

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