Interview: Uzbekistan, an active player in the global trading system

New Europe, in an exclusive interview during the first Tashkent International Investment Forum, spoke with Laziz KudratovUzbek First Deputy Minister for Investment and Trade, on cooperation with important partners such as Europe, USA, UK and WTO.

New Europa: Can you tell me about relations with the EU? Uzbekistan benefits from GSP+ but there are also discussions on other agreements.

Laziz Kudratov: Last year, in April, my country became a beneficiary of the GSP+ system, it opened up great opportunities for us, firstly it gave us access to the very large European consumer market and of course it will help us to increase our exports and will enable us to diversify our exports to new high-end markets.

Of course, this requires our exporters to adapt and our manufacturers to raise their production to a new level so that their product can meet the expectations, standards and requirements of EU consumers. It is a great opportunity but it is also a great responsibility that is why we have started to implement special programs adapted to our manufacturers and exporters, it is essential to train them so that they understand the requirements of the industry. market access but also on the necessary standards in terms of labeling and quality. We already see that the export from Uzbekistan to Europe is developing specifically: textiles, agriculture, chemicals and some metal products. Uzbekistan therefore has with the SGP the obligation to respect international conventions on human rights, free society and this is exactly what my country’s policy is about.

During the plenary session of the Tashkent International Investment Forum, the President of Uzbekistan Shavkat Mirzioev made a strong and committed message to develop a free society, he said that the main idea behind all his reforms is to “ensure ownership and respect for human beings”, this is the main motto of our president. With the EU, my country is also discussing and finalizing the Enhanced Cooperation Partnership Agreement (EPCA), we hope for a final round of discussions and negotiations on the document soon, we are very optimistic for the signing final.

As soon as we are ready for this, we also plan to organize a visit by our President to Brussels to initial this document. The EU is one of the biggest export destinations and a source of investments, technologies and know-how that allow our economy to be more competitive. We are committed to strengthening our cooperation with the EU and bringing more EU companies to do business and operate in our country.

NOT : There is also accession to the WTO among your priorities. Can you give me an update?

LK:We have a deputy minister dedicated solely to our WTO membership, when President Mirziyoyev came he understood the need for the Uzbek economy to be integrated into the global trading system, so he instructed the government to ensure our country’s membership of this organization in the near future. We plan to have the next round of working groups for our membership, hopefully in April, and then parallel discussions have started with all WTO members, the main objective of these discussions being to obtain their consent . I think we need a year or two to finalize the process. Of course, this path should not harm our economy, which is why we are negotiating so that our manufactured products can benefit from WTO membership.

NOT : What are the new tools that could attract investors to Uzbekistan? Are there specific tax benefits?

LK:We are designing a business-friendly tax system, this is the task given by the president to the competent authority, he asked them to be friends and supporters of entrepreneurs and not to punish them for their mistakes but rather to guide them . If our tax officer sees that he is making mistakes, he shouldn’t impose penalties on him, he should just guide him to be more efficient. A change of mentality of our taxation is essential.

The World Bank’s Doing Business report was relevant two or three years ago, but at that time Uzbekistan was among the top 10 countries in terms of ease of starting a business. You can do it online and in 15 minutes you can go with your passport to the one-stop shop that you will find everywhere. Another mechanism that we have is the free economic zones, the industrial zones in each region, the residents of the zones benefit from tax and customs advantages. They get land, they hook up the infrastructure, they hook up to all the utilities. We had good results and there was a growth of foreign companies in the free economic zones, then in order to support the establishment of large-scale projects, we set up the Uzbek Direct Investment Fund which covers the risks of investors in our country. They provide equity and they co-invest up to 49%, we understand the difficulties of first-time investors, this fund was created a year ago to restore confidence to foreign investors, the state can be a partner and share risk together.

My country wants the increase of Free Economic Zones (FEZ) because we see the need for it, we have recently built one in Tashkent and another is under construction next to the border with Afghanistan. Now we have connectivity issues with Pakistan and there is a high demand for products from Uzbekistan.

NE: So you are part of the “silk road”, do you have any news?

LK: We are trying to revive this old road by pushing on new infrastructure projects, one project is the railway that will connect China to Uzbekistan, now with the new government in Kyrgyzstan they are also committed we will pass soon to the practical phase with a feasibility study and hope that we will also mobilize international financing to build this new railway. Another major infrastructure project is between Termez and the border with Pakistan, a 700 km railway that will connect huge markets in South Asia, including India, Bangladesh and Pakistan, to India. Central Asia and Europe. For example, goods from India will be able to reach Europe two weeks faster and it will cost 20-30% less.

NOT : Do you think that in the future it would be possible to start talking about an Uzbekistan-EU free trade agreement?

LK: Yes, why not, Uzbekistan wants to be part of the global trading system, we started negotiations for an FTA with Korea last month and we concluded a preferential trade agreement with Pakistan. An FTA with the EU will not be an easy task, but I think it might be worth exploring at least. We will have to do research and analysis first, and then move on to a decision.

NOT : What do you think of trade relations with the United States and the United Kingdom?

LK:With the UK we managed to be the first country to sign an enhanced GSP, with the US market, of course, the geographical location has a negative impact on trade, but we are nevertheless seeing greater interest in terms of supply of textile products in Uzbekistan. We therefore do not want to limit ourselves to textiles, we already have supplies of chemicals, materials and food. We are interested in having more American companies here, a few weeks ago we visited the United States and spoke to companies, banks, they are learning about our country. Now it is essential to inform investors more aggressively in Europe and the United States about the opportunities that my country can offer, we understand that there is a lack of appropriate information on Uzbekistan, which is why the media support is needed now.

Mary I. Bruner