January 6, 2021

Message from the President of the Republic of Uzbekistan Shavkat Mirziyoyev to the Oliy Majlis

The President of the Republic of Uzbekistan in his message to the Oliy Majlis at the end of 2020 touched upon and determined a number of areas listed below.

  1. Personnel policy

The President stressed that the availability of qualifications will now become a key condition for working specialties. In this regard, the Government is instructed to introduce a system for assessing the professional qualifications of citizens in popular professions from January 1 of 2021.

  1. Protecting the health of the nation

In view of the experience gained during the pandemic, it is planned to expand the scale of digitalization of the medical sector. Namely, the range of remote medical services provided will be expanded, and an electronic record-keeping system will be introduced in medical institutions. Communication will be established between the republican specialized centers and their local branches, and it is also planned to increase the opportunities for diagnosis and treatment in the regions. Moreover, in the next three years, it is planned to open 315 points of family doctors and 85 polyclinics.

  1. Structural changes in the economy and transformation of state-owned companies

At the moment, most enterprises with state participation, due to their financial instability, are burdensome for the state. Therefore, since this year, the implementation of the program of reforming all state-owned enterprises has begun. Namely, next year Navoi Mining and Metallurgical Combine, JSC “Uzbekneftegaz”, “Uzbekhydroenergo”, “Uzavtosanoat” will have the opportunity to enter the international financial market and raise funds without state guarantees.

Due to the lack of experience, knowledge and technical capabilities of the enterprises themselves and their specialists, they are not able to independently carry out the transformation. Therefore, the state involved the World Bank, the European Bank for Reconstruction and Development, the Asian Development Bank, McKinsey & Company, Boston Consulting Group, Rothschild & Co and other world-famous companies in reforming large enterprises of the electric power industry, oil and gas and chemical industry, mechanical engineering, as well as commercial banks.

In 2021 the transformation of the 32 major companies in the sectors of strategic importance will be implemented.

  1. Introduction of digital technologies in the activities of banks

Sanoatkurilish bank, Asaka Bank, Ipoteka Bank, Aloka Bank, Turon Bank and Kishlok Kurilish Bank are also preparing for privatization. The state’s stake in at least one major bank will be fully sold to strategic investors. Negotiations are underway with leading European banks on this issue. One of the most important areas of structural reforms will be to reduce the share of state participation in the country’s economy.

  1. Privatization

In 2021, state shares in such enterprises as “Ferganaazot” and “Dehkanabad Potash Fertilizer Plant”, “Coca-Cola Ichimligi”, “Beldersay” and “Charvak” sanatoriums, “Ichan Kala” and “Hyatt Regency hotels”, “Poitakht business complex”, as well as 83 large enterprises of the alcohol, fat and oil industry and other industries will be put up for auction.

In general, the number of enterprises with state participation in the next two years will be reduced by at least 3 times.

  1. Competition and access to raw materials

The President stressed the need to create a free competitive environment in the commodity and financial markets, as well as equal opportunities for entrepreneurs to access raw materials. In 2021, it is planned to start forming a wholesale electricity market with the participation of public and private power plants and consumers. It is planned to abolish monopolies and introduce market mechanisms in the gas industry. The company “Uztransgaz” will be engaged only in the transportation of gas. In order to expand the presence of the private sector in the market of liquefied gas, duties on its import will be abolished.

Moreover, in the field of jewelry production, from March 1, 2021, the procedure for the free sale of silver to manufacturers through the exchange will be established. From 2021, excise taxes on 73 commodity items in the food, oil and electrical industries will be abolished.

  1. Public procurement

In view of the problem that only 4% of private entrepreneurs participate in public procurement, in 2021, requirements for 24 large state-owned enterprises on transparency of public procurement will be introduced. As a result, domestic entrepreneurs will be able to sell products to these enterprises for at least 10 trillion soums per year. In addition, the President stressed that now all public procurement will be under public and parliamentary control.

  1. Development of key sectors of the economy

The President also stressed the need to take all measures to support private sector initiatives and new projects, and to develop cooperation in these sectors.

It was noted that new power plants with a total capacity of 760 megawatts will be put into operation in the Tashkent, Navoi, Samarkand and Surkhandarya regions.

  1. Foreign exchange market and external borrowing

The key task of the Central Bank and the Government in 2021 will be to keep inflation at a level of no more than 10 percent within the framework of inflation targeting.

It is planned to reduce the share of foreign currency loans from the current 50 to 45 percent in 2021, that is, by at least $ 2 billion. It is also planned to increase the share of international bonds issued in the national currency from the current 25 percent to at least 40 percent. At the same time, the interbank foreign exchange market will be transferred to an online platform, which will allow entrepreneurs to buy currency directly from the bank. As a result, the purchase of currency will take entrepreneurs not 4 days, as now, but only half an hour.

Moreover, projects implemented in the regions at the expense of external loans will be discussed by local Kengash and the public, and a system of reporting to the public on the results of such projects will be introduced.

Also, external borrowing under the state guarantee will be reduced, and more private capital will be attracted to investment and infrastructure projects. For example, it is planned to start implementing more than 40 large and medium-sized projects on the basis of public-private partnership next year. In order to strengthen competition in the financial market, the Central Bank is instructed to submit a draft law on non-bank credit institutions for consideration by February 1.

  1. Development of entrepreneurship and small business

For the convenience of entrepreneurs, 105 types of licenses and permits will be canceled, and procedures for obtaining 115 types of such documents will also be simplified.

In connection with the pandemic, the benefits in the areas of tourism, transport and public catering will be extended until the end of next year. It is also proposed to extend the deadline for paying taxes on land and property for a total of 400 billion soums for another year. This preference will be available to 20 thousand entrepreneurs.

It is planned to review about 5 thousand regulatory legal acts regulating business activities, reduce their number, and develop an Entrepreneurial Code.

The moratorium on inspections of economic entities was proposed to be extended for another year.

  1. Agriculture

Within two months, the Government was instructed to make a proposal to strengthen land rights, determine the economic valuation of land and introduce mechanisms for its inclusion in the financial turnover. For the first time, more than $600 million in loans and grants will be raised to modernize agriculture, digitalize it, increase land fertility, and introduce modern agricultural technologies.

  1. Regional development

The President noted that a number of regional airports will be transferred to external management on the basis of public-private partnership. Next year, it is planned to launch 2 high-speed trains, electrification of the Bukhara –Urgench – Khiva railway will begin.

In Tashkent, the second stage of construction of the surface metro will be completed and a 12-kilometer section will be put into operation. As a result, underground and surface metro lines will be connected and form a single system.

  1. International integration

The President stressed the need to step up work on joining the World Trade Organization and large-scale cooperation with the European Union in 2021. Exporters will be compensated for 50 percent of the costs of opening trading houses and stores, advertising costs abroad.

  1. Activities of public administration bodies

The Government was instructed to prepare draft legal acts within two months aimed at reducing duplicate departments, functions and bureaucratic barriers in management. The number of employees in the public administration system should be optimized to an average of 15 percent. By the end of next year, it is planned to increase the number of types of state electronic services by 60, bringing them to 300, and the share of remote services – to at least 60 percent.

The responsibility and accountability of State bodies in solving problems will be strengthened. The Legislative Chamber and the Senate, together with the Cabinet of Ministers, need to draft new laws by April 1, 2021, aimed at radically improving the activities of executive authorities, local representative bodies and the mahalla institute.

  1. Anti-corruption measures

The Ministry of Finance is instructed to establish within three months the practice of publishing information on revenues and expenditures of extra-budgetary funds of state bodies, procurement of organizations with state participation, as well as data on state subsidies and grants.

The Anti-Corruption Agency should make a proposal to expand the list of open data within one month.

One of the most effective means of combating corruption is the creation of an open system of personnel selection and recruitment.

  1. The reform of the courts

The principle of “one court – one instance”, which is being implemented since 2021, should become the main criterion for ensuring justice, legality and stability of court decisions.

Starting next year, duplicate courts will be abolished. The practice of supervising cases that do not meet the standards of justice will be abolished.

Another important issue: from 2021, three categories of regional courts – civil, economic and criminal cases-will be merged into one court. This innovation will create convenience for the population and entrepreneurs.

Also, since the beginning of the year, the practice of preliminary hearing in court will be introduced as a new procedure. Thus, if there are sufficient grounds for suspending or terminating the case, the court will make an appropriate decision as soon as possible, and therefore there will be no need to return the case to the investigation or prosecutor’s office, as it was previously.

  1. Investor Protection

Another important innovation is that in order to properly protect the rights of investors, the Supreme Court has established a special judicial structure for consideration of investment disputes and competition cases. Now the investor can, at his discretion, directly apply to the Supreme Court to resolve the dispute.

In the course of further expansion of the digitalization of the judicial system, citizens will be able to submit documents online without coming to court, as well as remotely monitor the progress of their applications.