Economics is a complicated discipline. It works in integration. It needs rigorous professionalism and diversified expertise. It stands for socio-economic prosperity and progression. The economic modeling varies from region to region and from country to country. The parameters of economic models show that proper human resource management, financial transparency, accountability, business and people friendly macro-economic policies, rule of the law and above all visionary leadership are must for the speedy economic growth and sustainability.
We are passing through a difficult time. Global economic recession and financial shortage have badly affected the economies of the world. Only few economies around the globe still succeeded to survive and showed great performance in its overall GDP, GNP and LSM. Uzbekistan is one of the few countries which successfully managed the bad effects of ongoing global economic recession and negated its integrated socio-economic and financial repercussions from its economy, trade & commerce, banking and institutions. Despite all odds, Uzbekistan stood firmed and developed a alternative model of economic growth in its country and showed and led the world. Following are given the salient features and diversified but integrated policy paradigm shifts in macro-economy of Uzbekistan which have already produced miracles in the era of diminishing growth rates
Uzbek model of Development proves its effectiveness in the conditions of World Financial Crisis. Uzbekistan registers highest economic growth rate in CIS
The Publishing and Printing House “Uzbekistan” published the book by President of Uzbekistan Islam Karimov “World financial-economic crisis, ways and measures to overcome it in the conditions of Uzbekistan”. Just recently Uzbek Embassy successfully presented this book in Islamabad for public opinion.
The essence and significance of the published work are that the concrete concept of the vision of aforementioned problems are put forward in this book based on the comprehensive and objective study, and are given the practical conclusions.
The book consists of two parts. The first part is entitled “Impact of the world financial crisis on the economy of Uzbekistan and factors that have averted and mitigated its consequences”. This part offers the comprehensive analysis of reasons of break-out of the world financial and economic crisis, emerging related acute social and economic problems in international scale, as well as consequences being awaited in the future.
In his book president underscores that the soonest tackling of the world financial crisis and mitigation of its consequences mostly depend on the efficiency and coordination of measures being undertaken within particular states and the world community, as a whole.
The second part of the book is entitled “Support of banking system, modernization, technical renewal and diversification of production, broad introduction of innovative technologies – a reliable way to overcome crisis and securing by Uzbekistan of the new achievements in the world market”.
However, despite the global crisis and consequent problems and difficulties the country has been able to achieve not only stable functioning of economy in 2008, but also ensure its high sustainable growth rates, elaborate the entire complex of measures, and above all, the Anti-crisis program and mechanisms of its implementation.
The book, the implementation of this program will allow not only to adequately confront the challenges and threats of the world financial and economic crisis, avert its negative impact on the Uzbek economy, but also overcome it with yet more stronger, sustainable and balanced economy, occupy the solid niche at the world markets, secure on such basis the dynamic economic growth, continuous resolution of tasks to further increase the living standards and well being of population of Uzbekistan.
Uzbek Model of Development
After gaining independence at the end of the 20th century, Uzbekistan had undertaken a radical socio-economic and political transition based on positive international experience. The following years proved the efficiency of the Uzbek model of economic reform, which has gained international esteem.
This model for building a market economy rests on the five key principles developed by President Islam Karimov, and also provides the backing for the policy of the transition period:
• An evolutionary manner of transition to a market economy without “revolutionary changes”, “shock therapy”, or any deterioration in the living standards of the people.
• Complete de-ideologising of the economy;
• Preserving the state’s role as the main reformer force in transition;
• The primacy of law in all aspects of life;
• Sound social policy
Apart from international experience in transforming economies, the Uzbek model takes into account the local specificity and interests, and is oriented towards a democratic, rule-of-law state.
Indeed, prior to independence, Uzbekistan’s economy was totally non-market-driven, cost-orientated, non-sensitive to the progress of science and technology, and lacked high-tech production. Therefore, the national model of market reform aims to change the economy’s orientation towards raw material production, restructure its industries so as to boost manufacture of finished products, and raise their quality and competitiveness up to International standards.
1991-2001 were the years of active transformations, modernization of economy, democratic reforms and gradual amalgamation to world market. Oil and food independence and industrial growth were achieved. In 2001 Uzbekistan’s gross domestic product for the first time exceeded the pre-reform level (1991) by 103%.
In other words, the country had gone through the most difficult section of its transition from a centralized command economy to establishing the basis of a market economy.
The years since 2001-till now have seen the progress of the market reforms, improvements in macroeconomic and financial stability, the implementation of a restructuring programme, the modernization and re-equipment of industries, and the laying of the foundations for the sustained growth of Uzbekistan’s economy.
The country’s GDP growth rate accounted for 9.5% in 2007, while the in 2008 the GDP of the country grew by 9 percent, the volumes of production of industrial goods – by 12,7 percent, of agriculture – by 4,5 percent, of construction works – by 8,3 percent, and of services – 21,3 percent. The State budget has been implemented with a surplus, while the inflation rate did not exceed the forecast indicator.
In the first quarter of 2009 the growth of the gross domestic product accounted for 7,9 percent, the volumes of industrial production – 9,9 percent, production of consumer goods – 12,5 percent, agriculture – 5,7 percent, services – 16,6 percent, and construction works – 12,1 percent. The country provided for a surplus of the State budget in the amount of 0,4 percent towards GDP, while the level of inflation did not exceed the forecast parameters.
The implementation of measures on structural changes and diversification of economy, modernization and technical renewal of the leading branches of economy, comprehensive support of the producer enterprises as a part of the Anti-crisis program served for the growth of investments by 31,4 percent, including the direct foreign investments – for 2,5 times.
Uzbekistan’s solid macroeconomic stance, availability of significant resources to finance the purposeful measures which provide for economic growth have been highly assessed by IMF mission, which visited the country in late 2008
The International Monetary Fund’s Spring 2009 Regional Economic Outlook (REO) reported that among Caucasus and Central Asian States only, Uzbekistan, Azerbaijan and Turkmenistan are expected to be able to delink somewhat from this downturn.
Selected Economic Indicators in Caucasus and Central Asia (CCA)
Average Est. Proj. Proj.
2000–04 2005 2006 2007 2008 2009 2010
Real GDP Growth (Annual change in percent)
CCA 8.2 11.0 13.1 12.0 6.3 0.9 5.0
Armenia 10.7 14.0 13.2 13.8 6.8 -5.0 0.0
Azerbaijan 8.3 24.3 30.5 23.4 11.6 2.5 12.3
Georgia 5.8 9.6 9.4 12.4 2.0 1.0 3.0
Kazakhstan 10.4 9.7 10.7 8.9 3.2 -2.0 1.5
Kyrgyz Republic 4.9 -0.2 3.1 8.5 7.6 0.9 2.9
Tajikistan 9.7 6.7 7.0 7.8 7.9 2.0 3.0
Turkmenistan 17.3 13.0 11.4 11.6 9.8 6.9 7.0
Uzbekistan 4.8 7.0 7.3 9.5 9.0 7.0 7.0
Central Government Fiscal Balance (In percent of GDP)
CCA 0.1 3.0 4.1 3.0 6.0 -1.4 1.9
Armenia -2.7 -2.0 -2.1 -2.2 -1.7 -3.6 -3.1
Azerbaijan -0.2 2.6 -0.2 2.8 22.4 -1.5 9.5
Georgia -1.5 -2.4 -3.0 -4.7 -6.4 -5.6 -5.1
Kazakhstan 1.7 5.8 7.2 4.7 1.1 -2.0 -1.0
Kyrgyz Republic -6.0 -3.6 -2.1 -0.3 -0.3 -1.9 -4.5
Tajikistan -3.1 -2.9 1.7 -6.2 -6.1 -7.0 -5.3
Turkmenistan 1.1 0.8 5.3 3.9 11.0 5.2 3.2
Uzbekistan -1.0 1.2 5.2 5.1 10.2 2.9 5.2
Current Account Balance (In percent of GDP)
CCA -1.9 0.3 3.2 1.6 9.9 -0.4 4.1
Armenia -7.5 -1.0 -1.8 -6.4 -12.6 -11.4 -10.5
Azerbaijan -14.9 1.3 17.6 28.8 35.5 10.8 18.4
Georgia -7.3 -10.9 -15.1 -19.6 -22.6 -16.4 -16.7
Kazakhstan -1.3 -1.8 -2.5 -7.8 5.3 -6.4 1.1
Kyrgyz Republic -0.6 2.8 -3.1 -0.2 -6.5 -6.3 -8.4
Tajikistan -3.1 -2.7 -2.8 -11.2 -8.8 -9.7 -8.3
Turkmenistan 4.0 5.1 15.7 15.4 19.6 15.7 9.2
Uzbekistan 3.0 7.7 9.1 7.3 13.6 7.7 6.8
Sources: Data provided by country authorities; and IMF staff estimates and projections.
According to the CIS Statistics Committee, the CIS GDP fell by 11% year-on-year in the first quarter of 2009.
Uzbekistan registered the highest economic growth in the first quarter of 2009. Uzbekistan’s GDP growth made up 7.9% in the reporting period. The country was the only CIS state which had positive industrial growth (9.9%). In other CIS states, industrial production slipped down.
Uzbekistan was leader in growth of retail trade turnover in the CIS states with interest rate of 18.3%. Inflation increased by 14% in the CIS states. The slowest growth was observed in Uzbekistan, Armenia and Georgia (2.7%).
With a view of further neutralizing the impact of the world financial and economic crisis on the nation’s economy Uzbekistan has started and now continues to implement measures as a part of the Anti-crisis program adopted in the country.
Uzbekistan accomplishes the purposeful measures to support enterprises of major sectors of economy, above all, the enterprises-exporters, to allocate them financial, credit and tax benefits, to further increase capitalization of the banking sector, to develop production and social infrastructure, especially in the countryside area, as well as to create new jobs.
Note: This is published and complied by Mehmood-Ul-Hassan Khan