Locating Uzbekistan’s high value-added products, mutually beneficial for exports to Korea: vice minister
Kudratov said Korea and Uzbekistan share a reliable and proven relationship with a special strategic partnership, stressing that Uzbekistan-Korea cooperation has reached a new level.
Trade turnover between Uzbekistan and Korea has nearly doubled in the past five years, from $1 billion in 2016 to $1.9 billion in 2021, according to Kudratov.
“In the first quarter of 2022, despite the ongoing pandemic, bilateral trade increased by 51.5% to $630 million compared to 2021,” said Kudratov, who is also director general of the Development Agency. strategy of Uzbekistan.
According to Kudratov, Uzbekistan and Korea should sign a free trade agreement to speed up consultations on Uzbekistan’s accession to the World Trade Organization and receive additional phytosanitary permits to expand Uzbek agricultural products on the Korean market.
Referring to opportunities in engineering, procurement and construction, he said Uzbekistan’s economic environment is changing rapidly with promising opportunities in public-private partnerships for Korean companies to engineering, procurement and construction.
Kudratov also pointed out that a new law on public-private partnerships has made a wider range of projects in Uzbekistan – including in health care, education and infrastructure development, including road construction, of railways and energy facilities – available for investment.
“There are also many promising opportunities in power generation,” he said.
He cited investment agreements signed by the Uzbek government with energy producers such as Masdar, Total Eren, the French group EDF, Veola and others to renovate and build solar, wind and thermal power plants.
Masdar is a renewable energy company owned by the government of the United Arab Emirates.
“The Uzbek government intends to increase the capacity of solar power plants from virtually zero in 2020 to 2.5 gigawatts, and the capacity of wind turbines to 2 gigawatts by 2025,” he said, noting that Uzbekistan had started implementing several socially important projects with the Korea Export-Import Bank.
Citing the framework agreement between the Uzbek and Korean governments signed in 2021, he said there are many opportunities.
The agreement envisages attracting loans from the Korea Economic Development Cooperation Fund for the period 2021-2023 to implement projects totaling $1 billion in the social field.
“There are no challenges but great opportunities for cooperation that are not yet discovered,” the minister stressed.
According to Kudratov, the Uzbek government gives priority to expanding investment cooperation and attracting advanced Korean technologies and know-how for the development and implementation of new projects in the technologies of information and communication, science, health care, pharmaceuticals and agriculture.
Asked how Uzbekistan would play a role in helping Korean companies reach the consumer markets of China and India, the minister said that Uzbekistan’s open, mutually beneficial and constructive foreign policy with the China and India, high-level government exchanges and Uzbekistan’s comprehensive strategic relations and intensification cooperation as the foundation of the goal.
“Uzbekistan’s trade turnover with China and India has increased by 50% since 2017 and reached 7.4 billion dollars and 400 million dollars in 2021, shows the growing interest of Chinese consumers and Indian for products made in Uzbekistan,” he said, pointing to Uzbekistan as a source for half of the total amount of mung beans imported into China.
“There is a significant amount of mutual trade accounts for yarn, which is also a vital product in the production of consumer textiles,” he said.
“China is one of the biggest investors in the Uzbek economy,” Kudratov said, adding that Chinese investment has increased fivefold to more than $8 billion since 2017.
Korean companies interested in producing value-added products in Uzbekistan can take advantage of investment and trade opportunities to supply more products to China and India, he said.
Kudratov highlighted the Uzbek government’s recent policies in the textile industry, saying that Uzbekistan is moving towards higher value-added production in the textile industry.
“From 2020, Uzbekistan has canceled raw cotton exports to encourage companies to invest in value-added production of finished and semi-finished products such as textiles and fashion,” he said. .
Kudratov named textiles as the first industry to be fully privatized by Uzbekistan to create a system of vertically integrated “textile clusters” run by private companies that control all operations, from cotton growing to finished products.
“Most cotton is now produced by 96 textile clusters in all regions of the country,” Kudratov said.
Uzbekistan must increase its exports of textile products to $7.1 billion by 2025 for consumers in the Commonwealth of Independent States, China, Turkey and the EU, according to Kudratov.
Describing the diverse market size and stable economy of his country, Kudratov pointed out that 35 million Uzbek consumers, a high literacy rate and a workforce of 15 million people are substantial attractive aspects for the industries.
“Uzbekistan is one of the youngest nations in the world with 60% of the population under the age of 30,” he said.
According to Kudratov, Uzbekistan has created a business ombudsman as well as the council of foreign investors under the chairmanship of Shavkat Mirziyoyev to raise the standards of investment and industrial and innovative development.
He said Uzbekistan had reduced tax types from 13 to nine and introduced light tax payment mechanisms with the possibility of deferral or installment.
Uzbekistan established unified centers as a “one-stop shop” for business entities to facilitate business registration procedures in 30 minutes, simplified permit application procedures by canceling 42 types of licenses and permits and reduces the number of documents required, Kudratov said.
Referring to the adoption of a new unified law on investments, the minister said that the law preserves all previous guarantees and privileges for investors with new incentives such as tax credits and government subsidies for investment. investment for the construction of external infrastructure.
“Uzbekistan has improved by more than 18 points, from 166 in 2012 to 69 in 2022 in the World Bank’s Doing Business Index,” he said, adding that credit risk of Uzbekistan in the ranking of the Organization for Economic Cooperation and Development fell from sixth to fifth group in 2019 placed Uzbekistan at the level of countries such as Brazil, Turkey and Vietnam.
Explaining the regional potential, Kudratov said Uzbekistan has regular cargo transportation to markets in Pakistan and South Asia with a total population of over 1.5 billion people.
“Twenty-two FEZs (Free Economic Zones) are operating in Uzbekistan to provide investors with privileges and preferences for three to 10 years depending on the volume of investments, with 538 projects worth almost $3 billion already in place. work in the FEZ”, according to Kudratov.
Uzbekistan has received the status of EU beneficiary of the General Scheme of Preferences Plus as well as the enhanced GSP framework from the UK, which creates additional opportunities to consolidate bilateral industrial cooperation between Uzbekistan and Korea , added the minister.
By Sanjay Kumar ([email protected])