Saudi Press

Saudi Arabia and the world
Thursday, Mar 28, 2024

Uzbekistan sets out an ambitious road map to becoming a key start-up hub

Uzbekistan sets out an ambitious road map to becoming a key start-up hub

In a major national event held physically in Tashkent and virtually across the country on August 20, Uzbek President Shavkat Mirziyoyev talked to around 10,000 entrepreneurs, addressing concerns and laying out plans for a root and branch reform of business and tax regulations.

The Central Asian republic has been slowly transitioning to a market economy since Mirziyoyev took power in 2016. An overhaul of economic policy has seen inflation reduced and the currency stabilised, attracting overseas investment and boosting job creation.

As a result, the number of new business owners has almost tripled, and previously established businesses have expanded across the country. Small and medium-sized enterprises (SMEs) have become a major driver behind Uzbekistan’s remarkable economic growth, which has defied the challenges of the pandemic.

SMEs already employ around 78 per cent of the nation’s workforce and contribute 57 per cent of Uzbekistan’s GDP.

“The private sector accounts for 90 percent of the jobs created annually in the country,” said Mirziyoyev, in a speech at the event. “The fact that it now employs more than five million people, mainly young people, testifies to its growing role not only in the economic, but also in the social life of the republic.”

Traditionally, the country has relied on substantial exports – particularly of cotton, gold, gas and oil – to keep the economy afloat, but Mirziyoyev's vision for the future will see a much broader diversification.

The country is moving away from the export of natural gas, for example, and there has been major investment in downstream processing intended to generate feedstock for clusters of value-adding manufacturing.

Drivers for the economy include an IT park in Tashkent, where SMEs can make use of tax breaks designed to free up capital for investment. Early-stage start-ups can also take advantage of the park’s incubator.

Education is also a key priority, and one of the challenges faced by the country is to expand the pool of talent in order to attract foreign investment.

Oiling the wheels of growth


Defying the challenges brought about by the COVID-19 pandemic, the government has continued to adopt or adapt a raft of regulations. Over the last five years, around 2,000 laws, decrees and resolutions have been drafted to help small businesses.

Strides have been made in abolishing unnecessary red tape, and procedures have been simplified. Inspections have been brought down to the minimal levels necessary, and restrictions governing currency and raw materials have been lifted.

Mirziyoyev spoke about the need to improve in seven areas: business financing; the tax system; the procedures for land acquisition; development of infrastructure; support for export companies; the transport and logistics sector and to simplify business procedures.

Matters related to business financing made up almost half the concerns of entrepreneurs invited to send in their queries. Many called for a solution to high-interest loans on prohibitively short timescales. Loans in foreign currencies were seen as particularly problematic, given the fluctuations of the exchange rate.

In order to address this, the Ministry of Finance is creating a loans system in local currency, and banks will next year receive US$600 million from the Fund for Reconstruction and Development on Market Principles.

Taxation, too, has seen some beneficial changes for those creating businesses. Among other improvements, taxable income will take expenditure into account, and the process for VAT refunds will be speeded up.

In a nod to the difficulties of the last 18 months for the hospitality sector, restaurants will be made exempt from property taxes, and hotels will see a two-year break from tourist taxes.

A major headache for any post-Soviet economy is land distribution, and various measures have been introduced to address this. The regulations around sale and purchase have been tightened, with agricultural land leased on the basis of open tender and non-agricultural land sold through auction.

Other announcements welcomed by attendees at the event included state-guaranteed provision of electricity, water, gas and road infrastructure for large projects; preferential loans for export companies; and continued subsidies for railway networks.

The conference provided a hugely successful way for business owners to communicate with those in power, and President Mirziyoyev plans to turn this into a regular event.

He has also proposed that August 20 should be named Entrepreneurs' Day.

“Together we have found practical solutions to many issues and problems,” he said. “Based on the topical issues you raised, and the specific proposals you made for their solution, we can see how the knowledge and level of our entrepreneurs have increased…today you are using completely different working methods and innovative approaches.”

Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Reports in Gaza: 5 dead from the impact of aid packages dropped by the USA
Apple warns against drying iPhones with rice
China Criticizes US for Vetoing UN Ceasefire Resolution in Gaza
In a recent High Court hearing, the U.S. argued that Julian Assange endangered lives by releasing classified information.
The U.S. vetoed a U.N. Security Council resolution calling for a temporary ceasefire in Gaza, instead proposing its own six-week ceasefire plan contingent upon the release of all hostages held by Hamas
Prince William Urges End to Gaza Conflict
Saudi Arabia ranks first in UN index for e-government services in MENA
Israel has gone ‘beyond self-defence’ in Gaza, says Labour’s Streeting
EU Calls for Immediate Ceasefire in Gaza Conflict
Israel Records 20% Drop In GDP, War In Gaza Is The Reason
Saudi Arabia's FDI Inflows Grow with New International Standards
Venture Capitals Power Up Across MENA Region
Saudi Arabia Introduces Terms for 30-Year Income Tax Exemption for Multinational Companies
Saudi FM: Establishing Palestinian state is only pathway for Mideast stability
Russian opposition leader Alexey Navalny has died at the Arctic prison colony
Elon Musk's Starlink Gets License For Israel, Parts Of Gaza
Influencers Exploit X Platform for Profit Amidst Israel-Gaza Conflict
PM Modi Announces Opening Of New CBSE Office In Dubai
International Criminal Court's Chief "Deeply Concerned" By Rafah Bombing
January Funding for MENA Startups Totals $86.5 Million
Saudi Arabia accelerates digital economy growth through Nvidia partnership
Indian female military officers commend Saudi Arabia's progress and women's empowerment
Israel unveils tunnels underneath Gaza City headquarters of UN agency for Palestinian refugees
Israel deploys new military AI in Gaza war
Egypt threatens to suspend key peace treaty if Israel pushes into Gaza border town, officials say
Israel Utilizes AI Military Technology in Gaza Conflict
Saudi Arabia Warns Of A "Humanitarian Catastrophe" If Israel Moves On Rafah
China Warns Iran to Halt Houthi Attacks or Damage Trade Ties
US University To Shut Qatar Campus Due To "Heightened Mideast Instability"
Iran-backed hackers interrupt UAE TV streaming services with deepfake news
Facebook and Instagram Ban Iran's Supreme Leader
Finnish Airline, Finnair, is voluntarily weighing passengers to better estimate flight cargo weight
U.S. Secretary of State Blinken: The Israelis underwent dehumanization on 7.10, this does not give them the right to do this to others.
Defense Technology Showcase Held in Riyadh
Saudi Arabia’s non-oil exports rise 2.5% to $6bn in November 2023: GASTAT
UK Bans Misleading "Zero Emissions" Claims for Electric Cars
Gaza's Teen Inventor Sparks Light in Displacement
Netanyahu Rejects Ceasefire Proposal, Insists On Total Victory Over Hamas
Guterres appoints independent UNRWA review panel
Private Sector Employment Hits Record High with Over 11 Million Employees in January
Rolls-Royce Executive Encourages Saudi Women to Tap into Their Inner 'Superhero' for Success in Defense Industry
Saudi Arabia launches National Academy of Vehicles and Cars
Saudi Tourism Minister Reveals Plan for 250,000 New Hotel Rooms by 2030
SAR to more than double eastern network passenger capacity with new trains deal
Saudi Arabia Enhances National Defense with New Partnerships
Saudi Aramco Maintains Arab Light Crude Pricing to Asia for March
NEOM Establishes New York Office to Support Investors
Saudi Wealth Fund Draws in Over $25 Billion Worth of Investments in Three Years, Al-Rumayyan Reveals
ZATCA Cautions Against Scammer Schemes
INTRA Defense Technologies inaugurates drone factory in Riyadh
×