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Ministry for Foreign Economic Relations, Investments and Trade of the Republic of Uzbekistan

INVESTMENT ENVIROMENT IN UZBEKISTAN AND PROSPECTS FOR COOPERATION

FACTORS OF SUCCESS IN UZBEKISTAN

1. Political and macroeconomic stability

2. Rich raw materials base

3. Energy self-sufficiency

4. Advantageous geographical location

5. Diversified industrial base

6. Scientific and intellectual capacity of the country

7. Legal base and system of investment incentives for foreign investors

The leading industrial economy in Central Asia

MAIN MACROECONOMIC PARAMETERS

GDP growth (% to previous year)

0 20 40 60 80 100

1995

2000

2005

2010

Structure of GDP production (%)

2003 2004 2005 2006 2007 2008 2009 2010102%

104%

106%

108%

110%

112%

114%

0%

5%

10%

15%

20%

25%

30%

106.2%

109.4%

107.2%

110.8%

112.1%112.7%

109.0%

108.3%

15.2%

17.5%

21.2%21.8%

24.0%

22.3%23.0%

24.0%

industrial production share of the industry in GDP

INDUSTRY GROWTH RATE IN UZBEKISTANGrowth rate of industrial output and

share of the industry in GDP

ACTIVE FOREIGN TRADE POLICY

- Export promotion and development of infrastructure

- Expansion of export loaning, insurance perfection, quality control system and certification of products

- Creation of logistic centers for the effective transportation of export cargoes

- Unification of customs procedures

Foreign Trade in 2010:

Turnover growth – 103,0%

Export growth – 110,8%

Trade balance – 4,3 bln. USD

Export growth (in mln. USD)

MAIN MACROECONOMIC PARAMETERS

Effective moderately rigid monetary and fiscal policy has allowed to support inflation rate at rather low level

Public external debt of the country does not exceed 10% of GDP

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

5

10

15

20

25

3025.25

21.6

3.8 3.7

7.8 6.8 6.8 7.8 7.4 7.3

Inflation rate

2. ACCESS TO RICH RAW MATERIALS

Uzbekistan possesses unique mineral resources:

Solid raw materials, including ferrous and non-ferrous

Over 2800 of deposits and 100 kinds of mineral resources

3. ENERGY SELF-SUFFICIENCY

Oil and gas

Hydro energy

Heat energy

Electric energy

Energy resources are sufficient to cover

demand of the economy at least for

100 years

COST OF DOING BUSINESS IN UZBEKISTAN

Gas - $50 per 1000 m3

Electricity - $0.35 per kWT/h

Water - $0.18 per tn

Labor - $350-500

Average prices for:

ALTERNATIVE ENERGY SOURCES

Alternative energy sources in Uzbekistan:

51 bln. ton of oil equivalent

solar energy wind energy biofuel solid waste recycling combustible shale

4. CENTRAL GEOGRAPHICAL LOCATION CLOSE TO THE LARGEST MARKETS

East AsiaLondon

Paris

Berlin

Moscow

Beijing

Tokyo

Seoul

Singapore

Jakarta

ManilaBangkokPhnom Penh

Muscat

Cairo

Abu Dhabi

Doha

JerusalemBaghdad

Riyadh

Amman

Tehran

Europe

South-East and South Asia

Ankara

Shanghai

Minsk

Kiev

CIS

Middle East & Africa

Central Asia

Astana

Ashgabat

Kabul

Bishkek

CA & Afghanistan: 90 mln. people

CIS: 300 mln. people

Brussels

Most Favorable Nation Treatment

with 45 countries, including EU countries, Japan, China, India,Republic of Korea, US, and others

5. LEADING INDUSTRIAL BASE IN THE REGION

Agricultural machinery

Automobile Electrical engineering

Oil, gas & petrochemical

Mining & metallurgy

ChemicalPharmaceuticals

TextilesBuilding materials Food processing

Electronics

6. WELL EDUCATED HUMAN RESOURCES AND HUGE INTELLECTUAL POTENTIAL

• 65 universities and institutions

• affiliates of key foreign universities:

• Moscow State University

• Westminster International University

• Singapore Institute of Management Development

• Turin Polytechnic Institute

• 850 directions

• 300 thousand students

• Oil&Gas Institute named after Gubkin

7. DEVELOPED LEGAL BASE & BROAD SYSTEM OF PREFERENCES AND BENEFITS FOR FOREIGN INVESTORS

Law of the Republic of Uzbekistan on “Guarantees and measures designed to protect rights granted to foreign investors”

Stable legislation during 10 years

Foreign investments and otherforeign assets are not subject to

nationalization

Free transfer of money resources in a foreign currency into Uzbekistan

and from it without any restrictions

FOREIGN INVESTMENTS IN UZBEKISTANIn 2010:

Attracted 3,77 bln. USD of total foreign investments including foreign direct investments 2,76 mln. USD

Growth rate – 10,6%

Share of FDI (%) Foreign investments (bln. USD)

Under Investment Program for 2010 more than 200 projects of large-scaled enterprises has

been set in operation

ENTERPRISES WITH FOREIGN INVESTMENTS

CNPC

4200 enterprises

INVESTMENT COOPERATION BETWEEN UZBEKISTAN AND INDIA

Total investments– 93,15 mln. USD

Trade turnover – 150,7 mln. USD

Export – 27,2 mln. USD

Import – 123,5 mln.USD

To 2010

Export Import

NEW PROSPECTS FOR COOPERATION

1. MINI-TECHNOLOGIES & EQUIPMENT FOR SMEs

2. Electronics (Consumer electronics, IT products and etc.)

3. Textile Sector (Silk, ready made garments and etc.)

5. Household chemicals

9. Tourism (Construction and management of hotels and etc.)

8. Free Industrial Economic Zone “Navoi”

4. Building materials

6. Pharmaceutics

7. Food industry

MINI-TECHNOLOGIES & EQUIPMENT FOR SMES

Production of equipment for agriculture and food processing, packaging

3-year market capacity is estimated at 3-5 bln. USD

Industrial enterprises are stable consumers of new

equipment and spare parts

ELECTRONICS

• Refrigerators and air conditioners – 1 mln. units

• Washing machines and vacuum cleaners – 600 thsd. units

• Microwaves – 300 thsd. units

• Lamps – 500 mln. units

Central Asia demand in:

TEXTILE SECTOR

Textile companies in Uzbekistan:

- Cotton fiber production – 1,2 mln. tons- Domestic processing only 30% of cotton fiber- Yarn production - more than 360 ths. tons- 50% discount from world cotton price - Only CIS textile market is 6,0 bln. USD- FTA within CIS countries

BUILDING MATERIALS

Sanitary ware

Glazed tile

Stone tileAshlar

Parquet

ceramic tiles - 10 mln. sq. m

sanitary ware - more than 160 thsd. units

Annual domestic needs in

HOUSEHOLD CHEMICALS

Production of demanded chemical products in Central Asia

Annual regional demand for soap – 130 thsd. tons,detergents – 300 thsd. tons

PHARMACEUTICALS

Domestic demand for pharmaceuticals:

• injections – 300 mln. ampoules

• infusions – 50 mln. flasks

• biopharmaceuticals – 500 thsd. packs• anticeptics – 100 thsd. flasks

• antibiotics – 50 mln. flasks

• uncture – 1 bln. packs

• suture – 500 thsd. r.m.

• syringes – 200 mln. units

FOOD PROCESSING

Annual production potential of fruits and vegetables is 10 mln. tn

Proposals for cooperation:

Storage, freezing, processing, production and packaging of agriculture products, beverages and confectionery.

FIEZ “NAVOI”: CONCEPT OF CREATION

FIEZ “Navoi” was created by the Decree of the President of the Republic of Uzbekistan on December 2, 2008.

Established near Navoi city administrative centre of Navoi region

The concept is based on the synergy of its 4 blocks or hubs:

- industrial - logistic - innovation - touristic, cultural & recreational

FIEZ: INCENTIVES AND PREFERENCES

The FIEZ residents are exempted from:

• Land tax• Property tax

• Profit (income) tax• Unified tax (for SMEs)

• Obligatory payments to the Republican Road Fund• Republican Fund of Elementary and Secondary Education

Registered enterprises for the whole period of FIEZ functioning to produce export goods are exempted from customs duties for imported:

• equipment • raw materials • production components

FIEZ “NAVOI”: CURRENT PROJECTS

Set in operation

1. Polyethylene pipes

2. Polypropylene pipes

3. Automobile wires (Korea)

4. Automobile OEM components (India)

5. Set-top box digital receivers (Singapore)

6. Fruit and vegetable production packaging (UAE)

7. Cosmetic output (Korea)

Under construction

4. Automotive fuel equipment (Korea)

5. Gas metering equipment (Korea)

6. Pharmaceutical and medical goods (Korea)

7. Hygienic production (PRC)

8. LED lams (Singapore)

1. Automobile alternators (Korea)

2. LCD monitors (Korea)

3. Energy saving lamps (Korea)

Under preparation

1. Silicon polycrystals (Korea)

2. Silicon policrystals (Korea)

3. Production of medicaments (Poland)

4. Production of medicaments (Singapore)

5. Gas metering equipment (USA)

TOURISM

• Construction of new world-class hotels

• Construction of motels and camping’s recreation units along automobile roads

• Establishment of joint travel agencies

• Management of existing hotels in Samarqand, Urgench, Tashkent

• Tourists exchange

Largest tourist potential among the countries of Central Asia

Medical and health tourism

Ecological and sports tourism

Proposals for cooperation

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