Download Initiates file download

EASTERN EUROPE AND
CENTRAL ASIA AGROINDUSTRY DEVELOPMENT
COUNTRY BRIEF
2014
UZBEKISTAN
Contents
Agro-industry national policy framework .................................................................................................................... 2
Economic and social development and trends.......................................................................................................... 3
Agro-industry outlook and performance ..................................................................................................................... 5
Trade liberalization, WTO accession and trade performance ............................................................................... 6
Foreign direct investments................................................................................................................................................ 9
Food safety, certification & quality control ............................................................................................................... 11
Business environment and competitiveness ........................................................................................................... 11
1
Key Economic Indicators1
GDP (PPP), current intl.$, billion
Manufacturing VA, % of GDP
2009
2011
2012
2013
106.8
129.5
142.5
156.3
13.0
12.8
12.7
n/a
Food&Beverages Indicators
2009
2011 2012 2013
Value Added, % of manufactur.
n/a
n/a
Enterprises, % of
n/a
n/a
27.5
n/a
n/a
n/a
manufacturing
Agriculture VA, % of GDP
19.5
19.1
18.9
n/a
Employment, % of manufact.
14.5
n/a
n/a
n/a
Employment in Agri., % of total
27.0
n/a
n/a
19.8
Investments, % of manufact.
5.5
n/a
n/a
n/a
Gross Fixed Capital F.,% of GDP
26.1
23.1
22.8
n/a
FDI inflow, % of total inflow
n/a
n/a
n/a
2.6
3.2
2.1
n/a
Net food trade, US$ billion
n/a
n/a
60.2
51.2
43.2
n/a
Food exp.,% of merch. exp.
n/a
n/a
Merch. exports, curr. US$ billion
10.74
13.25
11.2
n/a
Food imports, % of merch. imp.
n/a
n/a
Merchandise imports, US$ billion
9.02
9.95
10.9
n/a
Food export, 2006-11 growth.
140
n/a
FDI net inflows., % of GDP
Merch. trade., % of GDP
n/a
0.5
n/a
n/a
n/a
n/a
8.9
%
Exports annual growth, %
-3.9
20.5
12.7
n/a
Food import, 2006-11 growth.
27.4
%
Imports annual growth, %
2.7
26.3
8.9
n/a
Food prod. index (2004-
119
137
06=100)
GNI per capita, PPP 1’000 c.intl.$
3.6
Trade per capita, US$ 2010-2012
29777
Doing Business Indicators Rank
Global Merch. Exports Rank 2012
Imports Rank 2012
4.6
4.9
5.3
Agribusiness Indicators Value
FDI inflow rank
154
146
Global Competitiveness Index
2.32
91
n/a
88
88
Agro-industry national policy framework
National development programmes: The key documents that set out the Government policies for the
country, agriculture, rural and agro-industry development include: (i) the Welfare Improvement Strategy of
Uzbekistan; (ii) the Anti-Crisis Program for 2009-2012 that includes measures to support the banking system,
encourage exports through subsidized credit and tax rebates and support the food and consumer goods
sectors; (iii) the multi-sector Housing for Integrated Rural Development Strategy (HIRDS) for 2011-2015; (iv) the
Privatization Programme for 2012-2013, where minority and majority stakes in almost 500 enterprises that will
be offered to local and foreign investors via open public tenders; (v) the Programme of Measures to Expand and
Develop the Food Industry for 2012-2015; (vi) the Industrial Modernization and Infrastructure Development
Program in 2011–2015, with investment of US$ 47.3 billion planned in strategic sectors; (vii) the Program of
measures to deepen and widen the scale of reforms in the economy for the period 2011-2015, which aims to
improve legislation and measures aimed at further improving the business environment and providing greater
freedom of entrepreneurship; (viii) the Modernization and Reconstruction Program for Cotton Gins; (ix) the
Concept of innovation development of Uzbekistan for 2012-2020 was drafted.
Together with the UN organizations Uzbekistan elaborated and agreed UNDAF for 2010-2015.
Uzbekistan has had a Partnership and Cooperation Agreement with the EU since 1999. The future EC assistance
will focus on rural and local development, rule of law and judiciary reform, trade facilitation, support to the
private sector and SMEs.
1
World Bank Indicators, ITC & UNIDO databases, accessed in August 2014. Author’s calculations
2
Legal framework: Uzbekistan has adopted a number of laws to encourage agricultural growth and rural
development, among those are: the Land Code (1998, amended in 2011); the Law on Farms (2004, amended in
2012), the Law on Dehkan Farms (1998, amended in 2010), the Law on Agricultural Cooperatives (Shirkat), the
Law on Guarantees of freedom Business (2000, amended in 2011); the Law on State Control activities of
economic entities (1999, amended in 2011), the Law on Competition (2012); the Law on Land Code, the Law on
Protection of Trademarks and Brand Names (2006), the Law on “amendments and addenda to some legislative
acts of Uzbekistan in connection with the deepening of economic reforms in agriculture and water
management” (2009), the Resolution on “the predictive parameters of production and use of fruits and
vegetables, potatoes, melons and grapes in 2011” (2010), the Decree “On measures for deepening economic
reforms in fruit and vegetable production and viniculture (2006), the Decree “On additional measures on
stimulating the attraction of direct foreign investments” (2005), the Decree “On measures to stimulate the
increase in livestock at dekhan farms and agricultural cooperatives” (2010), the Decree “On concerning
improvement of the functioning of oil and fat industry” (2010); the Resolution “On additional measures on
deepening processing of raw agriculture products, increasing volume of production and expanding assortment
of food products for 2012-2015”; the Law on guarantees of freedom of entrepreneurial activity. In 2011 the Law
on Agriculture was drafted.
Supporting institutions: The main state bodies related to agriculture and agro-industry support and control
in the Republic of Uzbekistan are the Ministry of Agriculture and Water Resources and the Minister of Foreign
Economic Relations, Investments and Trade. Other supporting institutions are: the State Committee on
Privatization, Demonopolization and Development of Competition; the Coordinating Committee for
Development of Science and Technology under the Cabinet of Ministers; the Information Support & Foreign
Investments Promotion Agency - UZINFOINVEST (established in 2007) under the Ministry of Foreign Economic
Relations, Investments and Trade; the Center on Science and Technology (established in 2002); a holding
company "Uzvinprom-Holding" (established in 2006) for supporting the development of wine industry as a
specialized sector. Extension services, agriculture and veterinary: advisory and consultative services are mainly
provided by governmental institutions: Business Centres, Resource Centres, agricultural Vocational and
Training schools, Chamber of Commerce, Ministry of Agriculture and other players on the ground.
Economic and social development and trends
Economic and social development: Uzbekistan is a lower middle income country with GNI per capita of
(constant 2005) US$ 921 in 2013. Total number of population is 29.3 million inhabitants, of which 64 percent
live in rural area, and the annual population growth is 2.69 percent. Uzbekistan enjoyed a strong economic
performance with 9.5 percent of real GDP growth on average between 2000 and 2011. The economy has
remained largely resilient to the global economic crisis and economic contraction but it was, and remains highly
resource-dependent. State ownership and interference in the economy remain dominant. However, the
authorities announced a new privatization programme for 2012-13, in which minority and majority stakes in
almost 500 enterprises will be offered to local and foreign investors via open public tenders. In 2011 GDP growth
was 8.3 percent, where industry (including construction) and services were the main contributors to GDP
growth. In 2011 the agricultural sector contributed 19 percent of value added to GDP and employed around 27
percent of the total labour force in 2011. The agricultural sector grew by 6.6 percent, supported by fruit and
vegetable production and livestock breeding. Despite the fact that industrial growth declined to 6.7 percent in
2011 from 8.3 percent in 2010, mainly due to a slowdown in the fuel subsector, all subsectors grew collectively
by 11.9 percent, where the food industry is one of them. Manufacturing industry contributed with 8.6 percent
to GDP in 2011 and showed 6 percent of annual growth.
Economic and social sector reforms remain vital for the sustainable development and stability of the country.
To support further growth the government approved a number of sectoral development programmes for 20112015.
3
Chart 1. Evolution of value added to GDP in Uzbekistan (percent)
Source: WBDI 2014
Growing demands and trends: In Uzbekistan, the poverty rate decreased from 27.5 percent in 2001 and was
19.5 percent in 2009 (i.e. it decreased already by one-third). At the same time, the poverty rate is significantly
higher among the rural population (24.9 percent in 2008) than the urban population (16.3 percent in 2008). The
rural population accounts for about 64 percent of the country’s population and 73 percent of all poor people.2
Based on the 2006 Uzbekistan Regional Panel Survey a share of total household expenditure on food of rural
population is 53 percent and of urban – 32.7 percent, in Tashkent it is about 30 percent, while poorest
households spend on food 61 percent of the total expenditures and richest families - 31.3 percent.
On the demand side, private consumption has increased recently, owing to rising remittances, increased
domestic lending, and wage and pension hikes. Despite the fact that agriculture provides 90 percent of
domestic demand for agricultural products and 70 percent of domestic trade3, Uzbekistan is a net food
importer, except in fruit and vegetables products. Domestic agriculture and food processing cannot satisfy
demand for a range of commodities such as vegetable oil, flour, poultry products and high-value grocery
products. The country needs to import one-third of wheat consumption despite the larger domestic
production. The prices of staples like wheat flour and bread are stable reflecting the Government price
regulation system.
In 2010, the five top agricultural products in terms of values in Uzbekistan were: cattle meat (ranked by
commodity in the world 18), cotton lint (ranked 6), cow’s milk (ranked 31), tomatoes (ranked 11), and wheat
(ranked 18).4 Besides, the important commodities of domestic production are apricots, cottonseed, cherries,
quince, grapes, melons and water-melons, stone fruits, pistachios, hazelnuts and walnuts.
2
UNDP (2011) Assessing Development Strategies to Achieve the MDGs in the Republic of Uzbekistan
IFAD (2011) REPUBLIC OF UZBEKISTAN: HORTICULTURAL SUPPORT PROJECT (HSP) PROJECT FINAL DESIGN REPORT MAIN REPORT
4
FAOSTAT, accessed in October 2012
3
4
Agro-industry outlook and performance
Agro-industry background and challenges: Despite a significant reduction of agriculture’s contribution to
GDP (from 37 percent in 1991 to 19 percent in 2011), it is still a very important sector of the economy and is
sharply and dually fragmented. Cotton was strongly developed in the past in Uzbekistan, providing about 60
percent of total former Soviet Union production of cotton fiber.
Private sector agriculture includes leasehold farms made available under Government’s land reform and rural
restructuring policies. There are around 81 000 private leasehold farms in the country with an average size
approaching 150 ha and more than 1.5 million people employed on these lands. In 2010 private farms
accounted for 35 percent of total agricultural output and dekhan farms shared 63 percent, which have small
allocations of up to 1 hectare of land.
The Uzbekistan’s agricultural systems went through significant structural changes, including the programme
for reduction in export of cotton fiber in an attempt to develop its own cotton processing industry. However,
according to EBRD Uzbekistan remains at an early stage in its transition towards a market economy and still has
a substantial structural reform agenda. To increase competitiveness and growth in the private sector,
government intervention needs to be reduced in Uzbekistan as the government sets prices and production
targets for the agriculture sector. Policy challenges include reducing discriminatory barriers against imports,
liberalizing state procurement prices in agriculture and implementing privatization in a transparent manner.
Agriculture and food industry development are priority directions of the economy of Uzbekistan providing
necessary foodstuff and raw-materials. The Programme of Measures to Expand and Develop the Food Industry
for 2012-2015 calls for an increase in the production of 16 types of finished food products, and to this end
EUR 74.8 million will be spent in the next five years on 33 construction, refitting, and modernization projects in
the country’s production facilities. During this period, the production of convenience foods using freeze dried
fruits and vegetables will be launched, along with a confectionery factory with cocoa bean processing facilities.
In addition, dry baking yeast, iodized salt, and cane sugar will all enter into production in this period. Other
plans for the next four years include the construction of 44 milk processing facilities, the construction or refitting
of 90 meat processing factories, and finally, with a planned combined capacity of 41 000 tonnes, the creation
of 26 and redevelopment of 78 fruit and vegetable processing facilities.5
Food & beverage industry performance: The food and beverages industry forms a large part of the economy,
generating UZS 3 136 billion (US$ 1.82 billion), that represented about 9.3 percent of industrial output in 2007
and enjoying a growth in value over time. In 2007 F&B industry employed about 90 000 people or 14.5 percent
of industrial labor force.
In 2007, there were 4 470 enterprises operating or about 27.5 percent of total number of industrial enterprises.
In many of ago-food industrial enterprises there are still a share of the state fund. Some movement in privatizing
refineries was made, resulting in 75 percent privately owned and 25 percent government owned out of which
70 percent are of cottonseed oil and 30 percent - of soybean oil.
In 2006, in accordance with the Resolution of the President of Uzbekistan HC 'Uzplodoovoschvinprom-holding'
was transformed to HC 'Uzvinprom-holding', counting 67 enterprises (63 wine-producing companies and 4
alcohol beverages plants), out of which there are 19 join-stock companies, 9 joint-ventures, 3 foreign
enterprises, and 34 limited liability societies.6 87 enterprises of industry are consolidated into the Association of
fat-and-oil industry including 20 joint stock companies, 38 joint ventures, 28 private and three unitary
enterprises. The investment potential of the industry is about US$ 200 million.7
Important subsectors include vegetable oil, flour, fruit & vegetables, meat and dairy processing. The trends are
expected in such directions as manufacture of infant’s foodstuff, dry breakfasts, confectionery, cheese and
sausage products.
Gross fixed capital formation in food and beverages sector accounted 5.5 percent of total investments in 2007.
5
http://www.ite-uzbekistan.uz/vis/worldfood/eng/index.php
http://www.uzinfoinvest.uz/eng/investment_opportunities/by_industry/fruit_and_vegatables_processing_industry/
7
http://www.uzbekembassy.org/e/investment_opportunities/
6
5
Chart 2: Evolution of share of food & beverage industry in economy of Uzbekistan over time (percent of
Manufacturing)
Evolution of share of Food & Beverages industry in economy
of Uzbekistan over time
10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
2004
2005
2006
Output, % of Industrial Output
2007
Investments, % of total GFCF
Employment, % of total Labour force
Source: Author’s calculations are based on national statistics
Trade liberalization, WTO accession and trade
performance
Trade regulation and trade unions: The legal frame of the Uzbekistan’s trade is regulated by the Customs
Code (1998, the latest amendment in 2010, the new Custom Code is under discussion), the Law on Export
Control (2004), the Law on Custom Tariffs (1997), the Law on Safeguard measures, anti-dumping and
countervailing duties (2003); the Decree on Approving the List of Consumer Products Imported into Uzbekistan
(2008), the Decree on “additional measures on strengthening control and stopping smuggling of wheat, wheat
flour, rice and bread products” (2008) and the Decree on Creating the first Free Industrial and Economic Zone
in Navoi region (1996, amended in 2008). Tariff reforms were adopted to ensure cost-recovery, but it lacks
proper collection mechanisms and payment systems. Foreign traders continue to experience major market
distortions with trade and foreign exchange owing to delays in currency conversions for imports, restrictions
on cash and foreign exchange availability, the restrictive trade policy and the continuation of state procurement
quotas in cotton and wheat. The lack of a liberal trade and foreign exchange regime continues to be a major
constraint on foreign investment and private sector development. The list of imports subject to obligatory
certification includes foodstuffs, alcohol and soft drinks, and tobacco.
Uzbekistan has signed eight FTAs with individual countries as well as with Eurasian Economic Community
Customs Union (in effect). In 2012, Uzbekistan signed the CIS free trade agreement that eliminates custom
duties for its products including those going to its major trade market, Russia. With some countries, like U.S.,
Korea, U.K., Switzerland, France, Germany, Belgium, Italy, Japan, India, China and Thailand, Uzbekistan has
special agreements on trading.
WTO accession: Uzbekistan has been negotiating accession to the WTO since December 1994, and it has gone
through various steps of the WTO accession procedure (application, Working Party creation, memorandum of
external trade, no export subsidies, three meetings, and agreements). The current status of Uzbekistan in the
WTO is an observer. There is no news on the negotiation progress after the latest third meeting of the WTO
Working Party took place in Oct 2005.
Trade performance: After a steady growth over time, Uzbekistan’s exports sharply declined by 34 percent in
2009. Exports increased in 2010, but again slightly decreased in 2011, amounting US$ 6.02 billion. Imports
showed a decrease by 12 percent in 2009 and an increase by 5 percent in 2010 and by 14 percent in 2011. This
6
resulted in a trade deficit of US$ 3.65 billion in 2011, compared to US$ 2.0 billion in 2010. The major export
agricultural product is cotton accounting around 19 percent of total merchandise exports.
Uzbekistan is import-dependent country on food and beverages products, except fruit and vegetables
products. The trade balance of processed food and vegetables showed a negative balance of US$ 820 million
in 2011, higher than any previous year. Food and agricultural exports and imports together made 13.6 percent
and 11.1 percent of total merchandise exports and imports of Uzbekistan in 2011. Processed F&B products
accounted US$ 35.3 million or 0.6 percent of total merchandise exports and US$ 851.7 million or 8.8 percent of
total merchandise imports in 2011 with annual negative growth of exports of -40.6 percent and an annual
increase by 41.3 percent of imports. The exports per capita of F&B were US$ 1.21 in 2011.
Both imports and exports are not diversified. In 2011, the highest share of imported food and beverages
commodities came from milling products, malt and starches products group (41 percent, ranking in world
imports 14), and vegetable oils (33 percent, ranked 65). The rest of imported products’ groups vary from 1 to 6
percent. The largest part of exports is made by the fruits and vegetables processed products, amounting 72
percent of total exports of food and beverages (ranking in world exports 80), another export-oriented group is
beverages (22 percent, ranked 114).8
Across partners, Uzbekistan has two main countries such as Russia and Kazakhstan for both exports and imports,
which together made 90 percent on exports and 78 percent on imports of food and beverages products in 2011.
Top destinations for F&B products: Russia (45 percent), Kazakhstan (45 percent), Kyrgyzstan (4 percent),
Poland (3 percent), and Germany (1 percent) in 2011.
Top origins for F&B products: Kazakhstan (43 percent), Russia (25 percent), Ukraine (10 percent), Malaysia (5
percent), and Turkey (2 percent) in 2011.
Chart 3. Food & beverages and agriculture trade performance over time
Source: ITC (UNCTAD/WTO): Trade Map online, accessed in October 2012
8
ITC (UNCDAT/WTO)
7
Chart 4. Share of product groups in total exports and imports of food & beverages, top ten products
Share of product groups in total F&B
exports by Uzbekistan in 2011
0%
4%
1%
1%
Share of product groups in total F&B
imports by Uzbekistan in 2011
0%
0%
0%
3%
0%
4%
1%
2%
1%
1%
4%
4%
41%
6%
22%
33%
72%
Milling products, malt, starches, inulin, wheat gluten
Vegetable, fruit, nut, etc food preparations
Animal,vegetable fats and oils, cleavage products
Beverages, spirits and vinegar
Sugars and sugar confectionery
Sugars and sugar confectionery
Dairy products, eggs, honey, edible animal product
Miscellaneous edible preparations
Cereal, flour, starch, milk preparations and products
Dairy products, eggs, honey, edible animal product
Miscellaneous edible preparations
Animal,vegetable fats and oils, cleavage products
Cocoa and cocoa preparations
Residues, wastes of food industry, animal fodder
Residues, wastes of food industry, animal fodder
Cereal, flour, starch, milk preparations and products
Beverages, spirits and vinegar
Meat, fish and seafood food preparations
Vegetable, fruit, nut, etc food preparations
Milling products, malt, starches, inulin, wheat gluten
Meat, fish and seafood food preparations
Chart 5. Evolution of the top five destinations of exported F&B products by Uzbekistan over time
Source: ITC (UNCTAD/WTO). Data is based on the selected products’ groups. Trade Map online, accessed in October 2012
8
Chart 6. Growth of national supply and international demand for exports of F&B products by
Uzbekistan in 2011
Source: ITC (UNCTAD/WTO). Data is based on the selected products’ groups. Trade Map online, accessed in October 2012
Foreign direct investments
Strategies, regulations and ranking: Uzbekistan has been creating a favourable investment environment for
foreign investors. To encourage foreign investors and provide them with information and other possible
support, the Government established the Information Support & Foreign Investments Promotion Agency
UZINFOINVEST in 2007. Lately, the investments regime has been facilitated by adopting a number of laws and
decrees, including: the Law on Foreign Investments (1998, amended in 2008), the Law on Investment Activities
(amended in 2008), the Law on Guarantees and Measures of Protection of Rights of Foreign Investors (1998,
amended in 2008), the Law on Concessions (1995, amended in 2008); the Law on Protecting Rights of Investors
in Securities Market provide the legal basis for foreign investment in Uzbekistan. In 2007 the Decree On the
procedure of application of customs privileges to the property, imported by foreign investors to Uzbekistan for
own needs was adopted. Uzbekistan has signed bilateral investment agreements with 49 countries.
According to WIR 20129 Uzbekistan was ranked 78 (among 181 economies) by the FDI Inward Attraction Index
in 2011, which is a significant improvement compared to 143 in 2000 (among 178 economies).
Uzbekistan has no restrictions on the form of capital investment. Foreign investors are entitled to create within
the county the enterprise in any organizational-legal form allowed by the legislation. Investors can benefit from
tax exemption, customs and other privileges if they meet the following terms: the established Fund of a
company must be not less than US$ 150 000; one of participants is the foreign legal entity; the share of foreign
investments makes not less than 30 percent of company capital, the enterprise earns over 60 percent of
incomes from the sale of produced goods or services. 10 The total period of registration of the enterprise with all
the subsequent registration with tax and other authorities may vary from seven days to one month depending
9
UNCTAD (2012) World Investment Report 2012: Towards a New Generation of Investment Policies, UN Conference on Trade and
Development NY and Geneva, Switzerland
10
Uzinfoinvest http://www.uzinfoinvest.uz/eng/investment_guide/investment_policy_of_the_republic_of_uzbekistan/
9
on the complexity of each case. In state registration, joint ventures shall pay a registration fee equal to fivefold
minimum salary plus US$ 500.11 Land can be leased (up to 50 years)
Foreign direct investments flows: According to WIR 201212 Uzbekistan was one of the largest recipients of
investments in the EECA region in 2011 (US$ 7.6 billion, compared with US$ 2.4 billion in 2010). In 2007
Uzbekistan experienced a significant increase of FDI inflow reaching US$ 710 million against US$ 170 million in
2006. In 2010 Uzbekistan’s FDI inflows accounted US$ 820 million or 2.09 percent of GDP with 15 percent annual
growth. The vast amount of FDI (around 80 percent) goes to the fuel, energy petrochemical, and automobile
manufacturing sectors. FDI in agro-processing sector is growing, especially in fruit and vegetable processing
and dairy and mineral water sectors. FDI inflow in wine production sector generated US$ 32.5 million during
the period 1996-2008. Since independence of Uzbekistan, fruit and vegetable branch attracted more than
US$ 100 million and has more than 200 joint-ventures (producing juice, jam, tomato paste, dried and frozen
and fruit and vegetable products) with participation of investors from Germany, Turkey, Netherlands, Austria,
Russia, Switzerland, Italy, Spain, the USA, etc. on production.13 The foreign investors, participating in dairy sector
and mineral water production, are: Nestle (Switzerland), Vimm-Bill-Dann-Foodstuff (Russian Federation), British
American Tobacco (the Great Britain). It is estimated that dairy sector needs about US$ 200 million of
investments.14 BBH (Sweden) and Shymkent beer (Kazakhstan) invested in brewery.
Chart 8. Foreign Direct Investments in Uzbekistan over time
Source: WBDI 2014
11
http://www.uzinfoinvest.uz/eng/investment_guide/business_expenses/
UNCTAD (2012) World Investment Report 2012: Towards a New Generation of Investment Policies, UN Conference on Trade and
Development NY and Geneva, Switzerland
13
http://www.uzinfoinvest.uz/eng/investment_opportunities/by_industry/fruit_and_vegatables_processing_industry/
14
http://www.uzbekembassy.org/e/investment_opportunities/
12
10
Food safety, certification & quality control
Food safety background and country’s membership: Uzbekistan is a member of the Codex Alimentarius
Commission and a member of the International Organization of Standardization (ISO).
Issues of protection of human health in general and in particular from food-borne risks are dealt with the Law
on Quality and safety of foodstuff (1997, amended in 2006); the Law on Veterinary (1998), the Law on Plant
Quarantine, the Law on Consumer’s Protection (1996, amended in 2010), the Law on State Sanitary Surveillance
(1992, amended 2010), the Law on Technical Regulations (2009), the Law on Standardization (1993), the Law on
Certification of Products and Services (1993, amended in 2006).
In 2004, new regulations on veterinary certificates were adopted for exporting, importing and transit of
commodities, which are based on requirements of the International Veterinary Codex. Uzbekistan is a member
of a CIS agreement on cooperation on hygienic certification of potentially hazardous imported products.
Quality control and certification: The State Inspectorate for Plant Quarantine and the State Veterinary
Department under the Ministry of Agriculture and Water Resources are responsible for veterinary and
phytosanitary control in Uzbekistan. The Committee of the State Sanitary and Epidemiological Control
(“Gossanepidnadzor”) under the Ministry of Health is responsible for sanitary-epidemiological control in
Uzbekistan. Hygiene Requirements of food safety is regulated by Sanitarian Norms (SanPiN). The Resolution as
of 2004 “On measures for implementation of quality management systems compliant with international
standards at the enterprises” regulates the introduction of the new system of the quality control in Uzbekistan.
Standards for locally produced and imported goods are subject to state registration in the branches of the
Uzbekistan’s Agency for Standardization, Metrology and Certification (Uzstandard). There are 17 Technical
Committees and 21 Organizations for Standardization were established over the country. According to Uzbek
legislation the following standard normative documents are applied in the country: international (interstate,
regional) standards; Uzbek National standards; industrial standards; technical specifications; standards of the
enterprise; national standards of the foreign countries; andadministrative-territorial standards. There are more
than 65 000 normative documents regulating national standards. Uzbekistan continues to use an arbitrary set
of technical standards based on Soviet methods. Certification for foodstuff is based mainly on national
standards and GOSTs.
The following Technical Regulations are scheduled to be ready in 2011-2013: on the safety of grain and its
products (grain, flour, cereals, bran) in 2012, on the safety of milk and dairy products in 2012, on the safety of
meat and meat products in 2012, on the safety of alcoholic beverages in 2012, on the safety of vegetable oils in
2013; other safety of margarine in 2013, on the safety of mayonnaise in 2013.15
Business environment and competitiveness
Business environment: According to the Doing Business Report16 Uzbekistan is one of the top 10 economies
that improved the most across three or more areas measured by Doing Business in 2011-2012. Uzbekistan has
through reforms improved in getting credit by introducing new laws and regulations guaranteeing the right of
borrowers to inspect their personal credit data; starting business by simplifying registration formalities and by
reducing the minimum capital requirement and the cost of registration; and making trading across borders
easier by introducing electronic single window for customs clearance and reduced the number of documents
needed for each import transaction. Uzbekistan has strengthened its insolvency by 29 percent (in points) since
2005 by introducing new time limits for insolvency proceedings and new time limits and procedures for the
second auction and by making it possible for businesses to continue operating throughout the liquidation
proceeding.
The economy was ranked 154 (out of 185 economies) in 2012 (2 points down compared to 2010; 16 points
down compared to 2006). Trading across the borders is ranked 185, paying taxes – 161, protecting investors –
15
16
http://www.standart.uz/blog/category/30
WB/IFC (2012) Doing Business 2013: Smarter Regulations for Small and Medium-size Enterprises. 10th edition. Washington, USA
11
139, getting credit – 154, and starting business – 90. Uzbekistan is still among the most difficult countries in
getting electricity and registering property, among the most costly countries in paying taxes, and among the
most difficult, slowest and costly countries in trading across borders.
Taxation relief: The Tax Code in force since 1 January 2008 has been amended with effect from 1 January 2012.
In accordance with the new Tax Code the tax burden on companies was eased by lowering the social tax and
the corporate income tax to 10 percent zero-rate VAT applies to sales of cotton fibre. To encourage the timely
replacement of fully-depreciated equipment, a charge of 0.25 percent of the equipment’s historical value will
be collected from legal entities (except for micro and small enterprises) for the continued use of such
equipment, but revenue from the sale/disposal of fully-depreciated equipment is exempt from CIT. The
corporate tax rate is 9 percent, but a reduction is available to exporters if export sales exceed a certain threshold.
General VAT is 20 percent. There is 0 percent on exports of goods for foreign currency. Foreign companies
producing agricultural products are exempted from asset tax. According to PwC report17, as of 2012 Uzbekistan
is also a party to 48 double tax treaties.
Research & Development, innovations: Required investments and activities in R&D of new technologies and
products in agro-industry still remain low. State-owned enterprises continue to be the primary beneficiaries of
government support for innovation and R&D.
Competitiveness. No information on Uzbekistan is available in the Global Competitiveness Report 2012-2013.
17
PwC (2012) Paying Taxes 2012. The Global Picture, PriceWaterhouseCoopers supported by WB and IFC
12
The designations employed and the presentation of material in this information product do not imply the
expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United
Nations concerning the legal or development status of any country, territory, city or area or of its authorities, or
concerning the delimitation of its frontiers or boundaries. The mention of specific companies or products of
manufacturers, whether or not these have been patented, does not imply that these have been endorsed or
recommended by the Food and Agriculture Organization of the United Nations in preference to others of a
similar nature that are not mentioned. The views expressed in this publication are those of the author(s) and do
not necessarily reflect the views of the Food and Agriculture Organization of the United Nations.
For more information please contact:
Stjepan Tanic
Agri-food Economist
FAO Regional Office for Europe and Central Asia
Email: [email protected]
13