Uzbekistan Business & Economy - The Times Of Central Asia

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Uzbekistan Aims to Become One of World’s Largest Producers of Olefins

Uzbekistan's largest private oil and gas company, Sanoat Energetika Guruhi (Saneg) will build a gas chemical plant to produce olefins from methanol. The work will be done in partnership with the Chinese state-owned energy giant, Sinopec. The complex will utilize natural gas from the Mubarek fields. Olefins are raw petrochemical materials used for a range of polymer products, such as plastics and films. The $3.3 billion plant will be able to process 1.3 billion cubic meters of natural gas by 2026. About 44% of the production will be exported, mainly to China and Turkey. In addition, the project will make it possible to produce value-added products from natural gas rather than simply burning it for energy or exporting it. The construction of the complex will also stimulate the development of related industries. The Karakul free economic zone in the southeastern Bukhara region will house plants producing textiles, carpets, footwear, plastic pipes and fittings, and other polymer products. "Uzbekistan's gas-chemical complex plans to produce 300,000 tons of polyethylene terephthalate annually, 350,000 tons of polypropylene, and other materials. This is expected to reduce the country's imports of polymers by $500 million a year and attract $350 million a year from their exports," said Bakhodyr Khafizov, director of the Karakul free economic zone. Saneg representatives said that, according to a marketing study, annual polymer consumption in Uzbekistan is now 5.5 kilograms per capita, far below that of other developing economy peers. For example, that figure in Turkey is 23 kilograms, meaning that the Uzbek domestic market shows significant room for expansion. However, there may be problems with exporting polymers abroad, as Uzbekistan has no direct access to the sea. In this regard, production will require additional investments taking into account overland logistics.

Central Asia Uzbekistan Tajikistan Business Economy Tajikistan Kyrgyzstan Uzbekistan Business & Economy Kazakhstan Kyrgyzstan Business & Economy Kazakhstan Business & Economy

ADB Forecasts Faltering Economic Growth

The People's Republic of China (PRC) will remain the engine of growth for the world economy, even despite some slowdown. That forecast has been made by the Asian Development Bank (ADB) specialists in their report, Asian Development Outlook. Inflation is expected to decline in 2024 and 2025 after the increase in food prices in many countries over the past two years - and developing economies in the Asia-Pacific region will grow by an average of 4.9%, according to the ADB. Experts predict the highest economic growth for India: where the economy will grow by 7% this year and 7.2% next year. As for China, experts are more reserved in their forecasts: China's growth will slow to 4.8% this year and 4.5% next year. "Obviously, China will play an important role for some time to come. It still accounts for almost half of the GDP [gross domestic product] in the Asia-Pacific region," said ADB chief economist ,Albert Park. At the same time, economists also warned of possible risks: supply chain disruptions, uncertainty over U.S. monetary policy, the effects of extreme weather, and volatility in the PRC's real estate market. Inflation in developing Asia-Pacific economies is expected to fall to 3.2% this year and 3% next year as global price pressures ease and monetary policy remains tight in many countries. However, inflation in the region, with the exception of China, is still higher than before the COVID-19 pandemic. According to the bank's forecasts, economic growth in Uzbekistan will slow this year and grow slightly next year. This is because higher state-regulated prices will limit the growth of real household incomes, thus reducing demand. Economists expect a lower growth in services and agriculture. Lower remittances, fiscal space constraints, and lower global demand for Tajikistan's main exports will cause Tajikistan's economic growth to slow slightly in 2024 and 2025, the ADB said. "Tajikistan faces serious climate challenges and risks that could lead to irreversible economic, social, and environmental damage," said the ADB 's resident representative in Tajikistan, Shanny Campbell. The ADB says developing a green economy is key to the country's sustainable growth. As for its nearest neighbor, Kazakhstan, the ADB has lowered its GDP growth forecast for 2024 to 3.8%, down from 4.3% in the previous review. In 2025, the figure is expected to be 5.3%. Actual GDP growth at the end of 2023 was at 5.1%. "The growth rate of Kazakhstan's economy in 2024 will decrease against the background of slowdown in industrial growth due to stagnation in oil production and then recover in 2025 due to the growth of resource extraction at the Tengiz field and investments. Prospects for Kazakhstan's economic growth in the medium term look positive," ADB analysts said. As for developed economies globally, their growth will slow down this year: GDP growth in the U.S. will fall to 1.9% from last year's 2.5%, and in Japan, GDP will grow by 0.6% compared to 1.9% in 2023.

Central Asia Uzbekistan Tajikistan International Affairs Tajikistan Tajikistan Business Economy Uzbekistan Business & Economy Uzbekistan International Affairs

Tajik Institute Hosts Conference on Furthering Cooperation With Uzbekistan

An international conference called Uzbekistan and Tajikistan: New Perspectives of Strategic Partnership and Alliance is being held in Dushanbe on April 12, in cooperation with the International Institute of Central Asia and the Center for Strategic Studies under the President of the Republic of Tajikistan, according to a report by UzA. According to this report, current relations between Uzbekistan and Tajikistan have reached a stage of rapid development. Mutually beneficial cooperation in the political, trade-economic spheres, and cultural-humanitarian connections are expanding. The amount of cross-border bilateral trade has increased more than threefold since 2017, and in the coming years is expected to reach $1 billion annually. The main goal of the ongoing conference is to discuss the prospects for further development of the bilateral partnership, as well as to develop practical proposals for expanding cooperation in the fields of trade and industry, transport, ecology and water use, agriculture, and education. Participants include representatives from the two country’s top research and analytical centers, and from ministries and agencies. Additionally, as part of the Uzbek delegation’s visit to Dushanbe, bilateral meetings are scheduled at the Ministry of Foreign Affairs, the Institute of Economics and Demography of the Institute for the Study of the Problems of Asian and European Countries of the National Academy of Sciences of Tajikistan, and the Center for Strategic Studies under the President of the Republic of Tajikistan.

Central Asia Uzbekistan Uzbekistan Business & Economy Kazakhstan Kazakhstan Business & Economy

Economist Marat Kairlenov: Kazakhstan Must Keep Up With Uzbekistan

In 2023, crude oil remained Kazakhstan's main export commodity, accounting for $42.3 billion, or 53.8%, of the republic's total gross domestic product (GDP). According to a proprietary forecast, Uzbekistan may overtake its neighbor in terms of GDP by 2037. This is due to the continuing technological lag in the raw materials-based economy of Kazakhstan, according to economist Marat Kairlenov, who recently discussed ways to diversify Kazakhstan's economy and create jobs. "We remain predominantly a raw material country; however, in the GDP structure, agriculture accounts for only 4%, industry -- 36%, and services -- 56%," Kairlenov told kapital.kz. He emphasized that changing the economic orientation requires time, and active use of raw materials sector opportunities, as other countries have done during reforms. The key issue is the equal distribution of national wealth. It's important to revise agreements with large subsoil producers to increase the wages of citizens. "In 2023, Kazakhstan's GDP reached 119 trillion tenge ($266.2 billion) with only 31% going to wages. This shows the need for policy correction," Kairlenov added. Speaking about economic diversification, the economist mentioned new technologies in mining rare metals, such as high-grade nickel. "Our country is rich in various minerals and we should actively develop their extraction," he believes. However, oil dependence remains an issue. "The price of oil is crucial, and the war in Ukraine incentivizes countries to give up oil". He assumes that at an average oil price of $30 per barrel, production will become unprofitable. In this regard, Kairlenov calls for the active development of other sectors of the economy, such as the extraction of rare metals and the information technology (IT) sector. "We need to get rid of misconceptions, for example, about the contribution of [cryptocurrency] mining farms to the economy," he stressed. Kairlenov draws attention to fading investment activity -- and the growing number of seized accounts, which indicates negative trends in the economy. "Policies must change to incentivize job creation and improve the welfare of citizens," he concludes. How can Kazakhstan create new jobs and stimulate economic growth? Kairlenov suggests a number of concrete steps to create jobs in the country. "Very simple -- we need to reduce customs duties on imported cars and machinery to the level of 2010. The same applies to scrappage duty." Reducing the cost of cars stimulates tourism and the development of agriculture, which needs modern equipment. In addition, Kairlenov notes the need for infrastructure renewal. "Costs are inevitable for new power lines, pipes and other engineering systems. The whole country needs renewal, which will create demand for machinery and many jobs," he explains. It's also important to create a favorable environment for business development. "Liberalizing the economy is the key to progress. Less regulation is required from the state and more freedom for entrepreneurs." he added. Kairlenov also calls for attracting foreign investment in promising industries. "Why don't we launch the production of [railroad] carriages or other goods in which we have advantages?" Asked about Uzbekistan's future as a regional economic leader, Kairlenov...

Central Asia Uzbekistan Uzbekistan Business & Economy Uzbekistan Life & Culture

Uzbekistan Widens its Doors to Foreign Tourists

In an announcement on the media portal Novosti Uzbekistana, Nurbek Yakubov, a senior expert at the Institute of Macroeconomic and Regional Studies of Uzbekistan, revealed plans to boost the country’s tourist industry. Boasting a unique and exotic cultural heritage, as well as stunning natural landscapes rich in archaeological sites and monuments, Uzbekistan’s inflow of foreign tourists has increased almost 2.5-fold, to 6.6 million over the past six years. As a result, tourism has become one of the key sources of stable economic growth in the country. In 2017, revenue from related services amounted to $531 million, and in 2023, quadrupled to $2.143 billion. The industry now aims to further increase its volume of foreign tourists to 15 million, in addition to increasing that of local tourists to 25 million, and pilgrims to 3 million by 2030. According to Yakubov, Uzbekistan is on course to double the availability of hotel beds, increase the number of tourist mahallas (local communities equipped to receive tourists) to 175, and has set a goal to increase the annual export of tourism services to $5 billion through attracting private investment. Citizens from 91 countries can currently visit Uzbekistan without a visa.

Central Asia Uzbekistan Uzbekistan Business & Economy Uzbekistan Local Politics

Uzbek Enterprises That Employ Returned Labor Migrants to Receive Subsidies

Uzbekistan has adopted a presidential decree entitled, “on the improvement of labor migration processes and additional measures to support persons engaged in temporary work abroad,” according to a report released by the Ministry of Justice. In accordance with the decree, a subsidy of 500,000 Uzbek som ($39.50) per month will be paid to employers for each worker who has returned from labor migration from June 1, 2024 (including federally funded organizations, state enterprises, and legal entities with a state share of 50% or more in the charter capital excluding individuals). Persons who have returned from labor migration are classified as those who have worked abroad for three or more months and returned to their place of residence less than a year ago. According to this decree, the subsidy will be paid out to employers for each person hired from June 1, 2024, to January 1, 2026; the basis for subsidy payment will be an employment contract concluded with a person returning from labor migration and registered in the Unified National Labor System (yagona milliy mehnat tizimi). From June 1, 2024, the following social benefits will also come into effect: - free medical examination of persons returning from labor migration and their family members, and; - the practice of providing free medical care to persons who have returned from labor migration and are suffering from a socially significant disease (as defined by the government). Additionally, starting from June 1, citizens going to work abroad will receive compensation to partially cover their expenses related to passing foreign language or professional qualification exams, formalizing a work visa, and purchasing a ticket.