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Supporting Uzbekistan's Development Strategy in Key Policy Areas: Industrial Cluster, Cyber Security, S&T, and Insurance

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Supporting Uzbekistan's Development Strategy in Key Policy Areas: Industrial Cluster, Cyber Security, S&T, and Insurance 2015/16 Knowledge Sharing Program with Uzbekistan Sharing Program 2015/16 Knowledge 2015/16 Knowledge Sharing Program with Uzbekistan: Supporting Uzbekistan’s Development Strategy in Key Policy Areas: Special Economic Zone, Industrial Development, Public Budgeting and Postgraduate Education 2015/16 Knowledge Sharing Program with Uzbekistan 2015/16 Knowledge Sharing Program with Uzbekistan Project Title Supporting Uzbekistan’s Development Strategy in Key Policy Areas: Special Economic Zone, Industrial Development, Public Budgeting and Postgraduate Education Prepared by Korea Development Institute (KDI) Supported by Ministry of Strategy and Finance (MOSF), Republic of Korea Prepared for The Government of Uzbekistan In Cooperation with Ministry of Foreign Economic Relations, Investment and Trade of the Republic of Uzbekistan (MFERIT) Ministry of Finance of the Republic of Uzbekistan (MOF) Institute of Forecasting and Macroeconomic Research (IFMR) Program Director Siwook Lee, Executive Director, Center for International Development (CID), KDI Program Officer Nu Ri Leem, Research Associate, Division of Policy Consultation & Evaluation, CID, KDI Senior Advisor Bong Kyun Kang, Former Minister of Ministry of Finance and Economy (MOFE) Authors Chapter 1. Siwook Lee, Executive Director, Center for International Development (CID), KDI Mutalib Hojimurotov, Head of the Coordination of Free Economic Zones Division, Ministry of Foreign Economic Relations, Investment and Trade of the Republic of Uzbekistan (MFERIT) Chapter 2. Changik Jo, Professor, Hallym University Hoon Heo, Research Associate, Center for International Development (CID), KDI Saidjon Kodirov, Chief Economist, Ministry of Finance for the Republic of Uzbekistan (MOF) Otabek Fazilkarimov, Chief Economist, Ministry of Finance for the Republic of Uzbekistan (MOF) Chapter 3. Jong ll Kim, Professor, Dongguk University Zulfiya Asfandiyarov, Senior Researcher, Institute of Forecasting and Macroeconomic Research (IFMR) Sanjar Karimov, Junior Researcher, Institute of Forecasting and Macroeconomic Research (IFMR) Chapter 4. Seul Ki Choi, Professor, KDI School of Public Policy and Management Doniyor Djunaydullaev, Head of Project, Institute of Forecasting and Macroeconomic Research (IFMR) English Editor Green Service Government Publications Registration Number 11-1051000-000690-01 ISBN 979-11-5932-122-1 94320 979-11-5932-117-7 (set) Copyright ⓒ 2016 by Ministry of Strategy and Finance, Republic of Korea Government Publications Registration Number 11-1051000-000690-01 2015/16 Knowledge Sharing Program with Uzbekistan: Supporting Uzbekistan’s Development Strategy in Key Policy Areas: Special Economic Zone, Industrial Development, Public Budgeting and Postgraduate Education In the 21st century, knowledge is one of the key determinants of a country’s level of socio- economic development. Based on this recognition, Korea’s Knowledge Sharing Program (KSP) was launched in 2004 by the Ministry of Strategy and Finance (MOSF) and the Korea Development Institute (KDI). KSP aims to share Korea’s experience and knowledge with the partner countries to achieve mutual prosperity and cooperative partnership. Former high-ranking government officials are directly involved in the policy consultation to share their intimate knowledge of development challenges, and to complement the analytical work of policy experts and specialists who have extensive experience in their fields. The government officials and practitioners effectively pair up with their counterparts in the development partner countries to work jointly on pressing policy challenges and share development knowledge in the process. The program includes policy research, consultation and capacity-building activities, all in all to provide comprehensive and tailor-made assistance to the development partner countries in building a stable foundation and fostering capabilities to pursue self-sustainable growth. In 2015, policy consultation and capacity building workshop were carried out with 26 partner countries covering over 100 research agendas. As a new partner, Nicaragua and Visegrad Group were selected in consideration of the country’s policy demand, growth potential, and strategic economic partnership. The 2015/16 Knowledge Sharing Program with Uzbekistan was carried out with the aim of exchanging socio-economic development experience of two countries for improving Uzbekistan’s policy making capacity and achieving her socio-economic development. Under the active cooperation between two nations, the joint research and seminars were conducted in order to support the establishment of “Supporting Uzbekistan’s Development Strategy in Key Policy Areas: Special Economic Zone, Industrial Development, Public Budgeting and Postgraduate Education”. I would like to take this opportunity to express my sincere gratitude to Senior Advisor Mr. Bong-Kyun Kang, Project Manager and Executive Director of CID Siwook Lee, as well as the project consultants including Prof. Changik Jo, Prof. Jong Il Kim, and Prof. Seul Ki Choi for their immense efforts in successfully completing the 2015/16 KSP with Uzbekistan. I am also grateful to Executive Director Dr. Siwook Lee, and Program Officer Ms. Nu Ri Leem, and all members of the Center for International Development, KDI for their hard work and dedication to this program. Lastly, I extend my warmest thanks to the Uzbekistan counterparts, the Ministry of Economy, Ministry of Foreign Economic Relations, Investment and Trade, Ministry of Finance and Institute of Forecasting and Macroeconomic Research, program coordinators, and participants for showing active cooperation and great support. In your hands is the publication of the results of the 2015/16 KSP with Uzbekistan. I believe that KSP will serve as a valuable opportunity to further elevate mutual economic cooperation of Uzbekistan and Korea to a new level. I sincerely hope the final research results on the selected areas could be fully utilized to support Uzbekistan in achieving economic development goal in the near future. Joon-Kyung Kim President Korea Development Institute 2015/16 KSP with Uzbekistan ················································································································· 014 Executive Summary ································································································································· 017 Chapter 1 Improving Investment Climates and Export Performance in the Navoi FIEZ Summary ·················································································································································· 024 1. Introduction ································································································································· 025 2. Current Status of the Navoi FIEZ ································································································ 028 2.1. The Navoi FIEZ: Overview ································································································ 028 2.2. Advantages of the Navoi Region as a FIEZ Location ····················································· 031 2.3. Framework and Incentive Systems of the Navoi FIEZ ···················································· 033 2.4. Current Situation and Performance of the Navoi FIEZ ·················································· 047 3. Survey Analysis Targeting Resident Companies in the Navoi FIEZ ··········································· 054 3.1. Overview ··························································································································· 054 3.2. Survey Results ··················································································································· 055 4. Policy Evaluations and Recommendations ················································································· 062 4.1. Policy Evaluations ············································································································· 062 4.2. Policy Recommendations ································································································· 070 References ··············································································································································· 079 Appendix ················································································································································· 080 Chapter 2 Development of a Strategy to Improve the Healthcare Budget Process and Budget Expenditure Effectiveness in the Republic of Uzbekistan Summary ·················································································································································· 090 1. Introduction ·································································································································· 093 2. Budget Process of Korea: Concepts and Framework ································································ 095 2.1. Conceptualization of Government Budgeting ······························································ 095 2.2. Legal Framework of Korea’s Budget Process ································································· 098 2.3. Budget Process in Korea: Formation and Execution ····················································· 100 2.4. Budget Management Methods ······················································································ 103 2.5. Health Financing
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