This Is the Right Time to Invest in Uzbekistan Uzbekistan Main Facts
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This is the right time to invest in Uzbekistan Uzbekistan main facts Total area 448,000 km2 Total 33 million population 76 people Density per km2 Languages Uzbek, Russian, spoken English 2 Why Uzbekistan is an attractive investment destination? – Growing economy with supportive business climate Supportive business climate Growing diversified economy 1 Our President named FDI attraction We are one of the fastest growing 4 as a key priority for the country countries in the world with diversified economy structure 2 We are focused on economy liberalization We have abundant natural and 5 and created a set of attractive incentives labor resources – 3rd largest in the CIS 3 Our efforts bring results – Our political, economic, and investment 6 Uzbekistan improved by 90 points environment is stable and on World Bank Doing Business ranking predictable 3 1 Action strategy for 2017-2021 sets up investment climate and FDI attraction as key priorities President Strategic Priorities Key areas of the economic policy State and public institution improvement • Stable foreign exchange rate • Modernization of the economy Supremacy of the rule of law • Technology development Economic development and liberalization • FDI promotion and investment climate Development of the social sphere • Private property protection mechanisms • Tax system Security, interethnic harmony, and religious tolerance, and constructive foreign policy • Banking system and financial markets 4 2 Liberalization of currency regulations No more constraint for private business development and FDI flows starting September 2017 What it is now… The volume of currency purchase and sale increased You earn revenue – it is yours. This is a fair play 1.5 times since the opening of the conversion and amounted to $ 1.3 billion. Exchange rate is determined by the free market Foreign exchange currency reserves increased by 1.1 billion USD during the year. Buy as much as you need. No constraints We believe in the market economy! 1 At a fixed non-market exchange rate 5 World Bank Doing Business ranking: 90 points improvement in the past 6 years 2012 2018 157 Comoros 71 Ukraine 158 Suriname 72 Greece 159 Mauritania 73 Indonesia 160 Afghanistan 74 Mongolia 161 Cameroon 75 Jamaica 162 Togo 76 Uzbekistan 164 Iraq 77 India 165 Lao PDR 78 Oman 166 Uzbekistan 79 Panama 6 4 World’s 5th fastest growing economy in 2015-16 and expected to be in the TOP-3 by 2019 Total GDP Historical GDP growth, % Bn USD Uzbekistan 7.8 67 Tajikistan 6.9 7 Turkemnistan 6.2 36 Kyrgyzstan 3.8 7 Turkey 2.9 858 Georgia 2.7 14 Kazakhstan 1.0 134 Russia -0.2 1 283 Azerbaijan -3.1 38 SOURCE: World Bank for 2016 7 Uzbekistan main facts about resources Cotton Vegetables Gold Uranium Copper Zinc Gas/oil Wheat Melons and gourds Fruits Nukus Found in all regions of Uzbekistan Tashkent Namangan Urgench Navoi Jizak Andijan Bukhara Ferghana Samarkand Karshi Natural Over 1800 Termez resources mineral reserves 8 Uzbekistan is a country rich in deposits More than 2,700 deposits About 100 kinds of mineral raw materials. Explored more than 900 deposits The total mineral and raw material potential - more than 3.3 trillion USD. Large reserves of coal - ranked 2nd in Central Asia. Reserves of such minerals as uranium, copper, gold, natural gas, tungsten, phosphorites, potassium salts, kaolin, - leading positions all over the world. Reserves of uranium and copper - the top ten countries in the world. 40 deposits of precious metals have been explored. 9 Fruits and vegetables in Uzbekistan 10 Price comparison of electricity Electricity prices by selected countries in 2017 (in U.S. dollars per kilowatt hour) India South Africa China Brazil Czech Republic Canada Poland 0,0252 USD/kWh Finland In Uzbekistan Slovakia Netherlands France U.S. Austria Sweden UK Portugal Spain Belgium Italy Germany 0. 0.05 0.1 0.15 0.2 0.25 0.3 0.35 USD/kWh Uzbekistan Source: https://www.statista.com/ 11 Price comparison of natural gas Natural gas prices for the residential sector as of 2016, by selected countries (in U.S. dollars per m3) Mexico Canada U.S. Turkey Poland Slovakia 0,123 USD/m3 South Korea Belgium In Uzbekistan UK Czech Republic Germany France Austria Ireland Netherlands Spain New Zealand Portugal Switzerland Sweden 0 0.2 0.4 0.6 0.8 1 1.2 1.4 USD/m3 Uzbekistan Source: https://www.statista.com/ 12 3 Attractive tax incentives Steady decrease of tax burden (in % to GDP) 45% 41% 38% 30% 23% 20% 19% 1991 95 2000 05 10 15 2016 1 excluding custom clearance fees 2 for 15%-30% export sales We have invested in creating attractive conditions for your business in Uzbekistan 13 5 One of the most populated countries in the region with free trade access to vast neighboring potential Neighbor countries with free trade agreements Population, in Mn Russia 144 Ukraine 45 Kazakhstan 18 Belarus 10 Other countries1 28 Outreach of free trade agr. 245 Uzbekistan 32 Total market access 277 Comparable to Brazil 1 Other countries include Tajikistan (pending final signing of free trade agreement), Kyrgyzstan, Turkmenistan, Moldova, and Armenia SOURCE: World Bank for 2016 14 5 Educated workforce of 18.5 mln people 65 higher education institutions and General literacy Largest workforce several international of the population in the region universities repre- is 97% sented in Uzbekistan Labor force in Mn ppl Literacy rates Uzbekistan 18.5 Spain 98.0 Kazakhstan 9.2 Singapore 97.0 Azerbaijan 4.9 Uzbekistan 97.0 Tajikistan 3.9 Upper middle income 95.0 Kyrgyzstan 2.6 countries average Turkmenistan 2.4 World average 86.0 SOURCE: World Bank for 2016 15 3 Free economic zones …and invite them to join one of the 21 FEZ to get full exemption from • Income tax and custom duties1 • Social infrastructure and uniform SME taxes Nukus-Pharm • Compulsory contributions to the Road Fund Boustonlik-Pharm Parkent-Pharm Kosonsoy-Pharm Khazarasp Angren Total projects: Navoi Jizak Kokand 259 projects Syrdarya-Pharm Gizduvan Total amount: Urgut Zomin-Pharm US$ 1811,3 million Including FDI: Boysun-Pharm US$ 565 million 16 Tax Preferences Residents of Free Economic Zones are exempted from all types of taxes if FDI amount is : US$ 10 million or more 10 years US$ 5 million – US$ 10 million 7 years US$ 3 million – US$ 5 million 5 years INVESMENTS US$ 0.3 - 3 million 3 years 17 IMPLEMENTED PROJECTS Number of projects 65 Cost US$ 464.4 million Foreign investments US$ 252.5 million Jobs (people) 4234 18 PROJECTS UNDER IMPLEMENTATION Number of projects 155 Cost US$ 1173.1 million Foreign investments US$ 289.8 million Jobs (people) 13760 19 PROJECTS AT THE STAGE OF AGREEMENT Number of projects 39 Cost US$ 173.8 million Foreign investments US$ 22.7 million Jobs (people) 2682 20 PRODUCTS MANUFACTURED IN FEZ “NAVOI” IMPLEMENTED PROJECTS Number 23 Cost 129.3 mln $ Foreign investments 41.1 mln $ 21 PRODUCTS MANUFACTURED IN FEZ “ANGREN” IMPLEMENTED PROJECTS Number 22 Cost 237.6 mln $ Foreign investments 163.1 mln $ 22 PRODUCTS MANUFACTURED IN FEZ “JIZZAKH” IMPLEMENTED PROJECTS Number 19 Cost 93.9 mln $ Foreign investments 46.6 mln $ 23 6 Stable political, economic, and investor environment Political Year of Economic Year of triple stability 26 independence stability 10 budget surplus State Substantial crises 0 0 internal debt Years of 0 political unrests Investor Legislative acts • “…foreign investors” protection and decrees on: • “…guarantees and measures to protect rights of foreign investors” • “measures to improve the system of protection of legitimate interests of businesses” 24 Companies with FDI in Uzbekistan 25 INVESTMENT OPPORTUNITIES BY INDUSTRY SECTORS TOURISM FOOD AND FOOD PROCESSING TEXTILE INDUSTRY CONSTRUCTION MATERIALS PHARMACEUTICAL INDUSTRY CHEMICAL INDUSTRY 26 Current projects in multiple industries need investments of almost $US 9 bn – and there are way more ideas and opportunities Metals 2.7 (30%) Textiles 1.7 (19%) Tourism 1.4 (16%) Construction 1.1 (12%) and infrastructure Chemicals 0.8 (10%) Oil&Gas 0.7 (8%) Power 0.1 (2%) Other 0.2 (3%) Total 8.8 (100%) SOURCE: КИ, Team analysis 27 Projects to invest (Chemical Industry) Ammonia and urea Synthetic washing detergents Cosmetics Plastic accessories for light industry Household water filters Toys for children 28 Chemical industry ESTIMATED COST PROJECT NAME REALIZATION PERIOD IN US$ MILLIONS Organization of sulfuric acid and 250 2018-2021 phosphoric acid (EPA) in Navoi Construction of a new sulfuric acid 105 2018-2020 production in Tashkent region (Almalyk) The construction of complex fertilizer 330 2018-2021 production JSC “Samarkandkimyo” Construction of the second stage of production of sulfuric acid and phosphoric 250 2026-2029 acid (EPA) in Navoi Organization of production of various types of dyes, pigments and inks JV 30 2025-2030 «Electrokhimzavod» Organization of production of film-forming bases nitrocellulose lacquers, 30 2018-2020 paints, enamels in the region of Navoi Construction & Building Materials Glass-crystallite Sanitary ceramics Natural stone (marble) Wood-polymer composite products Thermal insulating materials Locks (door, wall) Glass products (glasses, wine glasses) 30 Construction materials ESTIMATED COST PROJECT NAME REALIZATION PERIOD IN US$ MILLIONS Manufacture of plumbing in Tashkent 20 2018-2020 region Manufacture of architectural and 100 2018-2020 construction glass in Bukhara region Production of porcelain ceramic products 20 2018-2020 in Fergana region Production of heat-insulating materials and reinforcement from basalt in Navoi 20 2018-2020 region Production of linoleum in Tashkent region 5 2018-2020 Production of roofing materials in Tashkent 5 2018-2020 region Production of aerated concrete and gas block, polystyrene concrete in Tashkent 10 2018-2020 region Pharmaceuticals & Medical Equipment Medicaments for cardiovascular diseases Disposable tests Anabolic medicines Finished medicaments Various diseases vaccines Medical gloves Medical equipment 32 Pharmaceutical industry ESTIMATED COST PROJECT NAME REALIZATION PERIOD IN US$ MILLIONS Expansion of production of 1.0 2018-2019 medicines for children (syrups) Organization of production of 1.5 2018-2019 disposable medical instruments Organization of production of disposable infusion systems for In estimation 2018-2019 intravenous infusion of infusion solutions.