Lessons 6 · 1 lessons · N. Jo‘rayev, A. Zamonov. History of Uzbekistan (the period of independence): textbook for Grade 11 pupils of secondary schools and for secondary specialised and vocational institutions. 1st edition. G‘afur G‘ulom Publishing and Printing Creative House, Tashkent, 2018
6
Raising production capacity and integration into the world economy
Textbook: pp. 46–51
GoalDescribe the stages of economic modernisation, small-business support, free economic zones, the tax system and currency convertibility.
New words
import substitution: producing at home goods that were previously imported · import o‘rnini bosishfree economic zone: a defined territory with special legal and tax conditions to attract investment · erkin iqtisodiy zonaconvertibility: freely exchanging the national currency for foreign currency · konvertatsiyaTax Code: the law that sets taxes and the rules for paying them · soliq kodeksi
Explanation
In the stage after 2000 the main tasks were to reduce the state’s intervention in the economy, guarantee entrepreneurs’ rights and modernise production; from 2002 a programme of import-substituting production and localisation was carried out. The 2000 law “On Guarantees of Freedom of Entrepreneurial Activity” simplified registration. A 1996 law defined free economic zones: the “Navoi” zone was set up in 2008, and the “Jizzakh” and “Angren” zones in 2013, offering investors customs and tax privileges. The tax system moved to a new edition of the Tax Code in 2008 and to a new Code from 2020; today value-added tax is 12 percent, and other rates are set by the Code. From 5 September 2017 legal entities and individuals were allowed to exchange foreign currency without restrictions, an important step towards convertibility of the so‘m. Uzbekistan cooperates with the World Bank and the International Monetary Fund and has stepped up negotiations to join the World Trade Organization.
Worked examples
Example: a manufacturer in a free economic zone makes goods for the world market, uses customs privileges on equipment and creates new jobs.
Example: convertibility lets a businessperson legally exchange so‘m for foreign currency to buy equipment from abroad.
Class activity
Zone project: groups prepare a short presentation for an imagined free economic zone, naming the sector (for example textiles), three benefits for investors and one risk.
Practice
1
How do the conditions of a company in a free economic zone differ from those of a company elsewhere?
Depending on the size of its investment it gets several years of tax and customs privileges and works under a special legal regime; in return it is expected to bring new technology, jobs and export goods.
2
From which date was unrestricted exchange of foreign currency introduced?
From 5 September 2017.
3
Why is import substitution thought to strengthen the economy?
Domestic production grows, less foreign currency leaves the country, jobs increase and dependence on external market swings falls.
4
In which years were the “Navoi”, “Jizzakh” and “Angren” zones set up?