―ИҚтисодиёт‖ факультети

 
The focus on transport sector: Tariff Reductions as a Means to Economic Growth 
 
Given Uzbekistan‘s remoteness from international seaways, the costs for shipping 
exported and imported goods are a critically important factor in securing a competitive 
position. The second half of the 2000s saw a significant increase in tariffs for trucking and 
freight rail transportation, and after 2010 there was a sharp jump in the cost of shipping 
services. High shipping costs, by impacting the final price of goods, may become one of the 
main obstacles to attracting investments, diversifying the economy and expanding exports. 
The shipping costs of entities involved in Uzbekistan‘s foreign economic activities 
range from 15-20 to 60-70% of the value of the cargo for ex-ports (depending on the type of 
goods), as opposed to 5-7% in the EU countries. The shipping component in the price of the 
bulk of Uzbekistan‘s consumer goods exports is 2.5-2.6 times higher than the world 
averages. Fluctuations in trucking tariffs are specially sensitive for Uzbekistan. 
As of today the transport sector accounts for 9% of Uzbekistan‘s GDP and 4% of its 
total employment
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. Transport, along with such sectors as electric power, the chemical and 
petrochemical industry, oil refining, machine building and metal-working, automaking, oil 
production, nonferrous metallurgy and construction, is one of the key sectors in 
Uzbekistan‘s economy, which provide multiplier effects on the development of other sectors 
in terms of both demand and supply. 
According to estimates, the economy‘s growth rate is heavily dependent on the 
upward trend in the volume of shipping services. Specifically, a continuation of 5-7% GDP 
growth must be accompanied by a 10% annual increase in the volume of freight shipments. 
Rail shipments must grow by 7.1% per year, and truck shipments, 10.5%. All this will also 
require an increase in investments of 15.1% per year. 
The growth of shipping costs, despite increasing investments in the transport sector and road 
construction, suggests that neither government-run nor private shipping companies are 
controlling costs effectively enough, confining themselves to merely increasing tariffs and 
passing along additional costs to customers. 
The transport sector is not providing a reduction in shipping costs for domestic 
producers‘ goods, which is critically important for increasing exports by SBPEs. The 
costliness of freight shipments and the rapid growth of shipping tariffs create risks for the 
sustainability of Uzbekistan‘s economic growth, and above all for the real economy. 
According to estimates by the World Bank, for most companies a 1% decrease in 
logistics costs is equivalent to an 8% increase in sales. If logistics expenses are optimized, a 
real improvement in the performance of Uzbekistan‘s enterprises is feasible already in the 
short term. 
The pricing mechanisms for domestic trucks and customs fees for im-ported vehicles 
should be revised in order to speed up the modernization and upgrading of the trucking 
fleet. With an 8% annual GDP growth in Uzbekistan, the volume of trucking shipments will 
increase by about 10.5% per year. To meet the demand for such shipments by 2020, the 
trucking fleet will have to be expanded to 62,000 vehicles. As of today, Uzbek private 
truckers operate about 34,000 vehicles. Therefore about 28,000 additional new vehicles will 
have to be pur-chased, i.e. an average of about 4,000 a year until 2020. The replace-ment of 
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Source: www.statista.com 

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at least 50% of the current trucking fleet will require the purchase of another 2,400-2,500 
trucks a year. Given the established prices for vehicles made by the MAN Auto-Uzbekistan 
joint venture and current customs fees for the truck imports, expenditures to purchase new 
vehicles will amount to about USD 4.3 billion over seven years. Under today‘s conditions, 
this could cause a further rise in shipping tariffs, make national producers and truckers less 
competitive and prompt a flow of capital from the trucking sector to other sectors. 
 
Ф. К. Фозилова – магистрантка, ТГЭУ