Topic : The role of foreign investment in the development of economy

fierce competition

• high levels of labor in production costs

• high levels of raw materials in production costs

• to find better accommodation facilities of their capital
• maximize profits

• the process of globalization

• the need to integrate into the world economy

• the lack of internal reserves and financial resources in developing countries

• the stagnation of production, the economic crisis

• the state budget deficit and others

• Reasons for international movement of capital.

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• Objective need to attract foreign investment in the economy of the Republic of Uzbekistan

• foreign investment contribute to improve of production processes in the country, GDP growth; foreign investment is required to improve the quality of domestic products and its compliance with international standards, the increase in exports, etc.;

• foreign investment is required to undertake by state structural reform of the economy: in addition to mining and agrarian sectors, pays great attention to the development of industrial and processing sectors;

• foreign investment provide the basis for:
• accelerating scientific and technological progress, updating equipment and technology for the production of competitive products;

• foreign investment helps to create new jobs and to solve the problems of employment of the population;

• with the help of foreign investment the state implements the most important social programs and projects;

• support and development of small businesses and so on.

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• Rate of growth attracted investment in the Republic of Uzbekistan, in percent

• We spoke about necessary of attraction foreign investment to the country and about important role of investment in development of the national economy, we can say that in past year to the economy of the country investment were attracted in amount 13 billion dollars USA and this factor grew on 11,3 % to the past 2012

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• Rate of growth investment, in % to the last year and share investment in GDP,%

• In whole attracted investment more then 3 billion dollars USA is foreign investments, and more then 72 percent of these foreign investments (or 2 billion and 200 million U.S. dollars) are strategic foreign investments.

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Sources of the financing	2005	2006	2007	2008	2009	2010	2011	2012	2013
The State budget	12,7	10,7	9,0	9,0	8,1	7,4	5,1	4,8	4,7
Foreign investments	19,2	19,0	22,8	25,8	32,4	28,8	25,3	25,5	23,2
Sources of enterprises and population	60,3	60,0	59,0	53,9	46,9	47,3	49,0	42,5	47,0
Other sources	7,8	10,3	9,2	11,3	12,6	16,5	20,6	27,2	25,1

• Dynamics of changes in the share of each source of financing of investments of Uzbekistan in the total amount
• (2005-2013 years)

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• According to the Law of the Republic Uzbekistan "On foreign investments", "foreign investors in the territory of the Republic of Uzbekistan may be:
• :

• International organizations based in accordance with the agreements;

• Legal entities, any other partnership or association, founded and operating in accordance with the legislation of foreign states;

• Individuals who are citizens of a foreign country;

• Stateless persons and citizens of the Republic of Uzbekistan residing abroad for a long time.

• Foreign states, administrative or territorial agencies of foreign states;

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Material		Financial		Intellectual property		Other
- buildings; -construction; - equipment; - transport facilities; - other		- cash; - loans; - insurance policies; - securities.		-copyrights; -know-how; -licenses; - other		-The rights of ownership and use of land and other natural resources, buildings, structures, and rewards of ownership entitlements - other.

• Foreign investment resources include:

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• Foreign investments divided into two groups by strategic objectives:

• Direct investments
• (strategic)

• Indirect investments
• (portfolio)

• Enterprises

• Financing of projects

• Financial resources

• Financial markets

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• Types of foreign investments in accordance with Methods of the International Exchange Fund

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• Foreign private investments (embedding private investor in objects, placed outside of territory given state);

• By ownership foreign investments divided:
•  

• Mixed investments (financing of investment projects which realized together by state and private investor)

• Foreign state investments (the facility of the foreign state budget);

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• The enterprises with foreign investments on the territory of the Republic of Uzbekistan are enterprises in which foreign investment is not less than 30% of shares or the authorized capital. They operate in any organizational and legal forms not contradicting the legislation of Uzbekistan. According to the law, the share of the foreign investor should not be less than 150 thousand dollars.

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• The main forms of attracting foreign investment

• Equity participation in the statutory funds and other assets of business entities, banks, insurance companies and other enterprises established with individuals and legal entities of Uzbekistan;

• Creation and development of business entities, banks, insurance companies and other enterprises wholly owned by foreign investors;

• Investments to intellectual property rights, including copyrights, patents, trademarks, know-how, and goodwill;

• Acquisition of concessions, including concessions for exploration, development, production or use of natural resources;

• Purchase of property, shares and other securities, including debt securities issued by residents of the Republic of Uzbekistan;

• The acquisition of proprietary rights to the objects of trade and service, on premises, together with the land on which they are located, as well as the rights of ownership and use of land and natural resources. Foreign investors may invest in other forms, not contrary to law.

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• Attracting of direct investments to the economy of the country

• Development of competitions

• Influence of competitions on increase production

• Influence of direct investments on development of the national economy:

• Production to high-quality products and services

• Attraction of the leading technologies

• Output to international market

• Carry out structural reforms in the country and
• development of innovation projects

• Economic growing

• Strategy of the development of the investment base of Uzbekistan

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• Law of the Republic of Uzbekistan
• “On investment activity”

• Law of the Republic of Uzbekistan
• “On foreign investments”

• Law of the Republic of Uzbekistan
• "On guarantees and measures of protection of the rights of foreign investors"

• The main objectives of these Acts are:
• Promote the development of the economy of Uzbekistan and its integration into the world economy by stimulating the inflow of foreign investment;
• Recruitment and management of foreign financial, material, intellectual and other resources, new, modern foreign technology and management experience.

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