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Recent Socio-Economic Developments Recent Events
The government has initiated bold reforms The authorities have undertaken ambitious reforms that have delivered improvements to Uzbekistan’s business and investment climate and are likely to boost economic growth over the medium term. Reforms include changes to the currency and tax systems, the lifting of state monopolies in some sectors (for example, fruit and vegetable exports), and the opening of the banking sector to foreign investors2. The government has also opened the previously-closed borders with Uzbekistan's neighbors and has initiated regional transport links to foster new trade and investment opportunities in Central Asia. The government’s medium-term economic reform priorities through 20213 include improving the business environment for the private sector; introducing public-private partnerships (PPPs)4; strengthening the corporate governance of state-owned enterprises (SOEs) and subsequently carrying out selected privatizations; reforming agriculture (reducing land under cotton cultivation, introducing direct contracts for cotton farms with textile companies, prohibiting the use of forced labor); improving statistics; strengthening the independence of the central bank and implementing banking sector reforms; deepening trade liberalization and resuming efforts for Uzbekistan’s accession to the WTO; reforming tax policy and tax administration; and enacting public procurement, administrative, and social service reforms. Reform implementation gained momentum in 2018 and early 2019 Significant tax reforms, which were implemented on January 1, 2019, included the establishment of a unified tax rate of 12 percent for personal income tax, corporate income tax, and payroll tax for both large and small firms. Other changes included the reduction of the unified tax rate for small firms to 4 percent, the property tax rate from 5 percent to 2 percent and the dividend tax from 10 percent to 5 percent.
The government adopted the Strategy for Innovative Development in September 2018, which includes quantitative targets for 81 indicators to be achieved through 2030.5 The Strategy prioritizes human development as a key factor in competitiveness, emphasizes basic and tertiary education, and removes administrative barriers for business and the private sector. Recently, the government has approved the Sustainable Development Goals (SDGs) to national needs, including plans to help vulnerable groups, with 16 national SDG goals with 127 related targets, as well as the coordination council and roadmap to achieve that6 . The additional spending needs for achieving SDGs are estimated by IMF at around 9 percent of GDP each year until 20307. Price liberalization continues To reduce the high cost of trading across borders, the government abolished export permit and licensing requirements for wholesale traders in October 2018. During the second half of 2018, the government liberalized bread prices and increased energy prices for firms closer to cost-recovery levels. Broad-based increases were made to the country’s energy tariffs in November 2018: electricity prices were raised by 9.3 percent for individuals and by 40 percent for businesses; natural gas tariffs were increased by 10.9 percent for households and by 100 percent for businesses; prices for petroleum products were also raised. The next energy price increase is scheduled for June 2019. Tariffs on cold waterwere increased in April 2019 by 23.5 percent for households with centralized supply and by 16.3 percent for households with non-centralized supply. Entry visas eased to promote tourism and business On February 1, 2019, the government introduced a visa-free regime for citizens of 45 economies, including many European and Western countries. On March 1, the government introduced a new type of three-year visa for investors and their family members that can be renewed without leaving Uzbekistan. Investors who invest a minimum of $3 million in Uzbekistan can obtain a 10-year residency permit.
Conclusion
As a way of conclusion, I can say that the reforms have a huge impact on the development of the economy in Uzbekistan. And, the rate of GDP n sectors has been decreasing slightly due to some unclear reasons. It can also be predicted that the economy will hopefully prosper in the foreseeable future with the help of reforms and job creation
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