The Speech of the President of Uzbekistan Islam Karimov at the

meeting of the Cabinet of Ministers on January 17, 2014, dedicated to the summary of social and economic development in 2013 and main

priorities of economic program for 2014

• Summing up the results of the social and economic development of Uzbekistan in 2013, the head of the state emphasized that previous year marked continuation of our strategy on ensuring high sustainable growth, macroeconomic balance, modernization and diversification of the economy.

• In 2013, GDP grew for 8%, industrial output increased by 8.8%, agricultural – by 6.8, the volume of retail trade – by 14.8%. Inflation rate was 6.8%.

• External public debt amounted to 17% of GDP and about 60% to export volume.

• The state budget is executed with surplus of 0,3% to gross domestic product, the tax burden was decreased from 21,5 to 20,5%, and the minimum tax rate for individuals was reduced from 9 to 8%.

• The high share of expenses on the social sphere remained 59,3%

Qualitative changes in national economy

• Priority in the implementation of the priority development programs in industry adopted for 2011-2015, as well as the modernization, technical and technological renewal of production is given to the processing industry that manufactures 78% of the country's products.

• Such programs as machine building and metalworking (121%), building materials (113.6%), light industry(113%) and food industry (109%) have been intensively developing in 2013.

Measures on rapid growth of consumer goods production

•In 2013, the growth of consumer goods was accounted 14.4%

•Total national production input has almost doubled

The role of small business and entrepreneurship.

• In 2013, more than 26,000 small scale businesses were opened in the country (190,000 by the end of the year)

• small business sector composes 23% of total industrial output, 18% of exports, 75% of all employment in the economy.

Export potential of the country

• Export growth in 2013 - 10,9%.• Positive balance in the foreign

trade activity - 1,3 billion dollars. Gold and foreign currency reserves increased by 2%.

• Export shows the steady dynamics of the amount of export sales of products

• In 2013 non-commodity goods made up over 72% of export.

• Over 450 new enterprises are involved in export activities

Changes in agriculture

•In 2013, production of agricultural products was increased by 2.3 times. Agricultural production was increased by 6.8%, crop production - by 6.4% and livestock production - by 7.4%.

•Specific growth of agriculture in total GDP has declined.

•Grain production increased by 2 times, potatoes - by 3.1 times, vegetables - by 3.2 times, grapes - 2 times, meat and milk - by 2.1 times, eggs - by 3.4 times.

Changes in agricultural sector

• 7.8 million tons of grain, 8.4 million tons of vegetables, more than 3 million 360 thousand of tons of raw cotton has been collected.

• Reclamation of soil is improved, the area of land at critical groundwater level is reduced, area strongly and medium saline lands is decreased .

• The State program of complex measures on improvement of a meliorative condition of irrigated lands and rational use of water resources for 2013-2017. has been adopted

Service sector• Additional measures for

the accelerated development of a service sector in rural areas in 2013-2016 has been approved. Over 13 thousand enterprises for rendering services, branches of mini-banks, insurance companies, etc. have been created.

• The volume of rendered services increased by 13,5%.

• The total amount of credits increased by 30%.

• The cumulative capital of commercial banks has been increased by 25%.

• Capital adequacy ratio ranks by 24.3%.

• Liquidity of a banking system exceeds 65%.

• There are 49.7 banking institutions per 100,000 of adult population, and 1028 bank accounts per 1,000 people.

Service sector

• In 2013, it $ 13 billion of capital investment with growth by 11.3% were absorbed within the investment program (47%) were private investment. The bulk of investments were made in industrial construction (70%), while the part of investment in the acquisition of modern equipment amounted 40%. Investments in the economy of the country amounted to 23% of GDP.

• Out of all utilized capital investments foreign investments amounted to more than $ 3 billion, more than 72%, or $ 2.2 billion of which – are foreign investments.

Investments

• The creation of Fund for Reconstruction and Development considerably contributed to the attraction of foreign investments.

• In 2013 33 major projects for more than 780 million dollars were implemented with participation of Fund.

• In 2013 implementation of 150 projects in production by total cost of about 2,7 billion US dollars was completed within the Investment program.

• Production at 21 enterprises of the food industry was modernized and technically renewed.

Investments.

Special industrial economic zones.

Since the establishment of "Navoi“ SIEZ, enterprises within 19 investment projects totaling over $ 100 million have been opened on its territory. In 2013 the enterprises of the zone manufactured the products for over 100 billions sums with the growth of 25,8% in comparison with last year.

The production of hi-tech products within 5 projects with total amount of approximately 44 million dollars has started on the territory of SIZ "Angren" – energy saving LED lamps, copper pipes and etc.

•The industrial zone "Djizak" has been created in Djizak region, along with its branch in Syr-Darya region, where development of transport, producing and engineering communication infrastructure has been taking place.  3 projects with the participation of Chinese companies for total amount of approximately 6 million dollars on production of 100 thousand mobile phones and processing of livestock products have been implemented on the territory of the zone.

Special industrial economic zones.

Construction and reconstruction of road traffic and engineering infrastructure.

•Works on the construction and reconstruction of the national highway roads were conducted, 530 km roads were constructed. Setting up a four-band cement-concrete covering of Guzar-Bukhara-Nukus-Beyneu road, 18 km four-band asphalt concrete covering on the road Tashkent-Osh, through the pass of Kamchik, a 15 km site of the road Tashkent-Osh are completed.

• Electrification of railway sites of Marakand-Karshi and Karshi-Termez wasconducted in 2013 .

• The construction of a new electrified railroad Angren-Pap (to connect the central part of Uzbekistan with Fergana Valley regions) was started.

Construction and reconstruction of road traffic and engineering infrastructure.

Information and communication technologies

• The following projects were implemented: "Modernization and expansion of the interurban centers of switching based on technology of new generation networks (NGN)", "Development of optical networks of broadband access based on the FTTx technology", "Development of the mobile CDMA-450 network with EVDO technology in the regions of the Republic of Uzbekistan".

• The transition to digital television by installation of 5 digital television transmitters in Dzhizak, Tashkent, Fergana and Khorezm regions is being carried out.

• Electronic forms and systems of data transmission, statistical, financial and tax accountancy were introduced.

• The volume of the government procurements made at the electronic auction amounted to 417 billions sum in 2013 .

• The system of payment of merchandise and services via Internet and mobile phones with use of the bank account and amount-based plastic cards was introduced.

Information and communication technologies.

Social welfare and social sphere development.

• About 970 thousand people were employed, more than 60,3% of them in rural areas in 2013 .

• More than 500 thousand graduates of professional colleges were employed. Over 140 billions sum of the preferential microcredits were allocated.

• Life of people in rural areas was improved through the fundamental change of the rural settlements’ visual environment.

Social welfare and social sphere development.

• 10 thousand comfortable houses with living space of more than 1,5 million square meters were constructed on 353 rural areas' streets in 2013 (growth of 17% in comparison with previous year).

• In April 2013, Tashkent international conference on the issues of modern housing construction was held.

• 28 new professional colleges were constructed, 131 professional colleges and the academic lyceums, 381 secondary schools and 45 higher educational institutions were restored. 55 schools of music and art for children, 112 children sports facilities and 4 swimming pools were put in commission.

• The continuous system of teaching foreign languages was introduced from the 1 grade of secondary schools.

Intensification of the reforms in educational system.

Intensification of the reforms in educational system

• More than 17 thousand of educational offices on teaching foreign languages were created. More than 538 thousand of textbooks on a foreign language with multimedia applications were published. About 2 thousand teachers of the foreign languages were educated, the total number of which reached 26 thousand. Highly skilled teachers of English language are involved to rural areas . The 30 percent extra charge to tariff rates was established.

•The system of primary medical and sanitary help was transited to the principles of family medicine in 2013.

•The general coverage of medical examination of fertile-aged women, children and teenagers was provided.

•the investment rate in the sphere of healthcare increased in 3,8 times in 2013 . 295 medical facilities were reconstructed and comissioned.

.Intensification of the reforms in educational system

Income of the population.

•Income of the population increased by 16%, the average monthly salary of budgetary organizations employees, the scale of pensions, social benefits and scholarships increased by 20,8%.

•The average scale of pension in Uzbekistan by the average salary is 37,5%.

Income of the population.

•Income and savings growth has increased the purchasing power of the population. For the period of 2000-2013, consumer expenses of the population have become 9.5 times higher.

•Families’ provision with household durables. The equipment of families with modern appliances, cars has increased.

The main objectives and priorities for advancing the economy in 2014 are determined by primarily long-term program objectives of the country, continuation of the adopted strategy that ensures consistently high rates of economic growth, mobilization of available resources and opportunities.

• GDP growth is planned by 8.1 %, industry - by 8.3 , agriculture - 6% , retail trade - 13.9%, market services - by 16.2 % , increasing their share to 55%.

• Further reduction of the tax burden is planned, reducing the tax rate on corporate income from 9 to 8% , lowering the minimum tax rate on personal income from 8 to 7.5%.

• It is planned to release and leave at the disposal of enterprises over 130 billion of soums, guiding them to increase their working capital, modernization and technological renewal of production, which will increase the population incomes by more than 90 billion of soums.

•The refinancing rate of the Central Bank has been lowered from 12 to 10% since 1 January 2014.

•2014 will be the year of commissioning the most important high-tech and modern facilities and capacities in the industry.

•Total investments will amount to the equivalent of $14.3 billion.

•More than 73% of all investments are going to be sent to industrial construction and 40% of capital investments are going to be directed to the purchase of machinery and equipment.

• It is planned to master more than $3.9 billion of foreign investment .

• The volume of investments in 2014 will be increased by 22.4%.

• Commissioning of more than 150 large industrial facilities is scheduled.

• Completing the projects : "The expansion of production capacity of Dehkanabad potash fertilizer plant from 200,000 tons to 600,000 tons," "Production of passenger cars models "Damas" in Khorezm region," etc.

• The construction of the complex on the Ustyurt Surgil deposit, production of synthetic liquid fuels based on purified methane Shurtan GCC are planned.

Power industry.

• Talimarjan TPS expansion through the construction of two combined cycle power plants with 450 megawatt, the construction of combined-cycle plant at Tashkent TPS and the expansion of Navoi TPS are planned.

The chemical industry

• It is planned to bring up the 2nd queue of Kungrad soda plant, as well as the production of methanol, ammonia and urea at JSC "Navoiazot" and other facilities.

•Comprehensive support and further promotion of small business and entrepreneurship should be an important focus of our activities in 2014.

•Implementation of the principle of business entity’s priority rights.

•In terms of business registration Uzbekistan rose by 66 positions and is on the 21th place among the 189 countries included in the ranking, in the sphere of credit . The rating has increased by 24 positions.

Formation of business environment.

Formation of business environment.

• Recognizing that the state of the business environment and business conditions in Uzbekistan does not fully comply with the requirements and principles of the free market economy, international norms.

• Paying attention to further shortening, simplifying and cheapening of licensing procedures for the organization and business activity.

• Making the transition to electronic processing of permits and licensing procedures, providing interactive utilities and services on tax and customs certification.

• Implementing the measures for the development of electronic commerce.

Social development.

•Formation of and employment of population, housing and community amenities, further reform and improvement of the educational process and healthcare.

•The social sphere is to be invested with 60% of all expenditures of the state budget.

•Creation of about 1 million working places. •This year, the labor sphere will get about

500 thousand young people - graduates of professional colleges.

Provision with comfortable accommodation

•In 2014, 11,000 standard houses with total area of 1.5 million square meters are to be built in 388 rural residential areas.

•Rural residents should not only get comfortable houses , but also villages equipped with all the necessary engineering and transport communications, facilities of social and market infrastructure.

Education sphere in 2014

•Reconstruction and overhaul of 380 schools and 161 vocational colleges and academic lyceums are to be financed over 410 billion soums.

•Special attention should be paid to the modern high-tech and training equipment of training workshops in professional colleges.

•In 2014, it is planned to allocate 173 billion soums for construction, renovation and equipping of 34 higher educational institutions.

Further reforming of healthcare system.

• In 2014, the funds allocated for strengthening the material-technical base of health, will account more than 407 billion soums.

• In 2014, construction of a specialized multidisciplinary pediatric clinic of the highest international standards, 4th level is to be started, funded by the Government of the Republic of Korea in the amount of $103 million.

• At the expense of the Fund for Children Sports Development 107 billion soums are to be allocates for the construction and reconstruction of 115 children sports facilities.

Conclusion

•The President of Uzbekistan Islam Karimov said in a conclusion - "Our goal is to continue and deepen the reforms we have initiated, updating and modernizing our economy and to ensure sustainable growth of the level and quality of our life, to be equal among equals – to take the rightful place in the community."...