President: “We all still in thrall of old stereotype of thinking”

Uzbek leader said: “I think that there is no need to talk about the fact that large-scale programme goals and objectives envisaged for 2014 require the mobilization of all our sources of growth, as well as the further strengthening of reforms and settlement of problems that put obstacles on the path of the economic development of our country”.

“I am referring above all to the formation of a full-fledged competitive environment in the country, which is known to be a key factor in technical and technological renovation and modernization of production, as well as access to world markets,” he said.

He said that it should be acknowledged adopted programme measures in this direction do not meet modern equipments. “We all still in thrall of the old stereotype of thinking and we did not get rid of old-dated planning and distributing system. He said it is wrong to think that tax preferences and protection measures will allow to survive in rigid competitive environment.

He said that officials are not considering the fact that these measures are harming businesses, decreasing their income and income to the budget. The preferences and benefits cannot be provided forever. In open economy, the enterprises should compete with foreign businesses both in internal and external markets.

“I think now it is not the time to be involved in explanations and clarifications on these issues, but it is time to be more determined and get rid of those officials who obviously do not want or cannot abandon old stereotypes and management practices. It is time for us to rely above all on trained and modern-minded managers,” he said.

Islam Karimov said: “It is not secret that high production costs, the high consumption of materials and energy in production, and above all, the technological backwardness of the real sector of the economy are now becoming a serious barrier to competitiveness.”

“A technical audit, which covered more than 500 companies in the real sector and over 160,000 units of the equipment used by them, found that over 30% of equipment was outdated, including 44% of equipment in the energy industry, 37% in mechanical engineering, 21% in the chemical industry, 20% in the manufacture of construction materials, 19% in the food industry and 8% in the light industry,” Uzbek leader said.

“In all, 172 unprofitable enterprises, 112 of which have already restored production operations and got new owners, were transferred to the balance sheets of commercial banks in 2009-2013. Forty three enterprises remaining on banks’ balance sheets upgraded production activities and 17 of them are working to upgrade production. Investments worth 316 billion soums were channelled in the implementation of modernization and restoration of production activities in these companies, where over 9,000 jobs were created,” Islam Karimov said.

“However, there are more than 140 enterprises, including 67 major enterprises, that are unprofitable. In all, 10 of them are in industrial production, including the agricultural machinery industry, as well as chemical, electrical and pharmaceutical industries,” he added.

He said that such major engineering enterprises as the Tashkent Tractor Plant, the open joint-stock company Agregatnyy Zavod, the open joint-stock company Chirchiqqishloqmash, the open joint-stock company Uzpakhtamash are in dire financial condition.

“Despite the fact that the country has a great demand for a variety of lighting devices, such major chemical companies as the open joint-stock company Samarqand Chemical Plant, the open joint-stock company Jizzakh Plastmassa and the open joint-stock company Onyx in Tashkent are not in good position,” Islam Karimov said.

He said that the existence of 26 loss-making companies in the public sector, as well as 13 of insolvent enterprises in the field of road construction give rise to concern.

The Cabinet of Ministers, the Ministry of Economy and the Ministry of Finance together with relevant bodies should draw up and approve a programme - a “road map” to resolve the financial crisis and actual bankruptcy in the aforesaid companies in a three-month period, he added.

Those companies, on which these measures will not have an effect, should be sold to private individuals at zero cost, Uzbek leader said.