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  • The expansion of industrial cooperation to maximize the effects of the formation of value chains and acceleration of structural reforms in the economy

The expansion of industrial cooperation to maximize the effects of the formation of value chains and acceleration of structural reforms in the economy

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Duration: August 2016 - December 2016

The expansion of industrial cooperation to maximize the effects of the formation of value chains and acceleration of structural reforms in the economy

In the interest of maintaining high rates of economic growth and further socio-economic development by 2030 in Uzbekistan, it is planned to implement the structural transformation of the economy to increase the share of industry from 33.5% to 40% and to insrease the share of the manufacturing industry by 2.5 times. 

In most countries that have succeeded to realize a sharp increase in the manufacturing industry in a short time period and to support high economic growth for more than 15 years, a key driver of this growth was the maximum involvement of industrial cooperation potential. This effect is achieved on the one hand, by increasing complexity of products in the sectors of the economy, and on the other - by involvement the chain of new enterprises (suppliers) to reduce production costs and increase its quality through greater specialization.

In Uzbekistan, the target to stimulate industrial cooperation is carried out mainly in the framework of regularly received localization programs. The mechanism involves the implementation of import substitution and strengthening of the country's industrial potential through the development of local raw materials and expansion of cooperation between enterprises in the realization of localization projects.

In this way we achieved undoubted successes. Since 2000, due to localization projects, import-substituting production has increased more than 220 times, including trucks, cars, machinery, oil and gas and chemical equipment, various chemical products, electrical appliances and others. It makes possible to carry out an annual import substitution in the amount of US $ 7 billion. Since 2009, the government also encourages enterprises to expand exports of localized products, including the involvement of local producers in the international value chain. At present, there are already several examples of successful integration of domestic enterprises into the international chain - e.g. the automotive industry enterprises started supply of components in the global network. The company "GM", the company "Artel" and its subsidiaries produce components for Chinese enterprises "Midea".

However, the mechanisms of formation and implementation of localization program as the main instrument to stimulate industrial cooperation, as well as a set of measures and policies in different areas of support for import substitution are not sufficient for the expansion of intra and inter-sectoral cooperation. To make full use of industrial cooperation as the driving force of the structural reforms, , it is necessary to expand the use of market management tools in the foreseeable future.