STARS International University
291
NEW BUSINESS
MODELS AND
FORECASTS OF
ECONOMIC GROWTH
IN UZBEKISTAN
UBAYDULLAYEV JAVOKHIR
STARS International
University student
ubaydullayevjavohir09@gmail.com
SAIDOVA MARKHABO
KHABIBULLO KIZI,
PhD., Associate Professor
marhabo.uzb@mail.ru
Abstract:
This article addresses the issues of improving ways to effectively use the do-
mestic potential of the textile and clothing industry. It also covers the development of the
textile and clothing industry and the effective use of domestic resources. In addition, indi-
cators have been proposed to identify the internal potential of the textile and clothing in-
dustry, and research has been conducted on their evaluation practices. The main indicators
of the structure of production capacity and the level of utilization of the internal capacity
of industrial enterprises have been developed. In addition, the export potential of the in-
dustrial sector of the Republic of Uzbekistan was analyzed and the export potential of the
Samarkand region was assessed. Conclusions and recommendations have been developed
to improve the effective use of the domestic potential of the textile and clothing industry.
Keywords:
Textile and garment industry, domestic potential of the industry, textile, in-
dustrial sector, domestic potential, export potential, corporate efficiency, innovation po-
tential, production potential, cotton yarn.
INTRODUCTION
In the context of globalization of world economic relations, Uzbekistan’s entry
into the global economic environment requires, first of all, the internationalization
of the national economy, the deepening of the international division of labor, and
adaptation to transcontinental competition in the market of raw materials and fin-
ished products. “The textile industry accounts for 5.2% of world trade and 6.1% of
industrial exports” [1].
Today, there are a number of problems at the macro and microeconomic levels
in the export activities of the textile and clothing industry. Solving these problems
requires integration into the world community, in particular, the formation of the
concept of economic development of modern textile and garment production in
the country and the development of a set of theoretical and methodological rec-
ommendations and practical proposals for building a marketing strategy for ex-
port opportunities.
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“By 2025, the total volume of cotton yarn produced in the country will increase
by 7 billion soums due to the processing of textiles. Therefore, it is very import-
ant to study scientifically the factors that actively affect the efficiency of export
activities of textile and clothing enterprises of the Republic in international mar-
kets [2].
In the first years of independence, Uzbekistan, unlike many other countries in
the Commonwealth of Independent States, has chosen a specific path of transition
to a market economy and has consistently implemented it. In order to continue
the positive changes in the economy, and further improve the welfare and quality
of life of the population, the President of the Republic of Uzbekistan approved
the “Action Strategy for the five priority areas of development of the Republic of
Uzbekistan in 2017–2021”. The third direction of the Action Strategy is aimed at
developing and liberalizing the economy, and the following tasks should be ad-
dressed [3]:
– further strengthening macroeconomic stability and maintaining high econom-
ic growth rates;
– deepening structural changes, increasing its competitiveness by modernizing
and diversifying the leading sectors of the national economy;
– modernization and accelerated development of agriculture;
– continuation of institutional and structural reforms aimed at reducing state
participation in the economy, protecting the rights of private property and further
strengthening its priority position, stimulating the development of small business
and private entrepreneurship;
– comprehensive and balanced socio-economic development of regions, dis-
tricts and cities, effective and optimal use of their existing potential.
In the medium term, it is planned to implement a program of measures aimed
at strengthening the revenue side of local budgets. The program of measures en-
visages increasing the revenues of local budgets by expanding the production
capacity of the regions.
Referring to the results achieved in 2017 on the basis of the Action Strate-
gy for 2017–2021, President of the Republic of Uzbekistan Sh.M. Mirziyoev said:
“In 2017, we have taken the first steps towards modern, meaningful and effective
reforms in the economy. A number of laws, decrees and resolutions, well-thought-
out programs have been adopted and are being consistently implemented to or-
ganize and further liberalize our economy on a completely new basis, improve its
legal framework, modernize and diversify production. In a short period of time, 161
large industrial facilities have been commissioned in the country. For us, this will
have an impact on the future development of the textile and clothing industry.
ANALYSIS OF RELEVANT LITERATURE
The issues of development of industrial sectors and effective use of domestic
potential in them were discussed by foreign scientists A. Lavopa, K. Ding, H. Chang,
Dj. Gibson, T. Berry, V. Dissolved in the scientific work of Lapidus et al. I. from sci-
entists of the CIS countries. Radionova, V. Vidyapina, G. Latfullin, V. Gruzinov, L. In
the works and scientific works of Basovsky and others, issues related to this area
of research have been studied in detail [5].
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Problems of development of industrial sectors and effective use of domes-
tic potential in them were discussed by one of the leading economists of the
country S. Guyaomov, I. Iskanderov, K. Abdurakhmonov, B. Khodiev, A. Ortiqov,
E. Makhmudov, A. Yusupov, A. Qodirov, N. It has been studied in the scientific
works of Makhmudov and others [6]. The research and works of the above sci-
entists, their conceptual views are an important scientific and methodological
source. As in other countries, the issues of modeling of socio-economic pro-
cesses are the subject of scientific interest of economists of the republic in this
area.
In particular, well-known economists of our country V.Q. Qobulov, S.S. Guly-
amov, N.K. Aimbetov, T.Sh. Shodiev, O.M. Abdullaev, R.X. Alimov, B.Yu. Xodiev,
N.M. Makhmudov, B.T. Salimov, Sh.R. Kholmominov, S.K. Salaev, B.A. Begalov,
R.T. Dalimov, X.S [7]. Mukhitdinov I.S., Abdullaev A.T., Kenjabaev S.A. In-depth
study of modeling and forecasting of production in Umarov’s scientific works,
modeling of socio-economic processes in complex environmental conditions, fore-
casting of small business development trends, factors and econometric models of
sustainable socio-economic growth, modeling of formation and development of
agriculture and rural labor market [8]. However, in the above research, the issue
of modeling the development trends of the industry of the republic has not been
studied as a separate object of scientific research. On the other hand, the cur-
rent research features and processes of industrial development of the republic are
taken into account in the research work, which provides ample opportunities to
determine the relevance, purpose and scope of the chosen research topic. At pres-
ent, taking into account the situation in the country, the existing potential and the
peculiarities of development, the problem of effective use of domestic potential in
the development of the industrial sector has not yet been fully explored.
Internal capacity is a source of industrial development, which, according to the
author, determines the future development potential of industrial sectors, the ef-
fective use of existing internal opportunities ensures the development of the in-
dustry [9]. At the current stage of development of the market economy, in the
process of diversification of the economy, with the introduction of family business
and home-based work in industry, their labor activity and living standards of work-
ers are closely linked.
RESEARCH METHODOLOGY
Our research was conducted in order to improve the textile and clothing indus-
try and effectively use the production potential, and identified tasks to increase
the export potential of the country. The methods of comparison, grouping, eco-
nomic statistics were widely used in the research process. The results of the study
proposed a methodological approach to the implementation of a form of manage-
ment that allows textile enterprises to use their production capacity in accordance
with market demand.
ANALYSIS AND RESULTS
In monitoring the interaction of counterparties, it is necessary to answer the
question «Is the activity of all enterprises included in the innovation group as a
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single unit more effective than the results of individual activities of each enter-
prise, and if so, to what extent?» To do this, it is an indicator of the effectiveness
of cooperation. It was determined by the ratio of the efficiency of the innova-
tion group to the average efficiency of the enterprises within the innovation
group [10]:
OX= (1)
HereZ – integrated efficiency of the innovation group,
E – average efficiency of enterprises within the innovation group.
The regional society “Janubipaksanoat” is engaged in collecting innovations of
innovative projects of silk enterprises in Bukhara region, conducting research in
various fields, receiving orders from enterprises and firms and selecting executors,
organizing innovative activities of enterprises in the regional branch of the associ-
ation, selecting investors.
The activities of the innovation group are supervised by the Department for
Work with Scientific Institutions of the Uzbekpaksanoat Association. The activities
of each enterprise within the innovation group should be constantly monitored. To
ensure this, a corporate performance indicator was identified for each enterprise.
The corporate efficiency of each enterprise is calculated according to the fol-
lowing algorithm [11]:Z
ig
1. The contribution of each enterprise cost (DZi) to the cost of the entire innova-
tion group was determined. It is found by the following formula:
DZi= (2)
In this caseZ
ki
– i – costs of the enterprise;P
ig
Z
ig
– is an innovative group cost.
2. The contribution of each enterprise to the benefit of the entire innovation
group (DP):
DP
(3)
In this case,
– i- is the net profit of the enterprise;
– the net benefit of the innovation group.
3. The Corporate Efficiency Coefficient (K
Ki
) is calculated separately for each
enter prise as follows: DP
ig
K
Ki
(4)
In order to better understand the production capacity, it is expedient to deter-
mine what are its constituent elements, which determines the complexity of this
concept, and the structure of production capacity is expressed below (Figure 1)
[12].
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Figure 1. The structure of production capacity
In addition to the identified comparative advantages, there are opportunities to
expand the export potential of the region (Table 1).
Today, the region has rich industrial sources of raw materials such as oil, petro-
leum and natural gas, natural gas, potassium salt, table salt, expanded clay raw
materials, limestone, marble, sand and gravel, cement raw materials. scattered [13].
Table 1
Promising areas for the development of export potential of Samarkand region
Regions
C
ott
on fiber
Pr
oc
es
sing of
agric
ultur
al pr
oducts
Building ma
terials
indus
try
Miner
als (limes
tone
,
dec
or
ativ
e s
tones,
expanded cla
y, and
brick r
aw ma
terials
)
Export of silk carpets,
suzana, and sa
tin
Exports of h
ydr
ocarbon
resour
ces (
oil, c
oal,
and lignit
e)
Export of silk r
aw
ma
terials
Kattakurgan
●
◙
◙
Aqdaryo
◙
●
●
Bulungur
●
●
●
●
Ishtikhon
●
●
Jomboy
●
●
◙
Qo‘shrabot
◙
●
●
●
Narpay
●
●
Payarik
◙
●
Pastdargom
●
●
●
Pakhtachi
●
●
●
◙
Samarkand
●
Nurobod
●
●
◙
Urgut
●
◙
Symbols:
● – high potential,◙ – medium potential
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The analysis shows that the reserves and use of natural and mineral raw materi-
als in the Kashkadarya region are characterized by the following features [14]:
●
Natural and mineral resources are accumulated in large deposits, which have
the potential for complex processing at the site of extraction;
●
Many types of minerals contain not only high levels of useful components but
also a large number of satellite elements;
●
Most deposits can be mined opencast, and ore beneficiation technology is
relatively simple. This technology allows us to produce of a large number of useful
components and get a product that is in demand in the world market.
It represents growth, cost-effectiveness, and maximum performance.
Table 2
The main indicators of the level of utilization of the internal
capacity of industrial enterprises
Value
The main symptoms of the condition
0,75-1,0
high level of internal capacity utilization in the enterprise; stability of the
economic and social situation in the enterprise; minimal additional production
costs; minimal losses until final product production is a high level of profit.
0,5-0,75
The presence of additional costs and losses in production;
The average level of internal capacity utilization;
Competitiveness of the enterprise;
The average level of stability in ensuring product quality;
The average level of stability of the economic and social situation.
0,25-0,5
Increased production costs and losses;
Low level of internal capacity utilization in the enterprise;
Low level of competitiveness of the enterprise;
Low level of product quality indicators;
Low level of economic and social stability.
Upered
≥
0,5 In this case, enterprises will be able to invest in the effective use
of their internal resources, improve technology, control product quality, increase
product profitability and reduce costs. As productivity increases in industrial en-
terprises, wages and gross incomes increase, which means that on the one hand,
the increase in wages has a direct impact on the growth of total incomes, on the
other hand, the increase in state budget revenues increases the number of social
transfers paid to the population indirectly affects income growth. We express this
process by the function (
Y
4
) [15]:
Y
4
=к*(k
2
Q+k
3
W)+к
3
Т (5)
In this case,
Y
4
is a function of income growth;
К
4
– income dependence ratio of enterprises;
К
3
–
coefficient of dependence of income on transfer payments;
Т –
increased amount of transfer fees.
К
4
coefficient is calculated as follows:
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k
4
= (6)
In this case, DI is the total income of the population.
К
5
–coefficient is calculated as follows:
K
5
(7)
Thus, based on the effective use of internal potential of industrial enterprises,
the general function of raising the living standards of workers can be seen in the
following form:
Y=y
1+
y
2+
y
3+
y
4
= +
k
1
W+(k
2
Q+k
3
W )+(k
4
.( k
2
Q+k
3
W)+k
5
.
)(8)
As a result of the increase in monetary income of the population (workers), their
consumption changes. This affects the living standards of the workers.
With additional funds remaining, the population can again use these funds as
capital investments for the development of industrial enterprises.
This process is constantly reaching a circular view. It is known that the above di-
rections are inextricably linked and can be expressed in the form of a multivariate
function:
Y=F (x
1
,x
2,
x
3,
x
4……
) (9)
Given the participation of many variables in this process and their implementa-
tion in the above directions, in general, this function is expressed as the sum of 4
functions:
The share of textile, clothing, and leather production is growing year by year,
from 16% in 2015 to 11.9% by 2020. The most important factor in the decline in tex-
tile production in recent years is COVID-19 (Table 3).
Table 3
Production of industrial products by type of economic activity (in percent)
Types of activities
2015
2016
2017
2018
2019
2020
Total:
100
100
100
100
100
100
including
mining and open-pit mining
9,7
8,1
10,3
12,3
13,5
9,0
processing industry
80,4
81,8
81,1
80,6
79,1
83,0
of which:
manufacture of textiles, clothing,
and leather products
16,0
16,7
16,3
14,5
11,8
11,9
electricity, gas, steam supply,
and air conditioning
9,2
9,4
7,8
6,2
6,8
7,4
water supply, sewerage system,
waste collection, and disposal
0,7
0,7
0,8
0,9
0,7
0,6
Source: Based on data from the State Statistics Committee of the Republic of
Uzbekistan.
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In addition, the dynamics of textile exports are growing from year to year. In
particular, in 2017, silk and silk products amounted to 30.9 mln. US $ 74.7 million by
2020. We can see that it has reached USD. In addition, ready-made garments and
garments amounted to 268.7 mln. 506.5 million US dollars. We can see that it has
reached USD. One of the main reasons for this is the modernization of technology
and the state’s attention to this area (Table 4).
Table 4
Dynamics of textile exports (million US dollars)
Brand name
2017
2018
2019
2020
1 133,6
1 300,3
1 626,9
1 922,2
Cotton yarn
631,3
726,6
926,1
940,7
Ready-made clothes and sewing clothes
268,7
289,6
354,8
506,5
Knitted fabrics
50,4
65,5
84,8
144,5
Silk and silk products
30,9
49,9
71,8
74,9
Cotton fabrics
53,8
65,7
69,2
96,8
Other textile products
31,7
36,1
51,9
88,8
Carpets
34,4
31,0
32,0
29,2
Cotton products
24,7
26,8
27,4
30,9
Others
7,7
9,0
8,8
9,7
Source: Based on data from the State Statistics Committee of the Republic of
Uzbekistan. In terms of countries, we can see the growth dynamics of textile ex-
ports, first of all, the qualification of the Russian Federation in 2018 alone amount-
ed to 542.8 million. US $ 655.5 million by 2020. Reached the U.S. dollar (Table 5).
Table 5
Dynamics of textile exports by countries (million US dollars)
States
2018
2019
2020
Russian Federation
542,8
592,3
655,5
People’s Republic of China
326,7
437,6
438,2
Kyrgyz Republic
70,2
96,6
283,9
Turkey
119,8
196,7
206,1
Poland
22,3
25,3
43,4
Kazakhstan
39,2
39,7
42,3
Tajikistan
8,7
13,7
34,7
Ukraine
18,8
29,5
33,1
Eron
25,3
55,2
26,4
Egypt
3,2
12,1
18,2
Republic of Belarus
23,3
24,1
17,2
Pakistan
5,5
10,4
16,5
Azerbaijan
5,9
10,9
12,5
Bangladesh
19,2
12,3
10,7
Other countries
69,2
70,5
83,5
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Source: Based on data from the State Statistics Committee of the Republic of
Uzbekistan.
CONCLUSION
The study concluded the following:
1. The development of industries is directly related to the effective use of the
internal capacity of enterprises, the effectiveness of internal capacity is assessed
by the level of physical and mental capacity of workers, the use of raw materials,
financial resources and production technology.
2. In the context of structural changes in the economy, there are many opportu-
nities for the effective use of internal factors in the development of industries. The
development of family business and home-based work in the silk industry, along
with increased efficiency in the industry, will improve the labor relations in it and
ensure the effective use of domestic opportunities for workers in the household.
3. The “circular motion model” of efficient use of internal capacity and increase
of workers’ interest in light industry enterprises shows that there are many internal
opportunities that are not used by workers, the effective use of which ensures the
rapid development of light industry.
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