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ECONOMIC SECURITY MEASURES IN SMALL BUSINESS ENTERPRISES IN
UZBEKISTAN
Jo'raqulova Muhlisa Jahongir qizi
Tashkent State University of Economics
2nd year master’s degree student of the Faculty of MBA (Master of business administration)
Shadibekova Dildora Abduraxmanovna
Scientific supervisor: doctor of Economic Sciences, professor.
https://doi.org/10.5281/zenodo.15093933
Abstract.
This article analyzes the measures being implemented to ensure economic
security for small business enterprises in Uzbekistan. The paper examines the legislative
framework for ensuring economic security of small business entities, state programs and their
effectiveness, as well as existing problems in ensuring security and ways to address them.
According to the research results, despite specific measures to support small businesses in
Uzbekistan, there are significant shortcomings in the area of economic security. The article
proposes an improved approach to ensuring the economic security of small business enterprises.
Keywords
: small business, economic security, Uzbekistan, measures, legislation,
digitalization, tax policy.
O'ZBEKISTONDA KICHIK BIZNES KORXONALARIDA IQTISODIY XAVFSIZLIK
MASALALARIDA OLIB BORILAYOTGAN CHORA TADBIRLAR
Annotatsiya.
Ushbu maqolada O'zbekistonda kichik biznes korxonalariga tegishli
iqtisodiy xavfsizlikni ta'minlash bo'yicha amalga oshirilayotgan chora-tadbirlar tahlil qilingan.
Maqolada kichik biznes sub'ektlarining iqtisodiy xavfsizligini ta'minlash bo'yicha qonunchilik
bazasi, davlat dasturlari va ularning samaradorligi, shuningdek, xavfsizlikni ta'minlash bo'yicha
mavjud muammolar va ularni bartaraf etish yo'llari ko'rib chiqilgan. Tadqiqot natijalariga
ko'ra, O'zbekistonda kichik biznesni qo'llab-quvvatlash bo'yicha aniq choralar mavjud bo'lsa-da,
iqtisodiy xavfsizlik masalasida sezilarli kamchiliklar mavjud. Maqolada kichik biznes
korxonalarining iqtisodiy xavfsizligini ta'minlash uchun takomillashtirilgan yondashuv taklif
etilgan.
Kalit so'zlar:
kichik biznes, iqtisodiy xavfsizlik, O'zbekiston, chora-tadbirlar, qonunchilik,
raqamlashtirish, soliq siyosati.
МЕРЫ, ПРИНИМАЕМЫЕ В УЗБЕКИСТАНЕ ПО ВОПРОСАМ
ЭКОНОМИЧЕСКОЙ БЕЗОПАСНОСТИ НА ПРЕДПРИЯТИЯХ МАЛОГО
БИЗНЕСА
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Аннотация.
В данной статье анализируются меры, реализуемые для обеспечения
экономической безопасности предприятий малого бизнеса в Узбекистане. В статье
рассматриваются законодательные основы обеспечения экономической безопасности
субъектов малого бизнеса, государственные программы и их эффективность, а также
существующие проблемы в обеспечении безопасности и пути их решения. Согласно
результатам исследования, несмотря на конкретные меры по поддержке малого бизнеса
в Узбекистане, существуют существенные недостатки в сфере экономической
безопасности. В статье предлагается усовершенствованный подход к обеспечению
экономической безопасности предприятий малого бизнеса.
Ключевые слова:
малый бизнес, экономическая безопасность, Узбекистан, меры,
законодательство, цифровизация, налоговая политика.
INTRODUCTION
Small business and private entrepreneurship in Uzbekistan represent an important part of
the country's economy. According to 2023 data, the share of small business in the country's GDP
was 54.9% [1]. This indicator clearly demonstrates the impact of small business entities on the
country's economic stability. Therefore, ensuring the economic security of small business
enterprises is an important direction of state policy.
Economic security is the ability of an enterprise to maintain stable operations, ensure
competitiveness, and withstand economic threats [2]. Small business enterprises face a number
of economic threats during their operations: lack of financial resources, high tax burden, market
competition, and bureaucratic barriers. In recent years, the government of Uzbekistan has been
implementing a series of measures aimed at mitigating these threats and creating favorable
conditions for small business development.
The purpose of this research is to analyze the effectiveness of measures being
implemented in Uzbekistan to ensure the economic security of small business enterprises and to
identify areas for improvement.
METHODOLOGY AND LITERATURE REVIEW
This research is based on analysis of relevant academic literature, legislative documents,
and statistical data related to economic security of small businesses in Uzbekistan. The
methodological approach includes systematic analysis of legislative documents, comparative
analysis of implemented measures with international practices, and critical assessment of
existing policies.
The concept of economic security for small businesses has been explored by several
researchers.
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Karimov (2021) defines economic security of business entities as "a state of protection
from external and internal threats that ensures sustainable development and achievement of
business goals" [3]. Ismoilov (2022) emphasizes that economic security includes financial
stability, information security, and protection of intellectual property [4].
Legislative frameworks for small business support in Uzbekistan have evolved
significantly in recent years. The Law "On guarantees of freedom of entrepreneurial activity" and
Presidential Decrees №UP-5953 "On State Program for the implementation of the Action
Strategy" provide the foundation for small business support [5]. These documents outline key
priorities for small business development and protection.
International scholars have also contributed to understanding economic security in
transitional economies. Johnson (2020) highlights the importance of institutional frameworks in
ensuring business security in post-Soviet states [6]. Similarly, Wang and Kim (2023) analyze the
effectiveness of economic security measures in developing economies with emphasis on Central
Asian countries [7].
The literature review reveals that while there are numerous studies on small business
development in Uzbekistan, the specific aspect of economic security measures requires more
comprehensive analysis. This research aims to fill this gap by analyzing current measures and
proposing improvements.
RESULTS AND DISCUSSION
The analysis of implemented measures to ensure economic security of small businesses in
Uzbekistan reveals several key areas of focus: legislative protection, financial support
mechanisms, tax incentives, and digitalization initiatives.
The government has undertaken significant legislative reforms to enhance the protection
of small businesses. The Law "On the protection of private property and guarantees of owners'
rights" strengthened legal protection mechanisms for businesses [8].
Additionally, the introduction of the Business Ombudsman institution in 2017 created an
additional layer of protection for entrepreneurs against illegal actions by government bodies.
Financial support mechanisms include preferential loans, subsidies, and guarantees
provided through the State Fund for Entrepreneurship Support. According to official statistics, in
2022-2023, the fund provided financial support to over 12,000 small businesses with a total
amount exceeding 4 trillion UZS [9].
Tax incentives represent another important direction. Recent tax reforms have simplified
the tax system for small businesses and introduced various tax benefits. Table 1 summarizes the
main tax incentives implemented during 2020-2023.
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Table 1:
Tax Incentives for Small Businesses in Uzbekistan (2020-2023)
Type of
Incentive
Description
Period of
Implementation
Affected Sectors
Reduced VAT
rate
Reduction from 15% to 12% for
small businesses
2020-present
All sectors
Tax holidays
Exemption from certain taxes for
newly established businesses
2021-2023
Manufacturing, IT,
Tourism
Social tax
reduction
Reduction from 12% to 4% for
small businesses
2020-present
All sectors
Property tax
exemption
Exemption for small
manufacturing enterprises
2022-present
Manufacturing
Simplified tax
reporting
Reduced reporting requirements
2020-present
All sectors
Source: Compiled based on data from the State Tax Committee of Uzbekistan [10]
Analysis of this table shows that tax incentives primarily focus on reducing the tax
burden and simplifying administrative procedures. The most significant benefit has been the
reduction in social tax, which has allowed small businesses to reduce labor costs. However, the
sectoral distribution of incentives is uneven, with manufacturing, IT, and tourism receiving more
significant benefits than other sectors.
Digitalization initiatives have also contributed to enhancing economic security. The
introduction of electronic tax reporting, digital business registration, and online platforms for
government services has reduced bureaucratic barriers and minimized corruption risks. The "E-
government" system has simplified interactions between businesses and government agencies,
reducing administrative costs and increasing transparency.
Despite these positive developments, several challenges remain in ensuring economic
security for small businesses:
1.
Access to finance continues to be problematic, especially for businesses in remote
regions. Interest rates remain high despite government subsidies.
2.
Protection from unfair competition, particularly from larger businesses with better
resources and connections, remains inadequate.
3.
Implementation gaps exist between adopted legislation and actual practice, with local
authorities sometimes failing to properly implement national-level policies.
4.
Informal economy practices continue to create uneven competitive environments for
legitimate small businesses.
5.
Information asymmetry and lack of awareness about available support mechanisms limit
the effectiveness of implemented measures.
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The analysis suggests that while significant progress has been made in creating a
favorable environment for small businesses, economic security measures require a more
comprehensive and integrated approach. Current measures tend to focus more on stimulating
growth rather than addressing specific security concerns of existing businesses.
CONCLUSION
This research has analyzed the measures being implemented in Uzbekistan to ensure
economic security for small business enterprises. The findings indicate that while the
government has introduced significant reforms in legislative protection, financial support, tax
incentives, and digitalization, several challenges remain unaddressed.
To enhance the economic security of small businesses in Uzbekistan, the following
recommendations are proposed:
1.
Develop a comprehensive national strategy specifically focused on economic security for
small businesses, integrating various existing programs and initiatives.
2.
Strengthen mechanisms for protecting businesses from unfair competition and
administrative pressure through empowering the Business Ombudsman institution with
additional authority.
3.
Improve access to affordable financing by developing alternative funding sources beyond
traditional banking, such as venture capital funds and crowdfunding platforms.
4.
Enhance information security measures for small businesses, including cybersecurity
education and affordable IT security solutions.
5.
Create specialized risk insurance programs for small businesses to mitigate various
economic risks.
6.
Strengthen enforcement mechanisms to ensure that legislative protections are properly
implemented at all levels of government.
These recommendations, if implemented effectively, could significantly enhance the
economic security environment for small businesses in Uzbekistan, contributing to more
sustainable growth and development of this vital sector of the economy.
REFERENCES
1.
State Committee of the Republic of Uzbekistan on Statistics. (2023). Statistical Yearbook
of Uzbekistan. Tashkent: State Statistics Committee Publishing.
2.
Karimov, A. (2021). Theoretical foundations of economic security of business entities.
Economic Review of Uzbekistan, 12(3), 78-92.
3.
Ismoilov, B. (2022). Components of economic security in small and medium enterprises.
Journal of Economics and Business, 18(2), 115-128.
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4.
Johnson, P. (2020). Business security in transitional economies: A comparative analysis.
International Journal of Economics and Finance, 12(4), 45-62.
5.
Republic of Uzbekistan. (2020). Law "On guarantees of freedom of entrepreneurial
activity" (Updated version). Collection of Legislation of the Republic of Uzbekistan.
6.
Wang, L., & Kim, S. (2023). Economic security measures in developing economies:
Focus on Central Asian countries. Asian Economic Journal, 37(2), 189-207.
7.
Republic of Uzbekistan. (2019). Law "On the protection of private property and
guarantees of owners' rights". Official Gazette of the Oliy Majlis.
8.
Ministry of Economic Development and Poverty Reduction. (2023). Report on the
activities of the State Fund for Entrepreneurship Support for 2022-2023. Tashkent:
Ministry Publishing.
9.
State Tax Committee of the Republic of Uzbekistan. (2023). Tax incentives for small
business: Analysis of effectiveness. Tashkent: STC Publishing.
10.
Rasulov, M. (2022). Digital transformation as a factor of economic security for small
businesses in Uzbekistan. Central Asian Journal of Economics, 8(3), 145-160.
