Scientific research results in pandemic conditions (COVID-19)
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Lola Khazratkulova, senior teacher, Tashkent Branch of Plekhanov Russian
University of Economics
BUDGETARY FINANCING OF INVESTMENTS IN THE REPUBLIC OF
UZBEKISTAN
L. Khazratkulova
Abstract. The article is devoted to the features of attracting and
financing investments in the Republic of Uzbekistan, there shown a priority
of the investment sphere, since its development will make it possible to
increase the efficiency of the use of raw materials, expand production of
high-tech competitive products and ensure socio-economic development of
the regions.
Keywords: investment policy, budgetary financing, centralized
investment, efficiency, modernization.
Investment development has always been a priority for the Government
of the Republic of Uzbekistan. Strategy of Actions on Further Development
of Uzbekistan emphasizes the importance of “pursuing an active investment
policy aimed at modernizing, technical and technological updating of
production” [1].
In January 2020 there adopted the Decree of the President of the
Republic of Uzbekistan “On measures to implement the Investment Program
of the Republic of Uzbekistan for 2020-2022” [2], which states that
comprehensive measures are being taken in the country on further
intensification of investment policy aimed at including the modernization
and creation of high-tech industries that provide deep processing of
domestic raw materials and production of finished products with high
added value.
In 2019 - the Year of Active Investments and Social Development - there
carried out a large-scale work on radical improving and simplifying
mechanisms for implementing investment projects, expanding the
attraction and development of foreign direct investments primarily.
These measures made it possible to ensure the development of about
184 trillion soums (UZS) of capital investments in 2019, which is 1.3 times
more than last year. The share of investments in gross domestic product
exceeded 34 percent.
The Presidential Decree “On measures to implement the Investment
Program of the Republic of Uzbekistan for 2020-2022” approved the
corresponding investment program.
According to the Investment Program, the forecast for the development
of capital investments for 2020 is 223.18 trillion soums, out of which are the
following:
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- 43.4 trillion soums - centralized investments (budgetary funds, funds
of the Fund for Reconstruction and Development of the Republic of
Uzbekistan, foreign investments and loans under state guarantee);
- 189.78 trillion UZS - decentralized investments (funds of enterprises,
including taxes left at the disposal of enterprises, borrowed funds and
foreign direct investments).
In 2020 the forecast for the development of foreign investments and
loans is 129.10 trillion soums, including 27.35 trillion UZS - foreign loans
under state guarantee and 13.96 trillion soums - non-guaranteed foreign
loans. At the same time, in 2020 it is planned to attract $ 9.11 billion of
foreign direct investments and loans, out of which $ 8.9 billion is not under
the state guarantee [2].
Financing of investments can be made at the expense of the budget
funds, the issue of securities, credit funds, at the expense of the funds
generated by the investment project itself, etc.
In many countries, the budget form of financing is still quite widespread,
despite the increasing introduction of the principles of individual and
collective investment in investing. The advantage of such a source of
financing the investments is a possibility of irrevocable basis for the
provision of funds for the implementation of projects, as a rule, with great
social potential.
Budget financing of investment projects in Uzbekistan is carried out, as
a rule, through financing under targeted programs and financial support. It
provides for the use of budget funds in the following basic forms:
investments in the authorized capital of existing or newly created
enterprises, budget loans (including investment tax credit), the provision of
guarantees and subsidies.
For 2017-2020 Uzbekistan has seen a significant increase in
government funding for centralized investments.
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Fig. 1. Dynamics of expenditures of the state budget of Uzbekistan and costs
of financing centralized investments, trillion soums [3]
If we consider the expenditures of the state budget of the Republic of
Uzbekistan in dynamics, we can see that in 2018 there was an increase in
spending on centralized investments +67%, in 2019 compared with 2018 -
a negative trend (-26.7%). The largest increase can be noted in 2020
(+244%). This confirms the importance of investment development for the
Republic of Uzbekistan.
Similar conclusions can be drawn by analyzing the share of
expenditures on centralized investments in the total budget expenditures of
Uzbekistan (Fig. 2).
Fig. 2. The proportion of costs on financing centralized investments in the
total expenditures of the state budget of Uzbekistan, % [1]
Presidential Decree dated 01.01.2020 “On measures to implement the
Investment Program of the Republic of Uzbekistan for 2020-2022” reflects
49 343,7
79 736,1
118 008,6
131 104,5
3 234,7
5 400,4
3 960,2
13 624,8
0,0
2 000,0
4 000,0
6 000,0
8 000,0
10 000,0
12 000,0
14 000,0
16 000,0
0,0
20 000,0
40 000,0
60 000,0
80 000,0
100 000,0
120 000,0
140 000,0
2017
2018
2019
2020
Expenditures of the state budget , total
Costs of financing centralized investments
6,56
6,77
3,36
10,39
0,00
2,00
4,00
6,00
8,00
10,00
12,00
2017
2018
2019
2020
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the planned parameters of the main indicators of investment activity of
Uzbekistan for 2020-2022.
Fig. 3. The ratio of centralized and decentralized investments in 2020-2022
in Uzbekistan, % [2]
According to the Investment program for 2020-2022 the ratio of
centralized and decentralized sources of investment financing will be on
average 20% to 80% (Fig. 3).
Fig. 4. The structure of centralized investments in the Republic of Uzbekistan
in 2020-2022, % [2]
Foreign investments and loans under the state guarantee of the
Republic of Uzbekistan have the largest share in the structure of centralized
investments in 2020-2022. In addition, about 20% are funds allocated to:
- improvement of land reclamation conditions;
- development of roads;
- development of material and technical base of educational and medical
institutions;
0,00
20,00
40,00
60,00
80,00
100,00
2020
2021
2022
18,61
17,87
17,49
81,39
82,13
82,51
Centralized investments
Decentralized investments
11,3
20,9
4,8
63,0
11,3
20,9
3,7
64,2
11,0
20,4
3,6
65,0
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
Budgetary funds
For reclamation,
etc.
Funds of the
reconstruction and
development Fund
Foreign investments
and loans under
state guarantee
2020
2021
2022
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- improving drinking water supply;
- development of the Aral Sea region;
- construction and reconstruction of physical training and sports
facilities.
Budgetary funds in the total volume of financing of centralized
investments of Uzbekistan in the coming medium-term prospect according
to the plan will consistently be about 11% (Fig. 4).
In accordance with planned indicators in 2020 in the investment
program of the Republic of Uzbekistan for 2020-2022, the largest volumes
of budget investment should be allocated in the 1
st
and 4
th
quarters of 2020
(Fig. 5).
Fig. 5. The dynamics of budget financing in Uzbekistan in 2020 by quarters,
billion soums [2]
In accordance with the actual indicators, from January to April 2020,
total amount of foreign investments made up $ 2.5 billion, including foreign
direct investments - $ 1.7 billion and foreign loans - $ 831 million [4].
At the same time, the growth rate to the same indicator in 2019 was 1.6
times. The share of utilized foreign direct investments in total investment
volume increased to 26%. 336 projects were put into operation: 8 large
industrial enterprises and 328 industrial facilities of regional significance.
The leaders in attracting investments in the economy of Uzbekistan
were Russia, China, Germany and South Korea, and total number of investing
countries in the country's economy was 37.
According to the results of the reporting period, the most attractive for
investors were an electrical industry (growth - 24 times compared to the
same period in 2019), chemical industry (growth - 13 times), leather and
footwear (growth - 2.5 times) industries. The oil and gas industry (growth -
2.3 times) and construction materials industry (growth - 1.6 times) also
show good performance.
At the same time, the growth trend of flows of foreign direct investments
and credits to projects of regional significance, the total value of which in the
reporting period amounted to $ 958 million, increased by 2.6 times
891
1,562
1,692
752
0
200
400
600
800
1000
I quarter
II quarter
III quarter
IV quarter
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compared to the same period in 2019. High growth dynamics by regions is
observed in Jizzakh (13 times), Namangan (9.4 times) and Surkhandarya
(4.2 times) regions.
In particular, in 2020 it is planned to put into operation more than 2
thousand social, infrastructural, and industrial facilities: 206 large new
production facilities, 240 regional production facilities, and 1.6 thousand
social and infrastructure facilities [4].
Thus, investment activity in Uzbekistan is a priority area, development
of which will make it possible to increase the efficiency of the use of raw
materials, expand the production of competitive high-tech products, and
ensure socio-economic development of the regions. However, budget
financing has a small share in the total investment financing in the country.
In this regard, the economy of Uzbekistan is vitally important for private
investments, mostly direct ones, which will increase physical and human
capital, as well as innovative potential of the country.
References:
1.
Decree of the President of the Republic of Uzbekistan no. up-4947
dated 07.02.2017 “The Strategy of actions for further development of the
Republic of Uzbekistan”
2.
Decree of the President of the Republic of Uzbekistan no. PP-4563
dated 09.01.2020 “On measures to implement the Investment program of
the
Republic
of
Uzbekistan
for
2020-2022”
https://lex.uz/ru/docs/4689644
3.
Data of the Ministry of Finance of the Republic of Uzbekistan
4.
Data from the Ministry of investment and foreign trade of the
