Uzbekistan economic reforms have positive results

September 1, 1991, was a landmark in Uzbekistan's history. It was the day the Republic became Independent.

On that day, the Republic of Uzbekistan's Supreme Council adopted a Resolution on the Proclamation of State Independence of the Republic of Uzbekistan, and the Law of the Republic of Uzbekistan on Foundations of State Independence.

Independence for Uzbekistan has opened up vast horizons, giving the country a unique chance to build its future with its own hands. A chance to determine its destiny and to arrange its livelihood to meet national interests and values, while universally establishing democratic norms.

Uzbekistan has a bright future, and to realize its plans it needs an atmosphere of peace and tranquility, with attention given to issues of security.

Uzbekistan's President Islam Karimov has written about this in his book Uzbekistan on the eve of the XXI century: threats to security, conditions, and guarantees of progress.

Uzbekistan, having gained its political independence, is now making industrious efforts toward achieving economic independence.

Public development experience has proven that effective economic development is possible only with the most complete opening up of opportunities, combining the economic interests of the individual and society.

At the same time, in a world dominated by the market economy in all its variations, Uzbekistan lacked experience but had to make the transition from its planned economy to a market economy.

In a country with a very difficult demographic situation, and with virtually no ongoing financial aid from the outside market, reforms were managed. This was done without the collapse of the manufacturing industry, social explosions, or shocks.

Today, after six years of independence, with the most dangerous periods passed, Uzbekistan's models of economic reform have been recognized by leading financial organizations.

In a meeting with President Islam Karimov, the International Monetary Fund's executive director, Kamdeceue, and the World Bank's president, Wulfenson, also commented favorably.

Once having determined the principles of its planned reforms, Uzbekistan implemented them. Not just for the sake of making reform, but to increase the well-being of its citizens.

At great historical turning points, every country decides its own path.

Thus, to successfully move to a market economy, Uzbekistan decided on a path which combines the deep historical traditions of its people and international experience.

The Uzbek model for reform is based on a coherent and economically justified program, which deliberately takes into account the historical background of the country. This program is based on the five following fundamental principles:

* The priority of an economic policy over politics;

* The essential role of the State in economic reform;

* The rule of Law;

* The social protection of the population, especially during the transition to a market economy; and

* Gradual implementation of economic reform.

Based on these principles, the country's first six years of independence have passed smoothly. The legislative base for reforms was passed first; this was accepted by the Constitution and ensures economic freedom and property rights. Liberalization of the economy was accompanied by strong support for the needy.

Privatization first started with small, medium and then large enterprises. The market began working and opportunities were offered to businesspeople.

Uzbekistan has opened a door for foreign investors and offers mutually advantageous cooperation, instead of asking for credit.

The country has no overdue external debts.

Major construction works have begun and whole new sectors have been established, for example, the car industry.

In the economic sphere, ongoing reforms have brought many positive results.

Steady economic stability has been achieved. And for the first time, there is growth in the GDP. The GDP was 101.6 percent instead of the forecast 99.8 percent. Industrial production increased 6 percent and the production of consumer goods rose 7.8 percent.

Basic, leading sectors like metallurgy, the oil-chemical industry, machinery processing and the food industry are growing rapidly.

The state budget deficit remained less than 3.5 percent of the GDP. External trade turnover brought in more than US$8.3 billion, and increased by almost 40 percent over 1995.

Due to the country's stringent monetary and credit policies, there was a considerable decrease in the rate of money volume growth: by 2.6 times in 1995 and two times this year. The average annual inflation rate has been significantly reduced.

There are also signs of positive change in the structure of Uzbekistan's economy. The share of industry and services in the GDP has increased. Production has accelerated, and new technologies are being introduced. Industries exports are expanding. Within a year, the country started production in 150 new industries.

The investment climate has considerably improved and investment volumes have increased. The 1996 gross volume of investment with foreign capital shares was $6 billion.

Within the total volume of investments being utilized in the economy, there was substantial growth of international sources of capital investment.

This year, Uzbekistan utilized $3.6 billion in capital investment. More than $1 billion came from foreign investments.

In regard to bilateral relations between Uzbekistan and Indonesia, there is a wide base for cooperation.

This can be seen from the visit of the Republic of Uzbekistan's President Islam Karimov to Indonesia in 1992 and the visit of the Republic of Indonesia's President Soeharto to Uzbekistan in 1995.

At present, relations are developing and becoming stronger. Uzbekistan pays major attention to its relationship with Indonesia.

The Embassy of the Republic of Uzbekistan in Indonesia is the country's first diplomatic mission in Southeast Asia.

There is great potential for cooperation in the trade and economic areas, and in science, culture and tourism.

Uzbekistan is implementing programs aimed at providing essential equipment to the telecommunications sector in cooperation with the Bakrie Group and in trade with Tirtamas Comexindo.