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04/27/2015 18:36 msk, Fergana.
The role of small and medium-sized businesses in the economic development of any country can not be overestimated. World experience shows that this sector provides the economy with the necessary flexibility and ability to respond adequately to crisis events. Small enterprises are relatively easier to create and reorient to other areas of activity, since they require less expenditure than large companies. If there are normal conditions for doing business in the country, small businesses send money to develop new areas of activity and build up existing production facilities, thereby creating opportunities for economic growth, increasing employment, and improving the living standards of the population. Small and medium-sized businesses, responding promptly to any changes in the business climate in the country, is a kind of indicator of the development of the economy and the effectiveness of the government.
Officials – nightingales: singing, pouring …
In mid-April 2015, a seminar “Establishing partnership relations between companies of Uzbekistan and Latvia” was held in Riga within the walls of the Latvian Chamber of Commerce and Industry (CCI). The Ambassador of Uzbekistan to Latvia Afzal Artykov and the head of the international cooperation and protocol department of the Chamber of Commerce and Industry of Uzbekistan Marat Zhuraev spoke at the meeting.
Both masters “bright colors” drew a bright picture of the rapid economic development of Uzbekistan and huge opportunities for small and medium-sized businesses in the country. Especially distinguished Mr. Zhuraev: “The country has E-Government, where you can get about 194 services from 110 state organizations, including registering a business. In general, now business registration is conducted on the principle of “one-stop shop”, that is, it is necessary to apply to one institution, and not to walk on several. For 15 years, the tax burden has decreased three-fold. There are three free industrial-economic zones – Navoi, Angren and Jizzakh, providing not only tax breaks, but also developed infrastructure. So, in the Navoi area there is even an airport of the same name “.
A high-ranking representative of the Chamber of Commerce and Industry of Uzbekistan said many more enthusiastic phrases about the successes of Uzbekistan, from which, as President Islam Karimov likes to say, “the main thing is not to fall into euphoria.” There are many phrases that do not, however, have any relation to the real situation prevailing in the country.
Small business and private entrepreneurship in Uzbekistan today are mainly concerned with how to survive elementary, avoid clashes with corruption and racketeering, pressure from officials and supervisory bodies that do not always pursue state interests. Examples of attempts to survive or overcome a corrupt system can be observed in the materials “Fergana” “In order to convey. How do tax officials destroy small businesses in Uzbekistan ?, “Uzbekistan: Is an entrepreneur responsible for the mistake of tax officials?”, “Uzbekistan: Law-abiding businesswomen are deprived of business”, “Uzbekistan: Small business goes into shadow. Under the roof of the tax “and others.
State sabotage of a billion dollars.
The Uzbek reality is such that even the beginning and implementation of entrepreneurial activities in this country are associated with great problems. At present, it takes, on average, more than a month to start it. According to sources “Fergana” in Tashkent, the registration of the company takes approximately 14 working days. Each enterprise needs to obtain three permits and approvals, this takes 15-17 working days. If an entrepreneur wants to engage in activities that require licensing, standardization and certification procedures, obtaining one license may increase the collection period by an average of seventeen working days, one standard for ten, and one certificate for six working days.
If the entrepreneur wants to open an agricultural enterprise, he will have additional difficulties associated with the allocation of land, obtaining the necessary equipment, providing fuel and lubricants, fertilizers, water.
Given that before obtaining all necessary registration and permits documents, entrepreneurs are not allowed to engage in their activities, slowing down the passage of the above procedures means a loss of profits. According to economists’ calculations, for every day of idle time, about 60,000 new small enterprises registered in 2014, the country’s economy lost more than 11 billion soums (about $ 2.7 million at the black market rate). This means that in just one last year the country lost almost a billion dollars, simply by preventing its citizens from starting business.
Conversion is not, goods are becoming more expensive.
To this day, the most difficult problem for entrepreneurs (as, indeed, for the entire population of Uzbekistan) is the actual lack of conversion of the national currency. Formally, the state declares that currency exchange is possible, but in practice, when an enterprise tries to get it for import, consideration of its applications is extended for a very long time, sometimes for six months or more. Such delays lead to serious problems with foreign suppliers: they either deny enterprises benefits, or cease cooperation altogether. Moreover, in the case of passing the procedure for converting money on the accounts of the enterprise are frozen for the entire period of consideration of the application. Given the length of the review period, inflation, changes in the exchange rate and lost profits due to the withdrawal of money from trade turnover, entrepreneurs incur huge losses.
For this reason, most small and medium-sized enterprises are forced to purchase foreign currency on the “black market”, and the necessary raw materials and components are bought from intermediaries at an overpriced price, which leads to a sharp increase in the cost of finished products. As a result, the competitiveness of Uzbek products in foreign markets can not withstand any criticism, and the inhabitants of the country have to buy constantly expensive goods and products.
“Economic development is becoming impossible”
The state of affairs in the country’s economy, including those related to the development of small and medium-sized businesses, demonstrates the international indices of development and perceptions of corruption in the most graphic manner.
So, according to the data of the international anti-corruption association TRACE International, in the world rating of bribery, Uzbekistan took in 1944 194 place out of 197, passing all the republics of the former USSR forward. The countries in this rating were evaluated by such criteria as the level of interaction between business and government, anti-corruption legislation and its application in practice, transparency of the civil service and the possibility of public control.
And in the international corruption perception index of Transparency International organization for 2014, Uzbekistan ranked 166 out of 175 – the worst result in the post-Soviet space.
Jose Ugas, the chairman of Transparency International, said this: “The corruption perception index for 2014 shows that economic development is becoming impossible, and efforts against corruption are fruitless when leaders and dignitaries abuse power to take public funds for personal gain. Corrupt officials are absolutely unpunished in extracting ill-gotten assets into safe places thanks to offshore companies. This is especially evident in the case of some countries in Africa and Central Asia. ”
Probably, the pretentious words and “nightingale singing” of diplomats and officials from Uzbekistan are so loud on the shores of the Baltic Sea that Latvia has recently become a country attractive for Uzbeks with big money. For example, from 2010 to May 2014, more than five hundred citizens of Uzbekistan received a residence permit in Latvia. It is in Riga, and not in Uzbekistan, that you can easily and quickly open your own commercial firm.
Officials, their relatives, businessmen who do not trust the state and want to “fall down”, while the system in the country of their “permanent residence” has not collapsed at all, Latvia’s banks are becoming more active, and they are channeling their shadow revenues. Latvia traditionally does not ask questions about the origin of capital, but almost all in Riga speak in understandable Russian. What else is needed for happiness? The state has put together – deduce more likely money in the safe European country. After all, at home, it is almost impossible to successfully engage in honest business.
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