Sustainable Development - International Journal of Economics ...

International Journal of Economics, Commerce and Management United Kingdom

ISSN 2348 0386 http://ijecm.co.uk/

Economy & Sustainable Development

Special issue on

Uzbekistan

REGIONAL FEATURES OF STRATEGIC DEVELOPMENT OF TOURISM IN THE REPUBLIC OF UZBEKISTAN Khasan Turdibekov Statistics and Management Faculty, Samarkand Institute of Economics and Service, Samarkand, Uzbekistan [email protected] Abstract The existent article provides current status of competitive analyses of hospitality and tourism sector deployment on the world market and highlights the problems of tourism infrastructure in Uzbekistan. It was determined that the factors of the stable tourism development are connected with the national economy policy priorities, state administration structure, the emerging of environmental problems and man-triggered risks. In addition, the location of Silk Road Tourism destination with marvellous resources and untapped traditional perspectives are considered as a vital feature of tourism enhancement in the Central Asian region. On this way, investigation covers SWOT studies of the destination including suitable suggestions from comprehensive argument of scrutinizes. It also determines that despite the advantages of the stable tourism enlargement principles, they are quite difficult to be achieved due to the major social, economic and political conditions in the region. Uzbekistan has an extraordinary prospective of tourism development which is, however, used only in its tiny partition. The lack of mechanisms of state support for the travel industry is one of the major problems that hold the development of the travel business in the country. Consequently, the formation and development of tourism in Uzbekistan as one of the furthermost dominant social and economic policies entails the specific regulations of economic relations and measures of investigation. Keywords: Tourism, Strategic analyses, Uzbekistan, Central Asian Tourism, Silk Road

Licensed under Creative Common

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INTRODUCTION The current stage of development of society is characterized by the dominant position of services. In modern economic literature, this stage of development is called "post-industrial society" (Bell D., 1973). An important feature of the postindustrial society – is strengthening of the role and importance of the human factor. Moreover, the world economy is changing the structure of the labor force: decreases the physical and mental growing share of highly skilled and creative labor. Increases the costs of training the workforce: the cost of training and education, training and retraining of workers. There is an outflow of labor force from the industrial sector to the service sector. According to a leading expert on post-industrial society, in the "knowledge economy" in the United States employs approximately 70% of the workforce (Carnoy M., 1993). If the development of the country entered a new stage of development, most developing countries are moving in this stage of development. In these circumstances, it is to develop an operative strategy for the modern development of the economy with the focus on further service industries. This will help reduce the unemployment rate, the growth of welfare and quality of life. The study aims to explore the features of the development strategy in the service industries (‘Государственный комитет Республики Узбекистан по статистике - Об итогах социально-экономического развития Республики Узбекистан за I квартал 2014 года’, 2015.). Strategic management as a science management in the long run was reflected in all economic sectors. However, the study of strategic management in the tourism sector in developing countries, taking into account the transition to a postindustrial society is not fully examined and considered to be an urgent task. The modern tourism industry is one of the fastest growing areas in international trade in services. According to UNWTO, hospitality and tourism’s contribution to world GDP grew for the fourth consecutive year in 2013, helped especially by strong demand from international travelers. Visitor exports, the measure of money spent by these international tourists, rose by 3.9% at a global level year on year, to US$1.3 trillion, and by over 10% within South East Asia. It is expected that the growth in Travel & Tourism demand from emerging markets continues with pace, as large rising middle classes, especially from Asia and Latin America, are willing and more able than ever to travel both within and beyond their borders. To meet the rapidly changing needs of today, travelers made possible by strengthening integration processes inside of tourism and with the environment (‘Узбекистан планирует расширить свою туристическую инфраструктуру | Туристические новости от Турпрома’, 2014.). In 2013, sector’s total contribution to the global economy rose to 9.5% of global GDP (US $7 trillion), not only outpacing the wider economy, but also growing faster than other significant sectors such as financial and business services, transport and manufacturing. Totally, nearly 266 million jobs were supported by hospitality sector in 2013 - 1 in 11 of all jobs in the world. The sustained demand for Travel & Tourism, together with its aptitude to generate high planes of employment continues to prove the standing and worth of the sector as a tool for financial development and job creation (‘Central Asia: Problems and Perspectives of International Tourism :: Slavomír Horák’, 2014). The sector for traveling in 2014 is also very positive, with Total Travel & Tourism GDP growth forecast to reach 4.3%. Much of this growth is being driven by higher consumer spending as the recovery


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International Journal of Economics, Commerce and Management, United Kingdom

from recession gathers pace and is becoming firmly established. Tourists are expected to devote more per trip and stay longer on their holidays in 2014, while long haul travel, especially among the European markets, is also expected to gain a greater share of international tourism demand. Profitability for travel companies should also start to edge up, bringing opportunities for further job construction in the process (‘Fifth International Meeting on the Silk Road.’, 2014). However, with the development of tourism arise, develop and actualize the problem of sustainable tourism development, the solution of which techniques have developed in the past, it is practically impossible, which leads to a decrease in the competitiveness of this lucrative industry, the inability to best meet the increasing demand for high quality tourism services. All of this points to the need for a systematic approach to strategic planning of tourism(‘Handbook on E-marketing for Tourism Destinations - World Tourism Organization’, 2014). However, with the development of tourism arise, develop and actualize the problem of sustainable tourism development, the solution of which techniques have developed in the past, it is practically impossible, which leads to a decrease in the competitiveness of this lucrative industry, the inability to best meet the increasing demand for high quality tourism services.

The purpose of the study was: 

To explore the features of strategic management and tourism

development

with

system

of regional management adjutancy; 

To describe the problems of reproduction of the tourist infrastructure and the direction of their solution in the strategic planning of tourism as part of the socio-economic system of the region;



To examine methodological foundations of resource support the development of tourism, hotel management;



To establish the basic features and development tools strategy of development of tourism, hotel management;



To shape an effective strategy for regional tourism development on the example of the city of Samarkand.

The paper examined the features and the methodology of the strategic analysis of the external environment on the example of the tourism industry. In particular, based on a literature review of the strategic analysis of the peculiarities of the tourism industry and recommendations on strategy. The ways of development of tourism in some regions of the Republic of Uzbekistan for example, the city of Samarkand.

REVIEW OF THE LITERATURE The essence of strategic development in a postindustrial society Called post-industrial countries, usually those which in the service sector accounts for considerably more than half of GDP (Pilzer PZ, 1990). The term "post-industrialism" was introduced into scientific circulation at the beginning of the XX century scientist A. Coomaraswamy, who specialized in industrial development to the


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Asian countries. In the modern sense of the term was first used in the late 1950s, and widely accepted concept of post-industrial society has received in the result of the work of Professor at Harvard University Daniel Bell (1973), in particular after the release in 1973 of his book "The coming post-industrial society" . Similarly, Alvin Toffler identifies three "waves" in the development of society and uses the term "information society (Alvin Toffler, 1980). A characteristic feature of post-industrial society is that the cost of corporations in the post-industrial society due mainly intangible assets - know-how, skilled workers, efficient business structures and so on. In addition, has been decreasing some lower industries as a result of the mass production that moves to other regions. The role of the small business and existence of it makes and creates more and more small-scaled products with a variety of modifications and variations of services to meet the needs of different groups of consumers. As a result, small businesses are competitive, flexible, not only in the local markets, but also on a global scale. An important feature of post-industrial society - strengthening the role and importance of the human factor. Renowned management guru Peter F. Drucker also includes the further development of the service sector (Peter F. Drucker, 1999). In the first decade of the XXI century will be observed two phenomena - the change in the trend of the distribution of disposable income and changes in this trend. In the XX century there was a steady growth in four sectors: government spending, health care, education and leisure. In the latter areas, there is a rapid increase in productivity and production volumes, it is comparable to the other three together sectors. Three remaining growth sectors - health, education, leisure - are the largest consumers of goods and services, in other words, sectors that should be pushed in Central Asian states as well. All of these four sectors are not subject to the rules of "free market" and economic laws of supply and demand, not highly price sensitive, do not fit the standard economic model, and their behavior does not correspond to economic theory. And yet, they make up more than half of the developed economies, even the most "capitalist". Therefore, the strategy development should be first and foremost in order to take into account changing trends in these four sectors, because all four sectors will almost certainly undergo significant changes in the next few decades(‘IUTF-2014’, 2014).

The concept of strategy in contemporary literature Strategic

management

as

a

new

management

philosophy diffused

widely

in

the

economic

literature especially since the 1970s. Up to the present time in this area were a lot of research. Initially this theoretical knowledge was applied in military practice, the term is widely used in the modern economy. In the works of the authors (Steiner G., 1979); Chandler AD, 1962; Mintzberg H., 1987) mainly studied characteristics of strategic management in enterprises, especially commercial ones, studied individual enterprises and in particular the impact of their activities on certain industrial sectors. However, despite all the benefits of information on the nature of Strategic Management, obtained set of analysis and management has not found a proper listening in the service sector. Review of the literature some authors showed that fundamental research in the development of strategies in the fields of services, particularly in the tourism sector is incompletely understood. In general, in many literatures defines strategy


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as a tool for long-term management of commercial organizations, and the essence of this approach in terms of the service industries in general, remains to be defined. In the works of the authors (Porter, M., 1996; Heene A. and Sanchez R., 1999; Bergman, E., and E. Feser, 1999) describes the features of the strategy of the country or the industry in general. We give a general direction, but the essence of the strategy applied service industries are not reflected(‘UNWTO and Government of Uzbekistan to host 5th International Meeting on the Silk Road | Tourism-Insider’, 2015). On this basis, ADChandler (1962) gives the following definition in which strategy is the determination of the basic long-term goals and objectives of the organization, adopting a course of action and the allocation of resources needed to meet these goals. Moreover, Henry Mintzberg (1987) who have made investigations on this direction put forward the idea that in many studies, the term "strategy" is practiced ambiguous and has several meanings. According to him, the strategy includes the following definitions: plan; ploy; pattern of behavior; position in respect to others; perspective. Next Mintzberg (1987) argues that there is a strategy for a long time, as the intention of facing and adapt changing environment. Thus, it can be concluded that it determines the strategy as a certain position to be achieved by an elaborate plan, a possible outcome and strategies need reflected in the sequence of decisions and actions in time. Strategy as a basis for competition determined by Professor Michael Porter (1996) of Harvard Business School. He argues that the essence of competitive strategy is in its distinctive qualities. This means consciously selecting set values, achieved a unique combination of value. In general, Porter argues that strategy as competition position created by the added value the combination of a set of values that distinguishes it from competitors. At the same time it highlights the strategy of the industry and individual enterprises (‘Policy and Practice for Global Tourism - World Tourism Organization’, 2014.). In summary can determine strategies to formulate the concept of relative industries. It is a common industry strategy for the industry long-term comprehensive program that enables organizations to effectively adapt to industry changes in the environment. According to business atmosphere there are lots of beliefs according to purpose and diffusion of them on various sub-sectors. A number of scientists developed general typology of this term and identified key areas and competitive strategies which are common to all businesses. Furthermore, Porter (1980) suggested an approach of explanation how organizations gain a competitive edge and outdo their contenders. In addition, each strategy reflects the degree of adaptation of the enterprise environment. However, according to the typologies it is difficult to analyze the industry as a whole. This characteristic is more suitable to select the strategies of individual companies. So, Garrigos - Simon (2005) used Miles & Snow typology in Spanish Hospitality Industry and it is identified and compared while analyzing the differences between the performance indicators. Also, Yeung & Lau (2005) found that hotels in Hong Kong increased their financial performance by diversifying its portfolio of services in order to apply this strategy typology. The study of Turkish hotels (Umut Avci, Melih Madanoglu, Fevzi Okumus, 2011) using the strategy of the methodology Miles & Snow gave an opportunity to improve the financial performance a number of hotels (‘Samarkand – Crossroad of Cultures - UNESCO World Heritage Centre’, 2014.).


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Considered above definition implies a positioning strategy in the competition and did not take into account the cooperation and cooperation within the industry. According to the procedures difficult to analyze the overall situation in the industry. Thus, strategic management based on resources and to pay special attention to core competencies to

achieve

competitive

advantage,

using

different

methods

of

analysis

of

the

competitive

environment. Disadvantages of the traditional models of analysis lies in the fact that they do not consider the internal and external tests in cooperation (Heene and Sanchez, 1997) originally suggested that companies are competitive in nature and are not aimed at cooperation, paying more attention to markets of goods and services than those markets in which the company acquires its resources do not recognize the fact that the company as a result of their activities by enhancing their competencies and new can change their own competitive environment, also do not consider that the enhancement of existing and development of new competences may allow the company to become competitive for outside their existing markets (‘Узбекистан планирует расширить свою туристическую инфраструктуру | Туристические новости от Турпрома’, 2014.). Similarly, the concept of competition strategies can be linked to Strategic groups (Bergman, E. and E. Feser, 1999). The concept of strategic groups has been proposed as the golden mean between sectoral level analysis borrowed from theory industrial organization and firm level of analysis, the inherent strategic management (Capps et al., 2002; Phelan et al., 2002; Porter, 1980). While each business performs qualitatively a unique strategy, focusing on similar symptoms, it allows scientists reveal basic approaches that may be more appropriate in some industries or the conditions of competition. Strategic group consists of enterprises using a specific general strategy.

Features Industry Strategy To study the strategies inherent in the industry need to understand the essence of the term. As a rule, to give a precise definition of the term "industry" is difficult. Porter (1980) defined the industry as a group of companies that produce products that replace each other, but that definition may not be sufficient, because some businesses and industries produce a range of products for different markets. In addition, the enterprise may be grouped according to similarities in their production processes. The objective industry analysis is to determine the nature of competition in the industry and the competitive opportunities of the company. Industry dynamics, in turn, is subject to change under the influence of the Macro(‘EHL/UNWTO Silk Road Strategy Initiative | UNWTO Silk Road Programme’, 2014.). Cluster studies have improved the understanding of innovation systems at a reduced scale level, including systemic imperfections and policy options. Cluster studies have been the corner stone of industrial policy making in a lot of countries. Cluster studies provide not only an analytic tool to analyze systems of innovation, but can be used also as a working method for policy making in this area and as an economic development tool for strategic business development, in industrialized countries as well as in developing countries ( Ceglie, G. and Dini M., 1999).


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- Cluster analysis provides options for recasting the role of the private sector, government, trade associations and educational, research institutions and brings together business development opportunities of firms of all sizes and across traditional industry lines. - Cluster analysis provides a starting point for creating a forum for constructive business-government dialogue. Not only common problems have been identified, but basically cluster analyses identify common development opportunities and highlights attractive public and private investment opportunities. Concluding we can say that the cluster approach focuses on communication and the relationship between the participants in the value chain in the production of products and services and the creation of innovation. Clusters are most often between the sectoral integration (vertical and horizontal) and comprise a diverse and additional companies that specialize around specific suppliers or knowledge base in the value chain(‘Silk Road on the map | SILK ROAD’, 2015).

The basic tools of strategic analysis Considered above situation forced us to take a qualitatively different approach to the economic development of the sector and find new and much more effective strategic management of technology. Based on the concept of development of the society D. Bell and statements P.Drukera service sector is a priority for the economy, which is specifically different from the production sector. Based on the characteristics of the tourism industry, as one of the sectors of services, given the degree of development of the industry is necessary to define more appropriate methods of analysis. Bearing in mind these shortcomings, we offer the following tools used to develop the strategy of the tourism industry in Uzbekistan: 

An approach based on strategic scenarios. On the basis of this approach, developed a number of scenarios, evaluating their results can operate effectively in an uncertain future. The method consists in the study of the environment organization for the presence of predetermined elements and key uncertainties and combining them for the formulation of alternative scenarios for the future (Kees van der Heijden, 2005).



The use of the cluster approach. On this basis, this approach tourism industry will investigate the relationship with the enterprises of tourist infrastructure. In a globalized world highly competitive countries cannot provide the individual (even if large and technologically advanced), firms and clusters of business entities, linked by close economic relationship. A cluster is a form of cooperation between the companies and organizations that are interconnected by vertical (buyerseller) and horizontal (technology, services, knowledge) bonds, concentrated in certain areas. As part of the cluster to the fore not just the performance of individual companies and organizations, and their "collective efficacy".



The use of elements of SWOT analysis. On the basis of the strengths, weaknesses, opportunities and threats will assess the state of tourism in the city of Samarkand under analysis and its objects.


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Thus, SWOT-analysis can be applied to objects of all sizes, and not only in areas where there is a focus on increasing profits, but also in areas where the goals are as following: Investigations are covered 3 main stages: 

Identification of the list of factors that characterize the internal and external environment of the facility;



Evaluation and ranking of the factors identified;



The formulation of strategies for the development of the object based on the intersections of pairs of factors.

Hypotheses As it mentioned above, the strategy of enterprises, industries, individual regions and states are differ. Even within an organization, there are corporate, business strategy, functional and operational strategy. Due to these differences, in this study, the task to explore the tourism industry based on the cluster approach. It internationally shows, the cluster name is most adequately meet the current criteria for tourism development in the region through effective implementation of the existing potential on them. At the same time, because the basis of this type of clusters based on various service industries, it is this feature allows you to flexibly respond to changes in tourism demand by making adjustments to the structure and proportions of the complex services provided by the cluster. Thus, the determining factor will be the tourism and recreation specialization, and other components of the composition can be changed during operation. At the same time based on a strategic analysis of the tourism cluster in Samarkand and make recommendations

for

the

development

of

tourism

in

the

region, the

authors

postulate

the following hypotheses: H1: There is a correlation in the study of tourism on the basis of cluster approach typology, on the levels of the cluster. The work involves the separation of cluster members on three levels. H2: Developing a common strategy for the tourism cluster of Samarkand is very important especially in the initial development of tourism in the region. H3: In the strategic analysis of the tourism cluster is the most effective method of analysis SWOT. In the process of analysis to be used, and other methods of strategic analysis as a method of PEST analysis and the strategic map, Delphi technique. H4: There is a difference of the strategies at the state level, industry, region and company. However, these strategies are interrelated. Thus, the strategy of the tourism cluster in the region directly affects the corporate strategy of the enterprises included in the tourism cluster. H5: When choosing a strategy based on the comparison of variants of scenario will be chosen the optimal strategy. The development of tourism in the city of Samarkand on the basis of this strategy will result in higher socio-economic level of the region. H6: The implementation of the overall strategy of the tourism cluster have a positive impact on improving the quality of services cluster members.


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H7: The strategy adopted on the basis of cluster approach will reduce the period of innovation in the tourism industry of the city of Samarkand. H8: Strategic management based on the cluster approach has not only economic benefits, but implies a positive social impact.

METHODOLOGY Sequence and methods of analysis. Investigation of this issues has analyzed various studies on the topic and found out consequently different factors by them:

Step 1

• Formulation of strategic objectives and strategic analysis of tourism development in the city of Samarkand. Identify the strategic goals of development of tourism in the city of Samarkand. System analysis of the current state and trends of tourism development; identifying, structuring and determination to solve the problems in order to achieve objectives.

Step 2

• Preparation of the consolidated strategic plan of action to implement the strategic goals and objectives of tourism development in the region. Justification resource maintenance plans for strategic tourism development. Developing a mechanism for implementing the strategy of development of tourism.

Step 3

• Monitoring of the implementation of the strategy. Monitoring and evaluation of tourism development strategy. Adjustment measures and required resources and mechanisms of corrective actions. The results (interim and final) implementation strategies for their evaluation.

When studying the possibilities of improving strategic management processes tourist complex it is advisable to use the experience of elaboration of theoretical and methodological recommendations on Building Cluster under organizational structures. Diffusion of Clusters are being the most effective form of achieving a high level of competitiveness of the territory, moreover it is considered as organizational form of interaction between different actors - industrial companies, research and innovation centers, government bodies and public organizations. All participants in the cluster receive a competitive advantage under the influence cumulative effect of economies of scale, scope and synergies(David Airey & Myra Shackley, 1997). Thus, it may be determined the optimal structure build tourism clusters that meet the current level of development of cooperative relationships between tourist enterprises and includes such structural elements: 

Generator cluster - forms an integrated tourist product, determines the strategy of its promotion in the market as a whole is responsible for the development strategy of the whole cluster structure;



Functional structural units form, performing the function of creating a basic tourist product (transport carriers, accommodation, restaurants (cafes, bars), Bureau of excursions, spa organizations, etc.;


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

Functional structural units of promotion, responsible for research, sales and marketing of the tourist product (travel agencies, tour operators who sell the generated product, marketing and advertising agencies, information and analytical services, etc.);



Functional structural units provide operating support functions necessary additional service for tourists (cinemas, sports and fitness centers, shopping centers, clubs, health centers, etc.);



Functional structural units of the infrastructure to ensure the dynamic development and integration of tourism cluster in the regional economy (specialized recruitment agencies, specialized institutions of higher education, financial institutions, insurance companies, energy, housing and communal services, etc.).

At the same time as a strategic cluster of the generator it is possible to consider only the largest institutional structure commensurate with the scale of the entire regional tourist complex, for instance, organs of state and municipal management in the field of tourism, and at the level of municipalities as a whole, or the combined structure of economic entities as well as at the municipal level, and among tourism enterprises (unions, associations, etc.).

Development and testing of the research instrument The industry of tourism is considered as a fastest growing segment of businesses in the world economy. Moreover, it is predicted that it will become one the world's leading tourism export industry of the 21st century. Tourism as one of the largest and fastest growing economic sectors in the world, and has a considerable role to play in delivering sustainable development in many countries. At the same time it must be well managed so that it benefits local communities and the natural and cultural environments upon which it depends. It is believed that tourism, covering employment, decent work and human capital, reflects the fact that tourism is fundamentally a people-based activity. Careful planning of human resources, involving consultation with private enterprises and employee representatives, is needed to ensure that tourism can fulfil its employment creation potential and has a sufficient supply of suitably skilled labour to meet future growth in Central Asian developing destinations (Samia , 2011) An ever-increasing number of destinations worldwide have opened up to, and invested in tourism, turning it into a key driver of socio-economic progress through the conception of jobs and enterprises, export revenues, and infrastructure expansion. Despite occasional shocks, tourism has shown virtually uninterrupted growth. International tourist arrivals have increased from 25 million globally in 1950, to 278 million in 1980, 527 million in 1995, and 1133 million in 2014. Equally, international tourism receipts earned by destinations worldwide have surged from US$ 2 billion in 1950 to US$ 104 billion in 1980, US$ 415 billion in 1995 and US$ 1245 billion in 2014. Intercontinental tourist arrivals worldwide are expected to increase by 3.3% a year between 2010 and 2030 to reach 1.8 billion by 2030, according to UNWTO’s long term forecast Tourism Towards 2030(‘National Company “UzbekTourism”’, 2014). Coinciding with the independence of five central Asian republics from the former Soviet Union, there has been a revival of interest in the Silk Road – for cultural exchange, trade and tourism. After having


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received its independence, Central Asian States (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan) have been established the policy and model of tourism development.(Coulibaly et al., 2012). During these years of independence, mentioned governments and tourism committees have done great job at a national and local aspect. It is noticeable that, organizational and structural changes implemented, a new system of state regulation and control was established, preconditions for infrastructure development were created and mechanism of preservation and restoration of cultural and historical attractions were ensured. As result of infrastructural improvement of tourism facilities and industry modernization, made up new job places and established supply chains. Therefore, working with informal traders and enterprise formation and, more widely, the application and use of tourism charges and collateral benefit from tourism investment that make easy to launch small business and entrepreneurship facilities in tourism area (Allison, 2004). This emphasises the need to ensure that local communities are consulted, engaged and empowered to engage with tourism development and operations that may affect their livelihood and society in whole. Based on collaboration team of international experts, has deliberated procedures in which meted out “Strategic Recommendations for Enhancing Tourism with a Special Focus on Central Asia” that compiled by UNTWO as a major measures for Central Asian tourism businesses (2012). According analyses, yet a number of barriers are hindering tourism development in the Silk Road countries. Visa and border crossing formalities, transport infrastructure, corporate governance and quality assurance are just some of the issues that require the attention of stakeholders to ensure positive growth across the regions (Raballand, Kunth, & Auty, 2005).

Specifically article is designed to: 

Outline the different components of the Central Asian countries while demonstrating their economic features



Identify strategic opportunities for economic growth through tourism sector



Set priority suggestions for developing tourism businesses while investigating challenges and objectives of the sector

Hence, the tackled issues of tourism area could be mentioned the deployment of small business enterprises and entrepreneurial founded deployment that may challenge highlighted obstacles. In this context, the general purpose of this paper is to undertake a review of the small business and entrepreneurship status on Central Asian tourist destination, with the specific purposes of describing and comparing the existing structural policy of the sector, and identifying major results and conclusions, as an approach to better engagement the existing enterprises and suppliers on the development of tourism in listed counties (‘The State Committee of the Republic of Uzbekistan on Statistics’, 2015.). In Uzbekistan, tourism is today one of the priorities and future directions of socio-economic development. There is room for improvement: according to the World Tourism Organization, Uzbekistan could take a year at least 6 million domestic and foreign tourists.


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High tourist potential of Samarkand city, and this - the rich historical and cultural heritage, natural and advantageous geographical location and a unique resource as folk arts and crafts, rightly makes it one of the most promising regions for tourism development. Government of the region for several years implementing a set of measures to promote a competitive tourist industry in the region. Among the measures implemented is the most significant credit and financial support for projects of tourism. The concept of development of the tourist cluster involves integrated development of the tourism industry in the region, that is, and the development of existing enterprises and construction of new tourist facilities, the introduction of innovative tourism products, development of new tourism destinations, and more. At the same time one of the most important areas of the cluster, we believe the work with educational institutions in the region and, consequently, training for the tourism industry, because in itself, even the richest tourist resources are not able to create comfortable conditions for receiving tourists and providing comfort this is primarily a matter of training. Classification of regulatory tools generator cluster approach in the spheres of their application must include: 

In the legal sphere: improvement of the regulatory framework; development of a

methodology for

licensing, standardization, certification in the field of tourism; customs regulations; establishing the rules of entry, exit and stay on the territory, taking into account the interests of tourism development; 

In the economic sphere: stimulating the development of the material base of tourism by attracting extrabudgetary sources, including foreign investment for renovation and new construction of tourist facilities; tax regulations; targeted budget funding for the development of tourism; creation of favorable conditions for investment in tourism.



In the social sphere: ensuring the development of social tourism; ordering of property relations in the tourism sector, taking into account characteristics of the nature of tourist activities.



In science and education: the development of the tourism industry of science, implementation of a set of basic scientific research in the field of tourism at the federal and regional level, the creation of information-analytical database; software professionals for tourist activities.



In the sphere of tourism: the formation of the image of Uzbekistan on the global market for tourism; advancement in promotion of national tourist product both on local and global markets;



Promoting participation in international tourist programs;



Creation of conditions to multipurpose use of the tourist infrastructure;



Establishment of collaborative investment programs with specific activities which are directed on private sector.



In the area of information technology: the creation of a single information space; advertising and information support.

Thus, for the integrated development of the tourism industry needed software and targeted measures to stimulate the development and management of tourism, including: planning of the development of the tourism


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industry, human resources, maintenance of scientific researches of tourism, support for tourism businesses to ensure protection of the environment, to create a favorable image of the country and the region, control and supervision of the tourist activity, the creation of a single information space and interacting network of information tourist centers on the basis of the generator of the cluster approach. After have been mentioned in UNESCO World Heritage List , Samarkand – Crossroads of Cultures city with its more than 400 unique monuments appear as one of the crucial tourist destination among Silk Road corridor ones. As history of the Samarkand, located in a large oasis in the valley of the Zerafshan River, in the north-eastern region of Uzbekistan, is considered the crossroads of world cultures with a history of over two and a half millennia. Evidence of settlements in the region goes back to more than three thousand and five hundred years ago, with Samarkand having its most significant development in the Temurid (Amir Temur) period, from the 14th to the 15th centuries, when it was capital of the powerful Temurid realm. Samarkand was one of the ancient capital cities which demonstrate lifestyle, culture, tradition, horizon of the nation, as well as history and distinct sightseeing monument made it more interesting one for travelers who would like to get real evidence of the past. Moreover it has linked with other famous cities of the ancient East («Samarkand – Crossroad of Cultures - UNESCO World Heritage Centre», 2012). The historical part of Samarkand consists of three main sections. In the north-east there is the site of the ancient city of Afrosiab, founded in the 7th century before Christmas and destroyed by great conqueror Genghis Khan in the 13th century, which is preserved as an archaeological reserve. Archaeological excavations have revealed the ancient citadel and fortifications, the palace of the ruler (built in the 7th century displays important wall paintings), and residential and craft quarters. There are also remains of a large ancient mosque built from the 8th to 12th centuries(‘UNWTO Silk Road Programme’, 2013). To the south, there are architectural ensembles and the medieval city of the Temurid epoch of the XIV-XV centuries, which played a seminal role in the development of town planning, architecture, and arts in the region. The old town still contains substantial areas of historic fabric with typical narrow lanes, articulated into districts with social centers, mosques, madrasahs, and residential housing. The traditional Uzbek houses have one or two floors and the spaces are grouped around central courtyards with gardens; built in mud brick, the houses have painted wooden ceilings and wall decorations. After the breakdown of the Soviet Union, service sector has developed exponentially in the short period of time. The policy and infrastructure of tourism, hotels, restaurants, and entertainment places have established in good way. It has made city and its society to be engaged with tourism activities, to do more businesses in the hospitality sector. Hence, the rate of lifestyle of people, average income of private sector, and privileges for entrepreneurs have modified and diversified completely. The further advancement of this sector in the city could be explored through SWOT analyses by investigating its strengths, weaknesses, opportunities, and treats. Given SWOT analyses empirically highlight objective merits and opportunities of tourism enhancement in Uzbekistan and way of its deployment as well as reveal resemblance of shortcomings and threats which obstacle tourist potential in state. The main obviously strength of tourist destinations in


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Uzbekistan is a huge amount of historical monuments, which are considered as unique and marvelous and can be seen only in some cities of the world. In addition to this feature it also has well organized tourist industry which provides various kinds of tourism and many advantages, such as low cost packages or exotic tourism for visitors who travelled in this country. Nevertheless, tourism sphere has also faced with some actual problems, which serve as a barrier for further advancement. The prior issue which should be tackled is poor quality of marketing and inadequate brand name of destination and tour products. Besides, another major problem which creates threat among travelers is visa obstacles and procedure of tourism as well as shortcomings of the sub-sector´s which are recommended to refine. The analyses of SWOT could determine the main drawbacks of the tourism industry and identify some solutions for the responsibility officials. Moreover, it could impulse some further researches on the sector of tourism in this destination with some proposals. Underlined facts and required features of studies may be addressed to find out more positive result in upcoming years. Threats and weaknesses of the issue could be tackled and through investigated shortcomings industry could lead to affirmative development in this economic field.

SWOT analysis of the tourism industry of the city of Samarkand •cost of tourist services (hotel accommodation, food, transportation and other); •insufficiently developed tourist infrastructure, a small number of tourist class hotels; •high costs and underdeveloped network of air and railway transport within the country •imperfect visa policy •inflated prices for foreign tourists for the services of state museums

•political stability •the stability of the national currency •the rich cultural and natural resources •stability of incomes per capita •constant demand for tourist services •development of information technology in the tourism sector •promotion of the training on qualified specialists

Strength

Weakness

Opportunity

Threats •

•presence of a new facilities and services •improvement of the legislative base of tourism •introduction of new services; •conquest of markets


preservation of the negative stereotypes of the image of Uzbekistan, supported by some foreign media outlets; •insufficiently developed tourist infrastructure, a small number of tourist class hotels; •high costs and underdeveloped network of air and railway transport within the country •poor quality of roads for tourism development using vehicles

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PREDICTED RESULTS AND DISCUSSIONS Socio –economic analyses of the deployment, Case of Samarkand region. After the independence, tourism sector in Uzbekistan has developed significantly. On this basis, Samarkand region has been contributed noticeably by the government and officials. Moreover, it has specific features while development of the area as a touristic destination as whole:  significant personnel , natural and investment potential ;  a developed manufacturing industries such as food and beverage , building materials and machinery  advantageous geographical position ;  great historical and natural - recreational resources ;  base to development of cultural and ecological tourism ;  advanced research and educational base ;  base to the development of modern business services within production infrastructure ;  advanced - transport system ;  considerable potential to attracting private investment in small business, as in production of goods and services , so and in rural economy  potential to effective foreign trade cooperation ;  the comparative advantages of food and cotton - processing industries in the region ;

Strategic trade location in Central Asia could turn the region in an important transit point from the provision of transport and freight services, as well as services by storage products. Moreover, a significant amount of fertilized land condition on rural economy, pasture land, good climate from a large number of solar days and acceptable amount of irrigation facilities.

Development of the Samarkand region is limited by the presence of the following factors:

Low-cost national tour packages which are dedicated on the traditional perspective

•creating suitable packages •perspective facility types

Lack of activeness in the investigation, major funding sectors of economy and infrastructure

•artificial projects •attractive modern amenties •investigation on infrustructure

High qualified specialists who can push distinguished services and so on


•educational programms •collaboration with foreign countries •service quality

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Potential risks of the development in Samarkand region are considered by following: reduction of budget and financing in some subsidized fields within sectors which could be improved intentionally

making adjustable marketing purposes with the help of managerial task and relationships

development of the inner markets with the help of the open market policy and projects of the government

providing facilitated features on entrepreneurship and other fields as whole while improving their attractiveness

selection of proper technologies with the help of the leading tendencies of worldwide

relieving extra products and services for both local and international markets under the control of the government

to make development projects in the touristic destinations with the help of neighboring regions as whole

usage of crowd technologies and current ICTs on the deployment of supply chains

Low-level of technological equipment of the enterprises for processing of raw materials, physical and moral depreciation of fixed assets (about half of the production base of the industrial enterprises is obsolete). 

Poor diffusion and implementation of innovative methods and modern technologies;



Fragile integration and cooperation between sectors and territories, small businesses, research organizations and universities and synergetic productiveness through them.



Scrawny development of industrial and engineering infrastructure and consequently effect under the placement of enterprises in rural areas.

Possibilities of regional industrialization: 

the development of "regional growth points" in order to accelerate growth areas based on their competitive advantages;



wide attraction of investments in the development of mechanical engineering, metal-working and chemical industries;



the development of building materials industry through the effective use of local raw materials by establishing a production of cluster;



Encourage the establishment of enterprises with foreign investment and creation of new brands on the basis of development of manufacture of wine, dried fruits, traditional handicrafts and so on.



Location and set of holy places of the world religion, especially on Islam and Christianity under the territory of the region ;


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

Possibility

of acquaintance from customs and the

traditions of

the

ancient historical

sightseeing places of World heritage cities of country like Samarkand, Bukhara , Khiva and so on ; 

Unique traditional folk crafts and crafts ;



Availability of expressive masterpiece of the prehistoric times of Samarkand and its inventers like Amir Temur, Abu Ali ibn Sina, Alisher Navoiy and so on ;



Favorable location from geographical position in the valley of the river Zarafshan with the consideration of the crossroads on " Great Silk way ";



Investment attractiveness of the city thanks to its labor force and potential development of tourism sector

Shortcoming of tourism development in Samarkand region: 

Lack of touristic development and infrastructure from global point of view ;



Limitation of tour operators in the touristic destination of Samarkand, while establishing direct contact with tourist companies of foreign countries by the organization of tourist trips and determining the route , and capacity of services on it;



Scarcity

at

tourist formation

strategy

of recreational services by the

development

of ecological tourism in region ; 

Relative seasonal tour flows in region ;



Insufficiency

of entertainment amenities as an extra facility for the organized list of

performances ; 

Complex endorsement of current visa regime and policy



Diversifications of touristic connections among destinations and routes while by the involvement of Samarkand and Bukhara through destinations like Shakhrisabz and Karshi ;



Transport connections of foreign companies within touristic destination and network of tour operators ;



Legislation of service types and physical appearance of them under the quality control and so on;

Potential opportunities of the development in the area tourism: 

Increased awareness of the historical and cultural heritage of Samarkand through the media, especially on the Internet by creating a special channel satellite television and other information systems;



Improvement on technical equipment of tour operators by facilitations on taxes and customs preferences;



Broad involvement of international organizations to promote the development of tourism;



Using historical and natural features in the nearby cities such as Shahrisabz and Karshi in order to increase the attractiveness of tourist trips in region.


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Possible factors deterring the development of the industry: 

Direct and indirect effects of the destabilization of the socio-economic and political situation in the neighboring countries (Tajikistan, Kyrgyzstan, Afghanistan and others.);



The imperfection of the legal framework regulating tourism in the Republic;



strengthening of competing provisions in other tourist cities (the cities of Bukhara and Khiva);



A possible deterioration of the ecological situation in the region and the spread of various infectious diseases and epidemiology.



Consider the main range of issues to ensure strategic planning of tourism development.

Uzbekistan as one of the touristic destination of the Great Silk Route demonstrates huge opportunity to contribute significantly on the economy of country. It also believed to enhance the lifestyle of inhabitants while organizing and advancing facilities. In briefly, the strategic development of country and policy of tourism infrastructure need modifications and diversifications as whole.

CONCLUSION As tourism stimulates infrastructure development of the Central Asian countries, has a strong multiplication effect and helps diversify the economy, supports local culture and crafts and environmental protection, it is very actual for all Republics of Central Asian region with its transitional economy, especially it is important as Uzbekistan is a country with vast capabilities in tourism. The most attractive, as well as crossroad of the Silk Road tourist destination, Samarkand possesses historical, medieval and tradition origin root of that areas. It represents huge potential to become one of the cities that attract travellers not only from Asian countries but also from entire world. Besides, the travel and tourism industry is a leading export industry in worldwide, Central Asian counties could contribute considerable even though they make modifications and diversifications on their policy of entrepreneurship with comparing and implying in reality. Moreover, with vast underused capabilities in tourism and diversity of tourist attractions represent the potential of tourism in these tourism destinations. Accessibility of various tourism types, distinct traditions and unique cultural background of Central Asia has considered as one of the main key factor tourism and hospitality businesses. As brand name of Silk Road unites countries under one destination, the usage of this privilege promotes to get rid lot of issues. Likewise, some problems could be solved as whole rather than individual ones. Optimization of Visa facilities could appeal flow of tourists from entire of the world as it has stated by UNWTO research group is one of the main example of this statement. By giving this chance, tourist could get visa for different short periods as a result the duration of their stay could be prolonged. Finally, as one of the main Silk Road tourism destination, Central Asian states have great potential to advance sector of hospitality and tourism that create a lot of promotions for different spheres. In the other perspective, tourism sector in Central Asia has already established and its policy has led to some fundamentals improvements in the last 20 years.


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REFERENCES Allison, R. (2004). Regionalism, regional structures and security management in Central Asia. International Affairs, 80(3), 463–483. Central Asia: Problems and Perspectives of International Tourism :: Slavomír Horák. (2014). Retrieved 24 April 2014, from http://www.slavomirhorak.net/news/central-asia-problems-and-perspectives-of-international-tourism/ Coulibaly, S., Deichmann, U., Dillinger, W. R., Ionescu-Heroiu, M., Kessides, I. N., Kunaka, C., & Saslavsky, D. (2012). Eurasian Cities: New Realities along the Silk Road. World Bank Publications. David Airey, & Myra Shackley. (1997). Tourism development in Uzbekistan. Retrieved 24 April 2014, from http://ac.elscdn.com/S0261517703001997/1-s2.0-S0261517703001997-main.pdf?_tid=52d31080-cbc0-11e3-937a00000aab0f6c&acdnat=1398351443_ac802891a64f5bf053879f65e012e8a7 EHL/UNWTO Silk Road Strategy Initiative | UNWTO Silk Road Programme. (n.d.). Retrieved 25 April 2014, from http://silkroad.unwto.org/en/project/ehlunwto-silk-road-strategy-initiative Fifth International Meeting on the Silk Road. (2014). Retrieved 25 April 2014, from http://silkroad.unwto.org/en/event/fifthinternational-meeting-silk-road-samarkand-republic-uzbekistan Handbook on E-marketing for Tourism Destinations - World Tourism Organization. (n.d.). Retrieved 15 May 2014, from http://www.e-unwto.org/content/r02520/?p=7818839427de449d880b57b9cd7459e9&pi=0 IUTF-2014. (n.d.). Retrieved 25 April 2014, from http://www.tourfair.uz/en/component/k2/item/2-mutv2014.html National Company ‘UzbekTourism’. (2014). Retrieved 25 April 2014, from http://www.uzbektourism.uz/index.php/ru/ Policy and Practice for Global Tourism - World Tourism Organization. (n.d.). Retrieved 15 May 2014, from http://www.eunwto.org/content/jj25vv/?p=bb96d121a1c1474a95d64048aff500db&pi=0 Raballand, G., Kunth, A., & Auty, R. (2005). Central Asia’s transport cost burden and its impact on trade. Economic Systems, 29(1), 6–31. Samarkand – Crossroad of Cultures - UNESCO World Heritage Centre. (n.d.). Retrieved 27 April 2014, from http://whc.unesco.org/en/list/603 Samia, N. I., Kausrud, K. L., Heesterbeek, H., Ageyev, V., Begon, M., Chan, K.-S., & Stenseth, N. C. (2011). Dynamics of the plague–wildlife–human system in Central Asia are controlled by two epidemiological thresholds. Proceedings of the National Academy of Sciences, 108(35), 14527–14532. http://doi.org/10.1073/pnas.1015946108 Silk Road on the map | SILK ROAD. (2014.). Retrieved 25 April 2014, from https://en.unesco.org/silkroad/interactive-mapof-the-silk-road Silk Road Project fact sheet_20130726 - 1_Silk Road Project fact sheet_20130726.pdf. (2014). Retrieved from http://www.silkroadproject.org/Portals/0/Uploads/Documents/Public/Press_Releases/1_Silk%20Road%20Project%20fact %20sheet_20130726.pdf Strategic Recommendations for enhancing Tourism with a Special Focus on Central Asia.pdf. (2012). Retrieved 15 May 2014, from http://dtxtq4w60xqpw.cloudfront.net/sites/all/files/pdf/recommendations_tour_operators_forum_2012_electronic_0.pdf The State Committee of the Republic of Uzbekistan on Statistics. (2014). Retrieved 11 September 2014, from http://stat.uz/en/index.php UNWTO and Government of Uzbekistan to host 5th International Meeting on the Silk Road | Tourism-Insider. (n.d.). Retrieved 25 April 2014, from http://tourism-insider.com/en/2010/08/english-unwto-and-government-of-uzbekistan-to-host5th-international-meeting-on-the-silk-road-2/ UNWTO Silk Road Programme. (2013). Retrieved 25 April 2014, from http://silkroad.unwto.org/publication/developingsustainable-tourism-strategy-silk-roads-heritage-corridors Государственный комитет Республики Узбекистан по статистике - Об итогах социально-экономического развития Республики Узбекистан за I квартал 2014 года. (2014.). Retrieved 11 September 2014, from http://stat.uz/press/1/8359/?sphrase_id=116365 Узбекистан планирует расширить свою туристическую инфраструктуру | Туристические новости от Турпрома. (2014.). Retrieved 27 April 2014, from http://www.tourprom.ru/news/19902/


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http://ijecm.co.uk/


Special issue on

Uzbekistan

ISSUES ON SUSTAINABLE DEVELOPMENT OF UZBEKISTAN Farhod Ahrorov Dean of Economic and management faculty, Samarkand Agricultural Institute, Uzbekistan [email protected], [email protected] Bobur Sobirov Service and Tourism faculty, Samarkand Institute of Economics and Service, Uzbekistan [email protected]

Diyor Inoyatov Westminster International University in Tashkent, Economic with Finance, Level 5 student, Uzbekistan [email protected] Abstract The paper scrutinizes the conceptual descriptions and evaluation of sustainable development of Uzbekistan with the status quo of economic analyses and its sectoral overview as whole. As the objectives, descriptions of the concept of sustainable development are analyzed and classified through current theoretical views. Furthermore, analysis the systematic view of the dimensions of sustainable development is provided while methods of systematic scientific literature analysis, general and logical analysis, comparison and generalization were used for the research. Investigation concludes with sustainability issues with analyzes


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and solution on the system levels where they develop and manifest themselves, one can consistently formulate respective aims of the sustainable development policy for separate dimensions (economic, ecological, social, and institutional) of sustainable development on each of these levels of economic development policy, thus obtaining the complex of the aims of sustainability policy. Keywords: Sustainability, Economy of Uzbekistan, Infrastructure, Central Asia, Economic competitiveness

INTRODUCTION The term “sustainable development” is used as a common denominator for positive outcomes of development efforts, that is, situations where development efforts succeed in maintaining or enhancing the capacity of environmental, economic, and social systems to evolve and interact in harmony with one another and with a long-term perspective (Barbier 1987, 1989; WCED 1987; Wiesmann 1998). Consequently, development at the local, regional, national, and global levels is only sustainable if it meets the requirements of all three dimensions of sustainability: the social, the economic, and the environmental. It is considered that, many researchers and policymakers perceive and address the different dimensions of sustainable development as separate issues – and primarily understand sustainable development as an environmental issue. A prominent example of such a perception is a current global research initiative that claims to be centered on “five Grand Challenges that, if addressed in the next decade, will deliver knowledge to enable sustainable development, poverty eradication, and environmental protection in the face of global change” (ICSU 2010). Three of the five challenges focus on calculating perceiving, and confining environmental alteration, based on the premise that humankind has not been able to manage this change so far. Other major scopes of unsustainable development, particularly the social and economic dimensions, but also the institutional and political ones, are perceived primarily as a means to advance environmental sustainability, rather than as global change processes in themselves, and are addressed only in the two outstanding challenges on responding and innovating. Another prominent example of a one-sided initiative is the Millennium Development Goals (MDGs), which focus almost exclusively on poverty as a social issue of unsustainability, to be overcome primarily by means of human development (United Nations 2009). The MDGs – and MDG-related research – thus largely neglect both environmental and economic aspects of sustainability, which may be a major reason why these goals will hardly be fulfilled by 2015(Bank, 2015). The shortcomings of these two major international initiatives are understandable: Indeed, the goal of sustainable development always requires a process of finding a balance between the three dimensions of sustainability, based on negotiated norms. Establishing such a normative balance means making choices and setting priorities. As a result, initiatives cannot address all dimensions of sustainability in a perfect way, but they can strive to meet at least the most urgent needs of the stakeholders concerned and the most urgent requirements identified for biophysical systems, with a view to doing things better in future. A mapping of sustainable development debates by Hopwood and co-authors (2005) reveals a growing concern for environmental challenges as well as issues of socio-economic disparities, human wellbeing, and equality that


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necessitate reform or even transformation. This confirms that all dimensions of sustainable development have to be addressed (Anonymous, 2014b). Global change embraces all aspects of global dynamics in the social, cultural, political, ecological, institutional, and economic spheres. It is discussed that humankind today is confronted with numerous threats brought about by the speed, scope and unpredictable interconnectedness of global change dynamics. A concerted and informed approach to solutions is required to address the magnitude and severity of the numerous crises we are facing, related to the global economy, climate change and natural resource degradation, food security, poverty and social exclusion, water and sanitation, and conflict and governance, to name but a few. Generating shared knowledge and developing the ability to cross multiple borders between understandings of realities and issues are a key to addressing such global challenges. (Hurni 2010, p 13) As asserted above, however, global variation should not be perceived as having only negative impressions: Indeed, some procedures of global change have in many salutations led to greater sustainability. Economic growth, for example, has enabled people and entire societies to progress their maintenances, which has in turn led them to pay more attention to their environment. Kuznets (1955) and other authors proved the correlation between economic growth and environmental superiority. Indeed, according to Raskin (2008, p 461), “sustainability research studies the dynamics and prospects of co-evolving human and ecological systems, a subject of intrinsic complexity and deep uncertainty”. The authors of the present book undertake that despite such uncertainty, global change can be governed for sustainable expansion (Bank, 2015). Drawing on theoretical thinking and research experiences conducted in many regions of the world within the framework of a 12-year partnership-based investigation program, they are even influenced that (global) change is needed to achieve sustainable expansion; but this change has to be steered to avoid negative significances. Today’s global change problems exist mainly because local difficulties were overlooked, neglected, not addressed, or not perceived as vital while they were gradually growing into global issues (Müller & others, 2006). Thus, the question is not whether or not there should be global change, but to what extent it will be possible to reduce or mitigate its negative impressions and processes, and find groundbreaking keys while trying not to generate new difficulties.

THEORETICAL BACKGROUND OF SUSTAINABILITY Establishing an integrative conceptual framework of sustainable development: The most common definition of sustainable development was established by the World Commission on Environment and Development (also known as the Brundtland Commission), indicating that sustainable development is “development that meets the needs of the present without negotiating the ability of future generations to meet their own needs”(Egamberdieva et al., 2008) . According to this notion, human beings at the center of sustainable development and at the same time implies that all other living beings, that is, plants and animals, as well as other natural resources must not be depleted if they are to remain available to future human generations for meeting needs at various levels,


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reaching from food supply and ecosystem functions to aesthetic and cultural values (Landau & KellnerHeinkele, 2001). In the sustainability debate of the 1990s (see United Nations 1997) three major dimensions of sustainable development were postulated, namely the social, ecological, and economic dimensions; moreover, the normative character of sustainable development was put at the forefront of the sustainability concept (e.g. Wiesmann 1998; see Figure 1).

Figure 1. Conceptual framework combining an analysis of human–environment systems and their interaction with a normative appraisal of sustainable development.

Source: Hurni and Wiesmann 2004;adapted from Wiesmann 1998

The definition of sustainable development presented in mentioned Figure 1 is rooted in a systems approach that includes a focus on the biophysical system with renewable natural resources, the social system with political, economic, and institutional characteristics, as well as an interface between the two major systems, namely a land use system where human use and natural resources are linked in a spatial, that is, landscape context (Anonymous, 2014a). Although developed in the context of research on rural areas in mountains, such a systems approach is capable of including urban areas as well, as long as they are observed in a broader context of urban–periurban systems(Karimov, 1998). When considering the three dimensions of sustainable expansion we could argue that the economic dimension is not a basic sustainability dimension with a long-term viewpoint, but a tool to accomplish sustainable use of natural resources between the ecological and social spheres. This priority of the ecological and social dimensions over the economic measurement, however, could be counter-argued by the need to keep goods and services flowing between individuals and societies, requiring a sustainable economy; hence


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this should be an essential dimension of sustainability. We may further argue that an institutional and political dimension of sustainable development should be considered as well; these two additional aspects could be incorporated under the social dimension of sustainability.

Economic sustainability of Uzbekistan Since the mid-2000s, Uzbekistan has enjoyed robust GDP progression, thanks to favorable trade terms for its key export commodities like copper, gold, natural gas, cotton, the government’s macro-economic management, and limited exposure to international financial markets that protected it from the economic downturn. Still, the deployment of economic advancement under the policy and structure of government have been making diversifications and modernizations as whole. On the other hand, the value of globalization and up-to-date innovative technologies are vital necessary for the future of country while facing challenges. Overall, growth for Uzbekistan is projected to endure at around 7 to 8 percent annually during 2014-17, supported by net exports and a large capital investment program. World prices for Uzbekistan’s principal exports were favorable through the first half of the 2012-15 fiscal years (FY) Country Partnership Strategy (CPS) period. The impression of recent fall in global food and energy prices is expected to be limited given Uzbekistan’s policy of self-reliance in both food grains and energy. Given the government’s plans to finance up to two-thirds of their investment program from external sources, including loans, external debt is expected to increase gradually. The country has to contend with a amalgamation of risk factors going forward, including deteriorating security conditions due to the situation in bordering countries, and increasing tensions between with neighbors over regional issues—especially the management and use of trans-boundary energy and water resources. Domestically, Uzbekistan has to work to minimize its economy’s vulnerability to external shocks affecting commodity prices and the predicted inflow of foreign direct investment (FDI) and external loans to finance the large public investment program. Uzbekistan, with the goal of becoming an industrialized, high middle-income country by around 2050, is continuing to transition to a more market-oriented economy to ensure equitable distribution of growth between regions and to maintain infrastructure and social services. The country’s policy goals and priorities are: to increase the efficiency of infrastructure, especially of energy, transport, and irrigation; to enhance the competitiveness of specific industries, such as agro-processing, petrochemicals, and textiles; to diversify the economy and thereby reduce its reliance on commodity exports; and to improve access to and the quality and outcomes of education, health and other social services. Urbanization criteria in each city were not equal in all the cities of the Republic of Uzbekistan. Therefore, it requires building the future socioeconomic capacity of them. In particular, the development of small business and private enterprises can be based for strengthening of occupancy of the population and improvement urbanization. Formed the basis of the social, economic and demographic situation, nowadays it requires to improve the quality of the population of the republic. The following can be determines main characteristics of the population:


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

the rate of health of the population;



the rate of child and maternal mortality;



the average life expectancy of the population;



education level and their structure;



vocational-technical training of the population and their structure;



social structure and social mobilization;



occupancy status of the population and the network structure;



urbanization level of the population;



the regional nature and intensity of the movement of the population;



national values, family and community traditions, folk traditions and their safety;



universal values.

For a major demographic processes birth, death, marriage and divorce levels of the Republic of Uzbekistan are given assessment. It was based that in the years of independence of the Republic of Uzbekistan in all regions the birth, death, marriage and divorce rates were decreased and marriage age was extended. Scientific offers were produced the development of an effective demographic policy and to control demographic development according of modern demographic condition which was developed in the territories of the Republic of Uzbekistan. The further development of the national economy during the global financial and economic crisis, to correspond it to the market economy under the requirements of such aspects as population, its growth, location, demographic structure has a great importance to study to pass to the modernization of the economy on the transition period point of view. In addition, a positive solution of the problems of the population, to improve living conditions and to pay much attention to the quality indicators is very important. But, the population is seen as well as a manufacturer power and consumer in the society. The structure and number of the population, to be re-built aspects were reflected to the development economic processes. Therefore, it was practical importance to analyze the changes in the properties of rebuilding them, to solve the problems in incomes and improve the quality of life of the people in the country and to support the occupancy of population which has been growing. Republic of Uzbekistan is a country with a high demographic potential. Today, 0.42 per cent of population the Republic of Uzbekistan is accounted for the world's population (7.2 milliard people). In table-2, it is believed Uzbekistan is the highest of the grow in population of the Commonwealth of Independent States countries, (Table 2)


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Table 2. The dynamics of the Commonwealth of Independent States countries mill. Person.

As it can be seen from the table, the number population of countries was increase in 2005-2014 Tajikistan (27.6%) Uzbekistan (17.1%), Kyrgyzstan (13.7%), Kazakhstan (13.0%), Azerbaijan (10.4%), Turkmenistan (10.4%) and Moldova (7.8%). Armenia, Belarus, Russia and Ukraine, countries were seen depopulation (decrease the number of people). The share of the population in Russia and Ukraine, the next place was taken Uzbekistan among the CIS countries. It consists of 10.9 percent of the total population. The urbanization rate of the population of the Republic of Uzbekistan was 51 per cent. According to this indicator Uzbekistan is placed more early place between neighboring countries Kyrgyzstan, Tajikistan and Turkmenistan. In fact that the urbanization rate of the population of the Republic of Uzbekistan was 35.8 percent by 2009 (Breckle, Veste, & Wucherer, 2012). In 2009, according to the Decree of 68 "About additional measures to improve the settlements of the administrative-territorial structure of the Republic of Uzbekistan" of the Cabinet of Ministers of the Republic of Uzbekistan due to the reorganization of 965 rural villages into the city the urbanization level of the population was equal to 51 percent. Under the territories of the regions of the Republic of Uzbekistan reorganized into rural urban area: the Republic of Karakalpakstan - 11, Andijan region - 79, Bukhara region - 59 region, 33, Kashkadarya region - 117, Navoiy region - 29, Namangan region - 108, Samarkand region – 75, Surkhandarya region - 106, Syrdarya region - 15 Tashkent region - 78, Ferghana region - 198, Khorezm region – 50. The way of policy and structure were accepted by The Decree of 68 “About additional measures to improve the settlements of the administrative territorial structure of the Republic of Uzbekistan”, 2009. According to Table-3, the data of the State Statistics Committee of the Republic of Uzbekistan, the population is amplified by 48 percent in 1990-2013, the quantity was 30492.8 thousand people on January 1, 2014(Song, Frostell, & Gadaev, 2013).


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Table 3. Permanent changes of the population of the Republic of Uzbekistan, thousand people (to the beginning of the year)

Some rises in natural movement of the population of the Republic of Uzbekistan were observed at last 15-20 years, they particularly were occurred according to the decrease in the birth and death. In general, the natural growth was very important in the growth of the population. It develops accordance with the socio-economic development opportunities. Typically, the high level of natural growth leads to a rapid increase in the number of people. Such position is depend on fertility and mortality rates(Van Assche & Djanibekov, 2012). There are significant differences in the age structure of the CIS countries. These differences were based on specific demographic behavior of the place where people live. Kept the high of birth rate for a long time in Central Asian republics were remained a large part of the population consisted the young nowadays (Sievers, 2013).


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Table 4. The natural development of the population dynamics of CIS countries.

In other CIS countries, namely depopulation process where observed in Belarus, Russia and Ukraine were different the children and teenagers in Central Asian republics almost two times less (Bekchanov, Bhaduri, Lenzen, & Lamers, 2014). One of the factors that directly affect the age structure of the population in the countries of the Commonwealth - which the changes happen in the natural development (Table 4). On the demand side, increases in wages and pensions, public investment, and commercial lending were the main sources of growth. Public sector wages rose by 19.1% in 2014, sustaining private consumption. Gross fixed capital formation was reported rising by 10.9% (Hornidge, Oberkircher, & Kudryavtseva, 2013). Capital investment reached $14.6 billion, or 24% of GDP, including more than $3.0 billion in foreign investment. Notable projects completed in 2014 include the expansion of the General Motors Uzbekistan automobile manufacturing plant and the completion of a key branch of the gas pipeline linking Central Asia to the People’s Republic of China. Commercial bank lending raised credit to the economy by 31.2%.The government reported average annual inflation at 6.1% in 2014 (Bobojonov et al., 2013). Official consumer price index data show that inflation slowed primarily because food prices fell in line with global trends. The International Monetary Fund estimated, using the same data as the government but a different methodology, that inflation slowed to 8.4% from 11.2% in 2013. Inflation is nevertheless believed to have risen in the fourth quarter because of rapid currency depreciation against the US dollar (Raupova, Kamahara, & Goto, 2014). Broad money is estimated to have grown by 26% in 2014, about the same as in 2013, reflecting higher domestic credit. Monetary survey data are not available, but net foreign assets in the banking system may have decreased as domestic credit grew more quickly than broad money.


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The government reported a budget surplus of 0.2% of GDP in 2014. Factoring in the surplus of the Uzbekistan Fund for Reconstruction and Development, the country’s sovereign wealth fund, the augmented budget balance is estimated to have shown a surplus equal to 2.4% of GDP, down from 2.7% in 2013. Budget revenues are estimated to have slipped from 36.2% of GDP in 2013 to 36.1% in 2014, in line with declining international prices for key export commodities. Higher government spending—notably for wages, pensions, health care, and education—raised budget expenditures from 33.5% of GDP in 2013 to 33.7% in 2014. Total government debt edged up from 8.5% of GDP in 2013 to 8.7% in 2014 as foreign lending for infrastructure increased. The current account surplus is estimated to have narrowed to 1.2% of GDP from 1.6% in 2013, reflecting a smaller trade surplus and lower remittances (Figure 5). External demand stayed weak, and international prices for Uzbekistan’s key export commodities declined from historic highs. Much of the narrowing in the trade extra reflected lower earnings from energy, which accounts for about 30% of all exports (Hornidge et al., 2013). Earnings from energy exports have been declining since the third quarter of 2014 in line with retreating global oil prices. Total exports are estimated to have declined by 2.0%. Developments in the economy of the Russian Federation during late 2014 profoundly affected Uzbekistan’s exports and remittances. Weak consumer demand there, coupled with rapid nominal appreciation of the Uzbek sum against the ruble, hurt bilateral trade. Diminished labor demand in construction and logistics—the main employers of Uzbek migrants—helped cut remittances from the Russian Federation by an estimated 10%, to about $5.0 billion. Quarter by quarter, bilateral trade and remittances were both lower than in 2013. Imports of goods and services rose by 1.1%, driven mainly by imports of consumer goods and chemicals. Despite declining by about 10% from 2013, machinery and equipment remained the largest import items, accounting for 40% of imports. This reflects continued but moderating demand for capital goods from state-led infrastructure development and industrial modernization programs scheduled to end in 2015. With the decline in exports, the trade balance is estimated to have moved into deficit by the end of 2014. Public and private external debt is estimated to have increased to 13.4% of GDP in 2014 from 13.0% in 2013. Gross official reserves were estimated at $23.9 billion, equivalent to 2 years of merchandise imports (Dubovyk et al., 2013). GDP growth is forecast at 7.0% in 2015 and 7.2% in 2016, reflecting projected due to new-born services arrival and diversification on the area. To limit the growth slowdown, the government is expected to boost spending further, particularly for public investment. Gradual recovery in external demand should begin in 2016, but industry will persist the key supply-side driver of growth, with output supported by higher lending. Large industrial enterprises in strategic sectors—mining, oil and gas, and manufacturing— are expected to receive the bulk of additional lending from both the government and commercial banks. Planned wage and pension increases that exceed the inflation rate should support private consumption and request for services. Agriculture is projected to grow by 6.0% in line with stable production of the key agricultural crops: cotton and wheat. The government is expected to complete its large modernization investment program in 2015 (Raupova et al., 2014). Public investment should increase substantially to achieve the goal of raising industry’s share of GDP to 28%, with most investment financed by the Uzbekistan Fund for Reconstruction and Development. Gross


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fixed capital formation is forecast to increase by 11.0% in 2015 and 12.0% in 2016. In response to growing external risks and global uncertainties, the government announced in January 2015 reforms to be implemented over 2015–2019 for economic diversification, private sector development, a smaller state presence in the economy, and better corporate governance. In early March 2015, the government adopted a comprehensive structural transformation, modernization, and diversification program for 2015–2019. The program visualizes a $19.6 billion investment package to be financed through foreign investments and loans, the Uzbekistan Fund for Reconstruction and Development, and commercial bank lending. As in 2013 and 2014, the government will carry on to stimulate domestic consumption in 2015 and 2016, most likely by raising public sector wages, welfare payments, and pensions. With presidential elections in 2015, additional measures are expected to sustain household spending, including expanded consumer lending. Reflecting these developments, private consumption is forecast to rise by 2.0% in 2015 and 3.0% in 2016. Inflation is projected at 9.5% in 2015 and 10.0% in 2016. Inflationary pressures will emanate from higher government spending and continued depreciation of the local currency. Estimated drops in global food prices and lower import costs could partly offset these pressures. Nevertheless, containing inflation will remain a key challenge over the medium term.

CASE OF SUSTAINABLE UZBEKISTAN Uzbekistan is a country striving for wide-ranging economic progression and a narrowing of gaps in infrastructure quality between rural and urban areas. As one of the most important international organization, the Asian Development Bank (ADB) has been supporting the Government of Uzbekistan since 1995, and has provided more loans to Uzbekistan than to any other emerging member country in the Central Asia region. As of 31 December 2014, Uzbekistan has received 54 loans totaling $4.1 billion, including two private sector loans totaling $225.0 million, and $61.7 million in technical assistance grants(‘Is regional economic integration in Central Asia a doomed vision or a promising future? | Asia Pathways’, 2014.). In September 2012, ADB approved the country partnership strategy (CPS), 2012–2016 for Uzbekistan. The CPS is aligned with Uzbekistan’s Welfare Improvement Strategy, 2013–2015, which guides Uzbekistan’s pursuit of business innovation and infrastructure development. The CPS focuses on transport and announcement, energy, water supply, municipal infrastructure and services, and access to financial services. In 2014, ADB provided a loan of $300 million to support energy-efficient power generation that will meet rising electricity demand in Uzbekistan. Cumulative disbursements to Uzbekistan for lending and grants financed by ordinary capital resources, the Asian Development Fund, and other special funds amounted to $2.01 billion. ADB assistance continues to help bridge gaps in economic opportunity and reduce disparities in public services through Uzbekistan. Water management and agriculture projects are helping to generate jobs and increase incomes in rural areas, with the Amu Bukhara Irrigation System Rehabilitation Project expected to benefit 1.8 million rural residents. Meanwhile, ADB commitments to clean water supply and sanitation should improve the lives of 3 million people, with the Solid Waste Management Improvement Project serving about 645,500 households by 2019. The Education Sector Development Program introduced an globally aligned education model to improve learning consequences for vulnerable students, while the Woman and Child Health


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Development Project has helped to reduce national maternal and infant mortality rates. Roads, railways, and housing in Uzbekistan have also been revitalized. Five projects were approved under the two Central Asia Regional Economic Cooperation (CAREC) Corridor 2 Road Investment programs, and 660 kilometers (km) of track were upgraded under two railway modernization projects in key regional areas. The first project of the Housing for Integrated Rural Development Investment Program provided 8,500 rural families with new homes, while the second project will finance 21,000 homes for families with moderate to low incomes (‘Handbook on Tourism Destination Branding - World Tourism Organization’, 2014.). With a need for jobs evolution, and to improve the livelihoods of rural residents, a key development priority for Uzbekistan in the medium term is economic expansion through industrial development. To attract private sector investment and expand access to financial resources for entrepreneurial purposes, support for infrastructure development will remain a priority area for ADB assistance. Direct private sector support will also continue. ADB will seek to underpin the sustainability of Uzbekistan’s strong economic growth by further deepening and broadening its knowledge products and services. ADB operations in Uzbekistan over the longer term will be guided by the country’s evolving development needs, and by Strategy 2020, ADB’s longstanding strategic framework, 2008–2020. On this basis, the above four major research frameworks provide guidance in designing research components. However, a research program that seeks to address issues of global change with the aim of promoting sustainable development worldwide faces challenges at an entirely different level as well, namely the sustainable context. As mentioned in the introduction, undesirable processes of global change occur around the globe and affect all parts of the Earth, but many of them are felt most dramatically in the developing countries of the Commonwealth Independent States (CIS), where they tend to aggravate existing disparities and hamper sustainable development. An understanding of these global processes and diminuendos can only be achieved through combined research efforts in global scale, in broad collaboration among researchers from the diverse world regions affected (Bradley 2008; Soete 2008). According to Figure 2, it is considered that conceptual elements of sustainable synergy has its vital necessity on the development of area. For instance, contextualization is believed as the direction taken in research aimed at achieving more sustainable development in concrete situations, as this requires contextual differentiation and, in most cases, transdisciplinary dialogue. These feature needs cooperation and synergy in order to make better efficiency and illustrate relevant productivity. Generalisation is needed to achieve research results that are valid for as broad a research context as possible. It means dealing with sustainable development in an integrative and transdisciplinary manner by applying a ‘syndrome mitigation approach’ (Hurni et al 2004). This implies looking at patterns of problems and potentials of sustainable development.


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Figure 2. Synergy of sustainability, Case of Uzbekistan

Contextualisation

Specilialisation

Application

Generalisation

Research findings from specific case studies and selected contexts are generalized and the overall theoretical, conceptual, and methodological foundations of the program developed, with a view to gaining more systems knowledge and to some extent also transformation and target knowledge. In terms of program components, regional research projects as a cooperative and integrative functionality, usually work towards contextualization of their (inter)disciplinary specialization. Conversely, thematic and integrative research projects work from regional specialization towards global generalization (Hurni et al 2010).

Figure 3. Case of sustainable development in Uzbekistan

Regional deployment

Cooparation and Collaboration

Sustainable Development

Policy and Strcuture

Integration and Innovation


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Sustainability deployment of the Republic of Uzbekistan is illustrated in the Figure 3, according to analyses of the globe investigations and studies on this context. It could be illustrated that, regional development, policy and structure, integration and innovation, cooperation and collaboration are considered as vital elements of this development. Through this advancement, region will enrich its sustainable enhancement, the way of life and facilities as whole. Life standard and income of people will increase step by step with market –oriented democracy of sub sectors and the view of the entrepreneurs. Therefore, it is believed that, synergy among companies and individuals will strength the concept of development and according this country make its status in the global market of services and production.

CONCLUSION Development at the local, regional, national, and global levels is only sustainable if it meets the requirements of the social, the economic, and the environmental dimensions of sustainability. Globally, changes embraces all aspects of global dynamics in the social, cultural, political, ecological, institutional, and economic spheres. Current trends in global food and energy prices to decline is expected to be limited given Uzbekistan’s policy of self-reliance in both food grains and energy. With GDP growth forecasted at 7.0% in 2015 and 7.2% in 2016, it is projected diversification of economy. Agriculture is projected to grow by 6.0% in line with stable production of the key agricultural cash crops: cotton and wheat. The government is expected to complete its large modernization investment program in 2015. Uzbekistan has to work to minimize its economy’s vulnerability to external shocks affecting commodity prices and the predicted inflow of foreign direct investment (FDI) and external loans to finance the large public investment programs. With the goal of becoming an industrialized, high middle-income country by around 2050, country is continuing to transition to a more market-oriented economy to ensure equitable distribution of growth between regions and to maintain infrastructure and social services. With a need for jobs evolution, and to improve the livelihoods of rural residents, a key development priority for Uzbekistan in the medium term is economic expansion through industrial development. Regional development, policy and structure, integration and innovation, cooperation and collaboration are considered as vital elements of this development.

REFERENCES Anonymous. (2014a, August 12). Uzbekistan http://www.adb.org/countries/uzbekistan/main

and

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Anonymous. (2014b, August 12). Uzbekistan: Publications and Documents [Text]. Retrieved 16 September 2015, from http://www.adb.org/countries/uzbekistan/publications Bank, A. D. (2015). Asian Development Bank and Uzbekistan: Fact Sheet. Asian Development Bank. Retrieved from http://www.adb.org/publications/uzbekistan-fact-sheet Bekchanov, M., Bhaduri, A., Lenzen, M., & Lamers, J. P. (2014). Integrating input-output modeling with multi-criteria analysis to assess options for sustainable economic transformation: the case of Uzbekistan. In The Global Water System in the Anthropocene (pp. 229–245). Springer. Retrieved from http://link.springer.com/chapter/10.1007/978-3-319-075488_16 Bobojonov, I., Lamers, J. P., Bekchanov, M., Djanibekov, N., Franz-Vasdeki, J., Ruzimov, J., & Martius, C. (2013). Options and constraints for crop diversification: a case study in sustainable agriculture in Uzbekistan. Agroecology and Sustainable Food Systems, 37(7), 788–811.


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Breckle, S.-W., Veste, M., & Wucherer, W. (2012). Sustainable land use in deserts. Springer Science & Business Media. Retrieved from https://books.google.com/books?hl=en&lr=&id=EvfsCAAAQBAJ&oi=fnd&pg=PA3&dq=sustanaible+development+of+uzbe kistan&ots=5gpFlBR2J2&sig=ICXUDmGN94h4XlSvdM3kJNvnH8M Dubovyk, O., Menz, G., Conrad, C., Lamers, J. P., Lee, A., & Khamzina, A. (2013). Spatial targeting of land rehabilitation: A relational analysis of cropland productivity decline in arid Uzbekistan. Erdkunde, 167–181. Egamberdieva, D., Kamilova, F., Validov, S., Gafurova, L., Kucharova, Z., & Lugtenberg, B. (2008). High incidence of plant growth-stimulating bacteria associated with the rhizosphere of wheat grown on salinated soil in Uzbekistan. Environmental Microbiology, 10(1), 1–9. Handbook on Tourism Destination Branding - World Tourism Organization. (n.d.). Retrieved 15 May 2014, from http://www.e-unwto.org/content/pv8055/?p=72fd8fc85b3f462bba2838061cbb6e99&pi=0 Hornidge, A.-K., Oberkircher, L., & Kudryavtseva, A. (2013). Boundary management and the discursive sphere– Negotiating ‘realities’ in Khorezm, Uzbekistan. Geoforum, 45, 266–274. Is regional economic integration in Central Asia a doomed vision or a promising future? | Asia Pathways. (n.d.). Retrieved 21 May 2014, from http://www.asiapathways-adbi.org/2014/04/is-regional-economic-integration-in-central-asia-a-doomedvision-or-a-promising-future/ Karimov, I. A. Uzbekistan on the Threshold of the Twenty-first Century: Challenges to Stability and Progress. Macmillan. Landau, J. M., & Kellner-Heinkele, B. (2001). Politics of language in the ex-Soviet muslim states: Azerbayjan, Uzbekistan, Kazakhstan, Kyrgyzstan, Turkmenistan, and Tajikistan. University of Michigan Press. Müller, M., & others. (2006). A general equilibrium approach to modeling water and land use reforms in Uzbekistan. Universitäts-und Landesbibliothek Bonn. Retrieved from http://hss.ulb.uni-bonn.de/2006/0801/0801.htm Raupova, O., Kamahara, H., & Goto, N. (2014). Assessment of physical economy through economy-wide material flow analysis in developing Uzbekistan. Resources, Conservation and Recycling, 89, 76–85. Sievers, E. W. (2013). The post-Soviet decline of Central Asia: sustainable development and comprehensive capital. Routledge. Retrieved from https://books.google.com/books?hl=en&lr=&id=J4lEAgAAQBAJ&oi=fnd&pg=PP1&dq=sustanaible+development+of+uzbe kistan&ots=pXE-SYIYzz&sig=rKXKyPI2nlsH2XW6FU5Xc84H4yg Song, X., Frostell, B., & Gadaev, A. (2013). UZWATER Tempus project: The study visit to KTH, Royal Institute of Technology, with focus on Master Thesis Work. Retrieved from http://www.divaportal.org/smash/record.jsf?pid=diva2:758745 Van Assche, K., & Djanibekov, N. (2012). Spatial planning as policy integration: The need for an evolutionary perspective. Lessons from Uzbekistan. Land Use Policy, 29(1), 179–186.


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http://ijecm.co.uk/


Special issue on

Uzbekistan

SYSTEM PERFORMANCE SERVICES FOR THE STORAGE AND SALE OF PRODUCTS, THEIR CLASSIFICATION AND DEFINITION OF THE WAY Olim Pardaev Senior researcher, Statistics and Management faculty, Samarkand Institute of Economics and Service, Samarkand, Uzbekistan [email protected] Abstract In the sustainable development of developing countries such as Uzbekistan, economic integration among individuals considered as a principle factor to acquire better results. In the way of deployment, economic efficiency of the enterprises could be increased with better results. The article describes the system performance services for the storage and sale of products, providing the subjects, their classification and definition of the way. On this basis, synergy of storage procedures with its fundamental basis is investigated on this study. Moreover, it is given formulation of the content with the definition of each indicator. Gained analytical conclusions and outcomes of the research identifies the way of the further studies and socioeconomic development.

Keywords: Performance, system performance, classification performance, efficiency, storage services, services for the implementation, the effectiveness of services


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INTRODUCTION At present, agricultural products, especially fruit and vegetables in order to increase the work carried out on the establishment of new orchards and vineyards separately. "During the years 2010-2014, about 50 thousand hectares of new parks, more than 14 thousand hectares, including 23 hectares of intensive orchards, vineyards were created. For the establishment of intensive orchards, Poland, Serbia and other countries brought more than 6 million seedlings. These parks have many advantages that is reflected today in practice. For example, a simple fruit tree planting gave the first harvest usually takes 4-5 years. Intensive horticulture as early as the second or third crop from the trees (‘FAO - detail: International Conference - The most important reserves of implementing the Food Program in Uzbekistan’). In 2011, the gardens created at the 2014 average of 300 quintals per hectare yield and productivity is increasing every year proves it. It shows that the population of the country provide them with fruits and vegetables throughout the year to supply environmentally friendly products and is rich in vitamins and microelements for the sale of agricultural products and services requires a high level of organization. The implementation of the above-mentioned tasks, and agricultural products to improve the quality of life of the population, it is also important to improve the efficiency of care and services to sell. For this purpose, requires the assessment of the effectiveness of the protector and supplier of products enterprises. To do so, they cover all aspects of the effectiveness of many indicators that will be used. When many indicators will require them to use them properly structured implementation (‘Food Independence Important Factor of Wellbeing, Stability, Prosperity’, 2014). Systematize the indicators say is the classification of certain marks on them. After the completion of this system is divided into indicators. System of indicators say certain groups, and each group with its own means instead of clearly formulated indicators. The effectiveness of this article is to sell products and services to these companies to advice on the content of the indicators characterizing the economic classification limits.

Research, sales of products and services in accordance with the following groups of indicators characterizing the effectiveness of the targets, found that: 

the overall efficiency of the enterprises representing the common indicators;



indicators characterizing the efficiency of the assets of the enterprises;



the main indicators characterizing the efficiency of enterprises;



indicators of intangible assets representing the efficiency of enterprises;



indicators effectiveness of current assets of enterprises;



indicators effectiveness of own funds of enterprises;



obligations of the indicators characterizing the efficiency of enterprises.

This series of indicators representing the efficiency of enterprises engaged in the storage and sale of products not determined a different approach. Because of this freezer warehouse filled with two source in the enterprise. The first of these products to farmers and other business owners in cash and money transfer


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through one of the drawbacks. The second is to rent one of the empty areas of the rest of the freezer. The other allows people to keep their products on a contract basis for a requested period of time. It is considered only to save money and economical expenses(Song, Frostell, & Gadaev, 2013). After the first case, the company sold products made by the owner will benefit. In the latter case, do not care how the owner of the refrigerators sold. Nevertheless, is committed to preserve for the further purposes. As a result, the definition of performance indicators to take into account these features of the products stored and sold separately will need to identify specific indicators (‘FAO Director General considers the Food Conference in Uzbekistan as a landmark event in the expansion of agricultural production Uzbekistan News - UzReport.uz’, 2014). This is another reason, part of the time they bought the business owner will be considered separately. Sales target is expected to benefit more than prepared for it. In this regard ready total size of the total volume of sales of the product are different from each other. It is this difference in the effectiveness and efficiency of health services for the sale of services to take into account separately found that the purpose of the calculation (Raupova, Kamahara, & Goto, 2014). The following products Protective Services is a separate system of indicators characterizing the efficiency of enterprises. The total revenue taken into account rather than the volume of products. The content of the ways to identify them, and the names of these indicators are presented in the table below.

Table-1. System of indicators of efficiency and the way of their identifying in the food storage enterprises The name of indicators

Formula

What they identify

Indicators of total efficiency the food storage enterprises Prepare and maintain, the profitability of sold products (Смр)

Сф ∗ 100 𝑄 Сф – product sold in the amount of net income riders; Q – the volume of production (total sales);

Storage of product sold is pure profit in 100 UZS

Cost effectiveness (Хсс)

𝑄 Ха Q - the volume of production (total sales);Ха – Amount of spending.

cost of many products in 1 UZS

Profitability (Хар)

Сф ∗ 100 Ха Сф – product sold in the amount of net income riders; Ха – Amount of spending.

storage costs corresponding to the product sold is pure profit in 100 UZS

𝑄 Хд Q - the volume of production (total sales);Хд – The average number of employees who are engaged with work in company.

1 employees corresponding to the production, storage product sold

of

expenses

Applied productivity (Му)


Смр =

Хар =

Хар =

Му =

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The indicators representing enterprises

the effectiveness of the assets of the food storage

𝑄 Total revenues corresponding to the Ак Q - the volume of production (total value of assets in 1 UZS sales);Ак – The average value of assets. Сф ∗ 100 Return on assets (Акр) Rate of return on assets Акр = (net profit corresponding Ак Сф – product sold in the amount of to the value of the assets net income riders; Ак – The average in 100 UZS) value of assets. The main indicators characterizing the efficiency of the food storage enterprises The effectiveness of assets (Акс)

Акс =

𝑄 Total revenues corresponding to the Ав Q - the volume of production (total basic tools in 1 UZS sales);); Ав – the average value of fixed assets. Сф ∗ 100 The main instruments Fixed rate (fixed assets Авр = profitability (Авр) corresponding to the Ав Сф – product sold in the amount of amount of net profit in 100 net income riders; Ав – the average UZS) value of fixed assets. The indicators representing the effectiveness of the intangible assets of the food storage enterprises The effectiveness of the basic tools (Авс)

Авс =

𝑄 Intangible assets corresponding to the total На Q - the volume of production (total revenues in 1 UZS sales);На - the fair value of intangible assets. Сф ∗ 100 The profitability of intangible Intangible assets rate (the Нар = assets (Нар) amount of intangible На Сф – product sold in the amount of assets corresponding to net income riders; Ав – the average the value of net profit in value of fixed assets. 100 UZS) Indicators effectiveness of current assets of food storage enterprises The effectiveness intangible assets (Нас)

of

Нас =

𝑄 Жа Q - the volume of production (total sales);Жа – the average value of the current assets. Сф ∗ 100 The profitability of current Жар = assets (Жар) Жа Сф – product sold in the amount of net income riders; Жа – – the average value of the current assets. Business indicators characterizing the efficiency of its own enterprises The effectiveness of current assets (Жас)

The effectiveness of its own funds (Ўмс)


Жас =

Ўмс =

𝑄

Ўм Q - the volume of production (total sales);Ўз – the average value of their own funds.

Current assets corresponding to the total revenues in 1 UZS

Change of current assets (current assets corresponding to the amount of net profit in 100 UZS ) funds in food storage funds corresponding to the total revenues in 1 UZS

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Profitability of own funds (Ўмр)

Ўмр =

Сф ∗ 100

Ўм Сф – product sold in the amount of net income riders; Ўз – the average value of their own funds. Indicators of storage companies and with the indexes of considering duties. 𝑄 The effectiveness of the Мас = liabilities (Мас) Ма Q - the volume of production (total sales); Ма – Average value of liabilities . Сф ∗ 100 The profitability of the Мас = liabilities (Мар) Ма Сф –the amount of net income ; Ма – Average value of liabilities.

Own funds of change (the amount of the net profit from its own funds in 100 UZS) their productivity while Liabilities corresponding to the total revenues in 1 UZS

The liabilities of change (the amount of liabilities corresponding to the net profit of 100 soums)

It is vivid from the given data that, while recognizing productivity of storage and products all suggested mathematical formulas. Moreover, the way of the categorizing of productivity and efficiency are similarly mentioned relevantly as whole. It is whispered that each of the above-mentioned directions possible to advance economic efficiency (Dubovyk et al., 2013). Changes on results derives conception of joint impression in efficiency. Assumptions and conventions are conducted in the article, proves integration of companies with the request of the collaboration. As it is obvious, providers of the services have different type of property and activity type of them is various, that proves complexion of this stages (‘Ministry of Foreign Affairs of the Republic of Uzbekistan — Uzbekistan and international organizations’, 2015). Implementation of the interaction is integrated in dissimilar areas of the industries. Yet, the way of its transmission could show better results with further investments. Outcome of our research indicates following proposals on storing and selling researches settled with scientific and theoritical suggestions. 1. Identified evaluation companent of effective storing and selling. Measurement of this trend calculated with following formula : Сс =

W ; Q

In this formula Сс – the rate of efficiency of storage products ; W – the benefit gained from food storage; Q –the natural quantity of storage products .

2. Sum of the profit (W) gained through storing of products also identified under investigations. Following mathematical measurement measures it.

𝑊 = {((𝑄 − F) ∗ Ph)– (Q ∗ Pb)};


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In the above formula Q – the natural quantity of storage products. F –the natural reduction of products during storage and selling proccess ; Ph – the price of product after storage; Pb – the price of product in time of storage.

3. Storing effeciency was chosen in order to identify effeciency. But from another persective, transport expenditures should be calculated too. Nevertheless, strict system was not orginized to calculate this feature. Carring stored apple could be calculated by following including transtport services. Ссu =

W − 𝑇𝑥 ; Q

In this formula Ccu – Overall rate of efficiency of storage food in term of storage; Тх – the total quantity of spending of carrying apple from garden to storage, and from storage to distribution destination.

Total efficiency (Wu) identified in the following stage with the diffusion of previous equitation Wu = {((𝑄 − F) ∗ Ph)– (Q ∗ Pb)} − Tx Sequence of this mathematic formula could be calculated in a diverse excessively: Сс𝑢 =

{((Q − F) ∗ Ph) − (Q ∗ Pb)} − 𝑇𝑥 𝑊𝑢 = ; Q Q

In the practical diffusion, these formulas could be calculated in order to classify rate of efficiency, which consequently lead to managerial decisions.

CONCLUSION In the sustainable development of developing countries such as Uzbekistan, economic integtration among individuals considered as a principle factor to acquire better results. In the way of deployment, economic effeciency of the enterprises could be increased with better results. Conducted analitical and theritical investigations conluded various possibility of theoritical definitions with real samples. Analytical definitions and their implecations on rural regions of Uzbekistan have diffused on the paper. Better storage cycle through synergetic collaboration have applied as in previous studies was investigated on the mentioned case – under “ From garden to tablemate” methodological concept. The way of planting in agricultural sphere and process of distributing to consumers could be orginized with better effeciency while using synergetic integration among individuals and enterprises(‘John Jay Hall’, 2014). Methods and mathematical equatations of the definition prove the need of this technique on economics. Further investigations of this technique may easyly identify the ways of it in a various sub-sectors of economy. Outcomes of this paper anylyses could open new doors of opportunities for the further deployment of “From garden to tablemate” through academic perspective, that cover totally in all branches of


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economics. Suggestions may serve further investigation of this term with better diffusion on economic life of individuals (Bobojonov et al., 2013).

REFERENCES Bobojonov, I., Lamers, J. P., Bekchanov, M., Djanibekov, N., Franz-Vasdeki, J., Ruzimov, J., & Martius, C. (2013). Options and constraints for crop diversification: a case study in sustainable agriculture in Uzbekistan. Agroecology and Sustainable Food Systems, 37(7), 788–811 Cost Synergy Definition. (2015.). Retrieved 18 March 2015, from http://www.investopedia.com/terms/c/costsynergy.asp Dubovyk, O., Menz, G., Conrad, C., Lamers, J. P., Lee, A., & Khamzina, A. (2013). Spatial targeting of land rehabilitation: A relational analysis of cropland productivity decline in arid Uzbekistan. Erdkunde, 167–181 FAO - detail: International Conference - The most important reserves of implementing the Food Program in Uzbekistan. (2014). Retrieved 19 March 2015, from http://www.fao.org/about/who-we-are/director-gen/faodgstatements/detail/en/c/234037/ FAO Director General considers the Food Conference in Uzbekistan as a landmark event in the expansion of agricultural production Uzbekistan News UzReport.uz. (2014.). Retrieved 19 March 2015, from http://news.uzreport.uz/news_4_e_120826.html Fuller, R. B., (1975), “Synergetics: Explorations In The Geometry Of Thinking”, in collaboration with E.J. Applewhite. Introduction and contribution by Arthur L. Loeb. Macmillan Publishing Company, Inc., New York. Food Independence Important Factor of Wellbeing, Stability, Prosperity (2014). Retrieved 19 March 2015, from http://www.press-service.uz/en/document/4967/ Goffee,R. & Jones, G. (2013). Creating the best workplace on the earth. Harvard Business Review, 99-106. Hertzberg, R. C., and MacDonell, M. M. (2002). Synergy and other ineffective mixture risk definitions. Sci Total Environ 288, 31-42. Information Agency ‘Jahon’. (2014). Retrieved 19 March 2015, from http://www.jahonnews.uz/eng/sections/economy/international_exhibitions_in_the_food_production_and_agricultural_indus tries_took_place_in_tashkent-46565.mgr John Jay Hall. (2014, December 4). In Wikipedia, the http://en.wikipedia.org/w/index.php?title=John_Jay_Hall&oldid=636672819

free

encyclopedia.

Retrieved

from

Ministry of Foreign Affairs of the Republic of Uzbekistan — Uzbekistan and international organizations. (2014.). Retrieved 19 March 2015, from http://mfa.uz/en/cooperation/international/1226/ Media Synergy see Linden Dalecki's article in Northwestern's Journal of Integrated Marketing Communications (2008) Peter A. Corning, The Synergism Hypothesis: A Theory of Progressive Evolution, New York, McGraw Hill 1983 ISBN 007-013166-X; Peter A. Corning, Holistic Darwinism: Synergy, Cybernetics and the Bio economics of Evolution, Chicago,University of Chicago Press 2005 ISBN 0-226-11613-1;Synergy and self-organization in the evolution of complex systems. President Karimov Meets with FAO Chief. (2014). Retrieved 19 March 2015, from http://press-service.uz/en/news/4966/ R. Buckminster Fuller’s Synergetics. http://www.rwgrayprojects.com/synergetics/toc/status.html

Retrieved

18

March

2015,

from

Raupova, O., Kamahara, H., & Goto, N. (2014). Assessment of physical economy through economy-wide material flow analysis in developing Uzbekistan. Resources, Conservation and Recycling, 89, 76–85. Song, X., Frostell, B., & Gadaev, A. (2013). UZWATER Tempus project: The study visit to KTH, Royal Institute of Technology, with focus on Master Thesis Work. Retrieved from http://www.divaportal.org/smash/record.jsf?pid=diva2:758745 Search results. (2015, March 14). In Wikipedia, the free encyclopedia. http://en.wikipedia.org/w/index.php?search=synergy+in+economics&title=Special%3ASearch&go=Go

Retrieved

from

Stan Laura-Melinda, The Necessity to Exploit the Economic Network's Synergistic Potential, LAP LAMBERT Academic Publishing, Saarbrücken, Germany, 2011, p. 3-4 А.Н.Азрилияна. Большой экономический славрь // под ред. Институт новой экономики, 1999. – p. 906 Большая экономическая энциклопедия. http://www.encyclopedia.ru/cat/books/book/9176/

Retrieved

18

March

2015,

from

Хамидулин М.Б. Развитие финансового механизма корпоративного управления управления. Автореферат диссертации на соискание ученой степени доктора экономических наук. Т.: Банковско-финансовая Академия РУз, 2008. – p. 27


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Special issue

http://ijecm.co.uk/


Special issue on

Uzbekistan

SOCIAL POLICY AND FOUNDATION OF FAVORABLE SOCIAL CLIMATE SECURITY IN UZBEKISTAN Zaynalov Djahongir Professor, The chief of “Financial and Insurance services” department, Samarkand Institute of Economics and Service, Uzbekistan [email protected] Khusanov Bakhodir Professor at “Financial and Insurance services” department, Samarkand Institute of Economics and Service, Uzbekistan [email protected]

Rasulov Zokir Professor at “Financial and Insurance services” department, Samarkand Institute of Economics and Service, Uzbekistan [email protected] Abstract Uzbekistan as one of the developing country has been revealing significantly in order to enhance economic diversity of its sectors throughout its socio-economical points. Policy of society and climate of its security is considered as a vital feature of economic deployment in the country. On this basis, paper investigates


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structural and political foundation of social layers with its current status as whole. In Uzbekistan, a number of government measures provides the solution to this problem, among which an important place belongs to the guardianship. Strategic steps promoting Uzbekistan as a dynamically developing country should be seen in the dynamic development of society, a society in which are surrounded by care and attention of the people, society, which provides a high quality of life. Furthermore, it demonstrates analyses of economy as whole, which may serve as a further instruction for investigations. Keywords: Social security, Finance, Economy of Uzbekistan, Structural deployment

INTRODUCTION Social policy is reliant on many factors, including either external or internal factors to the country's environment that is considered as a key indicator of balance and economic development. The current stage of formation and development of social policy is characterized by the increase of resources allocated to social security of the population (‘Законодательная палата Олий Мажлиса - Конституция Республики Узбекистан’). Politics, due to social security is the policy of the state that its actions to mitigate the negative consequences of individual and social inequality, social and economic upheavals in society. Problems of social security remain relevant at all times, regardless of the level of socio-economic development of a society, because the social security system must guarantee the stability of its development(Schwarz, 2003). However, on the path of market transformation of social security of the population is a key objective of social policy – which is the most important factor in quality growth and in living standards(Asadov & Aripov, 2009). The aim of employment policy is to promote full, productive and freely chosen employment through training, professional development, expanding the scope of public employment services and the implementation of other measures aimed at ensuring the social protection of the population. All social processes of social policy in a single national economy that may affect by global environmental conditions in connection with the progressive globalization(Cox & Mason, 1999).

POLICY OF SOCIAL SECURITY: CASE OF UZBEKISTAN Today it is difficult to overestimate the importance of social security policy, wherever this policy was carried out in this area. Social policy is dependent on many factors, including by factors external to the country's environment is a key indicator of balance and economic development. Thus, the current stage of formation and development of social policy is characterized by the increase of resources allocated to social security of the population. Social policies should ensure a high quality of life and high levels of income (Mukhamedov, 2002). However, social security is the policy of the state that its actions to mitigate the negative consequences of individual and social inequality, social and economic upheavals in society. Problems of


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social security remain relevant at all times, regardless of the level of socio-economic development of a society, because the social security system must guarantee the stability of its development(Van Assche & Djanibekov, 2012). However, on the path of market transformation of social security of the population is a key objective of social policy - the most important factor in quality growth in living standards. We need to rethink the fact that the task of qualitative growth of welfare of the population can only be solved taking into account the efficient use of resources of the budget (including off-budget special funds) to social security (see. Fig 1) and is determined by the system as a set of measures, including:

Figure 1. Security components of Uzbekistan

Stable stimulation, paid employment ;

Preventation and payment of the income ;

Providing social assistance intended for vulnerable groups not party to the social security system;

Access citizens to education and health care

As it is mentioned above, stable stimulation on employment, income and its security, various types of programs provided by both public and private groups with access for basic need such as education and health care is considered as vital feature of development from economic perspective. Moreover, have been done a numerous steps for the enrichment of citizens in places. Contractions and new small business enterprises, entertainment facilities and amenities on different areas, health checkups in regions and others are obvious on this way. This is revealed on the statistic demonstration of economy as whole. Table-1 indicates implementation of state budget in Uzbekistan with overall digit analyzes of sub-sectors.


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Table 1. Implementation of state budget of Uzbekistan for 2011-2014 Indexes (Milliard sums)

2011

2012

2013

I. INCOME (without any funds) – TOTAL

17061,3

21295,7

26223,2 31730,5

1. Direct taxes

4497,0

5414,2

6353,7

7433,0

1.1 Advance corporation tax

861,6

1001,1

1038,8

1120,2

2014

1.2

Contributions to the state budget from the single tax payment for trade and public catering

561,4

645,9

832,6

954,4

1.3

Contributions to the state budget from the single tax payment, including micro and small enterprises

480,2

588,2

755,0

967,9

1.4 Income tax on individuals

1919,1

2301,8

2717,3

3261,7

1.5 Fixed tax on certain types of business

225,0

317,3

415,6

553,1

449,6

559,9

594,4

575,7

2. Indirect taxes

8225,0

10434,5

13398,6 16852,3

2.1 Value added tax

4761,4

5966,6

7552,5

9476,1

2.2 Excise tax

2541,8

3175,9

4168,2

4941,1

2.3 Customs

516,3

759,7

1007,4

1350,0

405,4

532,4

670,5

1085,1

3. Resource payments and property tax

2626,2

3312,5

3888,2

4311,5

3.1 Property tax

571,5

736,1

1011,6

1273,7

3.2 Land tax

437,2

486,3

583,4

647,5

3.3 The tax for the use of mineral resources

1555,0

2016,3

2190,9

2275,6

3.4 The tax for the use of water resources

62,4

73,9

102,4

114,7

4. Other income

1713,1

2134,4

2582,7

3133,7

П. EXPENSES (without the any funds) - TOTAL

16726,0

20882,0

25833,7 31425,4

9704,9

12299,9

15167,8 18493,7

1.1 Education

5582,9

7130,4

8803,3

10673,5

1.2 health care

2226,7

3024,9

3709,9

4507,2

1.3 Culture and sport

185,3

223,4

287,4

361,5

1.4 Science

108,8

137,4

164,7

187,0

1.5 Social Security

72,2

86,9

106,4

126,2

Social benefits for families, including those 1.6 with children

1378,4

1617,2

1611,3

1805,0

374,7

706,7

7,0

8,2

1.6

2.4

The tax on improvement and development of social infrastructure

Income tax from individuals on consumption of gasoline, diesel fuel and gas for vehicles

Expenditure on social sphere and social support of the population - all

1.

of them:

1.7

The credit line for financing the program of individual housing construction in rural areas

2.

Funds and grants for the development of NGOs, NGOs and civil society institutions


5,0

6,0

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3.

Expenses on economy

1931,6

2317,0

2756,7

3363,3

4.

Expenses for financing of centralized investments

1096,1

1131,7

1439,5

1616,5

5.

The content of public authorities, and court administration and self-government bodies

629,6

852,8

1150,7

1414,2

6.

Other expenses

3358,7

4274,6

5312,1

6529,4

335,3

413,6

389,5

305,1

Deficit (-), Surplus (+) State budget

It is believed that in Uzbekistan, welfare and development of its financial instruments is not without interference from the state, which is in a crisis the nature of their activities is both an element of market mechanisms, and the stabilizing factor of social development(Crosa, Stefani, Bianchi, & Fumagalli, 2006). Considering the social priority, the President of the Republic of Uzbekistan drew attention to the social indicators of economic events occurring in the world. Therefore, amid the unprecedented wealth holds poverty. Nearly half of the world's population is forced to live in poverty, receiving $ 2. US per day, and 1.2 million people survive on less than $ 1 US dollars a day. From the total workforce in the world (about 3 billion.) - 40 million workers do not have jobs. We have to admit that the dynamic development of the economy of the Republic of Uzbekistan has created a stable ground for the transparent development of standards and quality of life of the population. Salaries of employees of budgetary institutions, pensions and scholarships for 2014 increased by 23.2%, real income per capita increased by 10.2%.

STATUS OF SOCIAL POLICY IN UZBEKISTAN The country is not a sharp stratification of the population by income level. The level of diversification in the income of the population from 2000 to the present time decreased from 53.3 times to 7.8 times at the threshold of 10, which is the criterion of social stability. It should be noted that the rate of the Gini index in Uzbekistan for years of independence has decreased from 0.40 to 0.296, that in terms of international standards threshold located, on the recommendation of the United Nations, within 0,35-0,37 indicates steadily growing social welfare of the population (Bank, 2015).

All of this points to the need to solve the problem, having the character of law: 

simplicity or reduction of state control over the activities of small businesses and entrepreneurship, the abolition of mandatory state order, full liberalization of prices;



changing nature of government property by passing on the various conditions the economic operators, who use it in further economic activity and have full financial responsibility for its results;



establishing innovative mechanisms of economic relations;



increasing competition;


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

modernizing the internal structure of the social sphere in the direction of advancing the development of products and services that are in demand in domestic and foreign markets;



extension of targeted social support system, both from the government and enterprises, the stabilization of the financial system to ensure social and transition to the micromanagement of its branches.

Referring to this, President Islam Karimov noted, "The focus has always been and still are the issues related to the steady growth of prosperity, living standards and quality of life." I must admit that the task is a natural character, dependent on the expansion of targeted social support of the population(Fumagalli, 2007).

Annex 2. Social security systems The largely quantitative measures of social protection are determined by the level of State benefits Social assistance

economic development.

Based on the

analysis of market experience of developed Social insurance

countries, we can conclude that the most effective and comprehensive social security systems usually include the basic elements (see Figure 2.) Social security in the Republic

Social protection

of

Uzbekistan

organized

a

disability, survivor, and social protection of Pensions

unemployed persons in age.

Citizens of the Republic, foreigners and stateless persons permanently residing in the territory of the Republic, upon the occurrence of risky cases, according to the current statute, obtain government benefits at the same level, regardless of labor force participation and contributions, unless otherwise provided by laws and international treaties. Now, because of the lack of standards developed by the calculus of social benefits, the relationship with the system of wages lost an adequate connection between the income of the working population and receive social benefits(Anonymous, 2014b). As a result, some of the elements of social security has become a subsidy, in particular, the pension fund each year is supplemented from other sources (from the budget, the Employment Fund and others.). An important element of the social security system becomes the social protection of the population. The implementation of the program of employment and re-training of the participating States and entrepreneurs. For example, in America, the company spent annually on these measures 30 billion US dollars. The state is spending for programs of retraining most of the money. By the end of the 90s in the US were retrained and


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trained about 50 million people. In order to create new jobs State assumed as the performance of such public works as roads, sewage systems, etc. During the economic crisis, the government increases investment in state-owned enterprises. Employment programs are also being implemented by the preferential tax treatment of companies that create jobs. Nationally, the modern state to reduce the army of unemployed trying to regulate fees at such a level that its growth rate was lower than the growth in labor productivity. For this, "incomes policy", an active monetary policy, etc. Private firms, trying to make sure that the level of labor productivity outpaced the growth of labor payment and the greatest success achieved in the United States, use this policy. In social policy, special attention should be problems of employment and social protection of the unemployed. The aim of employment policy is to promote full, productive and freely chosen employment through training, professional development, expanding the scope of public employment services and the implementation of other measures aimed at ensuring the social protection of the population(Abramson, 1999). Important in a system of social protection of the unemployed are active and passive measures. The former include the training and retraining of the unemployed, organization of public works and the creation of new jobs. Regarding the latter, it is noted that, in Uzbekistan, as of January 1, 2015 were registered 273.6 thousand legal entities. From which operating - 246.7 thousand units or 90.2 percent of the total number of registered legal entities (see. Table 2). Sector-wise, the highest number of enterprises and institutions was registered in trade and catering ( 28,1 percent of total registered), industry (17.3 percent), construction (8.9 percent), agriculture and forestry (8.3 percent).

Table 2. The distribution of registered and operating enterprises and organizations by branches of economy, as of January 1, 20151 Registered

Operating

thousand units

In total %

thousand units

In total %

273,6

100,0

246,7

100,0

Industry

47,4

17,3

42,8

17,3

Construction

24,4

8,9

21,3

8,6

Agriculture & Foresting

22,6

8,3

19,9

8,1

Transport & Connection

11,0

4,0

9,8

4,0

Other types of industry

22,7

8,3

20,0

8,1

Trade & catering

76,9

28,1

67,2

27,2

Non manufactured types of domestic service

3,8

1,4

3,4

1,4

Total From them:

1

По данным Госкомстата Республики Узбекистан за 2014 год


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Registered thousand units Healthcare, sport, physical training

In total %

Operating thousand units

In total %

11,1

4,1

10,7

4,3

Education, culture, science and scientific service 21,9

8,0

21,4

8,7

Other excluded industries

11,6

30,2

12,3

31,8

The total number of registered enterprises and organizations of non-state ownership share of 85.6 percent, including 33.1 percent - private enterprises, 1,8 percent - enterprises with participation of foreign capital, 50,7 percent - other enterprises. In January-December 2014 newly registered 26.9 thousand enterprises and organizations (including 26.0 thousand. - Small businesses). A significant number of newly established enterprises and organizations of the city of Tashkent (24,4 percent of total registered enterprises in the republic), Tashkent (9.9 percent), Fergana (8.6 percent) and Samarkand (7.5 percent) regions. In the sectoral structure of newly registered enterprises and organizations in the share of trade and catering 28.3 percent, industry - 24.0 percent, construction - 11.7 percent (‘Народно-демократическая партия Узбекистана’, 2015). In the reporting period was eliminated 20.0 thousand. Companies and organizations, including 5.8 thousand using the procedures of voluntary liquidation. Of course, this phenomenon is not passed in vain. This led to a slight reduction of jobs, influence social segments are temporarily exempt from the work of individuals, although the gaps were offset by newly created small innovative enterprises, enterprises with foreign capital (MacDonald, 2013). The second includes employment assistance, benefits, and providing financial assistance to the unemployed. I would also like to note that the number of employed in the economy amounted to 12 million 818.4 thousand people and increased by 2.4% compared with 2013 year. Significant growth of employment was observed in agriculture (3.9%), trade, catering, sales and procurement (by 3.8%), housing and communal services and non-productive types of public services (3.7%), transport and communication (3.6%), construction (3.4%). The employment rate of the economically active population (the ratio of the number of employed in the economy of the economically active population) was 94.9%. The share of employment in the private sector reached 81.9%, against 81.3% in 2013. The number of citizens registered through labor agencies as job seekers in 2014 was 3,400 people, which is 36.6% less than in 2013 (5,400). The number of unemployed at the end of the year amounted to 687 thousand people, the unemployment rate - 5.1% of the economically active population. All this gives grounds to take decisive action to increase more jobs with decent wages. It is of great social importance for the life of the population as a whole ((Uzbekistan), 1995).


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FUNDAMENTALS OF SOCIAL SECURITY The transition from the first to the second, of course, dictated by financial considerations. Employment and unemployment rates are controlled by the state. Much easier is to suspend the activities of the company and free up working without pay, than to establish the company in the normal operation mode. For instance, reduction of wage arrears to workers is one of the prove on this basis. Lack of motivation and revenues at the main place of work shall be compensated state compensation(Abdullaev, Konya, & others, 2014). The Law of the Republic of Uzbekistan "On the State Fund for Employment" is more clearly defined the status of unemployed, which is related to the working population, the basic principles of employment policy and state guarantees. In addition, the law says about securing additional government guarantees for citizens who need social protection, rights and responsibilities in employment, registration and accounting, control and reporting. The Law "On Employment" provides assistance in job placement, vocational training, skills development; retraining and public works for the unemployed; pay the unemployed engaged in public works; the provision of targeted social assistance to the unemployed among the poor citizens in accordance with the legislation. Nevertheless, this law does not say about the hidden unemployment and measures of its regulation, is not provided unemployment benefit, although in many countries they exist ( Karimov, 1998). In the social policy of the Republic of Uzbekistan occupies an important place public pension, which is regulated by the state. It is also considered as a part of social security. The size of the pension depends on the level of socio-economic regime and legislation. Since 1998, pension system in Uzbekistan has moved from the distribution on cumulative performance. The pension fund held 25% of payroll employees. When pension system establishes a connection between the individual contribution and pension payments. Accumulative Pension Fund could become a major source of investment. The size of the labor pension is linked to employment, it depends on the length of employment and the size of the salary before retirement. The source of financing is a system of social insurance (Kandiyoti, 1998). Pensions are designed to ensure a minimum means of subsistence and are paid from the Pension Fund and the Road Fund. In addition, the state budget at a low value of per capita income, not the occurrence of the Pension Fund deficit (‘Законодательная палата Олий Мажлиса - Конституция Республики Узбекистан’). According to the degree of social protection in Uzbekistan pensioners are better off segments of the population, in spite of this, now the existing methods of renovation pensions are imperfect, so that their sizes are citizens of the same qualifications, who have made equal labor contribution, but emerged at different times of retirement, are very different. This person receives a fixed income, were at a disadvantage. With the retirement of people, tend to live by themselves, or lower standards of living than before retirement. Previously, in order to fill up the budget, many retirees hired again. At the present time, because of unemployment it has become problematic. Even while maintaining the work, regardless of the size of salaries and pensions reduced by 50%. By disadvantaged population are children without parental care. In our country, a number of public events provides the solution of this problem, among which an important place belongs to the guardianship.


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The goal of both institutions is the safety and protection of the rights of children deprived of parental care and upbringing in a family environment. Concerning this, it should be noted that the assistance provided to children in need of care, diverse. It is carried out through an extensive network of governmental and public childcare centers, where the necessary conditions for the education of comprehensively developed and active members of society. Here are important laws related to the targeted social assistance, the main principle of which should be providing it in the form of cash payments(Egamberdieva et al., 2008).

The system of targeted social assistance should include four types of benefits:

Housing assistance; Disabled children who are educated at home

Allowances to unemployed mothers with four or more children up to 7 years Extra cash to the features of the minimum wage

Targeted social assistance should be aimed at certain specific groups of citizens according to their necessity social help need to be actually provided. For instance, in education, the government introduced a system of study grants. College had the opportunity to train students on a contract basis, also operate private institutions whose activities, although it is under the control of the State, to undertake specific targeted assistance to vulnerable groups. There was a change in the health sector, which is believed as a main indicator for inhabitants. They open and operate private clinics that provide paid medical services to the population, in some cases it is organized free of charge.

PROPOSALS AND ANALYTICAL SUGGESTIONS In the Republic of Uzbekistan in the social protection system acts as an important element of social insurance, which includes medical and industrial accidents. Nevertheless, it is required to legalize the unemployment insurance. Social insurance – and other social features are focused as an objective necessity. At a certain stage of development of society takes up the defense of individuals who for some reason cannot work and receive pay for work.


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A sound social security system - one of the prerequisites for social justice, establishing and maintaining social stability. It should be noted the particular importance of social security and its impact on social processes. The government in many countries creates a system of compulsory state social insurance, enabling a significant concentration of resources in a single fund and thus provides a reliable social protection of the population. In a special social support for vulnerable people in need: people with disabilities, mothers with many children, orphans (Anonymous, 2014a). In Uzbekistan, there is currently no system of compulsory social insurance, which would include the implementation of additional security employees in the event of social risks. Social risk - occurrence of the event and (or) loss of job, loss of a breadwinner, which resulted in the party system of compulsory social insurance for whom social contributions, or in the event of the death of family members, his dependents, will acquire the right to receive social benefits in According to the current legislative act. However, the list of persons subject to mandatory social insurance include employees (except for working pensioners) and self-employed persons, including foreigners and stateless persons permanently residing in the territory of the Republic of Uzbekistan and implementing income-generating activities in the territory of the Republic of Uzbekistan. Health and pension insurance in developed Western countries is carried out by deductions from wages and profit in the same amount. VSSHA, for example, for this purpose from the wages of employees held 7.5%. In Sweden, the social funds are formed entirely by the state. In Japan, the payments for social, health and pension insurance is 7% of the average salary of the employee. Means quiet funds accumulated by special means, which include representatives of workers and employers. Unemployment insurance is available from a special insurance fund. The amount of payments depends, first, on the duration of unemployment, and secondly, the specific conditions of a country. In the first case, the maximum payout (from 50 to 70% of the average wage) are paid in the first months of unemployment for a certain period. Further, the amount of payments reduced. In the second case are taken into account the period of employment, work experience, physical fitness for employment, while providing aid and others. For example, in Germany, work experience must be at least 6 months for three years and at least 10 weeks during the last year of loss operation. In France, such a condition is to work for 150 days a year and 91 days of insurance. In the UK, it is taken into account only the payment of contributions to the insurance fund: within a year, there should be 26(Smit & Pilifosova, 2003).


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Figure 3. Social insurance

Activities to prevent accidents

Health insurance

Insurance againts Unemployment insurance accidents at work

Social insurance as a special form of social protection of citizens is used as an independent mechanism for the accumulation of funds (for example, for the individual functions of social protection). It includes mentioned categories as whole (see Fig 3).

In this regard, Uzbekistan state compulsory social insurance should be submitted three funds: - Pension; - Required Health insurance; - Social security.

From our point of view, the formation of these funds can be carried out by special contributions to extrabudgetary funds by means of the unified social tax.

CONCLUSION Social priority should be marked as one of the key, the practical implementation of which will allow Uzbekistan to qualify for a place in the group of countries belonging to the top of the world rankings table. At the same time, special attention should also be paid to the problems of strengthening care and attention, providing material and moral support to the people of the older generation, the solution of the existing problems concerning the life of the elderly. As is known, in 2015 in Uzbekistan has been declared the Republic of Uzbekistan Islam Karimov the President of the "Year of attention and care for the older generation(‘Народнодемократическая партия Узбекистана’, )." In this regard, the state program implemented measures to provide adequate attention and comprehensive support to older people, increase the level and quality of health and social services,


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supporting software needs and technical means and rehabilitation, etc. in order to ensure their well-being and dignity of older people, surround them with care and attention. At the same time, the strategic steps of promotion of Uzbekistan as a dynamically developing country should be seen in the dynamic development of society, a society in which are surrounded by care and attention of the people, society, which provides a high quality of life. Finally, as an independent country Uzbekistan has been retrieving significantly in the development of the country as whole. These directed measures need to be analyzed in the further way of the investigations in order to provide deep and suitable conclusions.

REFERENCE Abdullaev, B., Konya, L., & others. (2014). Growth Maximizing Tax Rate for Uzbekistan. Applied Econometrics and International Development, 14(1), 59–72. Abramson, D. (1999). A critical look at NGOs and civil society as means to an end in Uzbekistan. Human Organization, 58(3), 240–250. Anonymous. (2014a, August 12). Uzbekistan http://www.adb.org/countries/uzbekistan/main

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Anonymous. (2014b, August 12). Uzbekistan: Publications and Documents [Text]. Retrieved 16 September 2015, from http://www.adb.org/countries/uzbekistan/publications Asadov, D. A., & Aripov, T. Y. (2009). The quality of care in post-soviet Uzbekistan: are health reforms and international efforts succeeding? Public Health, 123(11), 725–728. Bank, A. D. (2015). Asian Development Bank and Uzbekistan: Fact Sheet. Asian Development Bank. Retrieved from http://www.adb.org/publications/uzbekistan-fact-sheet Cox, T., & Mason, B. (1999). Social and Economic Transformation in East Central Europe: Institutions, Property Relations, and Social Interests. E. Elgar. Retrieved from http://www.unrisd.org/__80256b3c005bccf9.nsf/0/13b89f13d7e6ac8180256b670065ee7d?OpenDocument&cntxt=4158E& cookielang=fr&Click= Crosa, G., Stefani, F., Bianchi, C., & Fumagalli, A. (2006). Water security in Uzbekistan: implication of return waters on the Amu Darya Water Quality. Environmental Science and Pollution Research, 13(1), 37–42. Egamberdieva, D., Kamilova, F., Validov, S., Gafurova, L., Kucharova, Z., & Lugtenberg, B. (2008). High incidence of plant growth-stimulating bacteria associated with the rhizosphere of wheat grown on salinated soil in Uzbekistan. Environmental Microbiology, 10(1), 1–9. Fumagalli, M. (2007). Ethnicity, state formation and foreign policy: Uzbekistan and ‘Uzbeks abroad’. Central Asian Survey, 26(1), 105–122. Kandiyoti, D. (1998). Rural livelihoods and social networks in Uzbekistan: perspectives from Andijan. Central Asian Survey, 17(4), 561–578. Karimov, I. A. (1998). Uzbekistan on the Threshold of the Twenty-first Century: Challenges to Stability and Progress. Macmillan. MacDonald, S. (2013). Economic Policy http://162.79.45.195/media/935015/cws12h01.pdf

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Mukhamedov, R. (2002). Geopolitical Approaches: Gas Policy of Uzbekistan toward Kyrgyzstan. Biweekly Briefing from Central Asia–Caucasus Analyst, 24. Retrieved from http://www.cacianalyst.org/publications/field-reports/item/7300-fieldreports-caci-analyst-2002-4-24-art-7300.html Schwarz, A. (2003). Old age security and social pensions. Unpublished Report. Washington, DC: World Bank, Social Protection Unit. Retrieved from http://info.worldbank.org/etools/docs/library/78330/3rd%20workshop/srmafrica/paristwo/pdf/readings/oldage.pdf Smit, B., & Pilifosova, O. (2003). Adaptation to climate change in the context of sustainable development and equity. Sustainable Development, 8(9), 9. (Uzbekistan), U. (1995). Uzbekistan Human Development Report. UNDP.


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Van Assche, K., & Djanibekov, N. (2012). Spatial planning as policy integration: The need for an evolutionary perspective. Lessons from Uzbekistan. Land Use Policy, 29(1), 179–186. Законодательная палата Олий Мажлиса - Конституция Республики Узбекистан. (2014.-a). Retrieved 16 September 2015, from http://parliament.gov.uz/ru/constitution.php Законодательная палата Олий Мажлиса - Конституция Республики Узбекистан. (2014.-b). Retrieved 16 September 2015, from http://parliament.gov.uz/ru/constitution.php Народно-демократическая партия Узбекистана: Сильная социальная политика — фактор обеспечения стабильности в обществе. (2014.). Retrieved 16 September 2015, from http://mfa.uz/ru/press/elections/2014/12/3145/


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DEPLOYMENT OF ECO-TOURISM IN CENTRAL ASIAN TOURISTIC DESTINATION AND RATES OF SUSTAINABLE TOURISM: A CASE OF UZBEKISTAN Obidjon Khamidov Service (Tourism) chair, International Tourism Faculty, Tashkent State University of Economics, Uzbekistan [email protected]

Ulugbek Hudayberdiev Samarkand Institute of Economics and Service, Universidad de Las Palmas de Gran Canaria, Spain [email protected]

Abstract Sector of tourism, which considered as an exponential growing branch of economy has improved the lifestyle of people, make them to travel and expand new horizons. However, in the rise new century it has been changed dramatically due to establishing new forms of tourism like eco-tourism in addition to already existing traditional forms of sightseeing. This tendency increased by great interest of scientists and researchers who dedicate their endeavors. This investigation scrutinizes this debate and specifically analyses the role of leisure and tourism in globalization processes. These processes will be analyzed on a theoretical, empirical


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as well as normative level. Central themes are transformations in leisure and tourism places; and the socioeconomic, technological, ecological and cultural determinants of change in Central Asia. Keywords: Eco-tourism, Tourism in Uzbekistan, Green tourism, Central Asia, Sustainable development

INTRODUCTION In recent years tourism has experienced continued advance and increased diversification becoming one of the fastest evolving economic sectors in the world. Tourism is a main activity supporting an economic sector that is responsible for 9% of global GDP. In recent years, it has seen noteworthy progress that is forecasted to continue, especially in developing countries, which have seen a rate of increase in visitor arrivals that considerably exceeds the world average. Tourism accounts for 29% of exports in services worldwide and for many developing countries, it provides a remarkable, and sometimes the primary, source of foreign exchange earnings(‘EHL/UNWTO Silk Road Strategy Initiative | UNWTO Silk Road Programme’, 2013.). Over the past six decades, tourism has continued to enlarge and diversify; it is now one of the leading and fastest-growing economic sectors in the world. These dynamics have turned it into a key driver for socioeconomic progress in countries worldwide. For the last twenty years, the idea settled in that in all aspects of contemporary life worldwide interconnectedness has amplified. Globalization has become one of the catchwords of the late 20th and early 21st Century(‘IUTF-2014’, 2014). Tourism and leisure are seen as imperative causes as well as consequences of global transformations. Tourism and leisure as a cause is supposed to induce global flows of people, ideas, images and capital. Tourism and leisure as an effect result from an increasing global interconnectedness of economic, technological and socio-cultural transformations. Global flows of capital, information and values with accelerating developments in technology have intensified and prolonged the global distribution of tourism, but also enmeshed the global and the local(‘Fifth International Meeting on the Silk Road.’, 2014). However, beyond a general recognition of a real or perceived intensification of global interconnectedness, there is a substantial disagreement as to how globalization is best conceptualized, how one should think about its causal dynamics, and how one should characterize its structural consequences, if any. Currently, tourism is one of the major sectors in global trade and one of the main wealth creators for many developing countries, especially in Asia, Uzbekistan as well. Deployment of tourism means jobs, poverty eradication, gender equality, and the protection and promotion of our natural and cultural heritage. The recognition of the significance and potential influence of tourism in regional expansion strategies and in the global enlargement agenda is also charming an actuality. In addition, tourism has been identified by the United Nations (UN) as one of the ten sectors to drive the modification towards a Green Economy and was involved in the Rio+20. Furthermore, the Outcome Document, as one of the sectors capable of making “a significant contribution to the three dimensions of sustainable development, has close linkages to other sectors, and can create decent jobs and generate trade opportunities” (‘UNWTO Annual Report 2013 | World Tourism Organization UNWTO’, 2013).


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Tour potential of untapped destinations, Uzbekistan in particular can be key drivers in this process by supporting Central Asian countries’ implementing tourism in an integrated manner, by providing guidance, monitoring progress and mobilizing the necessary resources. Uzbekistan possesses many ancient monuments that attracts flow of tourists from all over the world, especially eco-tourism is one of the attractive segment. In particular, it flourishes on assets, such as the natural environment, a warm climate, rich cultural heritage and plentiful human resources, in which regions have a comparative advantage(Abramson, 1999). However, tourism can also be a source of environmental damage and pollution, a heavy user of scarce resources and a cause of negative change in society. For these reasons, it is imperative for it to be well planned and managed, embracing the principles of sustainable tourism, defined as “tourism that takes full account of its present and future economic, social and environmental impacts, addressing the needs of visitors, the industry, the environment and host communities(Bank, 2015). Sustaining the natural and socio-cultural resource base of destinations while the tourist numbers are constantly rising and tourism facilities are being expanded to all regions of the world is a major challenge. At the same time, the concept of sustainable development has become widely accepted as the way to a better, more human and socially responsible future. There is a growing belief that eco-tourism can play a significant role in sustainable development in the tourism industry of Uzbekistan. As well as, ecotourism is considered to be one of the fastest increasing fragments of the tourism industry in Central Asian region. UNWTO and officials of “Uzbektourism” national company that administrates countries tourism industry have claimed that ecotourism is growing by 25% to 30% a year (Hassan, 2000; Jones, 2005; Pforr, 2001; Sharpley, 2006; Wood, 2002) and most tourism forecasters predict ecotourism to raise further over the upcoming years, driven by consumer concerns over environmental and climate changes. On this basis, sustainable tourism is tourism that biases on nature, environment and heritages of Central Asian states (Müller & others, 2006). Sustainability principles refer to the environmental, economic and socio-cultural aspects of tourism development in the region, and a suitable guarantee of its long-term sustainability should be established within subsequent features according governmental policy of Uzbekistan: 

make optimal use of environmental resources that constitute a key element in tourism enlargement, maintaining essential ecological processes and helping to conserve natural resources and biodiversity;



respect the socio-cultural authenticity of host communities, conserve their built and living cultural heritage and traditional values, and contribute to inter-cultural understanding and tolerance;



ensure viable, long-term economic operations, providing socio-economic benefits to all stakeholders that are fairly distributed, including stable employment and income-earning opportunities and social services to host communities, and contributing to poverty alleviation.

Sustainable tourism should also maintain a high level of tourist satisfaction and ensure a meaningful experience to the tourists, raising their awareness about sustainability issues and promoting sustainable tourism practices amongst them. A clear distinction should be made between the concepts of ecotourism and sustainable tourism: “The term ecotourism itself refers to a segment within the tourism sector with focus on environmental sustainability, while the sustainability principles should apply to all types of tourism activities,


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operations, establishments and projects, including conventional and alternative forms” (Landau & KellnerHeinkele, 2001). The term sustainable tourism describes policies, practices and programs that take into account not only the expectations of tourists about responsible natural resource management (demand), but also the needs of communities that support or are affected by tourist projects and the environment (supply). Sustainable tourism thus aspires to be more energy efficient and more climate sound (for example by using renewable energy); consume less water; minimize waste; conserve biodiversity, cultural heritage and traditional values; support intercultural understanding and tolerance; generate local income and integrate local communities with a view to improving livelihoods and reducing poverty. Making tourism businesses more sustainable benefits local communities, and raises awareness and support for the sustainable use of natural resources(Anonymous, 2014).

ROLE OF SUSTAINABLE TOURISM AND CASE OF ECO-UZBEKISTAN The Government of Uzbekistan has identified tourism as a priority sector for deployment. With the support of global organizations, it decided to seek UNWTO’s technical assistance in the formulation of a long term National Strategy for the Sustainable Development of Tourism in Silk Road tourism destination. The Strategy was approved in April 2011 and formally launched in September that year. On this way, nature based tourism facilities have derived as a main facility source on tour packages of country. Role of ecotourism have identified and considered as an untapped resource of tourism potential, which provide extraordinary and attractive service types. In 99th session of UNWTO, which was held in Samarkand on October 1-3, 2014, was observed tourism potential of Uzbekistan both theatrically proved and practically advised. According to officials, the main recommendations related to following features: 

the need for a strengthened institutional and regulatory framework;



the creation of a consolidated and diversified tourism offer;



the strategic positioning of Uzbekistan within Silk Road tourism;



quality tourism services and enhanced tourism management;



creating an enabling environment for tourism investment in the country. Concept also implemented the formulation of a new Eco-tourism Law for Uzbekistan, created a

national platform for the harmonization of tourism statistics and formulated pilot demonstration projects that included a coastal management plan for Central Asian states. In order to guide implementation, detailed methods identified priority actions for the recent years, possible sources of funding, lead implementation agencies and a coordination, monitoring and evaluation framework for the implementation process (Karimov, 1998). All of the above negative aspects underline the need for tourism to be very carefully planned and managed in developing countries. This requires governments to establish and implement clear policies on the control and management of the sector, in conjunction with all tourism stakeholders (‘Законодательная палата Олий Мажлиса - Конституция Республики Узбекистан’, 2014.). In order to progress the tourism sector in a sustainable manner and enhance the local socio-economic impact from tourism, many Silk Road tourist destinations have made tourism a priority in their national development policies, and are trying, with the


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support of donors and improvement organizations, to formulate and implement interventions to proliferation tourism’s impact to poverty reduction. According UNWTO’s Definition of Sustainable Tourism: “Tourism that takes full account of its current and future economic, social and environmental influences, addressing the needs of visitors, the industry, and the environment and host communities”. Sustainability principles refer to the environmental, economic, and socio-cultural aspects of tourism development, and a suitable balance must be established among these three dimensions to guarantee long-term sustainability. Hence, sustainable tourism should: 1. Efficient use of environmental resources that constitute a key element in tourism development, maintaining essential ecological processes and helping to conserve natural heritage and biodiversity. 2. Respect the socio-cultural authenticity of host communities, conserve their built and living cultural heritage and traditional values, and contribute to intercultural understanding and tolerance. 3. Ensure viable, long-term economic operations, providing socio-economic benefits to all stakeholders that are fairly distributed, including stable employment and income-earning opportunities and social services to host communities, and contributing to poverty alleviation. Sustainable tourism development requires the informed participation of all relevant stakeholders, as well as strong political leadership to ensure wide participation and consensus building. Achieving sustainable tourism is a continuous process and requires constant monitoring of impacts, introducing the necessary preventive and/or corrective measures whenever necessary. Sustainable tourism should also maintain a high level of tourist satisfaction and ensure a meaningful experience for tourists, raising their awareness about sustainability issues and promoting relevant sustainable practices. (Source: UNEP and UNWTO, 2005.) A fundamental characteristic of the tourism sector is its ability to link the economic, social, cultural and environmental aspects of sustainability and to act as a driving force for their mutual enrichment. This is because tourism as an economic activity is highly dependent on the presence of intact environments, rich cultures and welcoming multitude communities. The opportunity that tourism brings to deliver income and jobs from cultural experiences is just one example of this. In turn, this places a heavy responsibility on the sector to address the social, cultural and environmental impacts of its own enlargements and operations (‘Народнодемократическая партия Узбекистана’, 2014.). Key Issues for Sustainable Tourism have been identified by UNWTO from many years of experience in working on the sustainable deployment of the tourism sector. Recognized pillars cover the thematic areas, which, could be addressed through future projects and interventions. 1. Tourism policy and governance that concerns the recognition of tourism in sustainable improvement policies and the presence and implementation of a clear tourism strategy that embraces sustainability principles. It looks at tourism governance structures, including tourism ministries and institutions. As well as, their affiliations to other areas of government that affect its sustainability and performance. It also deliberates the presence of structures and mechanisms for engaging public, private and third sector stakeholders, including local communities, at diverse levels.


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2. Economic performance, investment and competitiveness reflects the business and investment environment and the position of trade liberalization in the tourism sector, including the consequences for the local economy, small businesses and sustainability in general. It looks specifically at issues of market access, product quality and the resilience of the sector. It recognizes the need for sound data to inform tourism planning and management. 3. Employment, decent work and human capital. The role of tourism as a generator of employment is a key aspect of its contribution to sustainable development. This pillar is concerned partly with the planning of human resources to meet the needs of the sector and partly with the quality of jobs provided, including conditions of employment. Skills assessment and provision of relevant training and capacity building is covered as a definite theme. 4. Poverty reduction and social inclusion that focuses on the impact of tourism to poverty reduction. It deliberates a strategic approach to pro-poor tourism at a destination level, employing methods such as value chain analysis. It then considers specific initiatives to gain more benefit for the poor, based on seven mechanisms identified by UNWTO, including strengthening local supply chains, working with the informal sector, developing community-based initiatives and securing collateral benefits from tourism. 5. Sustainability of the natural and cultural environment. The critically important relationship between tourism and natural and cultural heritage is a key theme of this feature, considering policies and actions to conserve the asset base, to manage tourism in sensitive areas and secure benefits from it. Specific attention is paid to mitigation and adaptation of the tourism sector to climate change. Finally, the use of mechanisms to improve the sustainability of tourism development and operations, and to monitor impacts, is assessed.

In addition, key materials that are biased on the deployment of sustainable tourism especially eco-tourism. While integrating features of the natural tourism in a whole following documents are believed as pivotal ones: • Development policies and strategies • Tourism policies, strategies and master plans • Policy and strategy documents relating to: Trade and investment; Human Resources, including education and training; Environment and Natural Resources, including climate change; Culture. • Tourism legislation (Tourism Bills, Acts, Laws etc.) • Other primary legislation affecting the sector: Labor; Planning/Environment • Annual Reports from Ministry of Tourism and tourism bodies (NTO, Associations) • Published statistics on the performance of the tourism sector • Promotional material and websites for the country.


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In addition to looking at the above documentation, the main process for undertaking the implication will be through a series of officials. This will involve list of main stakeholder groups including in Uzbekistan: • Ministry of Tourism ( Uzbektourism Administrative Organization) • Official tourism bodies, e.g. National Tourism Organization • Other key Ministries including those responsible for development, finance, trade, employment, environment, natural heritage and culture • Relevant government agencies, e.g. Environment Agency, Investment Promotion Agency etc. • Regional Authorities • Private sector tourism associations • Key NGOs working in the field of development, poverty, communities and environment • Universities and institutions engaged in tourism research and teaching. Moreover, according to UNWTO’s provided practical guidance on sustainable tourism to policy makers , included a summary of the priority issues for an agenda for sustainable tourism in relation to the economic, social and environmental impacts of tourism. This provides a framework to assist the development of policies for more sustainable tourism based on: • minimizing the negative impacts of tourism on society and the environment; • maximizing tourism’s positive and creative contribution to local economies, the conservation of natural and cultural heritage, and the quality of life of hosts and visitors. Furthermore, Uzbekistan as a destination, which has not been untapped, retrieves great potential of green tourism development. On this case, research concludes mentioned categories of sustainable tourism. The twelve aims for an agenda for sustainable tourism are:

1) Economic viability 2) Local prosperity 3) Employment quality 4) Social equity 5) Visitor fulfillment 6) Local control 7) Community well-being 8) Cultural richness 9) Physical integrity 10) Biological diversity 11) Resource efficiency 12) Environmental purity Source: UNEP & UNWTO, 2005.


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It should be considered that the order in which these twelve aims are listed does not imply any order of priority, what it reveals is each of this feature equals to vital relevancy. According company of “Uzbektourism” defines ecotourism as: 

Nature-based forms of tourism in which the main motivation of the tourists is the observation and appreciation of nature as well as the traditional cultures prevailing in natural areas.



Containing educational and interpretation features.



Generally, but not exclusively, organized for small groups by specialized and small locally owned businesses. Foreign operators of varying sizes also organize, operate and/or market ecotourism tours, generally for small groups.



Minimizing negative impacts on the natural and socio-cultural environment.



Supporting the protection of natural areas by:



Generating economic benefits for host communities, organizations and authorities that are responsible for conserving natural areas;



Creating jobs and income opportunities for local communities; and increasing awareness both among locals and tourists of the need to conserve natural and cultural assets.

A precarious requirement of tourism policy in the context of tourism’s role as an expansion tool is that it should fully embrace the philosophies of sustainable tourism. This is defined as “tourism that takes full account of its current and future economic, social and environmental impacts, addressing the needs of visitors, the industry, the environment and host communities”. More specifically, pursuit of sustainable tourism involves the following outline. Many aspects of the sustainability agenda relate to ethical issues for tourism, concerning the rights and responsibilities of all stakeholders participating in and affected by the activity of tourism(‘Fifth International Meeting on the Silk Road (Samarkand, Republic of Uzbekistan) | UNWTO Silk Road Programme’). 

Global ecotourism problems and its reflection on Uzbekistan Ecotourism



Local ecotourism problems



Strengths and treats of natural resources in order to become one of the eco-tourism destination in Central Asia.

Moreover, ecotourism is considered as one of the vital one in order to develop both tourism and economy as well. In this way, article provides benefits of green tourism in the following way:


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Economic viability Local prosperity Employment quality Social equity Visitor fulfilment Local control

Community wellbeing Cultural richness Physical integrity Biological diversity Resource efficiency Environmental purity

All in all taking into account of all the persuasive factors aforementioned, Uzbekistan as a major partner of Silk Road tourist destination program could tackle various issues with the support of some international and non-governmental organizations. In consequence, some shortcomings of tourism industry will be prevented and some privileges could be provided for small businesses and entrepreneurship(‘EHL/UNWTO Silk Road Strategy Initiative | UNWTO Silk Road Programme’, 2014).

CONCLUSION As tourism encourages infrastructure growth of the country, has a strong multiplication influence and helps diversify the economy, supports local culture and crafts and environmental protection, which is actual for the Republic of Uzbekistan with its transitional economy, what’s more it is important as Uzbekistan is a country with huge proficiencies in tourism. The travel and tourism industry is a principal export industry in worldwide, Central Asian counties could contribute considerable as well. Additionally, with enormous underused capabilities in tourism and diversity of tourist attractions represent the potential of tourism in these tourism destinations. Location of the area, corridors on the Great Silk Road, with cities, which were main points of trade, make destination attractive one for the flow of tourists


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internationally. Accessibility of several tourism types, different traditions and unique cultural background of Central Asia has considered as one of the leading key factor tourism and hospitality businesses. After have been establishing and implying global experience, the attractiveness of tourism assessed to become as one of the essential one in the Central Asian destination. Likewise, the optimization of visa facilities has listed as one of the main development of tourism policy by the UNWTO research group. As one of the main Silk Road tourism destination, Central Asian states have great potential to advance sector of hospitality and tourism that create many promotions for different fields. In the other perspective, tourism sector in Central Asia has already established and its policy has led to some fundamentals enhancements in the last 20 years. Further investigations and explorations may be addressed to recognize problems of the industry by learning all its sub-sectors. In briefly, Central Asian states, including Kazakhstan, Kyrgyzstan, Turkmenistan, Tajikistan, and Uzbekistan have great potential of tourism deployment as whole. Traditional policies and directed measurements in counties have made already its results. Forthcoming diversifications and modernizations in the industry may contribute exponentially for the economies of the Central Asian counties. Nonetheless, tourism can be an important source of income and improved standards of life only if; economic, social and ecological goals are maintained in balance. Henceforth, conventional mass tourism approaches has yield its place to community based role tourism strategies in order to minimize harmful effects while generating profits to local communities. Maintainable community tourism should object to improving quality of life for the host community by producing social and economic benefits, as well as, by defending natural environment. In order to manage sustainable tourism development, destination management organizations should respect the local needs; thus, they need to engage with local communities’ decisions. In other words, ecotourism observations and weaknesses should be taken into account by policy makers in order to develop tourism in a sustainable manner. Community based tourism methods have succeeded throughout the globe in protection and promotion of natural environment together with development of communities’ standards of living. The notion of community-based tourism was identified through sustainable community tourism, which certainly constitutes the base of community-based tourism. As a final point, community based ecotourism was estimated in agreement with its key principles and challenges in the non-developed world. REFERENCE Abramson, D. (1999). A critical look at NGOs and civil society as means to an end in Uzbekistan. Human Organization, 58(3), 240–250. Anonymous. (2014, August 12). Uzbekistan: Publications and Documents [Text]. Retrieved 16 September 2015, from http://www.adb.org/countries/uzbekistan/publications Bank, A. D. (2015). Asian Development Bank and Uzbekistan: Fact Sheet. Asian Development Bank. Retrieved from http://www.adb.org/publications/uzbekistan-fact-sheet EHL/UNWTO Silk Road Strategy Initiative | UNWTO Silk Road Programme. (2014.). Retrieved 25 April 2014, from http://silkroad.unwto.org/en/project/ehlunwto-silk-road-strategy-initiative Fifth International Meeting on the Silk Road. (2014). Retrieved 25 April 2014, from http://silkroad.unwto.org/en/event/fifthinternational-meeting-silk-road-samarkand-republic-uzbekistan Fifth International Meeting on the Silk Road (Samarkand, Republic of Uzbekistan) | UNWTO Silk Road Programme. (2014.). Retrieved from http://silkroad.unwto.org/en/event/fifth-international-meeting-silk-road-samarkand-republicuzbekistan


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IUTF-2014. (2014). Retrieved 24 April 2014, from http://www.tourfair.uz/en/component/k2/item/2-mutv2014.html Karimov, I. A. (1998). Uzbekistan on the Threshold of the Twenty-first Century: Challenges to Stability and Progress. Macmillan. Landau, J. M., & Kellner-Heinkele, B. (2001). Politics of language in the ex-Soviet muslim states: Azerbayjan, Uzbekistan, Kazakhstan, Kyrgyzstan, Turkmenistan, and Tajikistan. University of Michigan Press. Müller, M., & others. (2006). A general equilibrium approach to modeling water and land use reforms in Uzbekistan. Universitäts-und Landesbibliothek Bonn. Retrieved from http://hss.ulb.uni-bonn.de/2006/0801/0801.htm UNWTO Annual Report 2013 | World Tourism http://www2.unwto.org/publication/unwto-annual-report-2013

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Законодательная палата Олий Мажлиса - Конституция Республики Узбекистан. (2014.). Retrieved 16 September 2015, from http://parliament.gov.uz/ru/constitution.php Народно-демократическая партия Узбекистана: Сильная социальная политика — фактор обеспечения стабильности в обществе. (2014). Retrieved 16 September 2015, from http://mfa.uz/ru/press/elections/2014/12/3145/


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Special issue on

Uzbekistan

THE DEVELOPMENT OF TRANSPORT LOGISTICS CLUSTERS IN UZBEKISTAN Uzakova Vazira Independent researcher, Samarkand Institute of Economics and Service, Uzbekistan [email protected]

Dilbar Aslanova Scientific vice-rector of Samarkand Institute of Economic and Service, Uzbekistan [email protected] Zuhra Sattarova Senior teacher, Finance faculty, Samarkand Institute of Economics and Service, Uzbekistan

Abstract The deployment of economy in Uzbekistan has been increasing at noticeable rates in recent years. The spatial expansion of economy and the growing diversification of its sectors in the country create opportunities for regions and communities to seek new concepts of development. On this case, transportation is considered as a major specific element of economy, which could be enhanced with the diffusion of clusters in order to make better synergies as whole. It makes the exchange of information and technology possible, encouraging different ways of co-ordination and collaboration within chains and service suppliers. Hence, clusters are considered as being efficient management and marketing tools for local economies of Central Asian region.


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These tools could be diffused in appropriate manner in order to contribute at achieving competitive advantages through local development while establishing sustainable development basis for the transport logistics. Keywords: Transport, Economics, Uzbekistan, Clusters, Competitiveness of country, Central Asia

INTRODUCTION As a belt of main cross corridors, Uzbekistan is considered as a vital destination for transportation of Central Asian area. Realizing infrastructure as a qualification for social and economic expansion, the government contributes highly to the development of the transport infrastructure and the related industry. Moreover, the infrastructure currently remains a priority direction of expenditures of budgetary funds, state non-budgetary funds, and external loans guaranteed by the government. As Uzbekistan is dynamically, developing state and progressive growth of its economy requires anticipatory development of its transportation and communication network. Main directions of transport policy of Uzbekistan are integration into international transport communications, development of efficient international routes for transportation of foreign trade and transit goods, modernization of transport complex and raising of transit potential in order to push facilities and services as whole (Romanov & Romanova, 2015). Lying on the ancient trade routes between Asia and Europe, Uzbekistan has been the center of commerce and trade in Central Asia for many centuries. Its territory covers 447,400 square kilometers, the third largest among the five Central Asian republics with which it shares its borders: Kazakhstan, the Kyrgyz Republic, Tajikistan, and Turkmenistan, as well as Afghanistan (Lu & Koufteros, 2014). Its capital Tashkent, with 2.1 million residents, is the largest city in Central Asia. Uzbeks are hardworking and successful in business. They form the core of the legendary group of traders along the ancient Silk Road. With a young and literate population in excess of 28 million, Uzbekistan enjoys a vibrant and fast-growing economy. Agriculture is its most important economic sector, accounting for nearly 29% of gross domestic product (GDP). Its other major exports include gold (its second largest export), natural gas, minerals, and fertilizer. In 2007, its GDP grew by 9.5%. From 2006 to 2007, its trade surged by 27.4%, driven by a 40.7% increase in exports (Lun, Lai, Ng, Wong, & Cheng, 2011). So far, the country is underway to establish a modern road transport network. Furthermore, an air communication system has been created in the country, the power system is developing, and other sectors and facilities of infrastructure are being modernized and diversified. Yet, successes of the economic policy, directed on development of private sector, also favorable market conditions, have naturally led to increase of burden on infrastructure capacities. There is a strong need to establish new infrastructure capacities for maintaining economic growth, but also to modernize or replace existing capacities, as well as to adjust infrastructure in order to respond to changing needs of the economy and the society (Romanov & Romanova, 2015).


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Today, Uzbekistan is faced by a shortage of infrastructure capacities and an insufficient efficiency of the infrastructure. In order to tackle the infrastructure shortfalls, the Resolution of the President of the Republic of Uzbekistan № ПП-1446 December 21, 2010 "On the acceleration of infrastructure development, transport and communication development in 2011-2015” approved the main parameters of capital investments and investment program's of the Republic and address a program of projects implemented with foreign credits guaranteed by the Government of the Republic of Uzbekistan. Furthermore, the Resolution of the President of the Republic of Uzbekistan № ПП-927 dated on 24.07.2008 "On measures to improve the process of attracting foreign investments and loans" was given the task of extensive notifying foreign investors and international financial institutions about promising investment climate and potential investment opportunities in the economy created the Republic of Uzbekistan. Special attention to ensure coordination of the activities of governmental and economic management were focused on the document. The tasks are to provide comprehensive assistance and support to foreign investors. Annually, the President of the Republic Uzbekistan declares by resolution the investment program for the coming year. Pursuant to Presidential Decision, the executive body of the Cabinet of Ministers shall issue special regulations to implement the investment policy (Singh & Bodh, 2014). Supplementary structure of motor and railroads, renewal of rolling stock and electrifying of railways is of great importance for the development of transportation in Uzbekistan. In December 2010, the President of Uzbekistan issued Resolution on Rapid Development of Infrastructure of Transport and Communication Construction for 2011-2015, which will serve as a strong impact for further facilitation of development of transport sector of the country. The total amount of investments to be disbursed by 2015 is US$ 6.9 billion (Karimov, 2012b). In addition, document foresees large scale creation and transformation of motor and rail roads, bridges, renewal of the fleet of the vehicles, railway locomotives and carriage fleet, purchase of new mid and long distance passenger air fleet manufactured by Boeing and Airbus. Besides, the country have established two Spanish high-speed trains Talgo-250 which travels specially among historical cities of Uzbekistan, in some sections reaching the speed of 250 km/h(Lagarde, Miglio, Eggenberger, Montalbàn, & Bossini, 2015). Uzbekistan is a land-locked country providing crucial transit for the centuries-old silk route. Roads and railways carry the bulk of the passenger and freight traffic. With the country having emerged from the post-Soviet planned economy, it is gradually progressing toward a market economy. As with other landlocked developing countries, Uzbekistan faces several challenges in connectivity, logistics, and access to sustainable modes of transport. The public sector agencies managing the transport sector are (i)

the Republican Road Fund (RRF);

(ii)

Uzbekistan Railways (Uzbekistan TemirYo’llari, or UTY);

(iii)

Uzbekistan Airways; (iv) Uzavtoyul (road construction and maintenance); and

(iv)

Automobile and River Transport. Although no single government entity is charged with the transport sector as a whole, the Cabinet of Ministers coordinates the sector.

The market of transport services is a separate sphere of the economy. The current situation in the world economy, which is characterized, in particular, the rapid development of integration processes, varying economic environment in the territorial context, differences in the degree of development of national


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economies and their openness to participation in international economic relations, intensification of commodity flows on different levels of interaction between economic agents, increasing tourist flows (Stein, 2012). On the one hand, and the insufficient development of the economic-theoretical framework, a small amount of modern research of methodological bases of functioning of transport and logistics complex in modern science. On the other hand, this determines the objective necessity of determining the place, role and importance of transport services as an important economic category. Structural changes that characterize the processes of global production and international trade, is largely predetermined by the changes occurring in the global transport sector. Without service differentiation in the number of species and quality, that is, without sufficiently rigorous classification of transport services, and then the appropriate identification is not possible to solve the various problems of the efficient functioning of the markets for these services. In particular, it is difficult to determine the degree of competitiveness of services addressing technical, technological, organizational, commercial and legal interaction between the various participants in the various markets for transport services, informed certain segments of the consumer market of transport services for the effective implementation of the transport organizations of their specific functions such as marketing, production, innovation , finance and personnel management, difficulties in pricing and others (Baldacchino, Ferreira, & others, 2013).

THE CONCEPT OF TRANSPORT SERVICES AND ITS MAIN TYPES Transport Service Market is a manifestation of the scope of economic relations between transport organizations and consumers of transport services between the cost and value of transport services. The kind of mechanism for coordinating the interests of transport and cargo. The transport market can be seen as part of the commercial market space, or as part of the delivering and transportation. It is considered that, the effect of the movement of goods and passengers by private mail (the point of departure - destination). Transport products are characterized by the following parameters: mail transport; kind of cargo; qualitative parameters. As with any product, the main products of transportation (transportation and delivery of goods to the final destination) and auxiliary transport services (freight forwarding operations) have on the transport market certain value (exchange and the consumer) that occurs during transportation and is included in the price goods at the place of consumption. The price of transport products to the market of transport services should be determined by supply and demand, taking into account the socially necessary cost of "living" labor and consumer properties of transport (Lun et al., 2011).

The transport market in the narrow sense is part of the product market, but it has a number of distinctive features: 

Transportation services, as well as other services are immaterial in nature (they can not save, create a reserve);


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

Coincidences production processes of transport services and their implementation not interoperability of transport services (restricts competition on one mode of transport between its divisions);



Space disunity transport services;



Generality and mass transport market;



It is the natural monopoly on certain types of Transportation, regions.

By the end of the 20 the century, the concept of "transport service" is not used in the organization and management of transport. Under the transportation, services are understood directly as a mean of transport, measured by such gross figures, the volume of loading and unloading of cargo turnover, and so on. However, this method of assessment took into account only the quantitative aspect of transport. In a market economy, the concept of "service" in addition to the volumes necessary to include the implementation and the level of quality and service, accompanying the implementation of services ( Pikalov, 2014). Transport services, as such, belongs to the sphere of material production. Not directly converting raw materials, transportation creates use-value. The transport service is the final process of material production and at the same time the initial stage of the production or final consumption. Transport services market is a separate sphere of the economy. The quality of infrastructure and a set of services Uzbekistan lags behind the level of the leading countries of the world, however, the market is rapidly developing transport services in the whole country, and in some regions (Hussain, 2014). A distinctive feature of the transport complex of the republic from other sectors of the economy in the transition to a market economy is the relative break-even and profitability. In addition, the country has a welldeveloped network of major transport routes, and the availability of highly qualified specialists. The branches of the transport complex a purposeful and consistent policy of creating a real competitive market of different transport services (Tolipov & Warikoo, 2012). The goods in the transport sector can only be what it produces and sells. The object of the purchase and sale of transport, including road, is the transportation - the movement of people and goods in space and time. Move and have a beneficial effect, the result of the production of the transport system and transport organizations. Carriage performed by a vehicle is both the manufacturing process and products - goods transport. This product, according to modern terminology, are called of carriage or transportation services. However, the process of transportation except direct load handling motor vehicle includes operation and co-operation, such as warehousing, preparing cargo for shipment, loading, unloading, etc. Individual operations or group of operations that accompany the main transportation process is a motor transport services. It should distinguish between transport and road transport services: transport - a basic service, goods transport operator, while road transport services in terms of marketing also serves as services (Alam, 2014).

Railways Uzbekistan has 4,014 route-kilometers (km) of rail track, of which 430 km is double-tracked. Continuous welded rail has been installed on 2,300 track-km, with 3,700 track km of reinforced concrete sleepers. The investment focus in railways, since independence in 1991, has been on constructing new lines to avoid transit


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through neighboring countries. This process was largely completed with the opening of the Tashguzar– Kumkurgan line in southern Uzbekistan, bypassing Turkmenistan. The only missing line is from Angren to Pap, to link the Ferghana Valley network In transport complex of Uzbekistan, special role belongs to cargo by which total transportations through railways comprises about 70 million tons p.a. with more than 35% to be export-import and transit cargoes including various destinations of the world. Moreover, the total length of railways is more than 7,000 km, with 4,600 km to be the main trunk. For further development of railway complex, with phased approach, the country is constructing new railway sections, modernizing existing trunks, electrifying of railway lines, and renewal of carriage fleet. For the last several years, projects on construction of railway sections Navoi-Uchquduq-Sultanuizdag- Nukus with the total length of 341 km and Toshguzar-Boysun-Qumqurghon with total length of 220 km have been implemented systematic. These sections are supposed to ensure continual railway communication among Northern, Southern and Central regions of Uzbekistan. Furthermore, railway Toshguzar-Boysun-Qumqurghon provided direct access to Afghanistan which is border neighbor country according its territorial location. Stabilizing of situation in Afghanistan would create realistic prerequisites for forming of entirely new Trans-Afghan transport route with access to the Iranian ports Bandar Abbas and Chakhbakhor, as well as to the Pakistani port Guadar. Beginning for this was put by the construction and launch of the railway Khairaton-Mazari Sharif, which is the first in Afghanistan (Malashenko, 2014). Under the ADB financing, the State Joint Stock Railways Company “Uzbekiston Temiryullari” acted as contractor for construction works of this road with length of 75km. Nowadays, “UzbekistonTemirYullari ” is considered as one of the strong railway companies in CIS. The fleet of locomotives, cargo and passenger carriages, special construction machines and laboratory equipment, scientific base, labor potential and experience of construction works in various climate and geodesic environments allow the Company to perform as contractor on implementation on infrastructure projects not only within Uzbekistan, but also is quiet competitive for participation in international projects. According to ADB experts, project on construction of Khairaton-Mazari Sharif railway appeared to be the most successful in the ADB history in co-relation of costs, implementation terms and the quality of the works. It should be noted, that the progress of construction was monitored by the international independent experts, which gave high evaluation to the quality of the work eastern Uzbekistan with the rest of the system.

Roads Uzbekistan has more than 183,000 km of roads, 42,530 km of which are highways. Highways are classified as international (3,626 km), regional (21,995 km), and national (16,909 km). While the road network is adequate, providing access throughout the country, it suffers from a backlog of rehabilitation work.As of today, the total length of the motor roads of Uzbekistan is 183,000 km (with 42,500 km of regular highways, including 3,200 km of international motorways). Motor transport covers about 10% of foreign trade and 88% of domestic passenger and cargo transportations. An annual growth rate of volumes of motor transport services is 20%. With aim at creation of unified national transport system through construction and renovation of motorways meeting international requirements and standards, in 2009, Uzbekistan issued National Highway


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Development Program, 2009-2014, implementation of which started beforehand. In the context of large scale program of construction of national highway, it's intended to renovate and construct motorways with total length of 1,501 km, including Uzbek section of trans-European highway Р•-40, passing towards Beineu Kungrad - Bukhoro - Navoi - Samarqand - Tashkent - Andijon, with total length of 1,139 km. Inland waterway traffic is concentrated on the Amu River, which flows east–west from Tajikistan and Afghanistan at the Uzbek–Afghan border, turning northwest toward the Aral Sea, bordering Turkmenistan. The only navigable section in regular use is from Termez to the Afghan port of Hayraton, 26 km upstream (Akimov & others, 2015). Uzbekistan’s road transport sector has undergone significant changes since 2003, yet the sector is still in a state of transition. Reform gains have emerged from improvement in road sector governance—the separation of the RRF from Uzavtoyul, and its institutional development to become a corporate entity with an appropriate organizational structure. The RRF has attained a quasi-autonomous status, which may be the first stage toward the evolution of a full-fledged road asset management system. An additional requirement would be to provide the RRF with a sustainable source of income to meet the demand for road construction and maintenance(Tolipov & Warikoo, 2012). On this basis, the way of development economically analyses noticeable on road contraction and modification as whole. By the way of its current existence the collaborative implementation has to make great importance on lifestyle of people(Karimov, 2012a). To improve the efficiency of passenger transportation in the city of Samarkand, in which the number of population for 2014 is already more than 2.5 million need push for the services of transportation. Inhabitants of Samarkand branch of the Uzbek Agency for Automobile and River Transport organized 13 public tender projects, in which entrepreneurs were, invited 23 passenger routes. They are conducted on the basis of resolutions of the Cabinet of Ministers "On organization and holding open tenders for urban passenger transport-sky" of 17 August 1998 "On organization and holding open access tenders for commuter, intercity and international passenger transport" from July 29th, 1999 in the Republic of Uzbekistan held a tender for the deployment of passenger ways (Schaefer & Whitney, 2015). In Samarkand region, currently operates 316 passenger routes, which operate 205 buses "Isuzu" (data buses equipped with engines, which by their environmental feature refers to the Euro-2 standard and it is characterized as being particularly green and safe). These buses are well proven both in comfort for passengers and reliability of the design.), 67 vehicles and 198 minibuses "Damas" .Total length of motorways area - 4678.8 km. The quality of road coverage area divided into cement and concrete - 62 km, c concrete 2065 km, Black - 1576 km, gravel - 351 km, ground - 64 km(Karimov, 2012a). In Samarkand region in 2013, the number of licensed cars involved in the provision of transport services increased by nearly 1 thousand. Units or 11.4% compared with 2012. These data were presented during a visiting session of the Uzbek Agency for Automobile and River transportation weight of transportation services, a set of transport has been increased. So in 2012 the share of road transport accounted for nearly 98.5% of passenger transportation and 90.5% - cargo. At the same time in the service sector the share of non-state actors are almost 100% in passenger traffic and 98% - in cargo transportation. The largest share in


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the transportation of passengers and passenger turnover in 2014 accounted for road transport - 94.7 percent (3.2941 billion. People) and - 81.1 percent (32.5 billion. Passenger-km). In general, the volume of passenger transport shared of private carriers was 56.7 percent, passenger turnover - 70.6 percentage. The volume of passengers this category of carriers increased by 24.9 percent, and passenger turnover increased by 25.7 percent. The analysis shows that in 2014 was the increase in the carriage of passengers compared with 2013 to 14.8 million/people with the growth rate of 141.3 percent. Compared with 2010, this change is 6.3 million persons or 114.2%, compared with the 2011 and from 2012-year period of change it is also positive, amounts to an increase compared to 2011 to 10.2 million. Passengers or 125.2 % and compared to 2012 is 13.7 million passengers or 137.1%. From this table, one can observe that public passenger buses in 2014 increased significantly compared to the previous year by 49.8 million/ passenger km or 112.2%. In 2010, this figure increased to 81.4 million Passenger-km. The growth rate was 121.6%, compared to 2011 and from 2012 years of change also showed high numbers of 36.3 and 60.3 million passenger km respectively. The growth rate was 108.6 and 115.2%, respectively. This suggests reducing the number of passengers using buses and reducing the number of routes, thereby increasing passenger public buses. According to table 1, it is illustrated the number of passenger buses for public in Samarkand region.

Table 1. Transportation of passengers & passenger buses for public Samarkand region for the yrs 2010- 2014 Indicators Carried passengers (million persons.)

2010 44,3

2011 40,4

2012 36,9

2013 35,8

2014 50,6

Difference (+,-), (million persons.)

-

-3,9

-3,5

-1,1

14,8

Increase rate,% Passenger turnover of public buses (million, passengers-km).

375,2

91.1 420,3

91.3 396,3

97 406,8

141,3 456,6

Difference (+,-), (million passengers-km).

-

45,1

-24

10,5

49,8

Increase rate,%

-

112

94.2

102.6

112,2

Road funding and sustainability Government contributes significantly on transportation development, while spending of 1% of its gross domestic product on roads is low by international standards. The RRF is responsible for financing about 25% of the entire network. However, its budget remains inadequate to meet the reconstruction and maintenance requirements of the network. This has resulted in about 60% of public roads having cracks on more than 10% of the surface area as well as having 10 potholes, on average, per kilometer. The RRF needs to tap the potential of public–private partnerships, restructure its revenue system, and introduce road user charges to improve maintenance and develop the network.


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Cross-border facilities Despite significant enhancements and boosts, trade simplification and the cross-border regime in Uzbekistan remains complex and time-consuming. Transit traffic is constrained by poorly maintained infrastructure and traffic safety concerns. Border infrastructure needs to be modernized and made view that is more efficient globally. Recently approved projects linking borders include components to strengthen cross-border facilities and shorten cross-border processing times(Hanks, 2013).

Private sector participation The ongoing ADB-assisted Regional Road Project4 and the two-multitranche financing facilities (MFFs) for the Central Asia Regional Economic Cooperation (CAREC) Corridor 2 Road Investment Programs 5 have stimulated private sector development by introducing international competitive bidding for some road works. Yet, the potential impact on private sector development is limited as the contracts for periodic maintenance of international and national roads are still a captive market for UzAvtoYul and its subsidiaries. However, some private contractors have been awarded construction and repair works by the RRF based on recognized competitive procedures; these needs to be expanded to all other works. Legal and regulatory frameworks for public–private partnerships in the transport sector also need to be finalized (Smal & Janasz, 2013).

Road safety Road safety has become a growing concern in Uzbekistan with the rapid increase in the fleet of motorized vehicles. Road accidents are a leading cause of death, especially among men. Traffic accidents average two fatalities for every 10 accidents. Uzbekistan records 1,430 fatalities per million means of transportation, which is high by international standards. Poor road conditions with inadequate infrastructure and weak speed control aremajor causes of the high fatal accidents rate.

Rail reforms and restructuring UTY has benefited from technical assistance focused on reforming railways to serve the country’s emerging market economy better. The government and UTY need to consider major policy issues to promote policy and regulatory conditions that will advance the three important and mutually reinforcing restructuring objectives— competition, productivity, and accountability—for moving UTY toward a market-oriented rail company.

Financing of recurrent costs UTY finances its operating expenses partly through tariffs on freight and passenger services. Under the ADBfinanced railway projects, UTY was to evaluation tariffs commonly and ensure they cover the cost of service. Although UTY has reviewed tariffs, they do not yet reflect the full cost of service, especially for domestic customers.


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Logistics centers Over the past 5 years, the growth rate in Uzbekistan averaged 8.5%, which is higher than the average growth in Central Asia. The GDP growth rate in 2011 actually amounted to 8.5% and for the period 2000-2010, the volume of GDP increased by 2.1 times, and thus indicators of Uzbekistan to be among the fastest growing economies in the world. Steadily growing rapidly in the past year, industrial production - 6.3%, agricultural production - 6.6%, the volume of retail trade turnover - 16.4%. The volume of consumer goods in 2011 grew by 11.2 per cent. The volume of exports in 2011 increased against 2010 by almost 15.4% and amounted to over 15 billion. US dollars or increased against 2000 by 4.6 times. The positive balance of foreign trade turnover exceeded 4.5 billion. US dollars(House, 2014). Given annually increasing volumes of trade between the countries of Southeast Asia and Europe, as well as the prospects of the use of transport and transit potential of Uzbekistan, is the need to improve transport and trade infrastructure, which include the creation of modern storage facilities for the storage, processing, storage and distribution of export import cargoes. Undoubtedly, these storage terminals could serve as internal loads and loads passing through Uzbekistan. Logistics centers functions and all appropriate infrastructure "dry port" might be a good solution for the optimization of international freight(Rakhimov, 2014). Currently existing in Uzbekistan storage terminals, only a small number meets the modern requirements for such complexes, and they tend to be specialized and focused on exports (such as cotton terminals) or created for freight and service specialist free trade and industrial zones (FIEZ "Navoi" and PPE "Angren").The geographical location of Uzbekistan is a strategically important aspect of motivation and development of a network of modern warehouses and logistics centers of trade infrastructure, which would minimize the logistics costs of manufacturing and trading companies for the delivery of goods. A study conducted with technical assistance from ADB and prepared on the basis of its strategy in the transport sector in Uzbekistan have shown the need for the development of logistics centers and warehouse terminals as the main components of the transport infrastructure. Currently, in addition to the problems existing in the system of rail and road transport in Uzbekistan there is insufficient development of infrastructure of logistics and communications, which can be used to organize the storage, processing and packaging of export-import cargoes. For example, Uzbekistan produces a significant amount of agricultural products (fruits, vegetables) but due to lack of appropriate logistics centers for processing, packaging and storage, more than 50% of products are becoming uncompetitive in foreign markets. Recently, in Uzbekistan was created a modern intermodal logistics center, which serves mainly international air cargo (cargo consolidation and layout) is the aviation hub in Navoi. In mid-2009, established JSC «logistics center Angren» is one of the largest logistics centers for maintenance of road and rail transport in Uzbekistan. Now, international logistics center "Angren" has warehouses combined terminal, access roads and maneuvering sites, hotel and security structures. Area transit-cargo terminal covers an area of 8.6 hectares on which there are rail travel line for loading and unloading of railway cars. The capacity of the terminal can overload up to 22 containers to the storage and processing of 60 containers of up to 1,500 tons storage space. The volume of traffic through the pass


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"Kamchik" ZAO "Angren Logistics Center" in 2011 amounted to 4.2 million tons of cargo, which is 1.3 times more than in 2010. According database on international transport corridors, their extent, the technical state of road infrastructure, settlements and rules for crossing of vehicles, the list and amount of payment for the entry and transit prohibitions and restrictions on entry to a particular territory, etc., Ltd. " Association for Development of Business Logistics "was created Transport and Logistics Information Portal www.logistika.uz. Availability of timely information on storage terminals would allow better plan production and transportation process, improve profitability, and reduce the cost of goods. Logistics has created a single portal available to all transport companies and entrepreneurs of the Central Asian region information database of a storage terminal, their specialization, the free areas, and tariffs, the availability of rolling stock and cargo, as well as statistical base cargo flows. Correspondingly, this active realized another major investment project that provides JV «UzVneshTrans». This is the first and only logistics center in the capital. ILC "Tashkent" will provide a full range of services for the processing, storage, customs clearance, shipping, including work will be organized on the principle "from door to door".

ANALYSIS OF TRANSPORT LOGISTICS SERVICES: CASE OF SAMARKAND Uzbekistan is among the countries with high logistics costs that consequence reduces the efficiency of production and trade, adversely affects the competitiveness of companies and the country as a whole. Total logistics cost in Uzbekistan in 2011 amounted-Wylie $ 212 million, the amount of the actual transport and logistics market (including services for transportation of oil and gas pipelines).The basis of logistics outsourcing services comprise transportation and freight forwarding. At present, market structure has changed related to the increase in the proportion of storage services. This is due to an increase in tariffs and revenue growth in the segment of transportation. For the segment of the transportation of goods, reflecting the level of development of the outsourcing market freight refers transport activities of the specialized organizations and entrepreneurs (natural persons). The Russian statistical reporting such activities are included in the commercial freight transportation, organizing the sector "Transport" by road, rail, inland waterways, sea and air modes, "public transport". In Samarkand region, trans-logistics services are in the process of 150 companies, 8 of them are now on the verge of bankruptcy. Analysis of the companies involved in logistical transport services shows strong performance. If you compare with other regions, the Samarkand region is located on the 2nd place after Tashkent region. Conducted survey among consumers indicates that professional services are engaged within 35 enterprises in the city. The enterprise has its warehouses 33 companies, rent another 12 enterprises. Services provided by these companies include warehousing, freight forwarding, and transportation. Following Table - 2, illustrates analysis of the number of enterprises engaged in transport logistics services in Samarkand region.


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Table 2. An analysis of the number of enterprises engaged in transport logistics services in Samarkand region (In percentages) Indicators

2010

2011

2012

2013

Total area Samarkand Kattakurgan Districts of Samarkand region Akdarya Bulungur Djambay Ishtixan District of Kattakurgan Koshrabad Narpay Payarik District of Pastdargom Paxtachi Samarkand Nurabad Urgut Taylyak

112 75 4

124 82 5

141 85 7

150 89 8

1 1 2 2 1 2 2 4 2 6 6 3 1

2 1 3 3 1 2 2 4 2 7 6 3 1

2 1 3 3 2 3 3 5 4 10 8 4 1

2 2 4 4 2 3 3 6 4 10 8 4 1

Increase rate of 2013 year to 2010 y. to 2011 y. to 2012 y. 133.9 120 106,3 118,6 108,5 104,7 200 160 114,2

200 200 200 200 200 150 150 150 200 166,6 133,3 133,3 100

100 200 133,3 133,3 200 150 150 150 200 142,8 133,3 133,3 100

100 200 133,3 133,3 100 100 100 120 100 100 100 100 100

An analysis of the number of enterprises engaged in transport logistics services in the Samarkand region showed the growth rate in 2013 to 2010, 2011 and 2012, years in the cities of Samarkand and Kattakurgan, as well as areas of Samarkand region. In all areas of the Samarkand region is growth in the number of companies engaged in transport logistics services. A survey among companies showed interest in this type of service, but inadequate skills, lack of personnel in this area. No relationship works with the governing bodies. There is no information about suppliers exporting goods from Samarkand region.

Table 3. Analysis of the structure of enterprises by type of transport involved in the logistics of transport services Samarkand region for 2010-2013(In percentages). Indicators

Rail public transport

2010

2011

2012

2013

Increase rate of 2013 year to 2010

2011

2012

29

29,5

29,9

30,2

104,1

102,3

101

21,5

21,5

21.5

21,7

100

100

100

Air

49

48,5

48,6

47,7

97.3

98.3

98.1

Pipeline

0,5

0,5

0,5

0,4

80

80

80

Road

Analysis of the structure of enterprises by type of transport involved in the logistics of transport services by rail public transport has increased by an insignificant figure. In 2010 compared with 2013 year increased by


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104.1% as compared with 2011 and the years from 2012 increased by 102.3 and 101%, respectively. Regarding the road and pipeline services growth rate in 2013 compared to previous years increased by 100 % and 80%, respectively. In addition, the rate of growth of air services in 2013 increased by 97.3 and 98.3% respectively compared to 2010 and 2011, while a comparison with 2012 it showed 98.1%. As a double landlocked country, transportation in Uzbekistan is an economic driver and supply chain logistics play a critical role. Uzbekistan has two logistics centers at Angren (70 miles east of Tashkent) and Navoi (a free industrial economic zone) in southwest Uzbekistan. Developing the necessary infrastructure for multimodal logistics centers, labor and management training, and market access to private entrepreneurs, are critical to the growth of the logistics industry(Karimov, 2012b). This factor became one of the key factors, laying basis for the project of creation of large hub with international intermodal logistic centre on the base of the Navoi airport, which is located in the centre of the country, on the crossroads of international inland and air corridors. Such location, which provides optimum access to the customers and partners, equal distance from large airports of the region creates environment for transforming Navoi airport into large regional hub for international cargo transportations. The objective prerequisites for achieving this goal are sufficient. Projections state that by 2015, transportations within Eurasian area will increase 2.4 times vs 2006, while transit of cargo transportations will increase 4 times. In 2001-2006, air transport carried 3 million tons cargoes through Eurasian route p.a., which is 17% of all international air cargoes and 30 million people or 6% of all international passenger flow. Attraction of only 5% of cargo flows between Europe and Asia to the Navoi Airport could turn it into sub-regional hub. Use of air routes with landing in Navoi provides tangible saving in time and costs for transportation of cargoes. Thus, the distance from South-East Asia to Europe through Navoi is 1,000 km shorter than from Dubai. While time saving in air flight comprises 1.5 hour, fuel - 15 tons per airplane(Novickis & Mitasiunas, 2015). The most tangible benefit from using advantages of location of the Navoi airport could be received by Japan, South Korea, Vietnam, Indonesia, Malaysia, Singapore, Thailand and Southern part of China, as well as the United Kingdom, Germany, Italy, France and other European countries. In direct proximity from airport pass international transport routes - Trans-European Highway E-40, connecting Paris with Beijing, railway with access in Western direction through Turkmenistan to the markets of the Middle East, Caucasus and Europe, in Eastern direction through Kazakhstan to China and other countries of Southeast Asia, in Northern direction through Kazakhstan and Russia to European countries, in Southern direction through Afghanistan to Pakistan and India. Now, the National Air Company Uzbekistan Airways is flying from Navoi airport cargo flights to Bangkok (Thailand), Deli, Mumbai (India), Dakka (Bangladesh), Dubai (UAE), Istanbul (Turkey). In 2010, the Company launched flights of cargoes through the route Navoi-Frankfurt-Navoi, Navoi-Dubai- Navoi, NavoiIstanbul-Navoi and Navoi-Bishkek-Navoi. In addition, through this airport the aircompanyKoreanAir is transporting cargoes through the routes Seoul-Navoi-Brussels, Seoul-Navoi-Vienna (Milano), Seoul-Shanghai Seoul-Shanghai-Navoi-Vienna and back.


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Creation of intermodal logistic center on the base of Navoi airport is practical example of organizing efficient mechanism of distribution of cargoes and services for the region based on advanced international experience. In 2009, in Angren, there was established Angren Logistic Centre. The main goal of the centre is accepting and handling of cargoes, as well as their delivery by trucks to Andijon, Namangan and Farghona provinces through mountain pass Qamchiq, thus providing reliable transport communication of Farghona valley with other regions of the country.In 2010, through mountain pass Qamchiq was transported more than 4 million tons of cargoes, out of which 467,000 tons of cargoes was processed by the logistic center.

Assessment of the Transport and Logistics Sectors Taking full advantage of its geographical position as a key transit country through which trade and people cross between Europe and Asia requires that Uzbekistan offer efficient and reliable transport and logistics services at reasonable costs. Unfortunately, its logistics performance index (LPI) rank is a disappointing 129th out of the 150 countries surveyed in the 2007 World Bank report: Connecting to Compete: Trade Logistics in the Global Economy. The LPI measures a country’s trade logistics performance using a number of parameters. Countries with high LPI scores have lower trade costs and are better connected to the global value chain.

Transport Networks At the heart of “The Great Silk Road”, Uzbekistan encompasses the shortest transport corridors between the west and east, and the north and south, connecting Europe to Asia. These routes are the Transport Corridor Europe–Caucasus–Asia (TRACECA) corridor and three of the six Central Asia Regional Economic Cooperation (CAREC) corridors. The three CAREC corridors are (i) Corridor 2-a, 2-b (Mediterranean–East Asia), (ii) Corridor 3-a, 3-b (Russian Federation–Middle East and South Asia), and (iii) Corridor 6-a, 6-b, 6-c (Europe–Middle East and South Asia). Traffic Trends Uzbekistan’s current traffic pattern is imbalanced, with substantially more traffic coming into the country than going out. This imbalance is partly caused by Uzbekistan’s import–export imbalance and partly by the import–export patterns of neighbors that route their goods through it. Most of Uzbekistan’s inbound traffic consists of high value goods, while its outbound traffic consists mostly of raw materials.

Road Transport Uzbekistan’s road transport system moves 10% of the international cargo that passes through the country. It also moves 88% of Uzbekistan’s domestic passenger and short haul cargo traffic. Uzbekistan’s 83,000kilometer (km) highway system, about 90% of which is paved, is strategically important to its neighbors as transit routes for interregional and intra-regional transport. As an example, Uzbek roads provide a year-round linkage between northern and southern Tajikistan. Most of the 1,500 km of highways the consultant traveled in are in fairly good condition and can be classified as Class 1 or Class 2 under Asian highway standards. However, roads in the country are constructed based on former Soviet Union (FSU) standards and thus may not be able to handle large amounts of heavy truck traffic.


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highway sections traversed regularly by heavy trucks have crumbled pavements and a substantial number of potholes. Also, arterial roads and city streets are generally in poor condition. This is mainly the result of insufficient maintenance work, with the budget for maintaining primary roads remaining inadequate. The Uzbek trucking industry is underdeveloped. It is estimated that there are fewer than 2,000 Uzbek trucks, most consisting of old Russian equipment. Meanwhile, foreign-owned trucks, mostly those from Turkey, Iran, and the Russian Federation, are in much better condition. Large numbers of foreign competitors are taking business away from local trucking companies in Uzbekistan(Faramani & Moradi, 2014).

Rail Transport Uzbekistan’s rail network has over 4,400 km of 1.52-meter broad-gauge tracks capable of handling 120 km/hour trains in most sections. It handles 65 million tons of cargo each year, transporting 20 million ton-km of goods. It transports 86% of international cargo and 66% of domestic freight in the country, mainly in wagons and containers that are old and in poor condition. Rail traffic in the country grew by 19% in 2007 and by around 15% per annum in recent years. The country’s railways are run by the state-owned joint stock company, “Uzbekistan TemirYo’llari” (Uzbekistan Railways), which, with a labor force of 33,500, is one of the largest of such companies in Central Asia. Uzbekistan, along with the Russian Federation and Ukraine, are the only three FSU countries with wagon construction and rehabilitation capabilities. In 2007, Uzbekistan Railways began to repair passenger wagons for the railways of the Kyrgyz Republic, Kazakhstan, and Tajikistan.

Air Transport Since Uzbekistan is a double-landlocked country, aviation plays an important role in icargo transported by air includes high-value fruits and vegetables to the Russian Federation, equipment and parts from Europe, and consumer goods from the People’s Republic of China (PRC), the Republic of Korea, and Japan. Uzbekistan’s air network is among the best in Central Asia. Its state-owned airline, Uzbekistan Airways, formed in 1992 out of the Uzbekistan Division of Aeroflot, is a reliable airline with one of the best safety records in the region. With 15,000 employees, Uzbekistan Airways is a huge enterprise that also runs the country’s air sector. Its modern fleet includes Boeing 757- 200, Boeing 767-300-ER, A 310-300, and RJ85 planes. It operates scheduled international flights to cities in the United States, Europe, Middle East, Southeast Asia, Central Asia, and the Commonwealth of Independent States (CIS). Uzbekistan is also well served by a significant number of foreign passenger and cargo carriers. The country’s network of airports is one of the best in the region. The Tashkent Airport has been certified by the International Civil Aviation Organization as an allweather airport. The Navoi Airport is being upgraded into an international air hub that can serve as a stopover for longdistance intercontinental flights. An international logistics center is also planned for the airport.


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Figure 1: Example of investment program in the rail sector of Uzbekistan

1-Project The project "Improvement of passenger railway transport" of the Cabinet Council of the Republic of Uzbekistan dated 04.06.1996, № 229-ф. Credit of the Japanese Bank for International Cooperation in the amount of 65 mill USD to build a plant for overhauling of coaches.

2-Project The project "Reconstruction of the railway," The Cabinet Council of the Republic of Uzbekistan dated on 28.10.1998, № 456. Asian Development Bank loan in the amount of 70 mill USD to repair the railway from Tashkent to Samarkand 320 km.

3-Project The project "Renewal of locomotives" RMB Uzbekistan dated on 26.11.1999, № 510. Loan from the European Bank for Reconstruction and Development in the amount of 40 mill USD for the purchase of 12 locomotives

4-Project The project "Modernization of railways of Uzbekistan" Uzbekistan RMB dated on 20.03.2001, № 136. Asian Development Bank loan in the amount of 70 mill USD and OPEC loan 5 mill USD to overhaul the railway route from Samarkand to Bukhara, 340 km.

5-Project The project "Modernization of diesel locomotives and reconstruction of foundries' RMB Uzbekistan dated on 26.12.2002, № 451. Loan from the European Bank for Reconstruction and Development in the amount of 68 mill USD for the purchase of 90 diesel engines for locomotives and the construction of the foundry.

6-Project The project "Construction of new railway line “Tashguzar-Baysun-Kumkurgan” RMB Uzbekistan dated on 04.10.2004 № 458. Credit from Japan Bank of International Cooperation in the amount of 151 mill USD for the construction of five steel bridges.

7-Project The project "Electrification of the railway section Tukumachi-Angren" by the resolution of President dated on 19.02.2007, № ПП-582. German bank KfW loan in the amount of 35 mill USD and Kuwait Fund of Arab Economic Development KFAED to 22 mill USD for the electrification of the railway line between Tashkent (Tukumachi) and Angren.

8-Project The project "Upgrading of passenger locomotives," Resolution of the President dated on 05.11.2008, № ПП-993. Credit of the Government of China in the amount of 70 mill USD for the purchase of 15 main line passenger locomotives.


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Water Transport As it is far from the ocean, with its closest access point to open sea being 2,950 km away, Uzbekistan has only a small volume of water traffic, mostly ferry traffic moving on its two major rivers: the Syr Darya and the Amu Darya. Over the long term, water transport in the country will decline as more bridges spanning these two rivers are built.

Multimodal Transport Multimodal transport in Uzbekistan is not well-developed, as elsewhere in Central Asia. The country’s rail intermodal terminals are generally antiquated, inefficient, and handle a small amount of traffic. Container trains are short and single-stacked and frequently mixed with general wagon traffic, which leads to slower service and higher costs to the shipper. Moreover, Uzbekistan Railways carries containers in old box wagons that had been converted into flat wagons by stripping off the box. It also moves containers in whatever wagon can accommodate a container. Inappropriate loading of containers and the use of equipment not designed for container carriage can damage the container and its cargo, and the rail wagon. Almost all of the containers used for transporting goods in and out of Uzbekistan are owned by shippers, foreign railways, foreign freight forwarders, foreign logistics companies, and foreign container-leasing companies.

CONCLUSION Development in the Republic network of railways and highways of international and national importance as well as flight connections allows transportation of goods almost throughout the country, serving the industrial clusters, industrial and agricultural enterprises, as well as the majority of business entities of the country. Today in Uzbekistan accepted multifaceted measures for the further development of transport and communication complex, creation of favorable conditions for cargo, national and international carriers, as well as improving control over the order of goods, their handling and processing. Special attention is paid to ensuring appropriate conditions for entrepreneurs engaged in production and investment activities in the country. Currently, measures are being taken for the construction and reconstruction of highways of national and international importance, the renewal and modernization of the rail and the car park, the creation of integrated logistics centers and the improvement of the regulatory framework, the establishment of a flexible system of tariffs for transportation of goods, simplifying customs procedures, reducing travel time customs checkpoints and the electronic exchange of documents. Measures are being taken to establish a mechanism for the effective use of information technology, transport and transport infrastructure. However, the rate of introduction of modern methods and techniques in the practice of the organization of logistics and cargo management still insufficient. On this case, paper concludes that deployment on this way could be conducted systematically by diversifications and modifications as whole. Moreover, country has great potential as a corridor for various routes, which may lead to better economic prosperity. Further researches on transport logistics is favorably conducted on the fundamentals of the country with the help of its relevant sub sectors.


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REFERENCE Akimov, A., & others. (2015). Political economy of financial reforms in authoritarian transition economies. The case of Kazakhstan and Uzbekistan. Griffith University, Department of Accounting, Finance and Economics. Retrieved from https://www120.secure.griffith.edu.au/research/file/e3bf6521-5a62-4668-8a8a-0c7f22f69adf/1/2015-01-political-economyof-financial-reforms-in-authoritarian-transition-economies.pdf Alam, M. M. (2014). CHINA’S CHANGING STRATEGIC ENGAGEMENTS IN CENTRAL ASIA. Journal of Central Asian Studies, 21(1). Retrieved from http://search.ebscohost.com/login.aspx?direct=true&profile=ehost&scope=site&authtype=crawler&jrnl=0975086X&AN=10 2595798&h=Cbv4U1WwIlDNZWpE9BDQfHqgUm6qZCg0eFIxFf5ZueSqNMcvE83aHpgXzFT%2FvUKWyISByadlkhucf%2 B9haTBE0Q%3D%3D&crl=c Baldacchino, G., Ferreira, E. C. D., & others. (2013). Competing notions of diversity in archipelago tourism: transport logistics, official rhetoric and inter-island rivalry in the Azores. Island Studies Journal, 8(1), 84–104. Faramani, R. R., & Moradi, H. (2014). UZBEKISTAN: A REGIONAL POWER IN CENTRAL ASIA? REALITY OR DILEMMA? Central Asia & the Caucasus (14046091), 15(2). Retrieved from http://www.cac.org/online/2014/journal_eng/cac-02/06.shtml Hanks, R. R. (2013). A Global Crossroads Reemerges in the Twenty-first Century. EDUCATION ABOUT ASIA, 18(3). Retrieved from http://www.asian-studies.org/eaa/Hanks-18-3.pdf House, F. (2014). Nations in http://www.ecoi.net/local_link/277858/411167_de.html

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Hussain, S. N. (2014). Geo-political importance of Central Asian republics: an Indian perspective. Retrieved from http://ir.inflibnet.ac.in:8080/jspui/handle/10603/19313 Karimov, I. (2012a). THE CONCEPT OF FURTHER DEEPENING THE DEMOCRATIC REFORMS AND ESTABLISHING THE CIVIL SOCIETY IN UZBEKISTAN. Himalayan and Central Asian Studies, 16(3/4), 194. Karimov, I. (2012b). The speech of the President of the Republic of Uzbekistan devoted to the 21st Anniversary of the Republic of Uzbekistan. Narodnoe Slovo, September, 1. Lagarde, N., Miglio, A., Eggenberger, P., Montalbàn, J., & Bossini, D. (2015). Constraining angular momentum transport processes in stellar interiors with red-giant stars in the open cluster NGC6819. arXiv Preprint arXiv:1502.02918. Retrieved from http://arxiv.org/abs/1502.02918 Lu, G., & Koufteros, X. A. (2014). Adopting security practices for transport logistics: institutional effects and performance drivers. International Journal of Shipping and Transport Logistics, 6(6), 611–631. Lun, Y. H., Lai, K., Ng, C. T., Wong, C. W., & Cheng, T. C. (2011). Editorial: research in shipping and transport logistics. INDERSCIENCE ENTERPRISES LTD WORLD TRADE CENTER BLDG, 29 ROUTE DE PRE-BOIS, CASE POSTALE 896, CH-1215 GENEVA, SWITZERLAND. Malashenko, A. (2014). Exploring Uzbekistan’s Potential Political Transition. Nd): N. Pag, 31. Retrieved from http://liportal.giz.de/fileadmin/user_upload/oeffentlich/Usbekistan/20_geschichte-staat/nachfolge_usb.pdf Novickis, L., & Mitasiunas, A. (2015). eINTERASIA Project: IT Transfer Concept for Adaptation and Dissemination of Innovative European Research Results in Central Asian Countries. Applied Computer Systems, 17(1), 7–11. Pikalov, A. (2014). Uzbekistan between the great powers: a balancing act or a multi-vectorial approach? Central Asian Survey, 33(3), 297–311. Rakhimov, M. (2014). Central Asia and Japan: Bilateral & multilateral relations. Journal of Eurasian Studies, 5(1), 77–87. Romanov, M. T., & Romanova, I. M. (2015). About Eurasian Transcontinental Transport Corridors and Economic Axes. Mediterranean Journal of Social Sciences, 6(5 S2), 328. Schaefer, R., & Whitney, A. (2015). The Uzbek Wild Card in the New Great Game in Central Asia. Region: Regional Studies of Russia, Eastern Europe, and Central Asia, 4(2), 291–308. Singh, K., & Bodh, S. (2014). POLITICS OF ISLAMISATION IN UZBEKISTAN. The Journal of Central Asian Studies, 19(1). Retrieved from http://ojs.uok.edu.in/ojs/index.php/jcas/article/view/240 Smal, T., & Janasz, D. (2013). Modelling of Polish Military Contingent Redeployment from ISAF Operation in Afghanistan. Logistics and Transport, 20(4), 107–112. Stein, M. (2012). Uzbekistan’s View of Security in Afghanistan after 2014. Military Review, 92(3), 75. Tolipov, F., & Warikoo, K. (2012). SPIRIT AND LETTER OF STRATEGIC PARTNERSHIP BETWEEN INDIA AND UZBEKISTAN. Himalayan and Central Asian Studies, 16(3/4), 161.


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http://ijecm.co.uk/


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Uzbekistan

ANALYSIS OF PROMOTION EFFICIENCY FACTORS IN FAMILY BUSINESS Ozoda Pardayeva “Economy and Management” department, Samarkand Agricultural Institute, Uzbekistan Mamayunusova Mehrangiz Olimovna Faculty of finance, Samarkand Institute of Economics, Uzbekistan [email protected] Abstract As Uzbekistan is considered as one of the dynamically developing country in the Asia, its economic perspective is believed to develop with the help of entrepreneurship and small business enterprises. Paper determines five considerably nucleus factors that impact on the promoting efficiency of family entrepreneurships as well as creation of model highlighting the results of finding. Moreover, individual assessment methods of guidance were devised and plausible finding of inner facilities were designed according competitive scrutiny. Investigation covers socio-economic analyses of Uzbekistan with the current sub-sectors status.

Keywords. Family venture, family business, efficiency, promotion foundation, efficiency of promotion foundation, inner facilities, factor analysis


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INTRODUCTION As it is known, family business is the most widespread form of enterprise activity in the world based on centuries-old traditions. Family firms form a basis of well-being and expansion of the society in countries with developed market economy; a considerable part of produced goods and services is related to them. Moreover, development of family business has not only economic, but also social and political significance for the country. Family that has its own business has something to aspire and bring up their children and pass in inheritance. Thus, there will be gradually generated a middle class of proprietors in the country, who are able to work on itself and at the same time create a great profit to the state. Middle class is a basis of social and political stability of the society. It is well recognized that Uzbekistan after gaining its independence in 1991, while rejecting the obsolete totalitarian, administrative-command and planning-distributive system chose its own Uzbek model of development. The essence and substance of the model, which was elaborated and is being put into practice today, are important to fundamental change and renewal of the state and constitutional order, also implementing political, economic and social reforms based on such principles as deideologization of economy and its priority over politics, giving the state the role of a major reformer. Moreover, the functions of an initiator and coordinator of reforms, ensuring rule of law, providing strong social policy and prosperious lifestyle (Malashenko, 2014). The country experienced sustained economic expansion over the last decade, with real growth rate averaging 8.3 % annually in the 2005-2012 period. Evolution is expected to continue at around 7-7.5 % over the medium term, supported by government spending and investment. Uzbekistan also has strong development potential (STEBLYAKOVA & UVAKASOVA, 2013). Business and family influence mutually on each other, common issue and purpose which is necessary to achieve, general work unites family relations and makes family stronger not for a year or two, but decades. Family firm is a unique business form where long-term strategic planning firm development linked inseparably with planning of family development and future of all its members. Family enterprises have a great importance for training youth’s life in the conditions of market economy and practical business and accustom members of the family to useful activity from youthful years which area major element of their occurrence in independent life. Consummation of Law of the Republic of Uzbekistan “About family business” (law became effective on April 27, 2012) produced a legal basis for family business expansion in Uzbekistan. According to various estimations, from 65 to 80% of all business units in the world are family property. Actually, even joint-stock companies, controlling interest of which is a property of one family, can be classified as family business in international practice family firm is assumed as a firm in which ownership control and right to make basic administrative decisions are at hands of one family - group of people, connected with relationships or relations that follow from marriage. Terms “family business”, "family enterprise", “family firm”, “family company”, “business which is family ownership” and “company supervised by family” have the same meaning from substantial point of view. Family firms have many compensations in some branches allowing them to advance companies with other proprietors’ structure of the same size on sales volume, profit and other indicators. Their main advantages are interest, knowledge continuity, reputation value, obtaining all family profit, personnel presence with common


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values and interests, high degree of trust and frankness, education and professional orientation of young generation etc. The country is rich in natural resources (gold, copper, natural gas, oil and uranium) and has a strong agricultural base. Its size and population (as the most populous Central Asia nation), its large workforce and its position (the country shares a common border with all other former Central Asia republics) makes the country a natural regional leader in both political and economic terms (Ergueshev, 2012). On the other hand, country also suffers from some evident – and some less evident –disadvantages. From geographical point of view, Uzbekistan lacks an access to the sea and is a 'doubly landlocked' (i.e. a country surrounded by landlocked countries) – a distinction it shares only with Liechtenstein. Economically, this handicap makes external trade both more difficult and more expensive(Clem, 2011). More generally, the country's strong potential is far from fully exploited. Despite its GDP growth – even during the global economic recession – Uzbekistan still needs to diversificate and modificate as its incomplete transition to a fully market oriented system. The country is excessively reliant upon a handful of commodities (gold, oil and gas and cotton), which represent more than 60 % of its exports as well as a significant share of the country's GDP (Dronzina & Houdaigui, 2012). FAMILY BUSINESS PROSPERITY AND IT’S COMPETITIVENESS On this way, family has always been perceived as sacred place and of high importance with occupation of main moments of one’s life. Strengthen of the family is, in the first place, main contributor of sustainable development of each country. Given this fact, as the newborn state, government realized the importance of families by widely supporting and making endeavor toward family units thriving. The constitution of the republic issued in 1992 has been placed with section about ''Family'' and with 63rd statute declaring the next:'' Family is one of the central constituents of society and thus has right to be protected by government''(Almatova & S Gulamov, 2014). Another prominent point is announcement of 1998 as “The year of family», thereby increasing the position and importance of cellules of community by inaugurating the special policy that would support family units. During the realisation of the policy there were myriad measures taken in order to maintain prosperity, peace and equilibrium in homes (Karimov, 2012). Moreover, it was perceived as matter of high magnitude throughout the whole period of existence. In addition, the official meeting held on 7th of December 2011, which was mainly dedicated toward celebration of 19th anniversary of republics constitution was threshold of president Islam Karimov’s proposal to name the ensuing year as “the year of strengthen family”. Consequently, legislation that involves execution of numerous actions for 2012 and small businesses have been emerged, this is to say even more flow of steps being taken currently. As the following milestone, the law concerning “Family enterprise «was legislated by Legislature Chamber of Oliy Majlis (the Parliament) of the republic of Uzbekistan in March 8th, 2012 and was corroborated by senate on 23rd. An abundance of opportunities were created in favour of family enterprises, likewise the rest aspects. Domain has seen a considerable development thanks to establishment of various reductions and preferences(Khudayberganov, 2014).


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The major focus here is mainly raising the sense of possession in the hearts of dwellers ,which would form another mid-layer of society composed of owner, moreover as family ventures are considered to be of high economical importance, they have potential to accelerate and strike maintenance in economy of the state. Taking into account aforementioned virtues it could be obvious that these businesses are one that act as central engine force,which without certain attention and fund-raising will fade. And if the promotion would halt the remedy for not only economical, but also social isues are put under severe risk (Almatova & S Gulamov, 2014).

ECONOMIC POTENTIAL OF UZBEKISTAN Since the mid-2000s, Uzbekistan has enjoyed robust GDP growth, thanks to favorable trade terms for its key export commodities like copper, gold, natural gas, cotton, the government’s macro-economic management, and limited exposure to international financial markets that protected it from the economic downturn. Still, the future is not without challenges (McGlinchey, 2011). Overall growth for Uzbekistan is projected to continue at around 7 to 8 percent annually during 201114, supported by net exports and a large capital investment program. World prices for Uzbekistan’s principal exports are projected to remain favorable at least through the first half of the 2012-15 fiscal year (FY) Country Partnership Strategy (CPS) period (Shenin, 2014). The impact of recent increases in global food and energy prices is expected to be limited given Uzbekistan’s policy of self sufficiency in both food grains and energy. Given the government’s plans to finance up to two-thirds of their investment program from external sources, including loans, external debt is expected to increase gradually (Almatova & S Gulamov, 2014). The country has to contend with a combination of risk factors going forward, including deteriorating security conditions due to the situation in Afghanistan, and increasing tensions between with neighbors over regional issues—especially the management and use of trans-boundary energy and water resources. Domestically, Uzbekistan has to work to minimize its economy’s vulnerability to possible external shocks affecting commodity prices and the anticipated inflow of foreign direct investment (FDI) and external loans to finance the large public investment program (Ambrosio, 2015). Uzbekistan, with the goal of becoming an industrialized, high middle-income country by around 2050, is continuing to transition to a more market-oriented economy to ensure equitable distribution of growth between regions and to maintain infrastructure and social services. The country’s policy goals and priorities are: to increase the efficiency of infrastructure, especially of energy, transport, and irrigation; to enhance the competitiveness of specific industries, such as agro-processing, petrochemicals, and textiles; to diversify the economy and thereby reduce its reliance on commodity exports; and to improve access to and the quality and outcomes of education, health and other social services (Turker, 2014). One of indexes of efficiency in family enterprises, promotion efficacy has been chosen as a topic for given article, due to the fact that in order to prosper efficiently, company should firstly address the efficient promotion of workers. In addition, the aimed target is to attain if taking into consideration the efficacy of promotion itself.


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It was discovery to find that in the way of increasing the promotion efficiency of workers its very useful to implement promotion foundation properly, as the achievement of enterprise is majorly dependant on workers and personnel. And investigation of them is perceived to be of high importance. Notwithstanding, being threshold to revealing of promotion efficiency, article has not been seen to divulge the ways that affect given efficiency in workplaces. It’s essential that pivotal magnitude of the concern and improper investigation on efficiency of promotion made reporting article to pose significant trace in current society. Since,

Uzbekistan

joined the World Bank in 1992, the Bank has provided commitments for 24 projects financed by the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). Of these, 14 projects have been completed. Currently, the World Bank Group aims to support Uzbekistan’s policy goals and priorities with a two-track approach under the previous Country Assistance Strategy (CAS) – full or limited engagement depending on the extent of agreement with the government. This means that CPS support for increasing the efficiency of infrastructure and for human development and social inclusion will broaden and deepen the operational involvement and related policy dialogue already in place from the previous CAS (Malashenko, 2014). Conversely, support for the government’s industrial competitiveness and economic diversification agenda, where government and Bank perspectives differ, will be limited initially to analytical and advisory services.

ANALYTICAL REVIEW OF ISSUE Over the 4-year period of fiscal years 2012 to 2015, the Bank’s provisional lending program comprises fifteen operations, of which eleven will support reforms and investments for achieving sustainable growth, including more efficient energy use and diversification of exports. The total financial commitment will be about US$1.3 billion, i.e. commitments averaging about US$325 million annually. Besides new lending, the existing portfolio of investment projects will support the infrastructure efficiency and social inclusion elements of the government’s strategy. Proposed analytical and advisory services will cover the government’s growth and development strategy. In addition, the provisional list of analytical and advisory services includes a proposed joint strategy report “Uzbekistan Vision 2030”. This will lay out roadmaps to facilitate implementation of the authorities’ industrial development, competitiveness and diversification agenda (Shenin, 2014). The International Finance Corporation (IFC) will maintain its focus on private sector development through a combined investment and advisory approach, by focusing on direct investments in the real sectors, such as general manufacturing, services, and agribusiness; strengthening access to finance for private sector through banks, especially by strengthening privately owned banks; and encouraging private sector participation in infrastructure (Almatova & S Gulamov, 2014). Throughout the research there were numerous factors that impact upon production efficiency. Aspects like cutting-edge technologies and techniques, investment, innovations, modernisation, diversification are classic examples, though human involvement is still major contributor as well as human labour is ground for achievement and lose. Given these facts, the contemporary workplace dedidate endeavour toward maintaining workers importance. The more employees are promoted for work accomplished, the more


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efficiency they bring to company. This is owing to unique features of every member of personnel that when integrated pose a great power (Shenin, 2014). The promotion foundation for workers has been chosen as field of study. The options below are factors contributing to change and if composed able to correlate with each other: 

Work efficacy of main worker in relevant manufacturing or service(We);



Proportion of main workers to overall quantity of personnel;



The work virtue of non tangible resources;



Proportion of non tangible resources to entire actives;



Provision of promotion-directed funds to integral base;

THEORETICAL ANALYSES OF FAMILY BUSINESSES The afterwards of above stated factors have been subjected to have pertinence between each other. From these results, there was emerge of economic-mathematical chain demonstrated as the next: Рфс = Му * Аху * Нам * Нау * Рат ;

Its clear from equation above that for influence sake one should take five necessary steps. During the discussion its of prime importance to take into account impact of various factors,in this respect one of the conventional approaches- the method with change in chains would work as intended.

To facilitate account the result of the "it" factor can identify with xi. In that case, the above formula will have the following form: 5 У = х1 * х2 * х3 * х4 * х5 = П xi ; n=i Now the calculation of the five factors listed above can be changed as a result. One of the traditional methods of economic analysis for which we recommend the use of chain sharing method. It is a factor to take into account the impact of the series. The first factor, the result (the effectiveness of the Fund to encourage staff) o'zgarishigabevosita key staff involved in the production or service labor productivity (x1) impact (∆Ух1) with the result of the first to identify the factors taken into account (х1ҳ * х2р * х3р * х4р * х5р) and the amount of results against planned or period (х1р * х2р * х3р * х4р * х5р) loses: ∆Ух1= (х1ҳ * х2р * х3р * х4р * х5р) – (х1р * х2р * х3р * х4р * х5р) ;

The second factor is the effectiveness of the Fund to encourage employees to changes in the main share of the total staff (x2) the impact of changes (∆Ух2) to determine the impact on the result of the first and second factors are taken into account (х1ҳ * х2ҳ * х3р * х4р * х5р) and results in the first factors changecalculates the amount (х1ҳ * х2р * х3р * х4р * х5р) loses: ∆Ух2= (х1ҳ * х2ҳ * х3р * х4р * х5р) – (х1ҳ * х2р * х3р * х4р * х5р) ;


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To encourage staff to change the effectiveness of the Fund The third factor, that is, non tangible assets mehnatliligi (x3) impact ((∆Ух3) to determine the outcome of the first, second and third factors are taken into account (х1ҳ * х2ҳ * х3ҳ * х4р * х5р) and resultsand the second factor is a change in the amount of (х1ҳ * х2ҳ * х3р * х4р * х5р) loses: ∆Ух3= (х1ҳ * х2ҳ * х3ҳ * х4р * х5р) – (х1ҳ * х2ҳ * х3р * х4р * х5р) ;

The result is an indicator of the effectiveness of the Fund to encourage staff to change in the fourth factor, the share of the total assets of the non tangible assets change (x4), impact (∆Ух4) to determine the outcome of the first, second, third and fourth factors are taken into account (х1ҳ * х2ҳ * х3ҳ * х4ҳ * х5р) and results in the first, second and third factors, calculates the amount of change (х1ҳ * х2ҳ * х3ҳ * х4р * х5р) loses: ∆Ух4= (х1ҳ * х2ҳ * х3ҳ * х4ҳ * х5р)– (х1ҳ * х2ҳ * х3ҳ * х4р * х5р) ;

The result, a change in the effectiveness of the Fund to encourage the staff of the fifth factor, the total assets of the funds allocated to stimulate the provision of (x5) impact (∆Ух5) to determine the outcome of the first, second, third, fourth and fifth factors are taken into account (х1ҳ * х2ҳ * х3ҳ * х4ҳ * х5ҳ) and results in the first, second, third and fourth factors, calculates the amount of change (х1ҳ * х2ҳ * х3ҳ * х44 * х5р) loses: ∆Ух5= (х1ҳ * х2ҳ * х3ҳ * х4ҳ * х5ҳ) – (х1ҳ * х2ҳ * х3ҳ * х4ҳ * х5р) ;

All features need to be conluded with draw of staff's rewarding funds against productivity. It should be used following: Ух1 = ∆Ух1 ± ∆Ух2 ± ∆Ух3 ±∆Ух4 ± ∆Ух5 ;

CASE STUDY OF FAMILY BUSINESS STRUCTURE By putting abovementioned methods into practice, the potential force that can create a change in promotion efficiency reveals in detailed features. The salient example used in demonstration of given words is family venture ''Bek''. Two tables given below would divulge this view. The former highlights practical information toward index results and factors contributing to alternation, while the latter accentuates on individual change aftermath of each factor. It can be observed that, ''Bek'' family business venture has seen myriad vicissitudes in terms of promotion efficacy of workers within the company, which befell in accounting factors of it as well. The main advances were in the aspect of sold items and service numbers when growth exceeded the point of 113%, 113,3 to be more precise. In the same vein, the increasing demand for non tangible resources emerged great clamours for it,which thereby increased as much as 113% in magnitude.


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Table 1.The aftermath of calculations of worker promotion efficiency and factors influencing on efficacy in the private enterpreneurship “Bek” based on family business structure” No.

Name of aspects

Last year

In

Difference

Change

calculation

(+,-)

pace, %

year 1.

Sold product,whole price of service,

1345,4

1497,4

+44,0

113,3

millionUZS 2.

All workers number, person

122

128

+6

104,9

3.

Number of main bodies,person

113

118

+5

104,4

4.

The average cost of non tangible

32,3

36,5

+4,1

113,0

1282,6

1388,4

+106,0

108,2

118,5

127,9

+9,4

107,9

11,91

12,69

+0,78

106,5

92,5

92,2

-0,3

99,7

3,777

3,507

-0,270

92,9

2,52

2,63

+0,11

104,4

10,82

10,86

+0,04

100,4

11,35

11,71

+1,12

103,2

sources,millionUZS 5.

The average cost of all sources,millionUZS

6.

The promotion of workers foundation overall amount,millionUZS

7.

The labour efficiency of main bodies,millionUZS

8.

Proportion of main bodies to all workers number,%

9.

Labour factor of non tangible resources, person

10.

Quantum of non tangible actives to overall base,%

11.

Distribution of promotion based UZSs to integral resource, thousand UZS

12.

Efficiency of promotion foundation for personnel, million UZS

Expansion in personnel quantity reached 104.9%,104,4% of which are main bodies. Currently, likewise to many enterprises family entrepreneurships are also suffering workforce boom and proportion of them in crew. The average growth of entire resources of the family venture has grown up to 108,2%,while the size of foundation concerning promotion efficiency of worker and labour productivity of main representatives elaborated to 107,9% and 106,5% respectively, which can be seen as guarantee label for sustainable development of this aspect. However, there were two considerable downsizes in this company: 1. Reduction in proportion of main workers to the rest personnel by 0,3%. 2. Labour capability of non-tangible resources that curtailed to tremendous 7,1%


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Given instances are indeed hindrances in the way of attaining stable rates in respect of productivity and efficiency. The table above has done emphasis on various contributive factors that potentially create changes and different growth rates. According to the Law of the Republic of Uzbekistan “About family business”, family enterprise has right to involve credits to form initial (starting) capital. The most popular way of external business financing is commercial banks credits. Some of them provide special credit lines to open credit small-scale business. For example, "Microcreditbank" of the Republic of Uzbekistan grants loan to form initial capital for the term up to 18 months at 50-fold size rate of minimum salary for entrepreneurship subjects without formation of entity and 100-fold size of minimum salary for entities. National bank of the Republic of Uzbekistan, “Orient finance” bank and some other commercial banks has the same program. Amounts, terms and interest rates differ. Common thing for such credits is that they grant loans to newly created entrepreneurship subjects (microfirms, small enterprises, peasant and farms, and sometimes-individual executives), in time no later than six months from the date of their state registration. One of the distinctive domains of analytical analysis is to explore each change mergers result, below is one of the classic instances for it explaining all step by step.

Table-2. Analysis of the factors contributing to change of efficiency rate of workers promotion in “Bek” private company based on family venture structure factors (хi) and result (R) х1

Last year

First factor with result

Second factor with result

Third factor with result

Fourth factor with result

Fifth factor with result

11,91

12,69

12,69

12,69

12,69

12,69

х2

92,5

92,5

92,2

92,2

92,2

92,2

х3

3,777

3,777

3,777

3,507

3,507

3,507

х4

2,52

2,52

2,52

2,52

2,63

2,63

х5

10,82

10,82

10,82

10,82

10,82

10,86

R

11,35

12,09

12,05

11,19

11,68

11,71

The information provided by 2nd table explains makes it obvious that the efficiency in the rate of workers promotion has been enlarged by 0,36 million UZS, mainly due to 5 reported factors manifested by 2nd table. The influence can be measured using the chain change approach.  Initially factor standing behind increase of foundation directed to elevate promotion efficiency that grown labour efficacy of main workers up to 0,78 million UZS or 0,74 million UZS in competency.  Creation of change was also on the behalf of decrease of proportion of cornerstone crew members to overall number of workers by 0,3% or 0,04% million UZS fall in the foundation of promoting efficiency of workers.


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 Another major contributor was the capability of non tangible resources, which ultimately abated by 0,270 persons and reduction in 0, 86 million UZS afterwards in result.  One of the prominent points that accounts for vicissitude mould was supplementation in the proportion of non tangible resources to all sources 0, 11% overall or 0, 49 million UZS in financial respect.  The final point extension in provision of promotion-dedicated funds to integral source base by 0, 04 million UZS or 0, 03 million UZS in index.

All in all, following calculation is derived from analysis performed above: 0,74 – 0,04 – 0,86 + 0,49 + 0,03 = +0,36 million UZS. Reported assessment method was one instance for enrichment of promotion efficiency. Reduction in proportion of main workers to the rest personnel by 0,3% and Labor capability of non tangible resources that diminished to enormous 7,1% were two bad affected factors without which efficiency and labor productivity could be rose in insurmountable rates. The fatal repercussions would have never been occurred if rates were slightly increased at the beginning, giving not 103,2% in efficacy as its now but 111,1% after feasible change in quantities (Fedorov, 2012). The following conclusion can be drawn after discussing all things, factor analysis is not harnessing in family enterprises at all, which considerable minimizes discovery of inner possibilities. Several methods pointed in given article would be key point for those have not used ways of development. After all, they are expected to bring giant benefits to society and thriving of business, itself, thus addressing elevation of living standards and maintaining equilibrium within families(Dronzina & Houdaigui, 2012).

CONCLUSION AND SUGGESTION Family business should correspond to following important criteria in order to receive external fi- nuancing on formation of initial capital from commercial institutions or structures, which are engaged in business support: • possess high potential growth; • have industrialized staff, capable to work hard in order to achieve goals of the enterprise • its profitableness growth; • head of family business is capable to convince potential creditors/investors in interest and full readiness of the family to start its business and achieve success in competitive struggle; • family firm confidently positions itself in the market, knowing its strengths and weaknesses of potential competitors, etc.; Thus, what way family firm would choose to obtain initial capital, its heads should formulate and organize its activity so that as a result of commercial operations this capital was not simply compensated, but also make profit. Second task of planning is to co-ordinate incomes and expenses (inflow and outflow of monetary funds) so that enterprise has always money to fulfill current obligations: payment of invoices for delivered goods and services, credits repayments, payments of taxes and obligatory payments, payments of employees’ salary.


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REFERENCE Almatova, D. G., & S Gulamov, S. (2014). Regional Economy Of Uzbekistan Modernization The Regional Economy Of Uzbekistan. Международный научный журнал, (3), 15–18. Ambrosio, T. (2015). Leadership Succession in Kazakhstan and Uzbekistan: Regime Survival after Nazarbayev and Karimov. Journal of Balkan and Near Eastern Studies, 17(1), 49–67. Clem, R. S. (2011). From the Arab Street to the Silk road: implications of the unrest in North Africa for the central Asian States. Eurasian Geography and Economics, 52(2), 228–241. Dronzina, T., & Houdaigui, R. El. (2012). Criminal Groups, Terrorist Organizations and Drug Trade and Trafficking in Kyrgyzstan. Contemporary Suicide Terrorism: Origins, Trends and Ways of Tackling It, 101, 158. Ergueshev, Z. (2012). Criminal Groups, Terrorist Organizations and Drug Trade and Trafficking in Kyrgyzstan. Contemporary Suicide Terrorism: Origins, Trends and Ways of Tackling It, 101, 158. Fedorov, Y. (2012). Uzbekistan: clans, succession, and stability. Security Index: A Russian Journal on International Security, 18(2), 39–54. Karimov, I. (2012). THE CONCEPT OF FURTHER DEEPENING THE DEMOCRATIC REFORMS AND ESTABLISHING THE CIVIL SOCIETY IN UZBEKISTAN. Himalayan and Central Asian Studies, 16(3/4), 194. Khudayberganov, D. (2014). THE ROLE OF SPECIAL ECONOMIC ZONES IN THE ECONOMIC DEVELOPMENT. Retrieved from http://dspace.wul.waseda.ac.jp/dspace/handle/2065/44430 Malashenko, A. (2014). Exploring Uzbekistan’s Potential Political Transition. Nd): N. Pag, 31. Retrieved from http://liportal.giz.de/fileadmin/user_upload/oeffentlich/Usbekistan/20_geschichte-staat/nachfolge_usb.pdf McGlinchey, E. (2011). Blood, chaos, and dynasty: Islam and patronage politics in Central Asia. Pittsburgh: University of Pittsburgh Press. Retrieved from http://mason.gmu.edu/~emcglinc/McGlinchey_Intro_Blood_Chaos_Dynasty.pdf Shenin, S. Y. (2014). The Transfer of Power in Central Asia and Threats to Regional Stability. Connections: The Quarterly Journal, 14(1), 137. STEBLYAKOVA, A., & UVAKASOVA, G. (2013). ETHICS OF BUSINESS COMMUNICATION IN MODERN MANAGEMENT. МЕЖДУНАРОДНЫЙ ЖУРНАЛ ЭКСПЕРИМЕНТАЛЬНОГО ОБРАЗОВАНИЯ, (12). Retrieved from http://cyberleninka.ru/article/n/ethics-of-business-communication-in-modern-management Turker, A. T. (2014). Explaining Authoritarian Regime Variations in Post-Communist Central Asia. REVISTA DE ŞTIINȚE POLITICE. REVUE DES SCIENCES POLITIQUES, 28.


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http://ijecm.co.uk/


Special issue on

Uzbekistan

INNOVATIVE ASPECTS OF DEVELOPMENT OF THE ROLE AND VALUE OF INVESTMENT FUNDS ON THE SECURITIES MARKET Zaynalov Djahongir Professor, the chief of “Financial and Insurance services” department, Samarkand Institute of Economics and Service, Uzbekistan [email protected] L. A. Talimova Karaganda Economic University, Karaganda, Republic of Kazakhstan S. S. Alieva Professor, Samarkand Institute of Economics and Service, Uzbekistan Khodjimetov Akmal Ashurovich Samarkand Institute of Economics and Service, Uzbekistan [email protected] Farrukh Tolibov Furkatzoda Master, Samarkand Institute of Economics and Services, Uzbekistan [email protected]


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Abstract In this article importance of investment funds in development of a securities market, modernization of economy, and activity of participants of a securities market is considered. The special attention is given consideration of the difficulties arising in the course of increase of the investment funds importance and investment capitals on a securities market, their role in distribution sphere, trade, the organization of exportimport transactions and other types of service. Keywords: Investment, Innovative competitiveness, Investment funds, Economy of Uzbekistan

INTRODUCTION As all subjects, institutes of investment funds affected to exactly economic sphere, which has decisive influences on functioning all participators of the securities market. In this, even so inverted influence of investment funds on this sphere is could not be ignored due to its narrow character. That is why subjects of investment funds need to adapt to economic sphere, which had surrounded it and affect within the framework of opening them opportunities. This totally concerned also to operations with securities (Abbas, 2013). Before proceeding to directly consideration innovative aspects of development of the role and value of investment funds on the securities market, it is necessary shortly characterize the modern economic situation, trends and directions to development of the securities market. From variety flows of real moment in economical processes, it is necessary to isolate those, who take a great role on organizations of operations with securities. To exact directs and mechanisms such kind of influences lets understand the role and meaning of investment funds of developing securities market and formulate rate of positions

relatively

dictating the economic sphere with importance participation of local investment funds on securities market. So, considering an important role of investment funds inside of market, The Republic of Uzbekistan holds to big works about activating role of financial institutes of commercial banks, as main level of investment process (‘Macroeconomic indicators of the Republic of Uzbekistan’, 2014). The last epoch have seen an incredibly successful to one of the largest economies of Central Asian region-Uzbekistan – dynamic growth of GDP around 8%, negligible amount of domestic and international debt, underestimated exchange rate and even more interestingly relatively distribution of income. (Vladimir Popov, 2014) Moreover the foreign direct investments, which is considered as a vital factor of growth in many newly developing countries, is developed one of the primary part of national investment policy of states with transition economy like Uzbekistan. On this basis, the government has done successful implementation the notion of free investment climate into legislature by inaugurating different acts and laws, which regulate flow of sources and simultaneously help foreign investors by providing various forms of information. (B. B. Valiev, 2014) Unadventurously, it is widely held perception that oil and gas industry are the main sectors of economy and paramount source of people’s welfare. The lion’s share of national economy, such as heavy and light industry excessively rely on fuel industry. Equally importantly, Uzbekistan proclaimed and currently is working under executing national program called ‘On the priorities of industrial development for 2011–2015’


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which accumulates more than 500 most-promising invest-projects, which assessed approximately 50 Billion USD. (Parpiev, 2014) Summarizing the annual results for 9 month 2014, the implementation of the State Investment Program approved by government in the share of attraction of foreign investments extended 102,7% over the yearly prognosis. Main part of foreign investments was put into the following sectors of economy: 

oil and gas 64,8%



power generation 6,6%



telecommunication and IT-technology 4,7%



credit lines for the development of small business entities 4,7%



road construction 4,4%



drinking water supply and sewage 3,8%



construction and construction materials 3,1%



agriculture and water management 2,1%



textile 1,9%

The majority of investment projects have been established in the association with more than 30 countries all over the world such as China, Germany, South Korea, Japan, Netherlands, Great Britain, Malaysia, and Russia etc. («MFERIT - Statistics investing activities»)

BACKGROUND OF UZBEK INVESTMENT POTENTIAL As one of the Central

Asian countries Uzbekistan possesses a range amount of natural and mineral

resources as well as pleasing weather, extraordinary background, hospitality, multiculturalism, tourism and recreation infrastructure like hotels and international class airports which highlight economic potential of state. It is also one of the few and unique countries which combines the high living standards, comprehensive medical care and sophisticated education system and minimum cost of living. In addition, Uzbekistan is the country that is well known for the greatest towns with hundreds of architectural monuments of different epochs. Samarkand, Tashkent, Bukhara, Khiva and other cities is regarded as the main industrial trade centers of country and architectural heritages of the world as well (‘Macroeconomic indicators of the Republic of Uzbekistan’, 2014). According to statistics given by states in 2014, there was a remarkable increase by 8.1% (Table 1), making it in marginal advantage over the results that demonstrated in 2013. Strike encountered in Russian federation has directly exerted on lesser growth owing to fact that Russia represents as one of the major trade companions as well as big contributor of finance transmission. As a result, depletion occurred in both external and internal scales in trade and remittance. Moreover, lower income from export expedited devaluation of the Uzbek sum toward the US Dollar. States, however, in order to keep interior demand, augmented expenditures to public and commercial loaning. In balance, two deployment industry and services benefited most, while industry’s rate revealed slight decrease from 8.8% in 2013 to 8.3% in following year with eliminating from construction, from 13.7% in 2013 to 15.4 has increased the percentage of services. Due to current condition of modernization program that is implementing in industry by tremendous assistance of public investment,


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there was a huge contribution in production of machinery, metals and chemical, thereby surged to 10.2% and made approximately 40% of entire production. As regard to services, nucleus output has seen in information and communication technology with 24.1% and finance strongly backed from demand as well as local lending («Macroeconomic indicators of the Republic of Uzbekistan, 2014»).

Table 1. Macroeconomic indicators in January-September 2014

Gross domestic product Industrial output Agricultural output

Billion. UZS

Annual growth comparing with previous year

100309,5 54401,3 28094,5

8,1% 8,4% 6,8%

Investments in fixed capital 23831,2 10,7% Construction work 15034,6 18,9% Retail trade turnover 41664,3 4,2% Services, total 57197,2 4,7% Source: The State Committee of the Republic of Uzbekistan on Statistics

Distinguishing peculiarity investment funds of last times appears increasing portion innovations in technical rearmament and reconstruction of acting business (products) directions of investment principally on basic industry machinery, agriculture.

Figure 2. The growth of investment in capital investments in the domestic economy Series1 160 122.9 120

101

107

109.1

2005г.

2006г.

128.3

124.8 113.6

111.2

109.8

109.6

2010г.

2011г.

2013г.

2014г.

117 Anticipation

80

40

0

2000г.

2007г.

2008г.

2009г.

2015г.

% Calculated according to the State Statistics Committee of Uzbekistan for 1999-2015 years.

Hence, if in 2000 growth of investment in economic Uzbekistan comparing with 1999 amounted in all 1,0%, that in 2014 this mark had already get 9,6% (or 33,715 trillion sums), (see figure 2). Moreover, in 2015, according to forecasts parameters, exacted governmental Program contracted building works in 2015, size of


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capital investments to economic of Uzbekistan overreached to 40,6 trillion sums with increasing to 17% mark of 2014. Economics of transition period makes all necessary chances for activating value of investment funds on the securities market, but also gives an opportunity for concentration in our hands considerable portion of this market and affair the monopolistic situation in it. It is clear, that investment funds aimed for its resources, to begin with, on that branches, where it’s guaranteed strong(unless it is no monopolistic) positions on market, or where it could be provided, having bought several connected among itself the stocks of native enterprises. Nowadays investment funds, as section of economic modernization, to set goals get strong positions in reason of holding social-economical actions. For that having felt sharp native investment of funds, business hang on no only having had peculiar “funds”, which accounts meaning of native economics, local and branches characteristics but also availability of business connections, entrepreneurial ability (‘MFERIT Statistics investing activities’, 2014). Trade and catering that are considered as an important subsector has amplified with 17.5%. Awful weather condition, though, was not impediment for yielding a positive account in agriculture, which demonstrated a better output assimilating to production of 2013 owing to healthy vegetable yields and enhancement of livestock goods. Complements in emoluments and pensions, public investment mercantile loaning were main assistance in growth of demand indoors country. Private intake has remained because of 19.1% escalation in public sector salaries.

Table 2. Index of External Trade Turnover Amount ( in million USD)

Annual growth comparing with previous year 0,6% 0,2% 0,9%

External trade turnover. 21277,0 Exports 11096,9 Imports 10180,1 Balance 916,8 Source: The State Committee of the Republic of Uzbekistan on Statistics

Total trade turnover of country which calculated by adding quantity of exports and imports of state reached 21,2 billion USD with the 0,6% growth in comparison with analog period of previous year. The balance of export and import is positive, about 916 million USD with 11,1 billion USD against 10,1 billion USD respectively. But annual growth of imports is more than export rise, 0,9% versus 0,2%. Therefore, governmental actions carried out activate value of investments funds on the securities market gives its positive results, making unnecessary technical-economic conditions for scaled developing of securities market. Especial attention in this is pay for formation and activation market mechanism and investment funds institutions, contributing to formation of favorable investment climate on the securities market (Almatova & S Gulamov, 2014).


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All in 2014 was signed 893 exchanging business (in 2013-941 business) in reason which is realized 178 339,8

thousand shares 120 incorporated shares to general sum 89,3 milliard sum and 7,7 thousand

obligations of four elements in 8,3 milliard sum. Moreover, Gross fixed finance foundation has enlarged by 10.9%. Investment taken by foreign executives has comprised just under $3.0 billion, from total $14.6 billion capital investment. There were perceptible assignments that aid to escalate the economy of Uzbekistan. First, project of extension of the General Motors Uzbekistan car manufacturing that has perfected in 2014. In order to supply gas to the People’s Republic of China gas pipeline has launched and already terminated(‘Macroeconomic indicators of the Republic of Uzbekistan’, 2014). This gas channel will bond Central Asia with the Republic of China. Furthermore, the serious considerable upturns were seen in pecuniary lending by commercial banks elevated to 31.2%, while by official report that has done by the

state there was 6.1% as average per annum in inflation rate in last year.

Depletion in price of food in a global scale eventuated slow inflation in official consumer price. According to certified information presented by the International Monetary Fund, there were quiet different ratios with lessening in inflation rate from 11.2% in 2013 to 8.4% currently. It is expected to have a rise in fourth quarter as a result of devaluation of Uzbek sum to US dollar(B. B. Valiev, 2014). As regard to informal restraint market ratio, national currency lose its worth in one fifth in previous year with last quarter being poised as a high point of acceleration, though owing to reduction in price of global fuel. However, the Central Bank of Uzbekistan responded by expediting official depreciation of currency to US dollar and legislated a strict regulation related to import controls. («Asian Development Outlook 2015: Financing Asia’s Future Growth | Asian Development Bank») The main reason of reducing rotations in primitive market RFB Tashkent last year appeared lower activity of commercial banks on exposing extra emissions its securities, so that placing the biggest part (more than 90%) issued in 2014, extra emissions of shares was realized by the way closed signing. Accounting year is observed significant falling rates of the secondary exchanging securities market. Specific weight of size of the secondary placing securities was made up 33% or 32,2 milliard sum, that rather to 65 lower level of 2013 (34,3 mlrd.sum), from those -1,25 milliard sum, business with corporative obligations and 1,0 milliard sum business REPO (look at picture 4). One of the reasons of reducing of commercial activity on the secondary market is the deficit of suggestions to the secondary market of large shares, financial stable companies, distinguished with relatively more higher liquidity and investment able attractive, for that shares, most of it is found ownership of government and is not found as resource for the secondary market.


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Figure 2. The structure of the exchange of the securities market for 2010-2014.

Republic stock market “Tashkent” is one of the trading squares, in which carried out placing and circulation corporative obligations of republic. However, also here is found a significant reducing of market activity. So, if exchange transaction with obligations in 2013 was made up 36,0 milliard sum, that for 2014 this mark decreased rather in 4 times and was 8.3 milliard sum.

ECONOMIC PERSPECTIVES AND TENDENCIES The similar rise has encountered in percentage of 2013-2014 year’s broad money with 26% in both years, thus accentuating greater domestic credit. Questionnaire made to calculate finance as broad money is not accessible, though quota of foreign tenures within banking system might fall in quantity as a result of overcoming in rate of domestic credit over broad money. As to 2014, budget surplus in GDP of country was at level of 0.2% relying on data proliferated by government. It has been computed that advanced budget balance have comprised 2.4% surplus of GDP in 2014, making it barely less than results of 2013 with 2.7%. Annual income to budget has seen depletion in 0.1% in 2014 year comparing to rate of 2013 year with 36.1% and 36.2% respectively. Similarly, prices for international major export goods was in minus as well (see fig 3).


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Figure 3. Structure of the import for the year 2014

Source: The State Committee of the Republic of Uzbekistan on Statistics

Consecrating funds to escalate the compartments of wages, pensions, health care as well as education have composed a great bulk from entire budget making enhancement in allocation of expenditure from 33.5% of GDP in 2013 and 33.7% of GDP in following year (‘Asian Development Outlook 2015: Financing Asia’s Future Growth | Asian Development Bank’, 2014.). Moreover, as a result of enlargement in the share of loaning finance from external sources the sheer governmental debt has increased in this account. Ongoing states surplus assessed to comprise smaller percentage to last year repercussions, thereby portraying lesser trade surplus as well as minor remittances. Exterior markets’ requirement for local commodities from Uzbekistan was frail as usual, while key export goods have crossed margin of debilitation as it have been ever before. This phenomenon emerged after presenting reduction in output from energy that compiles almost 30% of exports. Detailed looking at the number of exports, it will be apparent that exhaustion in price for energy has followed the identical trend in global oil prices. The key two commodities that account for lion’s share of importing goods were consumer goods and chemicals. The whole trend of imports went up by 1.1%, in contempt of reduction in quantum of machinery and equipment to about 10% assimilating to 2013, these aspects held a nucleus position counting for 40% of entire import rate. If we look in details of import goods (Figure 4), it could be noticed the prevalent role of machinery and chemical industries which occupy more than half part of total. In contrary, Figure 4, which reveals the share of various industries into total export goods of country, is predominated by raw materialsbased industries and energy resources. In addition, machinery equipment and chemical production have significant contribution to export consistency of state.


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Figure 4. Structure of the export for the year 2014

Source: The State Committee of the Republic of Uzbekistan on Statistics

POLICY OF INVESTMENT Objective factor restraining of rising the role of investment funds on developing securities market in country stands as prolonged process of financial stabilization and eliminating factors of arising from world financialeconomic crisis. That was marked by President of Republic of Uzbekistan I.A. Karimov in opening ceremony of International conference “About role of small business and private enterprise in realization socialeconomical politics in Uzbekistan” at all elected model by us about reformation and modernization of country played a decisive role in Uzbekistan for warning and neutralization negatives and destructive consequences of global financial-economic crisis, out broken in 2008. Crisis, which today unfortunately, had deepening of tendency (Almatova & S Gulamov, 2014; B. B. Valiev, 2014; Vladimir Popov, 2014). For eliminating factors, preventing increased role of investment funds on securities market unnecessary finances participators securities market, facilitate increasing issues investment projects for level, increasing yield riskless operations of financial market. Main difficulties in the way of increasing meaning of investment funds and investment capitals in securities market are due: 

changing of foreign economic conditions, which can be added to the numbers of beginning world financialeconomic crisis, and then tendency decreasing of world

prices in raw resources and

particularly nonferrous metals, that promoted shortening income currency from export; 

limiting size of conversion received profits of investors from participating in cooperative businesses, investment projects, also from operations with securities;



fast reformation activity of investment funds institutions, miscounts in organization of cooperative securities market;



Unlimited methods of governmental regulation of investment funds institution activities without complaining inclusion in general mechanism of regulation elements of own regulation;


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Therefore, directs of investment funds in real sectors of economy, shows, that budgetary resources until plays significant role in Uzbekistan, at one time when portion in extra-budgetary origins, share investment of lend origins financing investments stays low. As the developing role and meaning of investment funds must be increased and piece of foreign investments at the expense of progressive financial equipment and increasing attraction of native economics. For fairness it should be marked, that, despite the increasing specific weight

of foreign investments,

dynamic increasing its absolute parameters stays unclearly. Beside it, should not forget about, that in big problems, which market developing countries in connection with unfounded attraction of foreign capitals had already faced. Herewith it should notice, that foreign capitals invests in native economics unlimited or disposable (in buying or creation production), that time when repatriation happens constantly. Even so in more accidences the capital invests to the branches of economy, where might be maximum benefit, and it can call disproportioned developing individual spheres of native economics. Unconditional, if at investment funds stays the aim to develop its activity in securities market, than they should give priority productivity social-meaningful, agriculture, food industry, machinery, medication and etc. If the primary task of government-not lets increasing of social intensity, than it needs to place investments in building dwellings, production construct equipment, developing branches, connected with creation of a large number of working places. Therefore, investment funds institutions should formulate exact determination of priority in securities market, allocation sphere, commerce, export-import operation organizations and other types of services. Moreover, it must be not forget about its interest to put resources in securities that subjects of production of goods and services, which is competitive in world market (Akimov & others, 2015). Narrow segment of the securities market objectively services as a factor, limitation tributary of foreign investment, even in priority sphere of economics. Therefore, actions of government regulation investment funds must be directed, firstly, to creating conditions for investing in that having potential businesses, products which yet not complies to demands of world market in its train moral or physical uselessness will be used here technologies and equipment (Asadov & Aripov, 2009; Faramani & Moradi, 2014). To summarize above mentioned, it should be marked, that current situation in conditions post crisis period, had influenced in role and meaning of investment funds and developing securities can characterize with following qualities: 

recession products;



deficiency liquid resources, expressed with destabilized (or low stabilized) defaults;



variability level of inflation;



the massed adoption government in funds market by means of securities;



formation of investment economical structure in base of equity possessions.

Beside this, the main influence to role and meaning of investment funds in operations with securities provides specificity organizations systems of investment funds, and especially, their number, level of concentration,


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structure of ownership, and, of course, normative installations of organs, regulating activity of participators securities market. All above-mentioned conditions could be realized effectively only by domain of investment funds considerable piece (unnecessarily with control packets) it could be enough 40% voted shares of business debtor, which gives their contacts necessary stabilization and predictability. All institutes of investment funds, connected in one system, can introduce ourselves professional infrastructure of fund market generally, particularly investments. Including this trying had done by us to look through role and meaning of investment funds in securities market in context of investment aspects. Clearness of business action results are unnecessary to all subjects of market contacts. In this connection appears necessity thorough analyze developing of the securities market (Bohr, 1998). Especially it is actual at problems on sphere business actions of investment funds as separated organizations etc. shares forms property carried out cultural business only in emission form property of securities and deals with “alien” securities. This means, that in funds market they act at the same time and as investors, and as elements. The developing shares business of companies originated necessity in new rules regulation of securities market and changes in acting inadequate inquiries of participators securities market (Fedorov, 2012; Haidar, 2014). From here it should note, that problems of regulation securities market consist of keeping this order of implementation operations with securities, which present situation in the most level may they answered interests of country. Availability diversified financial instruments, committing operation with them and several participators of securities market causes necessity in making this financial m mechanism of regulation market, which could look difficult, always developing organ, normal work which allows effectively reacted, as real demands of securities market, so and real inquires its participators, that may let provide balance interests of participators. Discrepancy among needs for maintaining stability principles of behavior in the market and demands their corrections including dynamic changing inside and outside situations engenders problems of perfection financial mechanism of regulation the securities market market, its participators at general.

according to needs of real life and demands for

In necessity changes of financial mechanism regulation and choice

optimal forms of correction this mechanism, which at the same time saved its stabilization and succession, consists on basic problem, standing before any organs of regulation funds business. Touching the securities market, located on dynamic changed stage, problems of regulation transformation in problems inventing completed innovation mechanism. This requires from government producing weighed approaches and creating innovation system of regulation activity its participators, which in most time dependent on stability of the securities market in condition of dynamic changing inside and outside situation. In this situation, formation of above-mentioned approaches must base on weighed accounting limitations and difficulties, in which will functioned participators of native the securities market.


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LEGAL PROCEDURE OF REGISTRATION INVESTMENT ACTIVITY IN UZBEKISTAN The main licit document, which provides information about guarantees and privileges in each particular case, is - investment agreement, which is concluded between the Government of the Republic of Uzbekistan and foreign investor (Figure 5). This legal act instructs rights, duties and responsibility of entrepreneurships with regard to their investment activity. The responsible body, which represents the country and conclude investment is - Ministry of foreign economic relations, investments and trade of the Republic of Uzbekistan. Moreover, the negotiation can also include list of other measures and protections to those requires by the legislation, for instance, creation special custom, reducing the burden of tax and payments regime, forming the state monitoring on execution of investment projects.(«Procedure of investment agreements conclusion and fulfillment “UZINFOINVEST” the Information Support & Foreign Investments Promotion Agency»)

Figure 5. Process of making investment agreement

Having at real moment several segments forming funds market of Uzbekistan it is necessary secure from possible desalinization factors, caused to necessity creating flexible financial mechanism of controlling the possibility its participators, as from government side, so and from side of professional its participators. It is clear, that securities market needs to regulation. Especially now, when increasing demands in formation effective financial mechanism of regulation the securities market is due as objective reasons, leaving its roots for economical inwardness and nature fictitious capital, so and subjective preconditions, connected with features of model of economics of Uzbekistan. Therefore, the current at real stage of time objective tendency developing of the securities market exact organizations process conducting operations with securities and proper orders behavior of all participators of market. Organization process holding operations in the securities market do not tolerates dilettantisms and anarchy. High complexity and dramatic changes status the securities market in condition dynamic changing situation, presence in it a large number of professional participators, size of business and information can

create condition for abuses , decreasing trust to market from the side of interests, in

conclude capable lead to decreasing its effectives. That is why in this given situation of developing the securities market and its innovation model the basic meaning (Bohr, 1998; Djanibekov, Sommer, & Djanibekov, 2013). Therefore, the current at this point of time is an objective trend of development of the securities market requires a clear organization of the process of operations with securities and orderly behavior of all market participants. Organization of operations on the securities market does not tolerate amateurism and anarchy. High complexity and rapid change in the state securities market in a rapidly changing situation, the


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presence of a large number of professional participants, the volume of transactions and information could create conditions for abuse, reduce confidence in the market by investors, eventually could lead to a drop in efficiency. Therefore, at this stage of development of the securities market and its innovative model especially important to the timely formation of an effective financial mechanism of regulation of the securities market, ensuring the implementation of common standards and rules while providing safeguards for the protection of investors' rights, whether by public regulatory bodies, and of his professional participants (Bobojonov et al., 2013; House, 2014). In terms of crisis management made attempts to form an innovative mechanism of regulation has not yet come to fruition, as the initial prerequisite for the formation of the financial mechanism of regulation of the securities market remains opaque system reform of property relations. Practice of the first phase of the crisis in Uzbekistan (2008-2009) Showed that an incorrect attitude to the activities of economic entities, particularly joint, capable of changing the methods of formation of a securities market, without changing the economic and legal foundation of their dealings in the stock market. It should be noted that subsequent stages in the formation of innovative models of development of the stock market indicate the need for timely formation of the financial mechanism of control, coordination and supervision of the stock space in a dynamic internal and external situation, including as a method of clear government regulation, and the methods self-regulation by the professional participants of the securities market. Consequently, in terms of crisis management the need for effective state regulation of securities market strengthened more than ever it possible, as in these circumstances, the domestic economy faced the task of not only rapid innovation development of the securities market, and to ensure its sustainable operation in order to ensure stable inflow into the domestic economy of investment resources of domestic and foreign investors (Almatova & S Gulamov, 2014). The introduction of a financial mechanism, namely, the additional investment on the part of various financial creditors (i.e. commercial banks, pension funds, accumulative pension funds, etc.) in the modernization of production, financial recovery, the introduction of new innovative products and management practices, as well as the recovery and job creation, has an important place in the process of revitalization of the securities market in the post-crisis period. Moreover, as we know, the result will be a positive change in the activities of financial institutions in the securities market. Qualitative changes may occur in the structure of the securities portfolio of commercial entities. The President approved the program "On the priorities of industrial development of Uzbekistan in 2011-2015". To fulfill the requirements of this program, commercial business entities have now begun to conduct a large-scale work on the financing of projects aimed at the diversification of production, production of high-tech products with high benefit based on the rational use of the country's potential financial resources by issuing shares and bonds. For the creation of new innovative enterprises and the implementation of new investment projects, the most preferred source of financing acts equity. The issue of ordinary and preference shares attract the share capital. Their potential buyers even in a high-risk customers are interested in products (goods, services, etc.) produced as a result of the commissioning of the investments and foreign


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investors interested in return on investment, profit or gains core capital. Of course, the role of the state should be a priority(Almatova & S Gulamov, 2014). This approach to the regulation of the securities market can provide a range of policies not only control - supervision of securities, but also increase the financing of innovative investment projects and optimize the structure of their sources and the role. State management bodies under the effect, firstly, to create a powerful and priority legal framework that takes into account not only the market conditions and the interests of the corporate members of the stock market, but also the public interest relating to the need to establish a flexible system of capital flow into the most competitive and vital areas the economy while maintaining the competitiveness of the securities market participants. Secondly, state regulation authorities could monitor the implementation of securities market participants and the application of uniform rules of tough sanctions against those who violate them. Third, the state would have had the opportunity to do more for the interest of economic entities in the formation of the modern institutional infrastructure of the domestic stock market, which unites local markets into a single system through the use of preferences, preferential credit guarantee system for investments in infrastructure, direct state investments in key infrastructure (Asadov & Aripov, 2009; Haidar, 2014; Minazzi & Lagrosen, 2013). Thus, the innovative model of development of the securities market caused by the increasing demand for the creation of an effective financial mechanism of regulation of the domestic securities market and, above all, the growing need of the economy for investment, which is essential for modernization, technical and technological renewal, the introduction of new products, consistent build-up export-import capacity and raise living standards through the creation of new jobs. The state today has logistical and resource base, financial, economic and professional human resources. "Today there is no need," - said the President of the Republic of Uzbekistan - "to persuade or to prove to someone that only educated and modern-minded, intellectually developed and professionally trained young people can be the most important condition and guarantee high-quality, dynamic and innovative development can provide decent future countries". State in particular, should take all necessary measures to transform them into the most capable members of the securities market that can not only monitor the activities of the stock in the country, but also make a significant contribution to the qualitative development of the securities market (Kantarci, 2007; ‘MFERIT - Statistics investing activities’, 2014.). Fourth, the scale-up of the securities market needs to be improved both institutional and functional mechanism for regulating not only the issue, circulation or service stock tools, but also address the supervision of the establishment and functioning of specialized institutions of the stock market, designed to serve the innovative segments of the securities securities. Formation of an effective financial mechanism of regulation of the securities market is a necessary condition, including, and for increasing the engagement of the securities market of personal savings of the population, ie, in his absence or slow the formation of depositors, experiencing the fear of financial fraud on the part of individual investment institutions may direct them to the informal sector or abroad. Unfortunately, in


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many countries with economies in transition in the post-crisis period, can be traced not only positive, but also negative consequences in the process of placement of investment capital and the associated free cash securities market participants.

CONCLUSION The analysis showed that for the financial systems of the countries with economies in transition is characterized by super-concentration of ownership and concentration of market liquidity, essentially only in stocks - blue chips. This is one of the characteristics of the securities market, which leads to the possible risks. The lack of broad market listed shares of domestic corporate enterprises - gray chips - does not create market stability and leads to increased volatility. The problem may be exacerbated and in connection with the diversion of financial resources of the countries with economies in transition abroad, in the example of market in the developed countries. Of course, there are innovative proposals, and to address these problems should be through the establishment of international financial centers, in particular in the city of Moscow. This proposal deserves attention because such innovative events can create the necessary conditions for recovery of finance that could eventually accommodate investment resources in socially important sectors of the economy and thus on the one hand, to guarantee the rights of ownership of securities holders, and on the other - to improve the liquidity of the securities, mitigate risks, reduce transaction costs in the distribution of securities and to make an effective flow of financial resources towards innovative consumers. Thus, the main factors to strengthen the role of the financial mechanism of regulation of the securities market are: 

unstable institutional development of the securities market, as well as the existing backlog of forms and methods of control over their development;



Increase the scope of the securities market in the country and an increase in direct proportion to the degree of risk of various categories of investors;



intensify and increase the scale of the needs of individuals to attract savings in securities and its effective regulation through financial mechanisms;



increase the requirements for quality innovative level oversight of the securities market participants;

Decrease in the yield on government securities, stimulating expansion of the range of innovative instruments traded in the securities market; 

appearance innovative securities transactions that require a differentiated approach to the assessment of their effectiveness and improve the effectiveness of effective state regulation through effective forms of control of the securities market;



Improving the interest of foreign issuers to the expansion of international speculative capital, which might be caused by the global financial and economic crisis;



Lessening of existing regulatory framework of corporate law and taxation from the real needs of the participants of the securities market and generally accepted international standards;


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

appearance need to improve accountability of officials for ensuring market transparency and preventing violations of shareholder rights.

The presence of the above prerequisites makes the issue of formation of an effective financial mechanism, control, coordination and supervision of the securities market participants in one of the key questions of the further institutional development of the securities market of Uzbekistan to ensure its stability, transparency and the availability of foreign investors to attract personal savings (Abdullaev, Konya, & others, 2014). Accounting factors hindering the development of the securities market in a rapidly changing internal and external situation provide a range of effective policies of securities market regulation, placing on enterprises and optimize the structure of the sources of its formation. Therefore, by doing all the proposed requirements, joint-stock companies can ensure the effective and successful management of its own financial assets, whose role in the operation of the subject is large enough, as they are the liquid part of all of the assets of the company. While all types of financial assets in varying degrees are the most liquid (except for bad debts), the overall level of their emergency liquidity should provide the necessary level of solvency of the company at the current (particularly urgent) financial liabilities, which in turn will enhance the role of and the value of investment funds in the development of the securities market. To conclude with, Uzbekistan has been establishing the investment atmosphere while organizing contemporary facilities.

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