On June 27, 2007 the Washington based American Uzbekistan Chamber of Commerce (AUCC) held its annual conference in the premises of the Embassy of Uzbekistan in Washington, DC.  The sponsors of the conference were Case New Holland Inc., Caterpillar, Dunavant Enterprises, NUKEM Inc. and the law firm of White & Case.  The Uzbek delegation was represented by the officials from various government structures headed by Minister of Foreign Economic Relations, Investments and Trade Mr. Elyor Ganiev.  The US side consisted of approximately 100 participants representing the US businesses, non-profit organizations, the Department of State, the Department of Energy and the Department of Commerce. 
The conference started with the greeting speeches of Ambassador of Uzbekistan Abdulaziz Kamilov, AUCC President James Cornell, and Minister Ganiev.  After a short video presentation made by “Uzbinfoinvest” on the investment opportunities in Uzbekistan the floor was given to BISNIS Director Philip De Leon from the U.S. Department of Commerce.

De Leon pointed out in his speech that participation of Uzbekistan in the regional cooperation with other Central Asia states could give an additional boost to the Uzbek economy.  In this regard, the Department of Commerce has launched the program called TIFA that tries to bring together the governments of the Central Asian states to elaborate the regional approach in attracting investments for the development of regional transportation, communication and other infrastructure.  He mentioned about the upcoming TIFA meeting to be held in Washington, DC on July 17 and expressed hope that the Uzbek government will delegate its representatives to this meeting.

The next speaker was the Chairman of the Chamber of Commerce and Industry of Uzbekistan Mr. Alisher Shaikhov who presented the latest figures and trends in the economic development of Uzbekistan, which make Uzbekistan an attractive place to foreign investments.  The key points were the following:

• High level of GDP growth in the last several years (7.3% in 2006);
• Low inflation rate (6.8% in 2006);
• Reduction of profit tax for the businesses to 10%;
• Increase of the share of the non-government sector in total GDP  volume (78% in 2006);
• Significant growth of the foreign trade turnover (10.7 billion USD in 2006),with the increase of export by 31.5% in 2006 to 6.3 billion USD
• According to Mr. Shaikhov, Uzbekistan is in the process of implementing reforms with an effort to reach the following goals:
• Reaching a stable and transparent legislation.  As an example, the introduction of Arbitration Courts for dispute resolutions.  Currently, the Arbitration Courts exist only in 5 regions of Uzbekistan.  The goal is to establish the Arbitration Courts in all the remaining regions of Uzbekistan by the end of 2007.
• Creation of the legislation that stimulates the use of new technologies and international standards.  For example, India used the U.S. standards in business, management and other spheres, which has led to the development of this country.
• Easing businesses in their interactions with the government authorities.  For example, already a new simplified reporting to tax and statistical bodies has been introduced; it is easier now to start and close a business and etc.
• Cutting the fiscal burden on businesses.  As an example, currently, new tax and customs codes are being developed that should serve this goal.
• Strengthening ties with economic partners.  For example, Uzbekistan has already 5 trading houses in other countries1.  The plan is to open 11 more trading houses.  Also, the development of regional cooperation is also important for further economic growth of Uzbekistan.

Director of the Agency “Uzbinfoinvest” Mr. Irmatov spoke on the most perspective areas for foreign investments and listed the following ones:

• Telecommunication sector
• Biotechnologies
• Textile processing
• Fruit processing
• Construction materials
• Agricultural machinery
• Electrotechnical industry
• Financial services

Deputy Chairman of State Property Committee (SPC) Mr. Akhtam Daliev named a number of industrial sectors with a list of enterprises offered or being planned for offering for privatization.  SPC is offering for sale the major Uzbek enterprises from the electrotechnical sector, such as Algoritm, Foton and Oniks.  Major Uzbek enterprises from other industrial sectors, whose stakes are offered for sale, include TAPOiCh (25% stake offered), Uzbektelecom (49%) and Tashkent Tractor Plant (82%).  Mr. Daliev mentioned that based on SPC's previous experience, the Committee now pays more attention to the pre-sale preparation of each enterprise that is offered for sale.
Presentation of the wine industry of Uzbekistan was given by Chief Specialist of Stock Company “Uzspiritindustry” Mr. Alisher Mavlonov.  The wine industry of Uzbekistan is represented by the holding company Uzvinprom Holding, which includes 65 industrial enterprises, 42 of which are engaged in bottling, 20  in primary wine making and 3  in the spirits production.  The export of wine products is distributed as follows: over 60% is sold in Russia, over 20% - in Kyrgyzstan and over 15% - in Kazakhstan.  Among the most important investment projects being currently implemented by Uzvinprom Holding is the construction of the glass and tare manufacturing plant the completion of which would allow Uzvinprom to produce competitive glass tare that would meet all international standards.

Deputy Chairman of the National Bank of Uzbekistan (NBU) Mr. Batir Nurullaev spoke on the NBU activity.  According to Mr. Nurullaev, for the entire period of its activity NBU borrowed approximately 1.1 billion USD from the foreign banks.  Currently NBU has its own internal funds for lending.  In addition, lately NBU has been credited by a number of Asian banks versus the banks from OECD countries.  One of the main reasons is that the insurance premium rate that the latter banks use for Uzbekistan is much higher and thus is less competitive with the rates of the Asian banks.  Mr. Nurullaev informed the audience that a 49% stake of NBU is being planned for sale by 2009.

AUCC Conference had two working seminars: (1) on the creation of a Central Asian regional fiber optic network and (2) on the prospects of commercialization of bio-ethanol production in Uzbekistan.  Speakers at the first seminar were First Deputy Chairman of the Agency on Communication and Information of Uzbekistan Mr. Isbasarov, Mrs. Lynne Gallagher from Telecom/Telematique, Inc. and Aaron Rose from Rose Consulting.

The main points of the discussion were as follows:

• Uzbekistan has advanced among other Central Asian states with installing fiber optic cable capacities in the country. Uzbekistan has a good potential for becoming a regional high speed communication hub, earning money by providing data transit. 
• Currently, an Afghan fiber optic ring construction is underway, which upon its completion in 2-3 years should provide Uzbekistan with the South Eastern route via Afghanistan and Pakistan.  Connection to this ring should
• result in a much greater data transmission capacity and create the potential for a significant reduction of price for the data transmission in the region.
• Minister Ganiev mentioned that Uzbekistan strives to become a regional hub whether in the telecom sector, or in the railway, the automobile or in the air transportation sectors.  Examples: railroad to Afghanistan is currently under construction; the project on the construction of the Trans-Asian automobile road Europe-China via Uzbekistan is being implemented; the modernization of six airports in Uzbekistan, with the last one in Navoi, that has enabled landing and take off for large aircrafts.

The second seminar had the following speakers: Head of the Committee on Coordination of Development of Science and Technologies under the Cabinet of Ministers Dr. Zakhidov as well as Dr. Forster Agblevor from Virginia Tech University and Mr. Frank Haagensen from Novozyme.  During the seminar it was mentioned that Uzbekistan is interested in using energy saving technologies together with developing renewable energy sources such as solar, wind and bio-fuel energy.  As for the production of bio-fuel, Uzbekistan has approximately 5 million tons of the cellulose-base raw materials, which become available mostly from the leftovers of cotton harvesting and processing.  These materials that can be turned into a biomass required for the synthesis of bio-ethanol.  The foreign speakers made remarks that by now more international research has been done on using starch-base raw materials for bio-ethanol production.  In any event, a lot more research needs to be done on any of these two and other approaches for bio-ethanol production in order to make it competitive with the traditional energy sources.  Dr. Zakhidov mentioned that Uzbekistan has already launched a pilot project on bio-ethanol production and has a great interest in cooperation with foreign partners on the research, pilot or commercial projects in the field of bio-fuel production in particular and in the field of renewable energy in general.

The AUCC conference concluded with the reception organized by the Uzbek Embassy for the conference participants, where everyone had an opportunity to try traditional Uzbek cuisine and wines. 

The conference went in a very open, constructive and active mode.  One could feel the message of the conference in that Uzbekistan and the USA have a solid ground for developing the commercial relations and there is a mutual interest and opportunities for the development of business cooperation between the two countries.

                 Prepared by Amcham Director, Yevgeny Onokhin, NUKEM