Acumen:
International Journal of
Multidisciplinary Research
ISSN: 3060-4745
IF(Impact Factor)10.41 / 2024
Volume 2, Issue 1
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Acumen: International Journal of Multidisciplinary Research
METHODS OF DEVELOPING FOREIGN DIRECT INVESTMENT
ACTIVITIES IN UZBEKISTAN
Abduqodirov Abdulaziz Abduxamid og’li
teacher Sa’dullayeva Gulnoza
Аnnоtаtiоn
In the conditions of globalization, the rapid growth of the national economy of
each country is primarily a result of factors such as international trade, foreign
investments, and improvement of financial services. As the President stated about the
modernization of the economy, we need to develop an investment concept that provides
for the modernization of all sectors of the economy based on the mechanisms of
attracting investments, and on this basis implement the "Development Strategy of New
Uzbekistan" program for 2022-2026. In this article, the theoretical problems of
improving the mechanism of attracting foreign direct investments to our country and
the strategic directions of their solution are discussed.
Keywords: investment economy, economy, market economy, foreign direct
investment, digital technologies, innovation strategy, investment, investor
In today's era of increasing globalization and fierce competition, it is difficult to
imagine the sustainable development of a country's economy without its active
participation in world economic relations. Along with international trade, international
investment flows, which are carried out on the basis of mutually beneficial cooperation
between countries, are gaining importance. In turn, foreign investment allows us to
accelerate the pace of structural restructuring of the economies of developing countries.
The attraction of foreign investment, as the most important direction, largely depends
on the political and socio-economic reforms being carried out in a particular country.
Foreign investment plays an important role both at the macro and micro levels,
determines the future of a particular economic entity and the country as a whole, and
is a driving force for the economy. As a result of great attention paid to attracting
foreign investment in our country, stable and high-speed economic growth is ensured.
Further strengthening the attraction of foreign investment to the republic's economy is
considered a necessary factor in creating a business environment as a source and
condition for the effective implementation of the measures set for the renewal and
modernization of the country. The more favorable the investment environment, the
lower the investor's entrepreneurial risk, and this activates the influx of investors. On
the contrary, if the investment environment is unfavorable, the risk level is high1. This
leads to an increase in the costs of the investment recipient. The state of the investment
Acumen:
International Journal of
Multidisciplinary Research
ISSN: 3060-4745
IF(Impact Factor)10.41 / 2024
Volume 2, Issue 1
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Acumen: International Journal of Multidisciplinary Research
environment is important not only for the investor, but also for the recipient of
investment.
The theoretical foundations of attracting foreign investment, promising areas of
its organization and development, and practical issues were studied by our country's
economists A.V. Vahobov, Sh.Kh. Khajibakiyev, N.G. Mominov, B. Mamatov, D.
Khujamkulov, O. Nurbekov, E.I. Nasirov, Sh.Sh. Asamkhodjaeva, N.R. Koziyeva,
Q.B. Khoshimov.
Currently, the Development Strategy of New Uzbekistan for 2022-2026 sets out
important tasks in our country to strengthen macroeconomic stability, create a
favorable infrastructure for the active attraction of foreign investments, primarily from
foreign sectors and regions. In this regard, the measures being implemented in our
country to establish special economic zones, technoparks and small industrial zones,
and increase their efficiency are of particular importance. The Decree of the President
of the Republic of Uzbekistan on the "Uzbekistan-2030" Strategy establishes as one of
the important directions to further increase the investment attractiveness of our country
and rapidly develop the securities market the absorption of $250 billion in investments
in our country, including $110 billion in foreign investments and $30 billion in
investments within the framework of public-private partnerships.
✓
Inward investment typically comes from multinational corporations investing in
foreign markets to expand their presence or meet specific needs in the local economy.
This can be in the form of new demand for a product or rapid development in a region.
✓
A common type of foreign investment is direct foreign investment (FDI). This
occurs when a company buys another business or opens new operations for an existing
business in a country other than its own.
✓
The state's investment policy is a set of goals and measures to ensure the necessary
level and structure of capital investments in the country's economy and its individual
sectors, to increase the investment activity of the main agents of reproduction, such as
the population, entrepreneurs and the state. Simply put, investment policy is the state's
activities aimed at finding investment sources and identifying areas for their effective
use.
✓
The goals of the state investment policy are:
✓
ensuring the structural restructuring of the economy;
✓
encouraging entrepreneurship and private investment;
✓
creating additional jobs;
Acumen:
International Journal of
Multidisciplinary Research
ISSN: 3060-4745
IF(Impact Factor)10.41 / 2024
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✓
attracting investment resources from various sources, including foreign
investment;
✓
encouraging the creation of non-governmental structures to accumulate savings
of the population for investment purposes;
✓
creating legal conditions and guarantees for the development of mortgage loans;
✓
developing leasing in investment activities;
✓
supporting small businesses;
✓
improving the system of incentives and sanctions in the implementation of the
investment process;
✓
creating conditions for the emergence and development of venture investment.
The coordination and regulation of investment activities in Uzbekistan is being
carried out step by step. In this, first of all, the Constitution of the Republic of
Uzbekistan, the Civil Code, the Labor Code, the Land Code, the Tax Code, the Law of
the Republic of Uzbekistan “On Investments and Investment Activities” and other legal
acts serve as the legal basis.
In order to further enhance the effectiveness of the ongoing reforms, create
conditions for the comprehensive and rapid development of the state and society,
modernize our country, and implement priority areas for the liberalization of all spheres
of life, the “Development Strategy of New Uzbekistan for 2022-2026” has been
developed, consisting of seven priority areas developed on the basis of the principle
“From a Strategy of Actions to a Strategy of Development”. The third major group of
goals in the development strategy, dedicated to programmatic and targeted tasks that
need to be implemented in the economic sector in 2022 and beyond, is called
"Increasing the pace of national economic development and ensuring high growth
rates." The socio-economic development strategy has been thoroughly developed,
along with the goals and objectives of economic reforms, including Goal 26: "Further
improve the investment climate in the country and increase its attractiveness, and take
measures to attract $120 billion in foreign investment, including $70 billion in foreign
investment, over the next five years." In particular:
✓
Establish a new system based on the "bottom-up" principle for the effective use
of investments and increasing export volumes;
✓
Implement the Strategy for Attracting Foreign and Local Investments until 2026;
✓
Attracting investments worth $14 billion in energy, transport, healthcare,
education, ecology, utilities, water management and other sectors through public-
private partnerships;
✓
establishment of foreign economic relations between the regions of the republic
and business representatives of foreign countries, including the development of
Acumen:
International Journal of
Multidisciplinary Research
ISSN: 3060-4745
IF(Impact Factor)10.41 / 2024
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investment and foreign trade relations with the business circles of the People's Republic
of China in the Syrdarya region, the Russian Federation in the Surkhandarya region,
and India in the Jizzakh region;
✓
To provide practical assistance to entrepreneurs by organizing an “Investor
Assistance Center” in Surkhandarya region, a “Business Assistance Center” by the
Navoi Mining and Metallurgical Combine in Navoi region, and a “Center for Advanced
Projects and Engineering” in Tashkent city, as well as “Innovation and Technology
Centers” in each district;
✓
The following tasks have been set: to hold the “Tashkent International Investment
Forum” annually in Tashkent city.
The Republic of Uzbekistan is creating all the necessary legislative framework to
regulate investment activities, including:
✓
The new edition of the Law of the Republic of Uzbekistan “On Investments and
Investment Activities” dated December 25, 2019;
✓
The State Investment Program of the Republic of Uzbekistan, approved by the
President of the Republic of Uzbekistan and adopted annually, and others.
The significant increase in the volume of investments in the economy from year
to year inevitably allows it to show its positive results through the growth of national
production. As a result of the attention and support given by the state to the
development of investment activities, the volume of gross domestic product (GDP) and
the volume of investments have achieved growth rates. In particular, in the period
2019-2023, the volume of investments has achieved absolute growth rates. During
these years, GDP increased by 1.58 times, and investments in fixed capital increased
by 1.53 times.
Dynamics of indicators determining the role of investments in economic development
Indicators
2019
2020
2021
2022
2023
Gross domestic
product, billion
soums
511838,1
580203,0
734632,9
766956,7
809906,3
Investments in fixed
capital, billion
soums
189924,3
210195,4
244963,3
266654,4
289876,8
Construction works,
billion soums
68854,4
37548,4
45802,7
49876,7
52876,1
Acumen:
International Journal of
Multidisciplinary Research
ISSN: 3060-4745
IF(Impact Factor)10.41 / 2024
Volume 2, Issue 1
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Acumen: International Journal of Multidisciplinary Research
Foreign trade
turnover, (million
US dollars)
42177,8
36256
42072
45110
47408
Export, (million US
dollars)
17901,7
15102
16611
17987
18976
Import, (million US
dollars)
24276,1
21154
25461
27123
28432
Balance, (million US
dollars)
-6374,4
-6052
-8850
-9136
-9456
Major investment projects implemented in our republic
The above table shows that the growth trend of large investment projects
implemented in our republic has not developed evenly. In particular, the number of
large investment projects launched in 2015 was 158, and the volume of large
investment projects amounted to 7.4 billion US dollars, and in 2017, based on 161
launched large investment projects, it amounted to 2.4 billion US dollars. After all, in
2015, 3 large projects were launched compared to 2017. Also, in 2018, a total of 353
projects were launched, amounting to 9.8 billion US dollars, while in 2019, 179 large
projects were launched, amounting to 20.5 billion US dollars, in 2020, 43 large projects
were launched, and in 2021, 236 large projects were launched, amounting to 28.9
billion US dollars. US dollars, in 2022 from 262 major projects 38.8 billion US dollars,
in 2023 from 287 major projects 49.5 billion US dollars. In conclusion, it should be
№
Time of launch of
major investment
projects
Number of launched
major investment projects
Volume of launched
major investment
projects, US dollars
1.
2015
158
7.4 billion
2.
2016
164
5.0 billion
3.
2017
161
2.4 billion
4.
2018
353
9.8 billion
5.
2019
179
20.5 billion
6.
2020
43
13.9 billion.
7.
2021
236
28.9 billion.
8.
2022
262
38.8 billion.
9.
2023
287
49.5 billion.
Acumen:
International Journal of
Multidisciplinary Research
ISSN: 3060-4745
IF(Impact Factor)10.41 / 2024
Volume 2, Issue 1
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Acumen: International Journal of Multidisciplinary Research
noted that the steady increase in the number of new enterprises with foreign investment
and the creation of new ones is the result of the great attention our state pays to this
sector and the conveniences it creates for them. Therefore, one of the most important
issues is the economic stimulation of enterprises attracting foreign investment to our
country and the creation of the necessary conditions for them. Therefore, in order to
activate the attraction of foreign investment to our national economy, it is necessary to
implement the following measures:
− reduce the impact of the inflation rate on the growth of the value of investment
projects, as well as further increase the volume of foreign investment;
− attract investments to the real production sector, that is, to industries that process
raw materials;
− further improve the incentive system in order to create a more favorable
investment environment for foreign investors, in particular, reduce the tax burden and
simplify the tax system for investors;
The implementation of the above proposals will have a positive impact on further
activating the attraction of foreign investments to our national economy. This situation
will ultimately create the opportunity to fully implement the investment policy in our
country in the future, based on the continuous technical and technological renewal of
production, the implementation of deep structural changes in the economy, and the
consistent continuation of the modernization and diversification of industry.
REFERENCES
1. Decree of the President of the Republic of Uzbekistan dated January 28, 2022
“On the new development strategy of Uzbekistan for 2022-2026”.
2. Takhumova Oksana V., Kasatkina Elena V., Maslihova Elena A, Alexey V.
Yumashev, Maria V. Yumasheva. The main directions of increasing the investment
attractiveness of the Russian regions in the conditions of institutional transformations.
// Revista ESPACIOS, Vol. 39 (Number 37) 2022. – P.12;
3. Lokteva Ye.Yu. The role of financial infrastructure in the formation of
investment attractiveness of the territory. 2023
4. Mollah Aminul Islam, Haiyun Liu, Muhammad Asif Khan, Md Tariqul Islam,
Md Reza Sultanuzzaman. Does foreign direct investment deepen the financial system
in Southeast Asian economies? // Journal of Multinational Financial Management, 12
February 2023. – P.13; https://www.sciencedirect.com
5. Gayduk V. I. Role of foreign investment and economic development, 2022.
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