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OVERCOMING ECONOMIC CRISES THROUGH PUBLIC
PROCUREMENT: THE ROLE OF THE STATE IN ECONOMIC POLICY
Ruzimurodova Charos Ural kizi
Assistant of the Department of “Finance and Financial Technologies” of Tashkent
State University of Economics
Annotation:
The article separately examines the transparency of the public
procurement system, the need to ensure competition and combat corruption, and the
micro- and macroeconomic impacts of public procurement. It also analyzes ways to
support small and medium-sized businesses, develop the manufacturing sector, and
increase export potential through public procurement. It shows how the role of public
procurement in economic policy, together with the strategic directions set by the
state, is important in overcoming economic crises and ensuring sustainable growth in
the future. The article also presents reforms and proposals that should be
implemented to ensure the effective functioning of the public procurement system in
combating the crisis. In particular, it analyzes the possibilities of increasing the
efficiency of public procurement through the use of digital technologies, increasing
transparency, and strengthening the audit system. At the end of the article, a general
conclusion is given about the role of the public procurement system in overcoming
economic crises and its future development directions.
Keywords:
public procurement, economic crisis, competition, small business,
investment, corruption, digital technology, international trade.
Аннотация
: В статье отдельно рассматриваются вопросы прозрачности
системы государственных закупок, необходимости обеспечения конкуренции и
борьбы с коррупцией, а также микро- и макроэкономические последствия
государственных закупок. Также анализируются пути поддержки малого и
среднего бизнеса, развития производственного сектора и увеличения
экспортного потенциала за счет государственных закупок. В нем показано,
насколько важна роль государственных закупок в экономической политике, а
также стратегические направления, заданные государством, для преодоления
экономических кризисов и обеспечения устойчивого роста в будущем. В статье
также представлены реформы и предложения, которые необходимо реализовать
для обеспечения эффективного функционирования системы государственных
закупок в условиях борьбы с кризисом. В частности, анализируются
возможности повышения эффективности государственных закупок за счет
использования цифровых технологий, повышения прозрачности и усиления
системы аудита. В конце статьи дается общий вывод о роли системы
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“Interpretation and researches”
Volume 1 issue 1 (47) | ISSN: 2181-4163 | Impact Factor: 8.2
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государственных закупок в преодолении экономических кризисов и
направлениях ее дальнейшего развития.
Ключевые слова:
государственные закупки, экономический кризис,
конкуренция, малый бизнес, инвестиции, коррупция, цифровые технологии,
международная торговля.
Currently, economic crises and financial crises in many developed and
developing countries of the world economy are causing serious social and economic
problems. The pandemic, global financial crises, fluctuations in energy prices and
other economic threats have had a profound impact on the economic systems of
countries. In such conditions, the public procurement system should be considered as
an important tool for overcoming economic crises. Public procurement plays an
important role not only in the effective management of the state budget, but also in
supporting economic recovery, creating new jobs, developing businesses and
combating corruption. Therefore, the urgent importance of public procurement in
connection with economic crises is increasing, since this system plays a major role in
ensuring the effective implementation of state policy. The article examines the role of
public procurement in economic crises, how economic stability can be achieved
through them, as well as the prospects for the development of the public procurement
system and the necessary reforms. Modernization and effective management of the
public procurement system during the crisis can serve the recovery of the economy.
In particular, such areas as the implementation of new projects, support for small and
medium-sized businesses, development of the manufacturing sector, and
improvement of social infrastructure serve as effective measures against the crisis.
The public procurement system is of great importance in implementing the economic
policy of countries. Through public procurement, state resources can be directed to
various sectors of the economy, which in turn allows the state to ensure stability in
times of economic crises. If the public procurement system functions effectively
during economic crises, this becomes an important factor in ensuring economic
growth and social stability. Public procurement, especially on the way out of the
crisis, serves to develop small and medium-sized businesses, create new jobs, and
also meet the social needs of society. The state's economic policy and its measures
implemented through public procurement are, in particular, a necessary tool for the
transition to a new stage of sustainable growth and recovery.
The public procurement system is the process of placing orders for specific
products, services or works in order to meet state needs and implement economic
policy. This system includes the provision of goods and services purchased by the
state, as well as supporting projects that meet the economic, social and political goals
of the state.
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Table 1. Main stages of the public procurement system.
Stage
Description
Objective
Planning
Identifying necessary goods and
services for public procurement
Efficient allocation of
resources
Tender Process
Announcing tenders, receiving
and selecting bids
Enhancing competition and
ensuring transparency
Procurement
Contracting, fund allocation, and
purchasing
Creating jobs and boosting
economic activity
Implementation &
Control
Executing projects, quality
control, and conducting audits
Increasing efficiency and
combating corruption
The public procurement system is an important tool for supporting economic
growth in many areas and implementing the state's economic policy. Proper and
effective management of public procurement during a crisis can increase economic
activity, create new jobs, and ensure the efficient allocation of resources.
Economic crises are usually associated with a slowdown in economic growth,
job losses, reduced investment, and loss of hope in society. The public procurement
system helps to overcome such crises through a number of mechanisms. These
mechanisms are analyzed in detail below:
a. Efficient allocation of resources
The efficient allocation of resources plays an important role in ensuring
economic stability. The public procurement system allows for the efficient allocation
of limited resources in the economy. During economic crises, it helps to direct state
resources to important social and infrastructure projects, stimulate economic activity,
create new jobs, and stimulate economic growth in general.
For example, large-scale public construction projects, healthcare procurement,
and social infrastructure projects mitigate the negative impact of the economic crisis
through the optimal allocation of resources. At the same time, the public procurement
system stimulates competition, reduces prices, and ensures the efficient use of
resources.
b. Job creation
The public procurement system is an effective tool for creating new jobs. During
the economic crisis, public procurement creates new jobs, particularly in the
construction, manufacturing, and service sectors. New jobs increase economic
activity, ensure social stability, and increase people's incomes.
The ability of public procurement to support small and medium-sized businesses
is especially important for accelerating economic recovery during the crisis.
Attracting small businesses to participate in public procurement, creating favorable
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conditions for them, and providing them with opportunities to compete contributes to
sustainable economic growth.
c. Support for investment projects
The public procurement system is also an important tool in supporting
investment projects. Among the important areas that direct public investment during
the crisis are infrastructure, healthcare, education and technology. Investment
projects are implemented through public procurement and contribute to the recovery
of the economy. New investments create opportunities to support economic growth,
create new jobs, develop infrastructure and stimulate economic activity in general.
Investment projects supported through public procurement, such as the
construction of bridges, roads, energy facilities, healthcare and educational
institutions, can become major sources of economic growth. These projects not only
create new jobs, but also serve to ensure the economic stability of the state.
d. Support for small and medium-sized businesses
The public procurement system plays an important role in overcoming economic
crises by supporting small and medium-sized businesses. The small and medium-
sized business sector is usually the most active and resilient part of the economy and
is able to withstand economic crises. Supporting small and medium-sized businesses
through public procurement contributes to economic recovery by creating new
opportunities for them, increasing competitiveness and supporting innovation.
Creating the necessary conditions for small and medium-sized businesses to
participate in public procurement and encouraging them to be competitive plays a
major role in post-crisis recovery.
The public procurement system is an important mechanism for overcoming
economic crises. Through the efficient allocation of resources, the creation of new
jobs, the support of investment projects and the development of small and medium-
sized businesses, the state helps to ensure economic stability. Effective management
of public procurement creates new opportunities for overcoming the crisis and
stimulates economic growth. Also, the transparency, competitiveness and
modernization of the system are important in combating the economic crisis and
ensuring sustainable development.
The state's economic policy is a set of approaches and actions taken by the state
to regulate, develop and manage economic activity. Economic policy varies
depending on the internal and external economic situation of the country and is
usually aimed at the main goals of the state, such as sustainable growth, social
development, investment attraction and efficient allocation of resources.
Economic policy is also implemented through the public procurement system.
Public procurement, as one of the main instruments of economic policy, directs the
economic activity of the state, stimulates economic growth and meets social needs. In
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the implementation of economic policy, public procurement ensures the proper
distribution of resources, products and services, and is also an effective tool for
achieving the strategic goals of the state.
Competition plays an important role in improving the efficiency of the public
procurement system and ensuring economic stability. By increasing competition, the
best prices and conditions for public procurement are ensured, as well as the
provision of quality products and services. This, in turn, contributes to the efficient
allocation of resources, cost reduction and sustainable economic growth. Competition
creates the opportunity to choose the best services and products among individuals or
organizations participating in public procurement. Competition leads to increased
quality, reduced prices and improved efficiency in public procurement. In such
conditions, the public procurement system selects the offer with the best conditions in
each tender, which increases overall economic efficiency. The public procurement
system should be an effective tool for combating corruption. By combating
corruption, it is possible to ensure transparency in the system and a fair distribution of
resources. Corruption can lead to negative consequences in public procurement, such
as increasing prices, making wrong decisions and creating familiarity.
Transparency plays an important role in ensuring the reliability and efficiency of
the public procurement system. By ensuring transparency in the public procurement
system, the best results are achieved for all segments of society and the economy.
Ensuring transparency in the public procurement system shows the openness of all
processes, how the state spends resources and what decisions it makes. This not only
creates trust in society, but also ensures high-quality and fair decisions on public
procurement.
The audit system is an important tool in ensuring the transparency of the public
procurement system. Audit processes include monitoring all stages of tenders and
help identify errors, abuses and injustices.
Ensuring transparency and competition in public procurement leads to economic
growth, stability and efficient allocation of resources. Ensuring transparency and the
effective functioning of the audit system ensure fair and proper management of
public procurement. Through electronic tenders and digital technologies, the public
procurement system will continue to function effectively, reduce corruption and
stimulate economic growth. These processes will serve to increase the transparency
of the public procurement system and ensure overall economic stability.
Small and medium-sized enterprises (SMEs) are an important component of the
economic system and play a significant role in ensuring economic growth, job
creation and social well-being. Through public procurement, it is possible to support
SMEs, stimulate their economic activity and ensure their growth. Increasing the
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participation of SMEs in the public procurement system has the following
advantages:
• Job creation: SMEs create new jobs through their active participation in public
procurement, which increases economic activity.
• Efficient allocation of resources: SME participation in public procurement
allows for a more efficient allocation of resources, which helps to increase
production.
• Promoting innovation: SMEs increase competition in public procurement by
providing innovative products and services. This, in turn, stimulates economic
growth. The following measures can be taken to support small and medium-sized
businesses in public procurement:
• Special quotations for tenders: Organize special tenders for small and medium-
sized businesses, creating additional benefits for them.
• Technological assistance and advice: Provide technological assistance, advice
and business development programs to increase the competitiveness of SMEs.
• Tax and financial incentives: Support SMEs by reducing taxes, providing
financial assistance and loans.
To increase the efficiency of the public procurement system, it is necessary to
carry out system reforms, use digital technologies and introduce new methods and
approaches. This not only increases the efficiency of the system, but also ensures
economic growth, stability and transparency. By introducing innovations and
technologies, the public procurement system can become more efficient, competitive
and corruption-free.
The public procurement system serves as an important tool during economic
crises. During crises, public procurement can stimulate economic activity, create jobs
and allocate resources effectively.
The following measures are important for ensuring sustainable economic growth
and development through the public procurement system:
• Development of small and medium-sized businesses: Economic growth can be
stimulated by increasing the participation of small and medium-sized businesses in
public procurement and providing them with new opportunities.
• Investment projects and infrastructure: Implementation of infrastructure
projects, creation of new production sectors and increase export potential through
public procurement.
• Innovations and new technologies: Sustainable growth and development are
ensured by introducing innovative technologies and producing new products. This, in
turn, ensures economic stability.
In order to make the public procurement system more effective in the future, it is
necessary to consider the following perspectives and recommendations:
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• Digital transformation and transparency: Improving the public procurement
system using digital technologies and making processes more transparent. The use of
electronic tenders and blockchain technologies will increase the efficiency of the
system.
• Innovative approaches and strategic planning: Managing the public
procurement system more effectively through new methods and innovative
approaches. This will allow, in particular, to quickly adapt to economic crises and
global changes.
• International cooperation and attraction of investments: Strengthening
cooperation with international markets and attracting investments through the public
procurement system. This, in turn, will help increase economic stability.
The public procurement system plays an important role in overcoming economic
crises and ensuring sustainable growth. Improving the system, introducing digital
technologies and using new innovative approaches can stimulate economic
development. In the future, the public procurement system should be more efficient,
transparent and competitive, which will ensure economic stability and growth.
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