10/08/2021 - 22:39 4305

Systematic modernization of the country's production facilities and the introduction of new technologies into production, building production chains with high added value due to deep processing of raw materials will ensure the competitiveness of the economy.

For example, countries such as Japan, South Korea, Malaysia, Singapore, Taiwan, Hong Kong and China have achieved "economic miracles" by specializing in the export of finished products with high added value.

At the same time, the growth of competitive products due to deep processing played the role of a multiplier.

The importance of deep processing of products in industry is explained by:

In 2019, our country produced industrial products worth 331 trillion soums, the share of the processing industry was 80.0% (264.4 trillion soums).

Figure 1. The share of value added created as a result of deep processing in industries.

Water, electricity, gas, steam supply, sewerage and the country's industries include crude oil and natural gas (25.7 trillion rubles). soums, 85.5%), metallurgy (33.2 trillion. soums, 33.1%), food products (10.9 trillion. soums, 10.9%), textiles (9.6 trillion. soums, 9.6%). %) and chemical products (7.3 trillion. soums, 7.3%). The percentage of value added was high.

Our priority is to increase the share of finished products in relation to raw materials in the export structure due to deep processing. This is due to the fact that the export of raw materials from the country without processing leads to disruptions in the production chain and an increase in the import of the corresponding finished products.

In particular, in 2020, 60.5% of Uzbekistan's exports and 71.2% of exports of goods (excluding services) were raw materials (gold, natural gas, non-ferrous metals, cotton fiber, etc.). In the structure of exports of raw materials that can be processed in the republic, the share of cotton yarn (748.4 million dollars), copper and products made from it (570.1 million dollars), silk and synthetic yarns (234.9 million dollars), flat rolled iron (229.6 million dollars) and cotton fiber (146.7 million dollars) is high.

The sharp decline in world prices for raw materials of the mining and extractive industries during the coronavirus pandemic indicates the urgency of increasing the share of processing in the industrial structure of our country.

World experience shows that over time, the profitability of funds or labor spent on production related to resources and raw materials decreases (in relation to a unit of capital). That is, in countries specializing in the supply of the latter, in order to stimulate economic growth and increase production volumes, it is necessary, first of all, to increase the costs of creating new capacities. Also, the economy of such countries depends heavily on foreign markets, negative changes in which lead to a weakening of the economy.

Based on the above, the issue of creating a chain of production of competitive finished products with high added value in the republic due to deep processing of raw materials and increasing the share of such products in the export structure is relevant. Special attention has been paid to work in this direction in recent years. In particular, 14 special programs have been adopted and are being implemented for the development of mechanical engineering, metallurgical, electrical, chemical, pharmaceutical industries, processing of hydrocarbon raw materials, fruit and vegetable products, non-ferrous and rare metals, production of building materials, as well as textile, clothing, knitting, leather and footwear, fur and fur industries.

Within the framework of the industrial policy implemented in the country, strategies for the development of the leading areas of our industry – oil and gas, electric power, light, chemical, food, electrical, as well as non-ferrous metallurgy and the production of building materials-have been adopted until 2025. The documents define the main directions for the future, which ensures the solution of current problems today.

The President's Address to the Oliy Majlis of the Republic of Uzbekistan dated January 29, 2020 states that economic growth will be achieved through the organization of competitive production chains. Based on this, it is necessary to increase the volume of output of finished products that are competitive in foreign markets in the driving industries of the industry, as well as to enter new markets through its export. According to a study by Harvard University, this requires activating the production of more than 50 types of industrial products of our country that have a relative advantage over competitors.

 

Information Service

Ministry of Economic Development and Poverty Reduction