How to make doing business in Uzbekistan easier?

Aug 1, 2017

The draft resolution “On additional measures to further improve ranking of Uzbekistan in World bank’s annual “Doing Business” report” is available for public consultations. “Business forum of Uzbekistan (phase III)” – joint project of Chamber of Commerce and UNDP contributed to elaboration of this resolution and provided recommendations on improving business environment,  discussed during a round-table meeting in May 2017.

United Nations Development Assistance Framework for the Republic of Uzbekistan for 2016-2020 (UNDAF) sets improvement of business environment as a factor for ensuring sustainable growth of incomes from entrepreneurship and increasing employment. It includes specific activities aimed at ensuring by 2020 improvement of Uzbekistan’s ranking and move to top-50 countries in terms of ease of doing business through strengthened public-private dialogue and regulatory reforms.

There are several  international studies, reports, indexes and ratings that assess various socio-economic and environmental processes and the state of economies in various countries around the world. For example, the “Global Competitiveness Report” is based on publicly available statistical data combined with results of surveys of various organizations, conducted by the World Economic Forum jointly with the network of partner organizations – leading research institutes and companies based in countries included in this report. The methodology of the research allows covering wide range of factors affecting competitive environment. The report includes detailed review of strengths and weaknesses of 138 nations in terms of competitiveness, making it possible to identify priority areas for formulating economic development policy and key reforms.

 “Global Entrepreneurship Monitor” is another interesting research, compiled by London School of Business (UK), evaluating entrepreneurial activity in the national context in over 100 countries.

Worldwide Governance Indicators of the World Bank includes government effectiveness as one of its indicators, which assesses perception of the quality of public services. Global Indicators of Regulatory Governance is another research by the World Bank, measures more than 185 countries across the world on extent of involvement of citizens and business community in the process of lawmaking.

World Bank’s “Doing Business” report is a popular, globally acknowledged and most cited research. Governments of 190 countries work on creating the most favorable conditions for doing business in their jurisdiction and results of such efforts are measured annually in the “Doing business" report. Foreign investors refer to findings of the report on business climate when making investment decisions.

According to the “Doing business- 2016” report, Uzbekistan was among the top 10 countries implemented the largest number of reforms.  At the same time, the analysis of doing business demonstrates that existing conditions still do not comply with international standards. For example, in order to obtain construction permits in Tashkent city, a business entity would have to complete 23 procedures, and it would take 176 days, whereas average for Central Asia and Europe is 15 procedures and 150 days.

Comparative analysis of data from “Doing business” reports for 2016 and 2017 demonstrates that difference in the number of procedures and timeframes, stipulated in legislation and actual adherence to them in practice, shows increase in the number of procedures by 9 (56 in 2016 and 65 in 2017), and decrease in number of days required to complete them by 3 (228 in 2016 and 225 in 2017). This is why further improvement of practical implementation of provisions of legislation is also important.

Based on the above, establishment of the permanent interagency commission to coordinate activities on improving ranking of Uzbekistan in the “Doing business” report was suggested by draft resolution. The commission will focus on ensuring coordination of activities of government agencies, conducting critical analysis of their work on implementation of activities on improving business climate, developing proposals on improving legislation in business sphere.

As fixed in the draft regulations, a special attention is to be paid to raising awareness of entrepreneurs about changes in administrative procedures, timeframes and costs associated with them.

Conducting semiannual surveys of at least 100 business entities directly and through the “Specialized portal on receiving, processing and discussing proposals of entrepreneurs” is proposed as a mechanism for assessing effectiveness of measures taken on improving business climate.

The draft resolution sets and objective to improve ranking of Uzbekistan in the World Bank’s “Doing business” report from 87th to 40th position by 2021.

The draft resolution is available for commenting until August 11, 2017.

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