UZBEKISTAN – AUGUST 1-31,

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4/03/2019 Uzbekistan, June 1-30, 2020 page 1 of 22

UZBEKISTAN – AUGUST 1-31,

TOP NEWS OF THE PERIOD

Uzbekistan’s gold and foreign exchange reserves exceed $34 billion

Most of the reserves are held in the form of monetary gold - $19.4 billion. Foreign currency assets amounted to $13.6 billion.

In general, since the beginning of the year, gold and foreign exchange reserves have increased by more than $5.6 billion. As of January 1, they amounted to $29.1 billion.

In early August, the price of gold for the first time in history crossed the symbolic border of $2,000 (2,000.11 on the New York Stock Exchange Comex). Since the beginning of 2020, gold has risen in price by almost 30%. Prior to that, the record price was $1,921.18 per ounce after a sharp rise in prices for precious metals in September 2011.

Experts attribute the growth to uncertainty due to the coronavirus pandemic. Gold is considered as a prized investment due to excellent liquidity, intrinsic value and ability to protect against inflation and currency devaluation. Gold is also known as a safe haven as it gives high returns when economies and markets falter.

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Uzbekistan carries out trade relations with more than 150 countries

According to Uzbekistan Exporters’ Association, Uzbekistan carries out trade relations with more than 150 countries of the world.

The largest volume of foreign trade turnover was recorded with the PRC (17.6%), the Russian Federation (15.9%), Kazakhstan (7.8%), the Republic of Korea (6.7%), Turkey (5.3%), Kyrgyzstan (2.4%) and Germany (2.1%).

In January-July 2020, the foreign trade turnover of the country reached $19 544.2 million, which, compared to the same period last year, decreased by $4 659.2 million.

Uzbekistan National News Agency – uza.uz

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POLITICS AND LAW

The term of visas for foreign citizens has been extended

The visa period for foreign citizens currently staying in the territory of the Republic of Uzbekistan has been automatically extended until 1 November 2020.

It follows from this that no action will be taken against these citizens, no fines will be imposed. This is stated in the decision of the Republican Special Commission on the preparation of a program of measures to prevent the penetration and spread of coronavirus in Uzbekistan on 30 July 2020.

It should be noted that air and road flights between Uzbekistan and foreign countries were suspended from 16 March to 10 April 2020.

Later, the term of visas for foreign citizens was extended until 5 May, 1 June and 1 August.

UzDaily – Uzdaily.com

Any interference with the legal activities of statistics bodies is prohibited in Uzbekistan

A resolution of the President "On measures to further improve and develop the national system of statistics of the Republic of Uzbekistan" was adopted.

The resolution defines the priority areas for improving the national system of statistics of the Republic of Uzbekistan.

In accordance with the resolution, one of the priority areas is the transformation of statistical bodies into a professional independent service aimed at generating high-quality and reliable information, increasing the transparency and openness of statistical information.

The State Statistics Committee exercises its powers related to the formation of official statistics, regardless of all state bodies and organizations, the statistical information generated by the committee is published as official statistical information.

Any interference with the legitimate activities of statistical bodies is not allowed.

Territorial departments of statistics, departments of statistics of districts (cities) are independent from local government bodies and are directly subordinate to the State Committee on Statistics.

The resolution approved the National Strategy for the Development of Statistics of the Republic of Uzbekistan in 2020–2025 and a roadmap for its implementation.

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Foreign vehicle owners to pay a fine for violation of traffic rules at customs

A resolution of the Cabinet of Ministers “On additional measures to ensure compliance with traffic rules”

was adopted.

The resolution introduced a mechanism for the collection by customs authorities of relevant fines from foreign drivers of vehicles or other persons who violated the traffic rules on the territory of Uzbekistan when exporting these vehicles from the territory of the republic, and also approved a provision on the collection procedure.

This rule does not apply to vehicles of diplomatic missions of foreign states, consular offices, organizations equated to them, foreign official delegations.

According to the regulation, the relevant fines are levied by the customs authorities on the basis of information provided by the internal affairs bodies online.

The amount of the fine is paid through bank offices or electronic payment systems or self-service terminals at the border customs post.

In case of non-payment of the fine, the vehicle is temporarily detained on the basis of an act for up to 60 days.

If the amount of the fine is not paid within 60 days, then in cooperation with the enforcement authorities and the court, measures will be taken to collect the amount of the debt at the expense of the vehicle.

From 1 January, it is not required to obtain a permit to attract foreign labor

In accordance with the Presidential Decree "On measures to radically improve licensing and licensing procedures", the following licensing procedures are canceled from 1 January 2021:

Permit to attract foreign labor;

Coordination of a set of measures to improve the financial condition of the insurer;

Certificate for the right to conduct audits of banks;

Conclusion of expertise on projects and works on acceptance into operation of facilities, products and technologies in terms of their compliance with the established requirements in the field of railway transport;

Coordination of the use in production of technical solutions to extend the service life of locomotives, freight and isothermal cars;

Coordination of the project for the construction of new and reconstruction of existing enterprises related to the use of water resources and the discharge of drainage and wastewater;

Coordination of design, construction, reconstruction of buildings and structures, water supply systems, sewerage and wastewater treatment, hydraulic structures, other facilities for compliance with sanitary standards, rules and hygiene standards;

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4/03/2019 Uzbekistan, June 1-30, 2020 page 5 of 22 Permission to design, build or purchase, install, commission and use cable television networks;

Permission to engage in coaching activities;

Passport of a health and fitness or sports facility.

Uzbekistan introduces KPI system for government officials

According to the decision of the President, from this year, the work of government officials on the realization of investment projects and optimization of imports will be evaluated using key performance indicators (KPI).

“...within one month, ensure the approval of key performance indicators for the evaluation of the works of heads of ministries, departments, regions and enterprises on the effective implementation of investment projects and the optimization of imports, with the quarterly submission of information on indicators of each chairman to the Cabinet of Ministers,” the document says.

The President has also instructed to complete the inventory of investment projects, suspending or canceling those with no confirmed financing sources and socio-economic feasibility.

By January 1, 2021, on the basis of the generally accepted Public Investment Management Assessment (PIMA), the government develops and implements a system for monitoring investment projects financed from centralized sources, including post-investment monitoring (within 3-5 years after the commissioning of the facility) based on an annual analysis of the achievements and assessment of the impact of the projects on the socio-economic development of the country and its regions.

To remind, there has been a long discussion on the draft law “On Public Service”, which envisages the introduction of the KPI system for government officials. The document has not yet been adopted.

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State Statistics Committee becomes independent of other state bodies

President Shavkat Mirziyoyev has signed the decree on measures to further improve and develop the national system of statistics.

According to the document, the State Statistics Committee exercises its powers, related to the formation of official statistics, independent of all government bodies and organizations.

Any interference with the legitimate activities of statistical bodies is prohibited, including the process of collecting official statistical reports and conducting surveys, as well as their publication.

The departments of statistics in the Republic of Karakalpakstan, regions and the city of Tashkent, as well as departments of statistics of districts (cities), are independent of local government bodies and are directly subordinate to the State Statistics Committee.

Heads of territorial departments are appointed and dismissed by the chairman of the State Statistics Committee, heads of statistical departments of districts (cities) – by the chairman of the State Statistics Committee at the proposal of heads of territorial departments.

The document also approved the National Strategy for Development of Statistics of Uzbekistan in 2020- 2025, developed with the assistance of the World Bank.

kun.uz

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ECONOMY AND FINANCE

Export of textiles crossed the billion-dollar milestone

According to the results of 7 months of this year, the export of textile and garment and knitwear of Uzbekistan reached US$1 billion. This was reported by the press service of the Uztekstilprom Association.

It is worth noting that at the beginning of 2020, realizing the export of textiles worth US$2 billion seemed an impossible task. Due to the strengthening of quarantine measures in Uzbekistan and abroad, a sharp rise and restriction of transportation prices, the closure of large retailers and shopping centers in China, Turkey, Russia and Europe, which are our main sales markets, led to partial or complete cancellations of orders.

As a result of measures taken by the state to support entrepreneurs in a timely manner, the activities of 252 exporting enterprises were restored, assistance was provided in increasing production and export of products.

For 7 months 2020, the Uztekstilprom Association and the industry’s enterprises ensured the export growth rate (compared to 2019, it reached 112%). The share of yarn in total exports is 49%. The share of value-added and high-value-added products (fabrics and knitwear, ready-made garments) in total exports reached 51%.

Although the pandemic had negative consequences, it also created new opportunities for the development of the industry: the opening of alternative transport corridors led to the establishment of supplies to new markets, the development of innovative products.

For example, together with the Ministry of Transport of the Republic of Uzbekistan, an alternative route has been developed for the transportation of goods through the Islamic Republic of Iran (Uzbekistan (Karakalpakstan) - Kazakhstan, the port of Aktau - Caspian Sea - Iran and Uzbekistan (Karakalpakstan) - Routes Kazakhstan-Russia-Georgia-Armenia / Azerbaijan- Iran). The widespread use of air transportation for export has begun.

In June 2020, with the support of the Embassy of the Republic of Uzbekistan in Kuwait, on the basis of an agreement between Fursan Al Khaleej (Kuwait) and LLC Engilsanoatsavdo (Uzbekistan), the export of textile products to Kuwait was carried out for the first time.

In addition, the enterprises of the industry have established the production of 6 million pieces of masks and 10 thousand pieces of protective overalls per day. Protective equipment was exported to countries such as Ukraine, Russia, Kuwait, Belarus and Georgia.

A total of 395 items of textiles and clothing were exported to more than 57 countries around the world.

In addition to the CIS countries, which are traditional consumers of Uzbek textiles, exports were also made to Hungary, Slovakia and Greece.

The bulk of exports fell on such countries as the Russian Federation (US$394 million - the share in total exports - 39%), China (US$188 million - 18%), Kyrgyzstan (US$139 million - 13%) and Turkey (US$123 million - 12%).

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Draft Law of the Republic of Uzbekistan "On Trade" submitted for public discussion

In order to consistently continue comprehensive reforms in the Republic of Uzbekistan, a State Program for the implementation of the Action Strategy for five priority areas of development of the Republic of Uzbekistan for 2017-2021 was adopted in the "Year of Science, Education and Digital Economy Development".

The State Program also envisages the development of a draft Law of the Republic of Uzbekistan "On Trade", as a prerequisite for the introduction of a trading system that meets the requirements of a modern market economy, equal protection of the interests of participants in the trade market, definition of rights and obligations through a legal basis, as well as the creation of free competitive environment.

The draft law was developed by a working group consisting of representatives of the Ministry of Economic Development and Poverty Reduction, responsible ministries and departments. Also, on July 3 of this year, a video conference was held to discuss the draft Law of the Republic of Uzbekistan "On Trade".

The discussion was attended by representatives of the Ministry of Economic Development and Poverty Reduction, the Ministry of Finance, the Ministry of Investment and Foreign Trade, the State Tax Committee, the Chamber of Commerce and Industry, the Antimonopoly Committee, the Association of Exporters of Uzbekistan and the private sector.

During the discussions, the points of the draft law were examined in detail, along with which the proposals and objections were discussed. It was noted that this law is aimed at serving as a legal criterion for determining the rights and obligations of participants in the trade market, reducing the share of the informal sector, regulating the legal norms of trade, limiting unjustified interference by state bodies, ensuring the development of trade through supply and demand.

At this stage, the draft law of the Republic of Uzbekistan "On Trade" has been submitted for public discussion in order to receive proposals and comments.

The procedure for insurance of export goods and their transportation has been determined

The Resolution of the Cabinet of Ministers from 12 of August 2020 № 477 approved the Regulation on the procedure for insuring the export of capital, goods and services (works), as well as activities related to export support.

According to the regulation, insurance of export goods and their transportation is carried out by legal entities that are commercial organizations and have a license to carry out the corresponding type of insurance.

There are several types of insurance contracts, depending on who is insured (exporter or financier).

When concluding insurance contracts, it is prohibited:

establishment of an unconditional deductible (part of the damage not covered by insurance) for political risks;

the size of the unconditional deductible for commercial risks - more than 50 percent of the insured amount;

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4/03/2019 Uzbekistan, June 1-30, 2020 page 8 of 22 the size of the unconditional deductible for logistics risks - more than 5 percent of the insured amount;

waiting period for political risks - more than 180 calendar days;

the waiting period for commercial risks is more than 90 calendar days;

the waiting period for logistic risk is more than 30 calendar days.

The policyholder can submit applications and documents directly to the insurer, by mail or electronically.

The insurer prepares the relevant insurance contract and ensures its signing within 24 hours from the moment the insured submits the necessary documents.

Insurance indemnity must be paid no later than 15 calendar days from the date of receipt of documents confirming the insured event and the amount of damage.

Rating of commercial banks of Uzbekistan by the quality of services provided and operating activities for the first half of 2020

During the pandemic, commercial banks of the Republic of Uzbekistan faced great risks associated with restricting clients’ access to bank offices, increasing the insolvency of borrowers, reducing the quality of assets and income. As a countermeasure, banks are increasing investments in digital remote banking technologies, optimizing costs, and introducing modern risk management methods.

In order to compare the effectiveness of measures to improve banking and counter COVID-19 in the first half of the year, as well as during the pandemic, individual and final bank ratings were compiled based on indicators such as the availability of remote services, quality of management, quality of assets and ability to generate income. It should be noted that the sources of data for the rating are the financial statements of banks, as well as the statistical data of the Central Bank of the Republic of Uzbekistan that are in the public domain.

1. Availability of distance services

The indicator of the availability of remote banking services covers both individuals and legal entities that use the bank’s services online.

As of 1 July 2020, the total number of users of remote banking systems reached 11.7 million, of which 93.8% are individuals, and 6.2% are legal entities and individual entrepreneurs.

By the number of users of remote services by legal entities and individual entrepreneurs, Ipoteka Bank is the leader (108,500 users), and by individuals (1.74 million) and by the total number (1.78 million) users, Uzpromstroybank is in the lead.

The top 5 in terms of the total number of users also includes Khalq Bank (1.68 million), Agrobank (1.48 million), Ipoteka Bank (1.22 million) and the National Bank (1.14 million). Tenge Bank has the smallest number of users of remote services (756), followed by Saderat Bank (926), Uzagroexportbank (1,280), Madad Invest Bank (2,601) and Poytakht Bank (3,430).

Based on the above data, the ratio of the total number of remote clients to the number of bank branches was calculated, i.e. the number of remote clients per branch. According to this indicator, Uzpromstroybank is in the lead (39,619 clients per branch). The top five also include Ipoteka Bank (31 391), Asaka Bank (28 800), Orient Finance Bank (27 807) and Aloqabank (24 263). The smallest number of users

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4/03/2019 Uzbekistan, June 1-30, 2020 page 9 of 22 of remote banking systems are in Tenge Bank (756), Saderat Bank (926), Uzagroexportbank (1,280), Madad Invest Bank (2,601) and Poytakht Bank (3,430).

2. Quality of management

The indicator of the quality of bank management, based on international experience, is determined by the level of operational efficiency or CIR (Cost to income ratio). This indicator reflects the efficiency of doing business and is calculated as the ratio of the bank’s operating expenses for the reporting period to operating income. So, for example, CIR of 50% means that the bank’s expenses for 1 soum of income amounted to 0.5 soums.

The CIR indicator for commercial banks of the Republic of Uzbekistan varies from 14.5% to 81.3%. The best CIR indicators for the country’s three largest state-owned banks are Asaka Bank (14.5%), Uzpromstroybank (15.8%) and the National Bank (17.5%). Also in the top five are Madad Invest Bank (20.6%) and Saderat Bank (23.3%).

The five Uzbek banks with the lowest operating efficiency include Hi-Tech Bank (81.3%), Ravnak Bank (75.9%), Savdogar Bank (74.1%), Kapital Bank (65.9%) and Asia Alliance Bank (61.5%).

3. Quality of bank assets

To determine the quality of assets of commercial banks in the Republic of Uzbekistan, consider the NPL (non performing loans) indicator. This indicator reflects the proportion of problem loans that have a risk of late payment or were not paid within 90 days.

According to the Central Bank of the Republic of Uzbekistan, as of 1 July 2020, the five banks with the lowest NPL indicator include Tenge Bank (0%), UzKDB Bank (0%), Saderat Bank (0.1%), Turkiston Bank (0,1%) and Universal Bank (0.1%). The highest indicators of problem loans were recorded by Uzagroexportbank (8.5%), Hamkorbank (4.8%), Uzpromstroybank (4.8%), Asaka Bank (4.6%) and Ipak Yuli Bank (4.1%).

In general, an increase in the share of problem loans was expected, given the quarantine measures taken and the benefits and deferrals provided by the government for the payment of loan debts, which was also mentioned in the speech of the President of the Republic of Uzbekistan on 6 July 2020. at a meeting on the implementation of the Banking System Reform Strategy for 2020-2025.

4. The ability of commercial banks to generate income

Evaluation of the bank’s performance as a commercial enterprise is based on the analysis of interest income and interest expense, since raising funds in deposits and lending at interest constitute a significant part of the daily banking operations.

Based on the above, the ratio of interest income to interest expense can serve as an indicator of the bank’s ability to generate income. The greater the bank’s ability to generate income for each sum of interest paid on deposits, the higher this indicator.

The top 5 banks in terms of the ratio of interest income to expenses included UzKDB Bank, Saderat Bank, Poytakht Bank, Madad Invest Bank and Tenge Bank. This can be explained by the fact that these banks have not yet established themselves in the deposit market and, accordingly, they have small obligations to pay interest on the funds raised. Accordingly, their total share in the total volume of term deposits in the sector is 0.16%.

In turn, the five banks with the lowest ratio of interest income to expenses are mainly banks with medium and large turnover, which need to attract a large volume of term deposits and other borrowed

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4/03/2019 Uzbekistan, June 1-30, 2020 page 10 of 22 funds. These are Kapitalbank, Aloqabank, Asakabank, Qishloq Qurilish Bank and Turkiston Bank. Their total share in the total volume of term deposits in the sector is 24.97%.

Orient Finance Bank ranks first in all ratings, although it is not the leader in terms of the above indicators. In particular, the number of users of remote services per branch is 27,807 clients (4th place), and the operating efficiency indicator (CIR) was 34.8% (10th place). However, unlike other banks, Orient Finance Bank does not have a significant discrepancy between ratings in individual categories.

If we consider the top ten of the rating, then banks with the participation of the state share, such as Uzpromstroybank, Ipoteka Bank, National Bank and Asaka Bank, have high indicators in terms of the quality of management (CIR) and the number of users of remote services per branch. This is facilitated by the fact that these banks serve the basic sectors of the economy and large corporate clients. In this regard, they manage relatively large assets per employee, which gives them the opportunity to reduce operating costs, as well as invest in new banking technologies and software products.

Other commercial banks from this rating, such as Orient Finance Bank, UzKDB Bank, Davr Bank, Ipak Yuli, Trustbank and Saderat Bank, differ from banks with state participation in their high ability to generate income, which can be explained by the high margin of loans issued by these banks.

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BUSINESS

Construction of a plant for the production of electric vehicles started in Kokand

The production capacity will be 2 thousand cars per year. Over $40 million will be allocated for the project, including $24 million in foreign direct investment, Spot writes.

In September last year, President Shavkat Mirziyoyev visited the plant. Then it was reported that the estimated cost of a domestic electric car would be $3,000. On one charge, it will be able to travel 150 km.

Launching the production is scheduled for October 2022.

“Shaffof omadli sanoat” is located on the territory of the “Kokand” free economic zone.

“The enterprise was in a quarry. First, we filled a seven-meter trench, now we are starting to build production facilities on an area of 30 thousand square meters,” the head of the company Gofurjon Usmonov said.

In 2019, Russian blogger Alan Yenileev tested Uzbek-made electric vehicles. In the video, Yenileev draws attention to the fact that the car is similar to the Mercedes AMG not only in its badge, but also in the interior and exterior.

kun.uz

Uzbekistan exported gold for $3.2 billion in January-July

In January-July 2020, Uzbekistan exported gold worth $3.2 billion. This is evidenced by the State Statistics Committee data.

According to the committee, the increase compared to January-July 2019 was 95.3%. In January-July 2020, the share of gold in exports amounted to 39.8%.

It should be noted that in recent years, Uzbekistan has increased gold exports. It exceeded $823.9 million in 2015, $738.2 million in 2016, $1.6 billion in 2017, $2.91 billion in 2018 and more than $4.9 billion in 2019.

Earlier, Uzbekistan’s gold export volume for the first half of the year was announced.

kun.uz

Deloitte receives investment advisory license in Uzbekistan

The Capital Market Development Agency has issued an investment consultant license to Deloitte's local office, which will enable the company to provide advisory services on the issue, placement and circulation of securities, analyze and forecast the state of the securities market and its participants, as well as advise companies preparing for privatization or conducting IPO, the CMDA press service informs.

“It is gratifying to see that international consulting companies are showing interest in the capital market of Uzbekistan and their number is growing. This well-deserved attention once again shows that the adopted reforms in the development of the domestic market create conditions for liberalization and increasing the confidence of the international community. Also, the Agency takes an active and principled

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4/03/2019 Uzbekistan, June 1-30, 2020 page 12 of 22 position in attracting all professional participants of financial markets to obtain a license for its financial and consulting activities,” said Atabek Nazirov, Director of the Capital Market Development Agency.

Director of the Agency awarded a license to provide consulting services to the Managing Partner of Deloitte in Uzbekistan Erkin Ayupov.

“Interest in securities as an investment target or raising capital is growing with the development of market infrastructure in Uzbekistan. An investment consultant license will allow our international experts share their professional knowledge and experience in this important area. We are always providing our clients with unique information on those strategies and instruments that help them make the most effective and timely decisions they can. We are sure that together, the Agency for Capital Market Development and Deloitte will be able to further improve the investment sector in our country,” the head of Deloitte in Uzbekistan Erkin Ayupov noted.

With over 312,000 employees, Deloitte has grown to be one of the largest professional services firms worldwide with a presence in over 150 countries. Deloitte offers unrivalled depth, breadth and quality of professional expertise to serve the needs of clients across various industry sectors.

kun.uz

Specialist: Uzbekistan produces 90% of its electricity from gas and coal – few underdeveloped countries has such a poor index

Uzbekistan plans to create a Scientific-practical innovative center of hydrogen energy technologies. This was reported on August 28 at a meeting with experts from the Ministry of Innovative Development and the Ministry of Energy. The center will become an important base for combining the capabilities of scientific and higher educational institutions, conducting research and cooperating with advanced scientific centers of foreign countries. At the event, the head of the Department for Energy Efficiency and Resource Conservation at the Ministry of Energy, Muzaffar Khakimov, highlighted the current potential of the energy sector.

“In terms of energy efficiency, out of 147 countries of the world, Uzbekistan is ranked 74. The economy of Uzbekistan is hugely dependent on natural gas. Ninety percent of the electricity comes from gas and coal.

That’s a poor indicator; only a few underdeveloped countries have such poor index. We do not have the hydrogen potential of other countries. We need to develop cooperation in this area, because in the next 50 years we need to make transition from methane to hydrogen gas. We have such expectations,”

Muzaffar Khakimov said.

According to the data, the center will be established under the Institute of Materials Science. The scientific laboratory Hydrogen Energy will be equipped with special devices and will carry out scientific research on the production, storage and use of hydrogen.

8 billion soums are planned to be allocated for the establishment of the center at the initial stage.

Odilhoja Parpiyev, Director of the Institute of Materials Science, also expressed his scientific considerations. According to him, the use of hydrogen increases the profit several times compared to the use of gas and coal.

“Firstly, hydrogen is environmentally friendly. Second, it is widely available in nature. Its energy properties are three to four times larger than the energy carriers we currently use, such as coal and gas. But the process of producing hydrogen is very complicated. It requires a high temperature. Hydrogen is extracted mainly in two ways. First uses methane, and second – water. The extraction of hydrogen from the

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4/03/2019 Uzbekistan, June 1-30, 2020 page 13 of 22 methane requires a temperature above 1,200 degrees, whereas from water – 1,600 degrees. And to get such a high temperature, you have to use gas, coal or electricity. As a result, four energy units will be used to get one hydrogen unit. It’s very expensive. For this reason, we are offering new technologies. In this process, it is possible to reach such a temperature using solar power,” says Odilhoja Parpiyev.

Today, the share of solar and wind power sources in the country is 0.001%. It is expected to increase them to 13.8% by 2030.

According to the analysis of international experts, the share of hydrogen energy in the world will be 18%

by 2050 and more than 40% by 2100.

kun.uz

Uzbekistan can become a CIS leader in Islamic finance

Despite the fact that Islam is a major religion, the Islamic financial sector in Uzbekistan is still relatively underdeveloped compared to its neighbors, although the country has great potential for development.

This has been acknowledged by experts from major international financial institutions (Islamic Development Bank Group (IsDB), Islamic Corporation for the Development of the Private Sector (ICD), Asian Development Bank, etc.). However, in recent years, some work has been done in this direction in cooperation with international financial institutions.

Small and medium-sized businesses provide 81% of employment in Uzbekistan, and over the past 10 years, they have contributed to the country’s gross domestic product (GDP) growth at an average annual rate of more than 5%. Uzbekistan is becoming the fastest growing economy in Central Asia. Given the need for Islamic finance by small and medium-sized businesses, Uzbekistan was admitted to the IsDB in 2003 and to the ICD in 2004. The mutually beneficial relationship between these organizations and the government has paved the way for Islamic finance to enter the Uzbek market and has taken the first step in this area.

According to a survey conducted by the United Nations Development Program in early 2020 on the analysis of Islamic financial products in Uzbekistan and a relevant survey, the main reasons for not using bank loans are religious beliefs, high-interest rates and the complexity of lending. If Islamic financial institutions are established in the country, the majority of respondents in the above survey noted that they can use the services of these institutions. Even traditional banks have expressed their views on the establishment of Islamic financial institutions in Uzbekistan, the emergence of fair and transparent competition in the financial sector, which will lead to an increase and diversification of investment flows into the country.

Given the high demand for Islamic financial services in the country, the ICD Advisory Group is currently working to open branches of Islamic financial services in 6 commercial banks of Uzbekistan, including Kapitalbank, Trustbank, Asia Alliance Bank, Agrobank, Qishloq Qurilish Bank and Ipak Yuli Bank. These branches are expected to be launched in early 2021. In addition, Aloqabank, People’s Bank, Universal Bank and Davr Bank are working to open branches as well.

Based on the above information, we believe that the comprehensive introduction of the Islamic financial services industry in Uzbekistan will open the following opportunities for the country:

- increasing and diversifying the volume of foreign investments;

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4/03/2019 Uzbekistan, June 1-30, 2020 page 14 of 22 - creation of fair and transparent competition in the banking sector and the opportunity to diversify the assets of the banking system;

- ensuring maximum participation of free funds of the population and businesses in the development of the economy;

- development and diversification of the capital market in the country;

- creating many new jobs;

- increasing the activity in the financial market by improving the financial literacy of the population;

- coordination and modernization of infrastructure in the country through the development of the Islamic financial services industry;

- establishment of new financial institutions;

- contributing to the implementation of the state program to combat poverty;

- creation of a training program in a new direction.

As a result of this work, Uzbekistan will undoubtedly become a leader in the field of Islamic finance among the CIS countries. To sum up, the Islamic financial services sector will be an important factor, and foundation for the bright future of Uzbekistan, which will increase the interest of foreign investors in the country, which reflects the deep roots of Islam in its culture, and the government will take full advantage of this opportunity.

kun.uz

Uzbekistan creates new geological system

President of Uzbekistan, Shavkat Mirziyoyev was presented with the work carried out in the geology sphere. The head of state proposed to increase the scale of geological exploration next year, by identifying new feasible areas and utilizing modern technology.

“We are making up a new system in geology. The purpose is to provide natural resources to our people, create jobs and improve their welfare”, - said Shavkat Mirziyoyev.

The Chairman of the State Committee for Geology and Mineral Resources submitted his report on the works to attract more foreign investors in the development of 20 new fields via online auctions.

The Committee was empowered to conduct exploration of new places and work closely with the private sector in this field. It was stressed to found permanent geological expeditions in each region based on the Namangan experience. The tasks were given to improve the efficiency of use of the subsoil plots and to develop scientific research work on it. The participants were instructed to present a "road map" for the implementation of the planned measures.

www.uzreport.news

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Netherlands to import lemons from Uzbekistan

A videoconference has been held with representatives of the Embassy of Uzbekistan in the Benelux countries and the leadership of New Wave LLC.

During the virtual talks, the owner of the Dutch company Boumanfruits Anton Baumann has expressed interest in promoting high-quality and tasty varieties and types of fruits from Uzbekistan on the European market

Anton Baumann showed particular interest in marketing special lemon varieties grown in Uzbekistan on the Dutch and European markets.

The parties discussed issues of establishing export of Uzbek lemons to the Netherlands. An agreement was reached to send samples of the new crop of lemon in early September this year and to continue negotiations to increase supplies.

Uzbekistan postpones signing of nuclear power plant contract with Russia

Uzbekistan is not yet ready to sign a contract with Russia for the construction of a nuclear power plant (NPP) in the republic. “The parties are still working on a detailed contract,” Sputnik Tajikistan quoted Uzbekistan’s Deputy Energy Minister Sherzod Khodjaev as saying.

In early September 2018, the governments of Uzbekistan and Russia signed an agreement on cooperation in the construction of nuclear power plants on the territory of the Central Asian republic.

Russia’s state atomic corporation Rosatom plans to build a complex of two power units of the 3+

generation with VVER-1200 reactors. The priority site for the construction of the station was chosen a site near Lake Tuzkan in the Jizzakh region.

“I can say that we are at the finish line to discuss all the details of the contract, but are not yet ready for signing,” Khodjayev said in an interview with the online-media podrobno.uz, answering a question about the timing of signing the contract.

The deputy minister said that at the moment the parties are working out the technical and financial details to sign a contract on mutually beneficial terms “without discrepancies”.

Khodjayev noted that the authorities of the two countries do not impose strict conditions on the terms of signing. “At some moments it is better to do it a little later, but on much more attractive terms,” the deputy head of Uzbek energy ministry said.

In February 2019, President of Uzbekistan Shavkat Mirziyoyev approved the concept for the development of nuclear energy in the country for 2019-2029. The document stipulates that the construction of the nuclear power plant is planned to begin in 2022 with a loan from the Russian government.

New Europe - neweurope.eu

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Uzbekistan inks new 20-year, €55.8 million FDA loan to boost hydropower sector

Uzbekistan Energy Ministry announced on August 27 that a 20-year loan agreement, worth €55.8 million, has been signed with the French Development Agency (FDA). The loan facility will finance a series of projects in Uzbekistan’s hydropower sector.

According to Uzbekistan’s Energy Ministry, the loan agreement complements Uzbekistan’s ambitious national energy strategy to generate a quarter of all electricity from renewable sources by 2030, including 3.8 GW of hydro energy. Uzbekistan is implementing several ongoing investment projects to construct new hydropower plants (HPP) and modernise existing ones.

The €55.8 million loan will be used as follows: €46.5 million will contribute to a €52.5 million project to construct a small HPP in Tashkent and assist construction of a small HPP 1A and HPP 2A in the Southern Fergana Canal; €9.3 million will contribute to a €33.95 million project ‘Safety of HPPs’ to be implemented at the Charvak HPP, the ministry said.

Successful completion of these projects will yield production of additional cheap and environmentally friendly electricity, increase hydropower’s share in the country’s energy balance, save fuel resources and meet the growing demand for electricity, Uzbekistan’s Energy Ministry said.

“With the support of international partners such as the FDA, Uzbekistan is making great strides towards its ambitious renewable energy goals for 2030. The Ministry of Energy would like to place on record its thanks to the FDA for their support and their public vote of confidence in its ongoing efforts to reform and modernise the country’s energy sector,” the ministry said.

Feasibility studies for the projects were developed by a consortium of consultants: ISL, IED and R-plus, on behalf of the FDA. Loan contributions will support the purchase and construction of modern technological equipment via a tender process in line with FDA procedures.

The FDA part-financed projects are part of an ongoing initiative by JSC Uzbekhydroenergo, the state hydropower producer and developer, called “Project Factory” promoting the development and implementation of new investment projects based on modern technologies. The total of 23 projects with projected capacity of 907.5 MW, worth $1.37 billion are currently underway.

By the end of 2020, it is expected that seven projects with additional capacity of 118.3 MW will have been commissioned.

New Europe - neweurope.eu

Uzbekistan sets up production of overalls preventing from infection

Uzbek textile sector has begun to produce protective medical overalls fully made of hydrophobic cotton fabric, Uztekstilsanoat Association reported.

The Cotton Road joint venture was the one to propose such an initiative – it developed and mastered the production of these overalls. Innovative technology is developed in Switzerland specifically for the production of active antiviral materials.

Currently, under an agreement with companies CHT Gmbh (Germany) and CHT Switzerland AG (Switzerland), the enterprise has mastered the latest European innovative technology “HeiQ Viroblock”. It

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4/03/2019 Uzbekistan, June 1-30, 2020 page 17 of 22 is an antiviral and antimicrobial technology for producing cotton protective suits saturated with microparticles of silver ions in combination with a special vesicular component.

Silver ions attract oppositely charged viruses and instantly bind permanently to their sulfur groups, then the vesicular component destroys the virus. This new technology allows active destruction of pathogenic SARS-Cov-2 secretions within 5-10 minutes, self-cleaning on clothing, which makes such overalls more effective than those currently in use.

The experience has shown several advantages of cotton overalls over a polymer one. Due to the air- permeability properties, such overalls, while maintaining their protective properties, provide for long-term comfortable work, preventing excess heat. They are beneficial from a financial perspective, as these overalls are reusable and cut costs of production 5-7 times; the cost of a reusable overall, which may be used more than 15 times, is only two times the cost of a disposable one.

kun.uz

A plant for the production of household refrigerators opens

The President of Uzbekistan Shavkat Mirziyoyev got acquainted with the projects of the Technopark organized in Yashnabad district last year. Here, in February of this year, the production of electronic gas meters was launched.

Today the second promising facility has been commissioned - a plant for the production of household refrigerators. President Shavkat Mirziyoyev visited the enterprise and launched production by pressing a symbolic button.

Then the head of state, together with representatives of the public, got acquainted with the technological process. The plant, worth US$51.5 million, is equipped with the technology of the South Korean company "Samsung Electronics". Korean specialists were involved in the installation of equipment and the launch of the project.

The production of refrigerators in our country has been established before. This enterprise is distinguished by the ability to produce high-tech products of a new generation with improved characteristics.

- The former aircraft plant ceased operations and remained ownerless. The measures that we have taken here in recent years are gradually yielding results. Our goal is to provide people with jobs and wages, to produce and export competitive products, - said Shavkat Mirziyoyev.

Thanks to the complete automation of processes, the enterprise is able to release products every 19 seconds. It is planned to export 30 percent of refrigerators with high added value. 1,500 jobs have been created here.

In a conversation with public figures, the head of state touched upon the issues of industrial localization.

It was noted, in particular, that at the end of 2016, about 100 thousand tons of copper were mined, and by the end of this year this figure will reach 150 thousand tons. In the future, it is planned to increase production to 400 thousand tons. As you know, copper is widely used in the manufacture of industrial products. The increase in production will help replace imports and increase the competitiveness of domestic products in the world market.

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4/03/2019 Uzbekistan, June 1-30, 2020 page 18 of 22 The Technopark was established in August 2019. In 2020-2021, it is planned to implement 15 investment projects. It is expected that after their completion, the volume of production by the enterprises of the technopark will amount to 800 million dollars a year.

A number of permissive documents are canceled

In accordance with the Presidential Decree "On measures to radically improve licensing and permitting procedures", from 1 January 2021:

- 37 licenses and 10 permits are canceled;

- 16 licenses and 11 permits are canceled by merging;

- 17 licenses and 13 permits are canceled by introducing a notification procedure;

- the deadlines for processing 14 types of licensed activities and permits are almost halved;

- the procedure for obtaining 115 licenses and permissive documents is simplified.

According to the Decree, licenses or permissive documents issued for an activity (action) in respect of which a notification procedure has been introduced continue to operate, and a notification of the authorized body is not required to carry out this activity (action).

From January 1, 2021:

it is established that when licensing tourist activities, certification of tour operators’ services is voluntary;

canceled:

- the requirement to have documents confirming consent to exchange credit information with at least 10 commercial banks when licensing the activities of credit bureaus;

- the practice of issuing a separate license for branches of legal entities by introducing the practice of indicating the address of each branch in the main license when licensing activities for the retail sale of drugs and medical products by legal entities licensed for this activity, when creating their branches carrying out similar activities;

- the procedure for requesting receipt of letters of guarantee from local government bodies from the applicant upon obtaining a license for the right to use subsoil plots.

Demand in the cement market increases in Uzbekistan in 2020

Starting from February 2020, the selling price of cement began to grow and reached the cost of 619-625 soums/kg in March. This was reported by the press service of the Antimonopoly Committee.

After the announcement of quarantine, due to the Covid-19 pandemic, the price in March fell to 512-523 soums/kg.

Thus, after the easing of quarantine measures, the price of cement began to pick up growth rates again, which is also associated with a decrease in imports in the first half of this year.

The situation with the Covid-19 pandemic undoubtedly had an impact on the import of cement, which in the first half of this year. amounted to 813,000 tonnes or an average of 135,500 tonnes per month, while

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4/03/2019 Uzbekistan, June 1-30, 2020 page 19 of 22 for the same period last year the volume of imports amounted to 1.84 million tonnes or 306,300 tonnes per month.

In order to stabilize the price of cement, the Committee studied the import procedure, as well as held negotiations with large suppliers of imported cement, as a result of which it was established that it was necessary to simplify the import procedure for cement, which was accordingly reported to the Cabinet of Ministers of the Republic of Uzbekistan.

In turn, the Cabinet of Ministers gave an order on 2 July to develop a draft document to simplify the import of cement, which was reported on the Committee's website, which also undoubtedly influenced the one-time drop in the weekly price from 777 to 752 soums/kg.

The adoptation of the resolution of the Cabinet of Ministers on 23 July had an informational impact on the price reduction, which fell from 875 to 784 soums/kg.

The actual action and impact of the decree is observed in an increase in imports to 70-97 thousand tonnes per week and a decrease in the exchange price to 712 soums/kg.

In particular, daily prices were formed as follows: 24.08 - 733.0 soums/kg; 25.08 - 722.7 sum/kg; 26.08 - 705.9 sum/kg; 27.08 - 684.2 sum/kg.

Uzbekistan, Cogetex discuss cooperation issues

On 27 August 2020, with the assistance of the Embassy of the Republic of Uzbekistan in the Kingdom of Belgium, as well as the Uztekstilprom Association, a meeting was organized in the format of an online video conference with representatives of the Belgian company Cogetex.

In addition to representatives of departments and organizations, domestic producers took part in the negotiations: Uztex, Textile Texnology Group, BCT Denim, Bahmal Group, etc.

The parties noted that this event contributes to the further development of bilateral relations in the textile sector.

During the negotiations, the main topic of discussion was the increase in the volume of export supplies of Uzbek textile and garment and knitted products to Belgium, in particular yarn. General Director of the Belgian company Eric Babikoff noted the prospects and opportunities of domestic manufacturing enterprises

As a result of the negotiations, it was decided to establish an operational exchange of necessary information in order to further develop and strengthen bilateral cooperation between the two countries in the textile sector.

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TOURISM AND CULTURE

Silk Road Family Resort in Navoi

The Silk Road Family Resort, located on the territory of Tudakul reservoir of Navoi region, has been opened.

According to the project of a resort that meets high international standards, the total cost of the beach, resort health complex and water park being built on the coast is $6 million.

This eco-tourism facility also includes various additional services such as a beach, a swimming pool, a water park, a mini Disneyland, a hotel with 50 beds, a recreation area, a restaurant, a summer terrace, a spa, a house in nature, a medical corner, a wellness center, a sports house, a parking lot and private water transport, as well as various concerts and show programs for visitors will be organized here in the open air.

Innovative mobile application for tourists

829 sites of tangible cultural heritage of Bukhara region are included in the National list of real estate objects of tangible cultural heritage.

The concept of an innovative mobile application for creation of an information system has been developed at the initiative of the regional department of cultural heritage, which collects geographic information about the location of cultural heritage sites and the search for information about them.

Using this mobile application, foreign tourists, historians, cultural heritage workers and citizens wishing to visit cultural heritage sites can easily reach the desired address without any difficulty.

Culture of Uzbekistan in figures and facts

Culture is the totality of the achievements of humanity in industrial, social and spiritual relations. It manifests itself in activities such as music, literature, art, architecture, theater, cinematography and others.

At the present stage of renovation and modernization of our country, increasing the role and importance of culture and art, educating the younger generation in the spirit of national and universal values has become one of the development priorities.

The State Statistics Committee presented the main indicators demonstrating the development of the cultural sphere in Uzbekistan, the Dunyo news agency reported.

So, in 2019, there were 100 museums in the country and 44 of their branches - 44. The number of museum visitors made up 7.77 million people, almost half of which (45.0%) are pupils and students.

The total number of exhibits in the main fund in museums in 2019 reached 2.06 million units, unique exhibits – 122,900.

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4/03/2019 Uzbekistan, June 1-30, 2020 page 21 of 22 It is interesting that the museum’s exhibits include 24,600 paintings, 56,000 graphic items, 3,800 sculptures, 71,000 objects of applied art, 288,100 numismatic works, 336,800 archaeological items, 250,100 paintings, 277,600 documents and 757,700 other items.

In 2019, the total number of theaters in the country was 50. Over the past 10 years, 8 theaters have been created in the country. 11,142 performances were shown, and the total number of spectators reached 2,646.7 thousand people.

By their genres, theaters were distributed as follows: drama theaters - 25, musical theaters - 7, puppet theaters for children - 7, puppet theaters - 6, theaters for young spectators - 4, opera and ballet theater - 1.

The total number of concert organizations operating in the country in 2019 was 72. The number of concerts organized by concert organizations in 2018 reached 2834, by 2019 their number increased by 29.8% (3681 units). Along with this, the number of listeners in 2019 totaled 2820.9 thousand people.

In 2019, there were 192 culture and recreation parks in the country. At the same time, their distribution across the regions of the republic showed that the largest number of parks of culture and recreation are located in the city of Tashkent - 27 and Andijan region - 27. In Syrdarya - 4 and Jizzakh - 5 regions, the indicators are lower than in other regions.

In 2019, the total number of attractions in parks was 1,726, of which 19.6% are located in the city of Tashkent - 338 units, 13.5% - in the Andijan region - 233 units, 10.1% - in the Samarkand region -174 units, 7.9% - in Surkhandarya region - 136 units and Fergana region - 136 units.

In 2019, the number of cultural heritage sites in the country reached 8208. Analysis of these sites by region showed that the leading places in the republic are occupied by the Samarkand region with its 1607 sites and the Kashkadarya region with 1468 sites.

Over the past five years, the number of films and other film productions has increased by 1.1 times. In 2019, the total number of films and other film products produced was 129, of which 61 are feature films (48.4%), 39 are dubs (30.2%), 21 are documentaries (16.3%), 8 are animated films (6.2%)

Over 100 metal objects found at the archaeological site of Varakhsha

More than 100 metal objects found at the archaeological site of Bukhara’s Varakhsha will be preserved in the laboratory of the cultural heritage, Bukhara regional division of the Department of Cultural Heritage reports.

The National Archaeological Center of the Academy of Sciences of the Republic of Uzbekistan and the Division of the Department of Cultural Heritage of Bukhara region are conducting research at the objects of archaeological and cultural heritage in Varakhsha settlement of Bukhara region’s Jondor district.

Archaeologists from Uzbekistan and the United States (New York University) are conducting research on the monuments of Varakhsha settlement of the oasis, which in ancient times was developed thanks to the waters of Zerafshan, but later became a desert zone. As a result of the excavations, more than 100 metal objects of copper, bronze, silver and lead of the 11th-12th centuries were found. These findings are currently being cleaned of layers of corrosion in a restoration laboratory.

Thus, the study, cleaning, repair and conservation of metal exhibits, divided into several types, related to the history of ancient Bukhara, began.

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4/03/2019 Uzbekistan, June 1-30, 2020 page 22 of 22 Bukhara Regional Department of Cultural Heritage also participates in the research of 287 archaeological sites in the region. Dozens of artifacts found in the area of the historical monument Poykent in Karakul district, or in the ancient Shakhristan of Bukhara, have been restored and transferred to the museum- reserve. Some of the artifacts found are undergoing a conservation process and are being prepared for transfer to the museum after their historical data is established.

Savitsky Museum resumes activity

The exhibition halls of I. Savitsky Karakalpak State Art Museum are opening today.

The museum suspended its activities due to lockdown measures introduced in the country, but despite this, exhibitions were regularly held online.

“Silk Road Dance Camp 2020” starts in the USA

According to the Embassy of Uzbekistan in the United States, yesterday in the American capital, in preparation for the 29th anniversary of the country’s independence, a two-week program for the study of Uzbek dance art was launched - Silk Road Dance Camp 2020, Dunyo news agency reported.

The event is attended by representatives from 10 US states. These include regions such as Virginia, California, Kentucky, Colorado, Louisiana, Massachusetts, Maryland, Ohio, District of Columbia, and Florida.

The program "Silk Road Dance Camp 2020" envisages a virtual tour of the Embassy of our country in Washington, a series of lectures on the history of Uzbek dance, demonstration of pilaf cooking, practical dance trainings in Khorezm and Bukhara regions, presentations of the historical and cultural features of Uzbekistan, a virtual tour of Memorial Museum of Tamara Khanum and other events.

The American co-organizer of the program is Laurel Gray, an internationally renowned scientist, head of the Silk Road Dance Company. In 1984, she founded the Uzbek Society of Dance and Culture, and in 1994 established the annual Central Asian Dance Camp. She was awarded the International Prize for Best Choreography (2003) and Best Ethnic Dancer (1999).

The American scientist has visited Uzbekistan fourteen times, having lived there for two years at the invitation of the State Academic Bolshoi Theater in Tashkent and performed in television dance programs more than ten times. She was also a member of the jury of such festivals as "Raqs sekhri" ("The Magic of Dance") in 2018, "Sharq Taronalari" in 1997, the puppet theater of Uzbekistan in 1993.

In order to transfer the exquisite skills of our outstanding performers, People’s Artist of Uzbekistan Kadyr Muminov was involved in the program, who will pass on the "basics" of traditional types of national dance art to young American choreographers.

The event organized at the Embassy in 2019 was attended by People’s Artist of Uzbekistan Kizlarkhon Dusmukhamedova, who performed national dances "Munojot", "Tanavor", "Intizor", "Star of Bukhara" and others in countries such as the USA, Libya, France, Germany, Tunisia.