Small and medium businesses take off
The small- and medium-enterprises (SME) sector is pivotal in developed economies. It saturates domestic markets with consumer goods and services. Small and medium enterprises enhance a country’s export potential, assist in solving employment problems and help people increase their real incomes.
At the outset of its independence, the Republic of Uzbekistan had to address several strategic tasks: gaining energy, fuel and grain independence. Along with this, another important priority was formulated – to saturate the market with domestic consumer goods and services. In this respect, small and medium enterprises were essential to a new economic pattern; their importance could scarcely be overestimated.
By tradition and their history, the people of Uzbekistan are entrepreneurs. For thousands of years Uzbekistan has been located at the crossroads of the most important trade routes of Eurasia. Since time immemorial, the cities of Samarkand, Bukhara, Khiva and Kokand have been famous for their craftsmen and merchants.
On the other hand, high population growth is a demographic peculiarity of Uzbekistan. This means that there are many young people in working age. In this sense, employment of labor-abundant groups is one of the most acute economic and social issues in Uzbekistan. The most effective solution for this issue is to make the development of small and medium enterprises a priority while finding the best possible ways to motivate private entrepreneurs.
The third aspect is no less important. As the greater part of the population lives in rural areas, the issue of employment and earning a proper livelihood is very serious. New jobs should be created in the rural areas and all necessary conditions and guarantees should be provided to ensure the accelerated development of business undertakings. Also, certain incentives should be offered to farmers in order to stimulate the productivity of their farms.
In 1992 Uzbekistan began building the legal framework for private entrepreneurship. According to the constitution adopted in December 1992, the state acts as guarantor of free economic activity and entrepreneurship, of equal rights and free access to material, labor, financial resources and more, and of legal protection of all forms of ownership. According to the constitution, private property is inviolable and protected by the state, along with other forms of ownership.
The presidential decree “On Measures for Further Intensification of Economic Reforms, Protection of Private Ownership and Development of Entrepreneurship” (Jan. 21, 1994) became the cornerstone of the SME legal framework for governmental support and motivation of small and medium enterprises. Another important document adopted on Jan. 5, 1995 was the presidential decree “On Initiation and Stimulation of Private Entrepreneurship.” In recent years the framework mentioned was further enhanced by several laws, including “On Stimulation of Development of Small and Medium Business Undertakings,” “On Chambers of Commodity Producers and Entrepreneurs” and “On State Control of Economic Entities’ Activity.”
In order to further support the small-medium enterprises at the initiative of President of Uzbekistan Islam Karimov an international conference entitled “The role and significance of the small business and private entrepreneurship into the realization of social and economic policy of Uzbekistan” will be held on Sept.12 to 14, 2014 in Tashkent.
The purpose of this event to exchange experiences between participants from many countries on the ways of supporting the development of SME, protecting the rights and interests of private businessmen and creating conditions for free competition and to further the development of SME.