February 16, 2005, Tashkent, Uzbekistan
– Today it takes, on average, only 16 days to register a business in Uzbekistan
under the new “One Window” registration system, down from 31 days
in 2001. The number of inspections of businesses by government authorities
has also dropped substantially, to 1.9 per firm now versus 6.2 in 2001;
this has reduced the “time tax” on businesses by two-thirds, in terms
of working days, since 2001. These are some key findings of a survey of
2,500 Uzbek small and medium enterprises conducted by the International
Finance Corporation with funding from the State Secretariat for Economic
Affairs of Switzerland (seco).
The improvements in the business environment reflect the reforms undertaken
by the Uzbek government, which introduced the new business registration
system in 2003 as well as streamlined business inspections procedures.
IFC’s surveys and advice have played a key role in the reforms.
The survey, Business Environment in Uzbekistan as Seen by Small and
Medium Enterprises, is the third annual survey that IFC and seco have
conducted in the country. The surveys look at regulatory issues from the
viewpoint of local entrepreneurs and provide first-hand information on
administrative obstacles they face, allowing the government to make better-informed
policy decisions and monitor the progress of reforms. Meanwhile, IFC has
drawn on international best practices in business regulation to provide
policy recommendations to the government. To date, the Uzbek authorities
have taken 18 of IFC’s recommendations into account in implementing reforms
of registration, licensing, taxation, foreign trade, and issuance of business
While the Uzbek government has undertaken a number of initiatives to improve
the country’s business climate, the survey of entrepreneurs points out
areas that still need to be addressed.
· The share of enterprises investing in growing
their businesses has declined dramatically, from 53 to 19 percent.
· Frequently changing tax legislation and a
lack of transparency in calculating and paying taxes continue to create
major difficulties for 57 percent of entrepreneurs.
· Despite progress in reducing the number of
inspections per business, the inspection authorities still wield excessive
powers that could significantly restrict the ability of entrepreneurs to
IFC will continue to work on improving the country’s business inspections
regime. Specifically, in 2005 IFC will assist the Uzbek Sanitary and Fire
Inspectorates to update their internal guidelines and regulations and to
develop practical checklists for use by inspectors during site visits.
The International Finance Corporation (IFC) is the private sector lending
arm of the World Bank Group. The mission of IFC (www.ifc.org)
is to promote sustainable private sector investment in emerging markets,
helping to reduce poverty and improve people’s lives. IFC finances private
sector investments in transition and developing countries, mobilizes capital
in the international financial markets, helps clients improve social and
environmental sustainability, and provides technical assistance and advice
to governments and businesses. From its founding in 1956 through FY04,
IFC has committed more than $44 billion of its own funds and arranged $23
billion in syndications for 3,143 companies in 140 developing countries.
IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its
own account and $5.5 billion held for participants in loan syndications.
The State Secretariat for Economic Affairs (seco) represents Switzerland
in multilateral trade organizations and international negotiations. It
is also involved in efforts to reduce poverty and help developing countries
with transition economies build a sustainable democratic society and viable
market economy. Each year Switzerland spends about 1.7 billion Swiss francs
on economic development and transition assistance to developing countries.