March 1999

By Umida Khaknazar

The Samarkand Region of Uzbekistan is the second largest industrial and agricultural center in the country. The region is home to over 7,000 enterprises and has been actively working to reform its market infrastructure to facilitate increased business activity and foreign investment. In addition to being an economic force in Uzbekistan, Samarkand is a major tourism draw, with a number of well preserved monuments and Silk Road era sites.

Samarkand is one of 12 administrative regions in Uzbekistan. It occupies 16,400 square kilometers and has a population of almost 2.5 million. The region offers a unique combination of geography plains, mountains, and fertile farmland. Although most of the population is rural, there are two major municipalities Samarkand, the center of the region since its founding in the 6th century B.C., and Navoi.

Industry and Privatization
Industry in the Samarkand Region accounts for one-tenth of the total industrial output of the Republic of Uzbekistan. The most important industries in the region include mechanical engineering, industrial, and construction materials, light industry (consumer goods production), chemicals, and agricultural processing. The region has a solid base of raw materials and natural resources to draw on, including large unexplored deposits of minerals. It contains the sole manufacturers of elevators, refrigerators, freezers, tea, and tobacco in Uzbekistan. It also produces the bulk of Uzbekistan's mineral fertilizers, phosphoric acid, vegetable oil, porcelain, and clothing.

In recent years, fundamental economic reforms have laid the foundation for a market economy in the region. A key factor in this reform has been the extensive privatization ofstate-owned enterprises. More than 80 percent of the region's enterprises have begun privatization and over half of these have no government participation.

Foreign Investment
The region has registered 107 joint ventures (JVs), 41 of which currently engage in production or the provision of services. The most notable cases of foreign investment in the region include: Archilik, a Turkish-Uzbek JV that manufactures environmentally friendly refrigerators, freezers, and washing machines; Samarkand-Praga, a Czech-Uzbek JV that produces mineral water; and Jintex, a Turkish-Uzbek JV that manufactures clothing. The region is also home to several small- to medium-sized JVs that produce ice cream, macaroni, juices, and other foodstuffs.

Priority Sectors
One of the Samarkand Region's top priorities is the development of the tourism sector, and a number of hotel construction projects are already under way in the city of Samarkand. The Ministry of Tourism is actively seeking foreign investment in the hotel sector, as well as in other areas of tourism infrastructure. In addition, the region is seeking investment in agricultural enterprises, food processing, and development of transportation and communication infrastructure.

For information on companies in Samarkand, contact Farkhad Akhmedjanov, director general of the Businessmen Association of Samarkand, tel: +998 (662) 33-14-11, 38-40-47, fax: +998 (662) 31-06-24, or Bakhtiyor Saidmurodov, director of the Regional Board of Manufacturers and Entrepreneurs in Samarkand, tel/fax: +998 (662) 26-29-16.
Umida Khaknazar represents BISNIS and is collocated with the U.S. Foreign Commercial Service/ABC in Tashkent.

This report is provided courtesy of the Business Information Service for the Newly Independent States (BISNIS)