During the years of independence, it is worth mentioning that a stable legal framework was established, which ensuredprivileges of private property and the basis of the market economy in Uzbekistan. When developing small business and private entrepreneurship, favorable entrepreneurial environment and legal security guarantees have been created and it is considered an important factor to form the middle class property owners, to develop country’s economy in a stable way, to creating new job opportunities, and to increase people’s income.
Legal guarantees have been created in such sectors of the economy as private property, small business and private entrepreneurship. [5] For example, President’s decree «On the measures of providing credible protection of private property, small business and private entrepreneurship, and overcoming the obstacles in the way of development», serves as the basis of development. [10] According to this decree, small businesses will enjoy the right to have following benefits:
− prevention illegal interference in entrepreneurial activities and improvement of the level of criminal liability for the violation of the rights of private property owners;
− guarantees for the protection of private property;
− registration and licensing of all types foreign economic activities related to the implementation and further simplification of procedures;
− in order to create necessary conditions and opportunities for the development of entrepreneurship by assisting with financial resources and improving loaning system;
− by accomplishing these stages, creating appropriate business environment. [7]
The banking and financial system, the formation of a favorable business environment for small business development and providing greater freedom to the wide range of measures have been implemented. As a result, the volume of credits allocated to the sector in 2013 increased by 1.3 times and 9.2 trillion as of January 1, 2015. soums (Figure 1).
Figure 1. Loans to small business and private entrepreneurship (Jan 1, 2014 – Jan 1, 2015)
In particular, micro-loans account for 1.9 trillion soums and that trend increased by 1,4 times compared to 2013. Commercials banks supported women’s entrepreneurship with loans in 2013 which increased by 1,4 times and accounted for 960.2 billion soums. Furthermore, banks persuaded young people especially graduates of vocational colleges to pay attention to financial projects to support seriously. In particular, in 2014, 200.9 billion soums was allocated to this aspect and in 2013, this figure increased by almost 1,4 times. (Figure 2)
Figure 2. Loans to graduates of professional colleges (Jan 1, 2014 – Jan 1, 2015)
That is one of the main reasons why a special attention has been drawn to the development of small businesses and private entrepreneurship in market economy. Small business enterprises are supposed not only to require much financial resource in the conditions of capital deficiency but it isalso quickly adaptable to immediate changing consumer demand, consequently it maintainsnecessary balance in a consumer market.
The development of small business in our country is definitely a worthy situation. However, the vast majority of running small businesses comprise of commercial and restaurant businesses, which is more disadvantageous compared to more profitable production business. It is generally understood that it is more effective to direct newly organized businesses to production of goods and services. It is vitally important to further develop production infrastructure of small business and private entrepreneurship in the country sides of our country where there are sufficient human resources.
If the development starts mainly in such spheres as hydraulic engineering, irrigation, energy sector, watering lands, planting long term seedling, setting up processing enterprises in industry, providing them with modern equipment, it will serve as the basis of development of small business and entrepreneurship in the country side.
If the activities of small enterprises, which are processing raw material to produce ready made products, are developed then it will lead to:
- firstly, meeting consumer demands of citizens;
- secondly, considering the fact that this sphere requires more human resource than other spheres, then it will help with current unemployment problems.
It is vitally important to create necessary conditions for light industry enterprises to be set up and develop eagerly. Also other important factors are to increase the efficiency of the use of cotton and other raw materials, to equip enterprises in this sphere with modern technology, to attract more foreign investment, to pay special attention to the site where they are organized, that’s to say, to organize these enterprises in more populated areas.
In the sphere of light industry, the improvement of quantity and quality of the products directly leads to the development of competition in this field. Fair competition in society has much chance firstly to solve many social problems while developing, secondly to extend choices of products and services, and allows people to purchase especially necessary products.
Business is an event, which influences our life of the state and society. Generally in our minds and practice, this field of activity does not only concern productions of goods but it involves industry agriculture and attract investment for construction as well.
If we take into consideration the relationship of business in all sectors of society, its development and for improvement it must be economically and closely linked with the production system. It should be provided with a planned economy to demonstrate material and financial resources, scientific and technological achievements, which are normally used efficiently, additionally labor productivity should have a significant impact on the growth.
Democratic reforms and economic liberalization in the context of effective measures of the entrepreneurship of Uzbekistan’s socio-economic development of the system should be considered as a valuable opportunity.
Despite the state support of small business and private entrepreneurship, the formation of a competitive environment in the world experience is rich and diverse; there are differences in mechanism for the implementation of this process in terms of methods and tools.
By learning this experience, it is one of our key responsibilities today to use efficiently positive aspects and specific features of this experience in structural changes of the economy.
The experiences of developed countries show that small businesses have tendency to become stronger to create new job opportunities than larger enterprises. The low capacity of small businesses in the capital is able to create new jobs quickly. The amount of small business enterprises recruit of labor force was done effectively and the hiring of labor is explained by the prevalence of the flexible conditions.
In addition, the state creates the conditions necessary to engage in the private sector and the population of small business, and creates opportunities to show their hidden talents. What’s more, it helps with the cut of their dependence mood and reduces dependence on the state budget.
Primarily, in the formation of a competitive environment,it is vital to stimulate competition for all enterprises, guaranteeing their economic freedom to create a legal and regulatory framework in other words creating a legal system. It is also important to run the financial and credit policy appropriately, and form a mechanism to ensure thatcertain market share is provided for small and medium-sized enterprises.
From the world experience it can be seen that the competitive environment in the economy of developed countries was preserved and the effective functioning of the mechanism of competitionand the creation of a favorable macroeconomic environment for private enterprise was aided in wide range by the government.
Creating a competitive environment in light industrial sector of national economy and accomplishing activities in this field is necessary which include following activities:
− Support priority sectors of the industry and influence structural changes in the industrial complex;
− Support national producers and protect domestic market by government;
− Support domestic producers by improving system of marketing;
− Create competitive environment and establish international certificates;
− Aid improvement of market infrastructure through perfected system of quality and standard assessment;
− On the basis of using the means of economic, legal and political ways, running the state politically to increase the level of competitiveness.
References:
- Golish L. V. Introduction to Technical Training in Economic High School. Training Seminar Materials. (Book 2). T.: TSUE. 2006.
- http://finance.uz/index.php/uz/uzm-ekonomika/
- http://uz.denemetr.com/
- http://uza.uz/oz/documents/
- http://bdm.uz/ru/birjaexpert/
- http://lex.uz/
- http://cbu.uz
- http://tashkent.uz
- Oqyulov О., Kamalov B., Ibragimov O. Small business and private entrepreneurship (training manuals). State Police Academy. T.: 2013.
- Providing credible protection of private property, small business and private entrepreneurship, presidential decree on the measures of overcoming the obstacles in the way of development. Collection of Laws of the Republic of Uzbekistan. No. 20. Article 251.2015.
