Uzbekistan’s Development of Information Technologies Minister Shermatov Sherzod, in an exclusive interview with New Europe during the first Tashkent International Investment Forum, presented different initiatives of his ministry to attract investors stressing some important cooperation projects that could involve Europe and the US.
New Europe: How do you see the cooperation with Europe and the US in your field after the launching of new measures to attract investors of your country?
Shermatov Sherzod: First, if you compare Uzbekistan with other former Soviet Union countries, we have the highest increase in terms of population since the 90′ so this is an advantage, we are a young country and we are at the beginning of a demographic dividend stage where the share of working age population will be the highest compared to young people as well as the elderly. Having said that, we have to use this potential and one of our initiative was to introduce a special tax regime for IT companies, then there was the important initiative to create and develop an IT park. About the tax regime, it is provided to its residents which are not necessarily located in some place but they can have a base all over the country, it is interesting to say that they will be exempted by all taxes and provided with any additional support to expand their business.
Already the number of our IT experts, from many different countries, increased by 76 times since the beginning the Presidential decree. Last year it was 46 million USD and this year we estimated to reach 100 million USD and our goal is to reach 1 billion USD by 2028. Then there is not only IT in our strategy but also the Business Process Outsourcing (BPO), this is an important component that can be used by our EU partners, most of our BPO export goes to the US market. As an example, in the US there are many truck drivers that should be managed by truck operators so these operators are paid a certain amount of money where here these operator are ready to work for a lower wage. If you remotely have 1000 people that makes the difference every month in terms of salary you have to pay.
From this outsourcing system American and European companies can have a big benefit. Because of Covid 19 every company everywhere implemented remote working policies so if your office is located in New York and you have a smart working system it is not a big difference for your company whether you are working from home in New York or New Jersey but the difference in the cost of living will be 500 USD or more. Then there is no difference whether you are in New Jersey or in Tashkent as long as make the job, this was an example of low level job.
For higher level job I can tell you about another example, the accountant who makes the financial reports, this certified job can be done in Tashkent. This is a knowledge process outsourcing then virtually any office job which can be done remotely, it can be done also in Uzbekistan so I’m sure that there are going to be many companies who are really interested in decreasing the costs. Another important issue is that, as a young country, we don’t want our people to go to other countries but we want to outsource our services remotely so this is an invitation to Uzbekistan.
NE: Can you present some of your measures to attracts investors?
Shermatov Sherzod: Uzbekistan is ready to provide important tools, they will not need to invest on buildings, furniture, PC’s; we will prepare a brand new office then they will enjoy free rent for half a year. The only condition to this incentive will be to bring here remote jobs and employ at least 50 people in our rural areas. About IT we have many companies who moved to Uzbekistan and several thousands of IT specialists moved from Belarus and some from Russia as well.
Our IT park can provide very nice conditions, this is good for us because we have lots of junior IT experts who recently graduated and it is good for them because in order to grow to medium and senior developer they need to work on real projects. Companies like Epam, Exadel and others, they brought their experts and senior specialists and for every senior they will take at 3 or 4 juniors so this will drive up our local workforce as well, this should help us to improve our export revenue.
NE: How important for you it will be to increase connectivity and digitization?
Shermatov Sherzod: On connectivity we are working in all fronts, we are trying to change also the environment between operators, we want to increase the role of the private companies as well as foreign companies in the telecom market as well and this will help us to meet conditions to increase connectivity. We have 4G connectivity all over the country and we are working to increase its quality, for that we have a special Presidential Decree which creates favorable conditions to mobile operators. We have piloted several 5G testing places in Tashkent city and we can work together on that but if we will be able to increase 4G speed I think this will be more that enough for most of our business to strive. About digitization this is a tool to cut bureaucracy and our goal is to give he possibility to our citizens and businesses to be able to use all the services using mobile phones so we are moving to mobile E-Government.
Here we are working with the Ministry of Justice who is helping us review all the legislative and bureaucracy base to make sure that we do have up to date legislation, after that we are going to produce all the necessary software solutions. We are also implementing mobile and face ID and all the services which could enable citizens a much better access to e-government.
On cyber or overall security my country is open to cooperate with Europe and US, there are lots of common threats and we have to work together because this requires a global attention. We have met recently in Barcelona, during the Mobile World Congress, with many companies and organizations and during this forum we had also several important meetings.