President Islam Karimov’s Speech at the
International Conference in Tashkent
President of the Republic of Uzbekistan Islam Karimov attended the opening
ceremony of the international conference “Modern housing construction as a
driving force of comprehensive development and transformation of rural areas,
enhancing the living standards of population” at Tashkent’s Palace of Symposiums
on April 17.
Following is the text of his keynote speech.
Dear conference participants, ladies and gentlemen!
It gives me a great pleasure to welcome you, our dear guests, representatives of
prominent international organizations and financial institutions – the United
Nations, the International Monetary Fund, the World Bank, the Asian Development
Bank, Islamic Development Bank, ASEAN, UNESCO and other agencies, the heads of
major companies and leading specialists in the field of housing construction –
all the participants of this conference, and express my deepest respect to all
of you and our sincere appreciation for your participation in the this forum.
Today, there is obviously no need to expound on the relevance of this conference
designed to address the role of housing construction in rural areas, given the
enormous significance this area has been acquiring not only in terms of tackling
pressing social issues, but also as the most important factor contributing to
balanced and sustainable growth of many construction-related industries and the
economy in general.
It is no accident that in the advanced nations, the share of investments into
housing account for between 20 and 40 percent in the overall structure of
investments, according to expert centers.
Housing construction and development of related sectors of economy are one of
the important links in the formation and sustainability of the financial system,
the source of a sound resource base and assets of banks.
In the current context of the ongoing global financial and economic crisis, this
circumstance acquires a particular importance.
It is no secret that one of the major obstacles to recovery from the global
financial and economic crisis, with sufficient provision of loan funds is that
these funds do not reach the end user – the real sector of the economy, despite
the fact that the level of interest rates in the countries-issuers of major
reserve currencies are extremely low. It is hard to believe, but in some cases
these rates reach zero values.
In short, the availability of sufficient loans is not becoming, unfortunately,
an impetus and stimulus for economic recovery due to many circumstances, and in
the first place – the pendency of grave problems that led to the global
financial and economic crisis of 2008.
Under these conditions, housing and concomitant infrastructure - public and
social sector, transport and communications networks, production of modern
building materials and structures - is the direction that can and should serve
as one of the most sensitive and effective areas of application of capital and
investments, and a solution to one of the most intricate and painful social
issues, namely, population employment.
The historical experience of many countries confirms the fact that the choice of
the sphere of housing and infrastructure as a priority development was a key
instrument for national economic recovery.
Thus, during the Great Depression of the 1930s in the United States, President
Roosevelt spearheaded a system of individual housing loans, which played a
decisive role in the resumption of economic growth.
Similar programs in due time in order to stimulate economic recovery have been
adopted in Germany, the UK, the Scandinavian and other countries.
Dear conference contributors!
Before proceeding to the nature and content of the model implemented in
Uzbekistan – a comprehensive program of housing construction in rural areas,
allow me to very briefly speak about issues of concern, the real state of
affairs that prevailed until recently in this critical area of economic and
social development and modernization of the country.
The feature that had characterized this sphere is its almost unmanageable
nature, in other words, unauthorized construction flourished bitterly.
What did it mean in practice?
In rural areas, houses used to be built without master plans for building
settlements, there were no clearly defined standard housing projects, taking
into account the specific natural and climatic features, the national traditions
of the Uzbek family.
Villager is the customer and the developer at the same time, deriving from his
limited capacities, as well as the constant lack of construction materials,
given the virtual absence of rural-developed construction industry, was left to
himself, in other words, houses were built out of scrap materials – usually
bricks of raw clay, without the wooden floors, and asbestos slate was used
mainly as the roof.
In homes built without a master plan, there were serious problems in terms of
maintenance of municipal facilities, water connection, electricity and gas.
All this is not to mention the problems to owners of newly built housing with
providing for healthcare facilities, schools, kindergartens, shops, markets,
access to roads – all the infrastructure that is needed to create normal
conditions and comfort for families.
If we take into account that the rural areas of Uzbekistan are currently home to
about 50 percent of the population, that is, about 15 million people, it is easy
to imagine the scale and scope of the difficult problems we face today in this
Here one must take into account that in the countryside alone, more than 150
thousand families are created in Uzbekistan every year, and throughout the years
of our independent development more than 2 million 600 thousand new young
families have been created in rural areas who are in need of proper housing. In
this regard, the challenge put forth by life itself has become obvious today,
that is, to fundamentally review the approaches that have existed over the
years, as well as methods and practices of individual housing construction in
What are the principal features, urgency and relevance of the individual housing
construction of model projects in rural areas currently realized in Uzbekistan?
One of the important issues that need to be addressed in the first place is the
fundamental review and transformation of the legislative, legal and regulatory
framework for housing development.
Basing on the principle of the inviolability of private property guaranteed by
the Constitution of the Republic of Uzbekistan, in the adoption of the Housing
and Urban Development Code and the Law of the Republic of Uzbekistan “On
Mortgage” and other laws and regulations, we fixed the owner’s right to own and
inherit perpetual dwelling house along with the land on which it is built.
I would especially like to point out that the villagers’ land for individual
housing construction are allocated for free on the rights of lifelong
inheritance, on the rate of 0.06 hectares per household, that the conditions of
our limited land resources is crucial.
In accordance with the approved regulations, the construction of housing estates
in the countryside is based on model projects developed and approved by the
owners simultaneously in conjunction with the construction of facilities
engineering and communication, social and market infrastructure. Prerequisite is
the laying of roads, internal communication networks – water, gas and
electricity from the national and local budgets.
Given the number of people expected to be living in new residential areas,
schools, nurseries, rural medical centers, shopping facilities and sports
facilities are built on standard designs.
The organization and implementation of rural services and new types of
e-services deserves special attention in the development of residential
complexes, along with engineering and communications infrastructure.
What would I like to suggest by this?
The talk is that, together with the construction of new modern homes, the
farmhouse, the rural family welcomes the fresh air of the latest computers,
information and communication technologies, advanced telecommunications, the
What is important is that these types of services that are almost new for rural
population not only meet the needs of people, but at the same time provide jobs
for tens of thousands of young men and women who have received the latest
knowledge and profession in rural vocational colleges.
Can you imagine what that means for our children, for the younger generation? It
is almost impossible to convey it in words.
I want to draw your attention to the mechanism of individual housing loans. The
villager, by having chosen a model project of the home, transfers his funds to
the bank as a down payment of 25 percent of the value of the house with the
provision of preferential mortgage loan on favorable terms – a 15-year grace
period with an annual repayment of debt at a reduced interest rate of 7 percent,
well below the rate of the Central Bank, established at 12 percent per annum.
For the implementation of the works on the construction of private housing in
the countryside, a holistic institutional system is created.
Design of model homes, development of a plan of integrated development of
residential areas, the construction of social and engineering infrastructure is
entrusted on the specialized design and survey institute Qishloq Qurilish Loyiha.
It also performs supervision over the construction process.
Loans funding the construction of individual housing on standard designs are
provided by the Joint-Stock Commercial Bank Qishloq Qurilish Bank specially
created for these purposes, the authorized capital of which to date has reached
the equivalent of about 130 million US dollars.
For the period the bank has existed, which is 4 years, they have issued 23.6
thousand rural mortgage loans worth over 677 million dollars in equivalent.
Bank loans are not only for the population, but also for construction companies
who are erecting housing and industrial and social infrastructure in rural
areas, as well as manufacturing companies that produce new advanced materials
and structures used in rural construction.
In the implementation of the programs of individual housing construction in
rural areas, actively involved in the country are other banks, too: the National
Bank for Foreign Economic Activity and the Ipotekabank JSMB.
All works on the “turnkey” construction of housing on model projects is provided
by the specialized engineering company Qishloq Qurilish Invest with branches in
every region of the country, which acts as a single customer, and ensures the
implementation of a common policy on building high-quality residential areas in
At the same time in the regions of the country we have created more than 900 new
specialized construction contracting organizations which today employ about
20,000 construction workers, and more than 60 enterprises for the production of
modern building materials and constructions, wood floors, window frames, roofing
materials, etc. An extensive system of privileges and preferences has been
created for them.
Villagers – developers of residential homes through the loans of the Qishloq
Qurilish Bank are exempt from income taxes to repay the mortgage loan and
interest accrued thereon. In addition, they are exempt from paying property tax
to the acquired property until their mortgage is repaid in full.
The engineering company Qishloq Qurilish Invest, contractors and specialized
enterprises producing construction materials involved in the construction of
housing in rural areas are exempt from the payment of all taxes and mandatory
contributions to state funds, as well as customs duties for imported
construction equipment and minor mechanization tools.
As a result, it has been possible to significantly reduce the cost of new
housing to the villagers, one square meter of which today costs an average of 2
times lower than the cost of housing in the cities.
I want to draw your attention that just as a result of the implementation of
special programs for housing of model projects in rural areas in 2009-2012, 650
new rural residential areas have been created in 159 rural districts of the
country, more than 23.6 thousand individual residential buildings with a total
area of 3,2 million square meters have been commissioned. For these purposes the
equivalent of over 1.2 billion dollars of investment has been assigned. 732
kilometers of paved roads, more than a thousand social and market infrastructure
facilities have been built.
The extent of rural population access to clean drinking water from centralized
networks is currently 75.8 percent and to natural gas is 76.2 percent.
Large-scale construction of housing in the countryside in the growing volumes is
envisaged to be implemented in the current year. Already started and is actively
under construction are the 353 rural quarters, which provides for 10,000
comfortable homes on standard design on the area of 1.4 million square meters,
17.5 percent up from over last year, more than 300 kilometers of water networks
and more than 280 kilometers of power networks are to be introduced, about 240
kilometers of access roads to be laid, a broad network of social and market
infrastructure is to be built. For these purposes, a total of about one billion
dollars of investment is to be channeled in 2013.
With the increase in rural construction, the modern construction industry and
new jobs are being created in rural areas, the employment of population is being
ensured with steadily increasing incomes and wealth.
Particularly valuable for us is the fact that on the basis of a new class of
property owners created, the appearance of the village is dramatically
transforming before our eyes, the public culture is growing, lifestyle is
changing, so is the mindset and mentality of the citizens of the country.
The subject of our pride and joy is the new generation growing in the new modern
context, a new generation of harmoniously developed, educated,
independent-minded children free of all the prejudices of the past, confident in
One can in fact be proud of this kind of generation and build the most daring
plans with it.
With great satisfaction would I like to note that in the implementation of
programs for individual housing construction in rural areas reputable
international financial institutions and organizations have been taking an
active part, such as the Asian Development Bank and the Islamic Development
Bank, the World Bank and others. In 2011, the Board of Directors of the Asian
Development Bank approved the Multi-Tranche Financing of the project
“Development of housing construction in rural areas in Uzbekistan” for a total
of 500 million dollars, of which the first tranche of 160 million dollars was
allocated in 2012, and the second tranche of the loan amounting to 200 million
dollars will be transferred this year.
Taking this opportunity, I would like to express my deep gratitude from this
podium to the leadership of the Asian Development Bank and other international
institutions for their invaluable support afforded to the implementation of this
strategic task for us.
Dear participants of the conference!
Ladies and gentlemen!
The program of individual housing construction in rural areas developed in
Uzbekistan, and our understanding of it would not be complete if we were to
consider it in isolation from the tremendous process of democratic changes and
renewal taking place in our country.
Today, we can confidently say that the dynamic progress of Uzbekistan on our
chosen path of formation of socially oriented democratic state, deeply thought
out and consistently implemented priorities of political, economic and social
reforms, the choice of an evolutionary, gradual transformation strategy have
created that solid and reliable foundation which serves to secure sustainable
and dynamic development of the national economy, ensure consistent growth in
incomes and living standards, the growing international prestige of the country.
Let me cite some figures in this regard.
Despite the global financial and economic crisis, Uzbekistan has been one of the
few countries in the world to achieve sustained high rates of growth. Only in
the last 6 years, the annual rate of GDP growth has amounted to 8 per cent, with
stable government budget surpluses and sufficient foreign reserves, external
debt remains low, which does not exceed 12 percent of GDP.
A characteristic feature of the state budget continues to be its social
orientation. About 60 percent of all government spending is directed to the
funding of social development, including more than 34 percent to education, more
than 15 percent the sphere of public health.
Reliable and stable has been the financial and banking system. Today the capital
adequacy of banks is 24 percent, which is 3 times higher than the accepted
international standards, and the liquidity of the banking system on the basis of
2012 figures is more than 2 times higher than the required minimum level.
Every year, hundreds of large investment projects are realized to create new,
modern production facilities, modernization and technological renovation of
Compared with the year 2000, annual investment in the country has increased 4
times in the past few years at an average of at least 12 billion dollars, of
which almost 78 percent, please pay attention to it, funded from internal
sources, including 21 percent of total investments are formed by the deposits of
Thus in 2012, more than 22 percent of all investments, or more than 2.5 billion
US dollars was made up of foreign investment, of which about 80 percent is
foreign direct investment, which demonstrates the growing confidence of foreign
investors in Uzbekistan, to the conditions created here for doing business.
The amount of savings in banks in the year 2012 grew by 35 percent, and against
2000, they increased 60 times.
We established the Fund for Reconstruction and Development of the Republic of
Uzbekistan, the capital of which has now reached 15 billion US dollars.
All of this is yet another confirmation of solid progress being made in
Uzbekistan on the way to further our goal, that is, to join the ranks of modern
democratic and economically developed countries, to provide its people a decent
standard of living and a worthy place in the world community.
We are well aware of the fact that in the present forum it is hardly possible to
completely and exhaustively discuss all questions submitted for consideration,
to cover all aspects of this multifaceted topic.
In forming our strategy of further bolstering housing development in the
countryside, it will be a very useful and important for us to hear the comments
and suggestions made by the participants of the conference in view of the
valuable experience gained in other countries.
I would like to emphasize that Uzbekistan is interested in expanding cooperation
with all international organizations and financial institutions, foreign banks
and companies, scientists and experts in the implementation of the task, namely,
a radical transformation of the village, a further gradual increase in the level
and quality of life of the rural population, approaching the standards of
In your face, our dear guests and participants of the international conference,
we primarily see people genuinely interested in the success of the ongoing
reforms in Uzbekistan and the modernization of the country, and I take this
opportunity to once again express my great respect and sincere appreciation.
I wish all participants a fruitful and creative work and a pleasant stay in the
hospitable land of Uzbekistan, a sound health and every success in your jobs.
Thank you for attention.