The COVID-19 pandemic, which suddenly hit in December last year, radically changed the situation around the world and determined the economic trends of the world economy. The decline in economic activity due to quarantine and border closures leads to stagnation in world markets, which leads, among other things, to a decrease in demand for products from many sectors of the economy, which in turn objectively restricts the possibility of exporting domestic products.
Uzbekistan quickly responded to this challenge – a number of preventive anti-crisis measures were taken. On March 19, this year, the Decree of the President of the Republic of Uzbekistan “On priority measures to mitigate the negative impact on economic sectors of the coronavirus pandemic and global crisis phenomena” was issued. This Decree was followed by several government resolutions, as well as adopted on April 3, 2020 of the Decree of the President of the Republic of Uzbekistan “On additional measures to support the population, economic sectors and business entities during the coronavirus pandemic”.
The diplomatic missions of our country abroad have brought “economic diplomacy” to the first level of priority within the framework of fulfilling the tasks assigned by the above-mentioned documents.
Currently, countries that account for more than two-thirds of the world’s production and income are implementing a policy of epidemiological “containment”, which leads to negative economic consequences. These problems concern all countries, including Turkey, which is one of the four largest foreign trade partners of Uzbekistan. The sharp downturn in the global economy has led to a significant decline in demand and, consequently, prices for raw materials, whose share in exports has declined in recent years, but they still continue to play a fairly important role. Exports of higher-value-added products may also decrease significantly due to the general decline in prices in the global economy due to the global decline in demand.
It should be noted that in recent years, Turkey has become one of the largest export markets for Uzbekistan. Annual export volumes exceeded the $ 1 billion mark (figure). In 2019, the trade turnover between the countries increased by 22.7% compared to the same period in 2018 and amounted to $ 2.52 billion, including exports – $ 1.2 billion (27.4%). Another advantage of Turkey as a major trading partner is that the structure of Uzbekistan’s exports to this country is relatively diversified and does not depend on one or two raw materials positions. Main exports: non-ferrous metals and products made from them (57.1%), textiles (17.6%), food products (8.3%), plastic and products made from them (4.1%), electrical equipment (4.3%), services (4.5%) etc.
Thanks to the emergency measures taken by both sides, significant volumes of bilateral trade have been preserved in the context of the global COVID-19 pandemic.In January-September 2020, the trade turnover between the Republic of Uzbekistan and the Republic of Turkey amounted to 1.4 billion USD, including exports – 650.8 million USD, imports – 783.2 million USD (Figure 2).
It is noteworthy that despite the temporary increase of import customs duty rates on textiles in Turkey, for 9 months of this year, yarn exports increased by 15% compared to the same period in 2019 and amounted to 150 million USD.
There was a significant increase in the export of Isuzu trucks, finished knitted products, dried fruits, nuts, frozen fish, products of zinc, steel and copper rods, distribution boards etc.
In general, the export structure expanded with 13 new products such as medicines, men and women garments, propylene polymers, ferrous metal products, etc.
By the end of the year, the expected export volume is at least at the level of more than 1 billion USD, which is a good forecast, given the forced restrictive measures on both sides and stagnation in the markets. Under optimistic scenarios, the indicators may be even better. However, the strategy provides for making up for lost time in the context of the pandemic in the near future and reaching a new level of mutually beneficial cooperation in the new realities that are being formed in the post-crisis stage of the global economy. To do this, it is very important to ensure that the current positions are maintained under the current conditions, avoid breaking off contacts with importers and prepare for a breakthrough in the development of new markets in Turkey for domestic products in the upcoming new post-crisis period.
An effective strategy and utilized mechanisms make it possible to provide practical export assistance, despite the extremely complex problems that objectively arise in foreign economic relations on an international scale.
In the current difficult conditions in the host country against the background of the COVID-19 pandemic and the restrictive measures taken by the Turkish authorities, the Embassy of Uzbekistan in Turkey is working in an enhanced mode. One of the key tasks of the diplomatic mission in the current conditions is to provide comprehensive assistance to domestic exporters as part of the efforts to mitigate the economic consequences of the spread of the coronavirus pandemic and global crisis phenomena for the population.
The Embassy has developed and is implementing a proactive, comprehensive strategy that includes several components. First, urgent measures have been activated to create favorable political, diplomatic and legal conditions for the export of domestic goods and services. Secondly, systematic measures are being taken to overcome emerging transportation and logistics obstacles. Third, systematic information and analytical work is being carried out to monitor the situation in the host country’s markets in detail, search for new sales markets, and track adverse and positive changes in order to timely predict and respond to the emergence of new risks or benefits for exporters. Fourth, an aggressive marketing policy is being implemented, as well as promoting hard-selling advertising activities to promote goods and services of domestic manufacturers and suppliers. Fifth, an emergency coordination function has been established: the Embassy is actively involved in the process of interdepartmental activities to support exporters in the Republic, works directly with manufacturers and consumers, suppliers and customers, provides practical assistance in establishing contacts, preliminary verification of potential partners, provides translation, protocol services, consular consultations, organizes direct communications, negotiations, including through modern video conferencing technologies. Sixth, a targeted study of Turkey’s best practices in supporting, stimulating and promoting exports is being carried out to further inform relevant institutions of Uzbekistan.
To implement this strategy, the Embassy has established contacts with almost all elements of the national export support system. The diplomatic mission maintains around-the-clock communication with the Department of Economic Diplomacy of the Ministry of Foreign Affairs, as well as practically integrated with the relevant departments of the Ministry of Investment and Foreign Trade of the Republic of Uzbekistan. Close cooperation is being conducted with the Chamber of Commerce and Industry, as well as with key representatives of the country’s regions and branches of the national economy assigned to the diplomatic mission.
All modern political-diplomatic, legal mechanisms, methods of information-analytical and advocacy work, including innovative ones – digital, virtual negotiations, webinars and online communication are used to solve these tasks. Virtual platforms for commercial and entrepreneurial initiatives have been created, including in social networks. For example, a new page “Uzbek-Türk Ticaret” has started functioning on Facebook. The content of this public information resource is updated daily with commercial offers of domestic producers of export-oriented products, creating an additional opportunity for direct dialogue. Open and closed channels on Telegram and Instagram messengers are used to promote Uzbek products and attract more interested customers, including our compatriots who are settled and permanently residing in Turkey.
Another system innovation is the post of honorary consuls abroad, created by the initiative of the Embassy. For the first time, several honorary consuls of the Republic of Uzbekistan in key regions of Turkey from among prominent, authoritative representatives of business circles have been accredited. Thus, the Embassy’s work on practical assistance in promoting exports with the attached regions and production sectors of Uzbekistan continues both in Ankara and in the provinces of Turkey.
Currently, taking into account the quarantine measures in force in Turkey, the Embassy continues the practice of holding regular presentations of the economic potential of Uzbekistan, assigned to the diplomatic mission of regions and industries of our country, for representatives of the provinces of Turkey and potential partners from the Turkish business community, but in the format of video conferencing. Presentations of Uzbekistan have already been held in 37 of Turkey’s 81 provinces. With the involvement of representatives of the private sector, as well as honorary consuls of Uzbekistan, direct meetings and negotiations are held in the “B2B” and “G2B” formats. Based on the results of the presentations, a list of requests for negotiations between Turkish entrepreneurs and representatives of the Uzbek side is formed, for which their visits to our country are planned with an appropriate program of meetings. Over the past 5 months, the Embassy of our country in Ankara has sent more than 1,000 representatives of Turkish business circles and specialists to Uzbekistan on charter flights to organize activities and implement investment projects with participation of Turkish capital and technology.
Another important system mechanism is the institutions and structures of the Cooperation Council of the Turkic-speaking States. Recently, the activities of this regional organization have been intensified in an unprecedented way, thanks to which tasks related, among other things, to the export of domestic products, mutual trade, development of transport links and logistics, and the establishment of direct links between business circles are being solved.
Recently, negotiations were held between the Deputy Prime Minister – Minister of Investment and Foreign Trade of the Republic of Uzbekistan S. Umurzakov and the Vice-President of the Republic of Turkey F. Oktay; the Ministry of Investment and Foreign Trade and the Ministry of Trade of Turkey; the Embassy and the Office of the Coordinator of the Turkish Agency for Cooperation and Development (TIKA); research centers of Turkey and Uzbekistan on the grant project of the Turkish R&D Agency TUBITAK on the use of the latest technologies in agriculture using agroclusters; between the Ministries of Transport of the member states of the Turkic Council and Hungary; Turkish delegation headed by the Chairman of the Planning and Budget Commission of the Grand National Assembly, L. Elvan, and the Chairman of the Board of Directors of Cengiz Holding, M. Cengiz, visited Uzbekistan.
Through the use of emergency political and diplomatic measures, a number of effective bilateral and multilateral negotiations at the highest levels have been organized in a short period of time. As examples it is important to note the extraordinary summit of the Cooperation Council of Turkic-speaking States which was held on 10 April via videoconference, telephone conversations between the President of the Republic of Uzbekistan Shavkat Mirzieev and Turkish President Recep Tayyip Erdogan, held on 22 April.
As a result of political and diplomatic consultations and legal work of diplomats, practical results were achieved:
● granting Uzbekistan cargo carriers the right to enter the territory of Turkey as an exception in the conditions of restrictive quarantine measures for COVID-19 from March 30, 2020;
● cancellation of entry visa requirements by the Turkish side for drivers of cargo vehicles from Uzbekistan;
● cancellation by the Turkish side from April 1 this year unilaterally of fees in the amount of $ 400 for entry into the territory of Turkey for cargo carriers of Uzbekistan;
● granting the right to enter the territory of Turkey for cargo carriers of Uzbekistan without stopping for a two-week quarantine from April 24, 2020, subject to compliance with the established sanitary and epidemiological standards.
of the Embassy of Uzbekistan in Turkey