MORE POTENTIAL FOR BUSINESSMEN IN UZBEKISTAN BUT CREATE `STRONG` COMPANY FIRST

By Nor Faridah Abd Rashid

TASHKENT, Jan 8 (Bernama) -- Malaysian ambassador Abdul Aziz Harun sees
more potential for Malaysian businessmen in Uzbekistan as the country starts to
further liberalise its economy to suit international market policy.

He said that at the moment the double landlocked country in Central Asia is
opening up its economy in stages.

"Uzbekistan is doing this step by step. When the country strikes more gas
and oil in the next few years, it will become richer with strong purchasing
power and will liberalise its economy further to suit the international market
policy," said the ambassador to Uzbekistan.

However, he advised Malaysian investors to have a "strong company" first
before venturing into Uzbekistan, a country of 27 million people.

"We try to encourage Malaysian investors to come here, but before you come
here you must first have a strong company. You must strike a good partner too,"
he told Bernama in an interview here recently.

Abdul Aziz said that Malaysia's oil company Petronas, for example, had met
the right partner and was backed by the government.

Petronas, he said, had "made a very good investment, a long-term one and
with sustaining power to make business".

Apart from exporation in oil and gas, the ambasssador said Petronas is also
working at developing the "gas-to-liquids" project with Uzbek national oil
company Uzbekneftegas and Sasol Ltd of South Africa, which is worth almost US$2
billion and expected to be completed by 2013.

"They are working on this and in the process of starting the project. Once
completed and implemented, the project would be one of Petronas' biggest
projects overseas," Abduk Aziz said.

According to reports, Petronas is already actively involved in a number of
upstream ventures in Uzbekistan through the Urga Production Sharing Agreement
(PSA) for the production and development of the Urga, Kuanish and Ackhalak group
of fields and several exploration blocks, namely the PSA for the Uzbekistan part
of the Aral Sea, the Surkhansi Investment Block and the Baisun Investment Block.

Reports quoting the US Energy Information Administration stated that
Uzbekistan (along with Turkmenistan) have large amounts of natural gas reserves
but are constrained by the lack of available natural gas transport
infrastructure.

Turkmenistan exports most of its natural gas production while Uzbekistan
continues to use its production for domestic purposes. Both countries expect to
increase export volumes and diversify routes through recent agreements,
according to the reports.

Abdul Aziz said another aspect to consider in doing business in Uzbekistan
is language. He advised businessmen to set up offices here if they wanted to
conduct business.

"Our weakness is that we cannot speak Russian. If we can speak the language
it will be a great advantage in conducting business. To them, English is an
alien language as they were under Russia for some 100 years," he explained.

Meanwhile, Uzbekistan's Deputy Prime Minister Elyor M. Ganiev, who is also
Minister of Foreign Economic Relations, Investments and Trade, said foreign
investors could invest in other sectors apart from oil and gas.

He said investors could venture into areas like automobiles, electronics,
home appliances, fruit processing and petrochemicals.

Stating that Uzbekistan would like to further expand its economic relations
with Malaysia, Ganiev said to accommodate investors, the Navoi Free Industrial
Economic Zone (FIEZ) was set up in December 2008, the first to be set up in the
country.

According to the "Invest in Uzbekistan" bulletin, the FIEZ located in the
Navoi region was set up in effort to increase production potential, acceleration
of introducing innovative technologies and developing new kinds of products
demanded in the world market.

Benefits of registering businesses in the FIEZ included exemption from land
tax, property, social and infrastructure development.

Businesses here have the advantage to also penetrate other markets as the
economic zone is situated near an international highway, which is the shortest
connection between Europe and Beijing, and railroad with access to the markets
of Central Asia, Commonwealth of Independent States (CIS), Southeast Asia,
Europe, the Middle East and Persian Gulf countries.

Speaking to a group of Malaysian observers, who were invited to monitor
Uzbekistan's Dec 27, 2009, parliamentary elections, Ganiev said there would be
no problem in setting up offices here for businesses.

"There is no problem to set up an office here. If you want to set up an
office in Tashkent, just give us some information about your company," he said
in response to a question from Malay Businessmen and Industrialists Association
of Malaysia (Perdasama) president Moehamad Izat Emir, who was in the four-member
Malaysian team.

The other members were Election Commission deputy chairman Datuk Wan Ahmad
Wan Omar, Asean Law Association of Malaysia secretary S. Radhakrishnan and
senior lawyer Kamarudin Ahmad.

They were part of the 270 international observers from 36 countries deployed
throughout the republic to monitor the conduct and the outcome of the election
to ascertain whether it is free and fair.

Ganiev also told the Malaysian group of observers that almost 100 per cent
of Uzbeks are literate and that education in the country is free.

Uzbekistan, a country of 447,400 square kilometres in size, is surrounded by
Afghanistan, Kazakhstan, Kyrgyzstan, Tajikistan and Turkmenistan. The republic
declared its independence from the Soviet Union in 1991.

It is the most populous of the five former Soviet republics in Central Asia,
and has large gas and oil reserves.

The country is also among the world's top 10 gold producers and the second
largest exporter of cotton, coupled with large uranium reserves.

Uzbekistan's diplomatic relations with Malaysia began in 1992.
-- BERNAMA