The government will issue the Eurobonds not so much to raise funds, but to create a benchmark for the Uzbek market. The funds raised are planned to be channeled into infrastructure projects. Specifically for this purpose, Odilbek Isakov, who has worked for several years in the British bank “HSBC”, has been appointed Head of the Treasury, Corporate (Bank) Debt and Government Debt Management Department of the Ministry of Finance and an Advisor to the Minister.
Korzinka.uz founder - Zafar Khashimov, comments on the statement of investment adviser Rainer Michael Price that after issuing Eurobonds, Uzbekistan may be in crisis in emerging markets.
The entrepreneur called this “utter nonsense” and noted that bonds for $ 300 million and even several times more, could do nothing for the Uzbek economy in either a positive or a negative direction.
“The volume is not at all such that it has any bearing on the course or scale of not only the global economy but also our local economic stability as a whole. Such transactions with hundreds, if not thousands, go daily almost unnoticed on global financial platforms”, said Khashimov.
According to him, the bonds are just a sensor that shows where Uzbekistan's credit rating is on the world financial map. He also noted that this is a very important step and an excellent experience for Uzbekistan if the country has the ambition to become a participant in the global financial market some day.
“Let's put an end to this particular topic of $ 300 million of sovereign Eurobonds. I hope that you do not need to be a Nobel Laureate in Economics or a professor of mathematics to understand the disproportionate marginality of the volume of these bonds in the scale of our country's economy, said Khashimov.
The entrepreneur also commented on Price's words that one of the reasons why the Uzbek sum has not weakened is that the country has virtually no debt and is only now beginning to open its doors.
According to him, to think that financial isolation will save someone from the global crisis is like hoping that not knowing the basics of medicine and avoiding doctor visits will save you from illness.
“The previous leadership of the republic constantly boasted about how our closeness to the global financial markets saved us from the global crises. They have always said loudly that wise economic isolation helps us avoid crises. But as a result, in spite of all these crises, and especially the sharp ones from 1998, 2000, 2008, 2014, our economy nevertheless lags far behind, even from our closest neighbors, who have felt the taste of these crises up close”, mentioned the owner of korzinka.uz.
He explicitly emphasized that, in fact, “incarceration” did not even save Uzbekistan. On the contrary, these crises were felt much more strongly than previously announced, simply because these facts were not acknowledged by the authorities.
Khashimov recalled that, as a result of the crisis, despite all the “incarceration” of [the economy of Uzbekistan], in 2008 the dollar rose on the real (black) market from 1,400 sums to 3,000 sums in a matter of months, which was significantly worse than it was in Russia or Kazakhstan, not to mention Europe, Turkey and other countries.
As the entrepreneur pointed out, if the crisis brought positive notes there, in the form of recovery of promising industries, market correction and optimization, writing off and getting rid of toxic or severely ill elements of the economy, then in Uzbekistan they have pounded these bitter pills, without any benefit or even with no hope of improvement.
Due to this reason, active players in the global economy are instantly shifting to high post-crisis growth, literally like a ball bouncing off the floor, while Uzbekistan's economy has been in constant stagnation and decline, reaching bottom after bottom.
“Therefore, if the global economic and financial crisis is inevitable now, which is also not unambiguous and indisputable, then trying to isolate ourselves by “incarceration” of the economy and locking ourselves is like we are trying to lock ourselves in the cabin of a sinking ship”, Zafar Khashimov summarized.
Uzbekistan has been preparing for more than a year for the release of its first Eurobonds. A consortium of banks, headed by J.P. Morgan Chase, was selected as the chief adviser in obtaining a sovereign credit rating and issuing a sovereign bond emission.
The government will issue the bonds not so much to raise funds, but to create a benchmark for the Uzbek market.
The funds raised are planned to be channeled into infrastructure projects - construction, reconstruction and major overhaul of affordable housing, highways, improved drinking water supply, sewerage, urban improvement, as well as the government programs as “Obod Kishlock” and “Obod Mahallya”.
Specifically for this purpose, Odilbek Isakov, who has worked for several years in the British bank “HSBC”, has been appointed Head of the Treasury, Corporate (Bank) Debt and Government Debt Management Department of the Ministry of Finance and an Advisor to the Minister.