Would Investors invest if we had free access to FX?

[Yozuvchi]

I will not repeat all those issues related to Foreign Exchange market liberalization in our country.

I was just wondering, Would Investors invest if we had free access to Foreign Exchange, i.e. would they invest if there is no convertability problem? Would we, uzbekistan people, really benefit from those investments in the long-run? What kind of investments would they be? Would it be long-term or short-term investment?
Dont you think, investors would try to make as much profit as they can in this not-well-functioned market, take their $$$ and leave the country without bringing any benefit, except selling their stuff to local people? Do you think, if this is the case, Foreign reserves, comprised of mostly export income from cotton sales, would decrease substantially?

Maybe these questions are too much to ask from the first time, so I may post other questions later.

Just discuss these issues as much as you can...

[Royal]

Yozuvchi,
I was just wondering, Would Investors invest if we had free access to Foreign Exchange, i.e. would they invest if there is no convertability problem?

I do not know Your knowledge regarding the business of the Afghan-Uzbeks conducted in UZB ? do You know they monthly (notyearly) financial turnaround ?

Yozuvchi,
Would we, uzbekistan people, really benefit from those investments in the long-run?

Of course, but depends who ? how ? majority of oficial komitie officers would get sucking to it ?

Yozuvchi,
What kind of investments would they be?

Could be just General trading Not like a CASE.

Yozuvchi,
Would it be long-term or short-term investment?

Of cource they try to sty to lst drop of blood.

Yozuvchi, Would it be long-term or short-term investment?

That up to the Judge.

Yozuvchi,
investors would try to make as much profit as they can in this not-well-functioned market, take their $$$

That 100% right , I think UZB officials also agreed with You allready .

Yozuvchi,
leave the country without bringing any benefit, except selling their stuff to local people?

Judge will decide to where send them to have better benefit of them.

Please, accept my appologies for my sarcazm, just came up, becose long time I did not type so much . Put the DOPPI on the table and think , What You looking for is upside down ? You did not thonk so ? As LENNIN say Government is like one Family (aha!) . If in the family 5 kids and only Father of the kids working ,in one day Wife says I would like to purchase mink coat for $$$, husband could say hold one wife, we have limited funds only I work and our familiy has 1 income, You don't work, kids are Young, lets calculate the our expences and lets find out after our savings when we can able to purchase the You mink coat. If the family dosn't make money how they can purchae anything .

Same as here Your issue, that Goverment try to (allready) to get loan (multy millions) to stabilize SOM to be convertible to HARD currency, as You mention that TAKING they $$$ out, off cource if not they should be idiots why, becouse there allready bunch a idiots ruling, (no offence) . During the 11 years how many successful industrial products produccers You know, just don't tell me about CASE, I remember that once IAK decided to visit the production site or would like to see thet tractors work in the cotton field/farm and under new project LOCALIZATION off supply to the producers (something like that) CASE order 10 cotton picking machines BUNKERS , that everyone knows that bunker means simple square box with own measurements and certain specifications, that could be done any one (if some one pays even alkash SEMYON in garage facilitry could do it), but what our people did it everything been denied becouse all of them was 10 different sizes and specifications, defenetly through this, job lots peoples summer houses walls bean done. CASE ordered to deliver those BUNKERS from ISRAIL on the plane.

INSOF bersin hammasiga. Ishlab chiqarishni yolga qoyilmasa va uni jahon bozori chiqarilmasa unda ancha qiyin boladi. hoto bolsa kechirasiz. Hurmat bilan.

[CrazyDT]

For investors to invest their money/capital into any country there has to be economical stability in that country first. The absence of it, there will be a little effect from having full convertibility of currency. I'll explain to you what I've said. Investors look into 2 things: risks, and payoffs. Investors work on these 2 frontiers. If there are higher payoffs, investors are willing to afford higher risks. Looking at Uzbekistan’s situation you can immediately tell there are super high risks, and low payoffs. Attracting investors is very competitive business. It's not enough to go on TV, and say investors are welcomed in Uzbekistan. Opening up exchange would only solve a fraction of a problem. There are many countries that have a readily available exchange but the rates are very unstable. Especially, with our record in Uzbekistan it will be super hard to convince investor of presence of exchange in the future. Everything works like business models, and Uzbekistan is not an exception. Only long term stability will ensure long term investments. Businesses aren't charities. It's a two way relationship. One side has to do its job, and other its own job. So, far Uzbekistan is failing to do its job.

And for those who are afraid to jump to cold waters, I could this. We,mean the government of Uzbekistan, need to do the right thing. We should not ignore of the recomendations of IMF, and other reputable advisers, that are so willing to provide their help. Please, take a look at other countries. We're in many respects are same. There is nothing different about us, expecially the mistakes commited. These mistakes could be avoided.

:!: :?: :idea:

Related articles:
http://www.eurasianet.org/departments/business/articles/eav031903.shtml

[ICQ]

Investers will invest if you strong friend such as America!
If you are enemy with America you will live in shit such as North Korea, Cuba, Iraq..etc!

[CrazyDT]

ICQ: 6f88a287, friendship would do nothing economically to Uzbekistan. These countries you've mentioned are sanctioned by international communities with big US influence. The science of economics has to be applied not alchemy!

[Prianik]

I was just wondering, Would Investors invest if we had free access to Foreign Exchange, i.e. would they invest if there is no convertability problem? Would we, uzbekistan people, really benefit from those investments in the long-run? What kind of investments would they be? Would it be long-term or short-term investment?
Dont you think, investors would try to make as much profit as they can in this not-well-functioned market, take their $$$ and leave the country without bringing any benefit, except selling their stuff to local people? Do you think, if this is the case, Foreign reserves, comprised of mostly export income from cotton sales, would decrease substantially?


I'll give u very simple illustration:

suppose an investor comes with 10 mln bucks to uzbekistan, he estimates an annual sales of $2 mlns. and with an assumption that the profit margin for the project will be 25% of annual sales investor has to stay in the country for at least 25 years to get his money back. at the same time he pays his expences, 75% of his sales figure in the country (tax, labour...). So ask again urself, do we benefit from such investments? Yes we do. not only in financial terms, but also in know-how which is becoming more important.

but those who are just interested in selling good in uzbekistan should be discouraged to do so by increasing custom taxes, as was in the case of Japanesse car makers in the US market, an agreement was reached on car sales to the US between car makers and government and government insisted them to set up the factories in the US.

All we have to do is adopt simple and FAIR rules and sitback and wait for money flow into the country. why would the want to come to uzbekistan? because they are desperate, desperate for markets, faced with mature markets at home and in their present locations, when there is alomost no room for improvement, no ideas that can bring mega-bucks, everything is too perfect. Whereas in uzbekistan and in former USSR in general, all they (investors) have to do is take their home-tried-and-tested concepts, make few or no changes and apply them in new market. or at least they can come to uzbekistan to for a cheap labour. China is no longer cheap now.

The important thing goverment has(d) to do is (was) to attract as many investors as their asses can resist so the investors can employ local people, so there will be middle class, so they can buy more expensive good, so big companies can come, because local people now can afford luxury goods, and after a while locals start exporting to the country of the investor themselves till it will be no longer feasible for the investors to maintain production in uzbekistan, because everything looks more expensive than in the country of the investor and then he shuts the factories and goes back to his country and starts production there and so on and on the cycle continues.... did u get this? that's why US is the biggest consumer economy. They are still rich and can afford the luxury of not producing locally.

unfortunately, goverment has failed to establish simple things that could lead all of us to prosperety of the country. convertability as it was mentioned is one of many things that refrain investors from investing. Reserves will decrease of course. u see it's like gambling. we, risk with our money from export of natural resources by letting investors taking money from uzbekistan (but are they really pulling the plug?!? read the aboove illustration). But if they are pleased they will stay here, they will recommend to the other businessmen, so others come and do business here etc. and again the key here is government with its accurate and targeted policies.

[Royal]

Dears,

Please, You are trying to think like programmed robot, why? becouse You are also trying establish the business to trade to Your own people, if the people in UZB is not getting any salary to whom You are selling the Your goods, As I say before in other places Uzb , spousably start to protect and support export industry, in UZB plenty Heavy, Light industrial factories and they products are very competetive in world market ( old verb: if marketed right way You can sell it DOG SHIT).

First of all re-wright the all the law with pen.

Just access to FX will not give anything , with what You are thinking to cover FX funds/budget, again loan from IMF, WB and from other financial structures.
Whatever loans You may get, will be socked up in 2 month, if they work slowly, otherwise 24 hours.

By closing the FX they think demand to FC would be dropped, of cource NO DEMAND - NO SUPPLY. You can not rely always only on GOLD, COTTON, GAS or other NATURAL SOURCES.

[Prianik]

hm...yahshisi uzbekcha yozing. nima demokchi ekanizni tushunish juda kiyin.

[CrazyDT]

Royal: 2760655f, you would sock up the funds, if only you have under priced exchange rate. At this point of talking, there is not real market price for uzbek som, because there isn't any market currently for it; it is regulated by the central bank. And the exchange rate has always been under priced to subsidies the imports (make cheaper). Of course these import goods aren't available to everyone, only to the government. That's why you would lose your entire fund immediately under very low rates, because it's worth much much higher, even higher than black market's. There is a very simple economics to it (demand and supply); you could easily have the quantity demanded decreased by increasing the price. We SHOULD NOT be afraid to jump into cold waters. The government would always find any excuse to have control exchange rate. My claims are well supported by IMF. Try to read their 500 page recommendation. And for the past 5 years they’ve been ignored.

[Royal]

Are You trying to use commodity manipulating techniques in Your market ?
with Your offered technique: You could easily have the quantity demanded
decreased by increasing the price.
DO THEY DID NOT DO simular type THING before & SCREWED UP. That techniques are doesn't work always. Could work for very short time only.
And how this pourposal should help to marketers, local business people, enterprizes and etc... this techniques could only stabilize som in the market thats all. I am talking about to FX with out loans from outside. Proper taxes, proper coordination on funding of commercial entities.

"And the exchange rate has always been priced to subsidies the imports (make
cheaper)" From bunch gets to it only one or two to that "honey", others gets
bankruptsy.

Yes, You may say business is business stronger eats the weaker.
Lots others , to say but I do not know , becouse this is like a chaine, but "chaine is broken in every ring".

[CrazyDT]

Royal: 2760655f, Are You trying to use commodity manipulating techniques in Your market ? with Your offered technique: You could easily have the quantity demanded decreased by increasing the price.

No I meant, to increase the price of an exchange rate, so the demand will decrease for it to help to manage the foreign exchange funds. This will no way hurt any market. Foreign exchange will be available to anyone who wishes to purchase, however it will come at a higher price as it should. Eventually, central bank can stabilize the flow. Sooner or later this will have to be done. And this has to be done carefully with the help from others to minimize an overall transition shock.

Loans are helpful only in crisis situations, which I'm sure the country will have, but no single country should rely on it entirely otherwise other kind of crises will spiral


Yes, You may say business is business stronger eats the weaker.
Lots others , to say but I do not know , becouse this is like a chaine, but "chaine is broken in every ring".


I'm with you on it. And that's why we need carefully plan it, and execute it very soon. I don't think the government is working on it. It refuses to take any kind of action. I'm sure this cannot go longer. In consequences, it'll snap.

[Royal]

CrazyDT , Your avatar is : Malekiy chertyonok. Tebya nravitsya bit malenkim
chertyonikom. Sorry, that was not my business, just came up.

Asosiy maqsadinglar faqat pulni boshqarish va pulni ortada aylantish bolayapti, shunday fikrda hamma edi va shunday qolsa kerak, lekin asosiy savol bu pulni qaerdan tushurish kerak ortaga.

"Oshpazni yahshi osh qilishi uchun massaligi yahshi bolmasa , quruq qozonni
taqillatgani bilan osh pishmaydi".

Kechirasizlar, borishim kerak kechroq yana chiqaman

[CrazyDT]

Royal: 2760655f, My avatar isn't related to me. I'm a fan of FreeBSD OS system. www.freebsd.org :o And this explains why little daemon: http://www.freebsd.org/copyright/daemon.html

I'm not trying to engage in arguments with you, I'm just broadening the issue, and trying to show different angles of this.

PS nothing personal. ;)

[Royal]

Hi, CrazyDT

I am not trying to argue with eather, but issue was kind of interesting , becouse this exactly UZB needs to work on it , but i don't thing so.

Everything is done there as: "You do it, You make it, You built it, You creat it, You saved and after worth we will come and take it. Just say thanks GOD , we let You go life otherwise we can give You "free vacation".

That is really discusting, therefor that some people try to talk about: heaven to do business. NO THAT IS NOT HEAVEN - THAT IS MIRAGE in front of the HELL"

Anyway no offence, regarding Your avatar, try to understand what is means the
"AVATAR" - really is not demon, demon don't come to help to the people.