Uzbekistan's state external debt: are concerns appropriate?

Until recently, in Uzbekistan, we did not say anything about public debt, poverty. Since a wide path to freedom of speech is now open, we follow who says what, instead of independently thinking, analyzing, comparing. Let's recognize that today there is not a single state in the world without debt. External debt is formed not because of need, it is spent on the development of industry, agriculture, infrastructure. Thus, the state ultimately takes on debt to achieve the development and stability of its economy, the well-being of the country's population.

The US external debt has exceeded $32 trillion. Even developed countries such as Japan, France and Italy are heavily indebted to international creditors.
Public debt is the debt owed by the State to external and internal creditors, including the amount of interest accrued on these debts. Simply put, these are the obligations of the state to foreign creditors (foreign countries and investors, international financial institutions), as well as to citizens and resident legal entities. External debt actually indicates the receipt of targeted loans, investments and other funds in the country's economy. 
To ensure a prosperous life of the people and sustainable economic growth, first of all, a developed infrastructure is needed. Tangible investments are required in the modernization of energy, water supply, transport and communications, production and entrepreneurship. So, these are funds that benefit and serve to ensure the well-being of the population.
One aspect should be clarified. The volume of Uzbekistan's current external debt is at a low level. This is recognized by international financial organizations and institutions, experts. Secondly, external debt is not a worrying factor. Concern will be appropriate and justified only if the debt is misused or appropriated through closed processes.
In recent years, a huge set of goals and objectives has been implemented in the country. Stable attraction of investments is also among these issues. Investments don't come by themselves. This requires the development of infrastructure in the country. This is the main reason why international investors did not invest in Uzbekistan until 2016, as, for example, today. They need a comfortable business climate and developed infrastructure. A foreign investor will not go to work where there is no necessary infrastructure, smooth roads, uninterrupted supply of electricity, hot and cold water, Internet. In this sense, taking a loan, spending it with accurate calculations, and then paying it back in stages is a very correct way. The goal is to ensure the well-being and a happy, decent life of our people. 
Achieving Uzbekistan's entry into the ranks of the most attractive countries for doing business and investing is the most important task facing us.
One more thing. External debt should be assessed as the trust of prestigious international financial organizations in our country. It would be appropriate to repeat that not all States are given a debt. First of all, the reliability, economic opportunities and prospects of the borrower are carefully studied. And Uzbekistan is a large 36-million market and a promising country. In this connection, interest in our republic is high, because young people form the basis of the population and represent its intellectual potential.
At the same time, the International Monetary Fund or the World Bank stopped allocating funds to most countries in Asia and Africa due to instability, unrest and high levels of corruption. And also because the public debt of these states exceeded 50-60 percent of their gross domestic product. Such indicators are alarming for the economy. For example, as of the end of 2020, Japan's public debt was almost 300 percent relative to GDP, and the United States - 138 percent. Within the European Union, this list includes Greece (176.7 percent), Italy (137.6 percent), Portugal (120 percent), Belgium (104.4 percent) and France (99 percent). 
The size of the external debt also worries even the population of developed countries: it raises concerns related to the increase in types of taxes, which are intensified at those moments when the state directs external debt to cover the budget deficit. However, the general situation in the world has been aggravated by the coronavirus pandemic. Naturally, this led to an increase in public debt not only in Uzbekistan, but throughout the world. However, our country has never directed debt to cover the budget deficit.
There are more deplorable cases related to external debt in economically disadvantaged countries. Among the heavily indebted African States are Angola, Congo, Djibouti. In these countries, the external debt is over 100 percent compared to GDP, and solving financial difficulties has become a serious problem. We are talking here about the complication of debt servicing without attracting additional external debt. One of the ways to help these countries is to provide additional objective financial assistance or a new loan on preferential terms while simultaneously restructuring the external debt.
The difficulties of the current era put humanity at a dead end. The pandemic and anxiety in the world, mitigation of the consequences of confrontations, saving lives have become top priorities in all countries. Obviously, the high public debt has also become more complicated, since the supply chains of services for foreign debt received in foreign currency have been interrupted. As a result of the decline in GDP and the value of the national currency, the ratio of public debt to GDP increases sharply. 
In Uzbekistan, despite the difficult situation, international liquidity has not been damaged, that is, external debt is directed to the continuation of reforms, priority is given to financing social sector projects without spending international reserves. This is a way to quickly respond to existing threats in today's conditions. 
Usually, before attracting external debt, it is extremely important to develop sufficiently sound projects and programs aimed at solving topical issues of strategic importance, which at the same time cannot be sidelined for the country and correspond to the priorities set by the state. 
As of January 1, 2021, the external debt raised on behalf of Uzbekistan and under its guarantees amounted to $21.1 billion, compared to GDP - 36.5 percent. However, as of the end of 2022, this figure was $29.9 billion, or 36.4 percent of GDP. Although the total amount of public debt is growing from year to year, its share in GDP decreased in the period after 2020. 
According to the forecasts of the World Bank, it is expected that the government of Uzbekistan will continue to comply with its loan restrictions. Public debt and total external debt can be gradually reduced by the end of 2024 to between 32 and 55 percent of GDP, respectively. In accordance with the law "On Public Debt", the amount of public debt should not exceed 60 percent in relation to the annual forecast indicator of gross domestic product. When the size of the state debt reaches 50 percent in relation to GDP, the Cabinet of Ministers, in accordance with the established procedure, submits to the chambers of the Oliy Majlis of the Republic of Uzbekistan measures that do not allow exceeding the size of the state debt provided for in part one of Article 35 of the law.
Consequently, there is no room for concern in matters of external debt. Firstly, the Accounts Chamber monitors the effectiveness of public debt management, assesses the amount of public financing from abroad and its expediency, monitors the effective and rational use of funds raised by the state, as well as timely and complete servicing of public debt. In addition, it monitors and controls the formation of projects carried out at the expense of state funding. Audits such projects and at the end of each year sends information on its results to the Chambers of the Oliy Majlis, the Presidential Administration and the Cabinet of Ministers. 
This, on the one hand, ensures control over the expenditure of debt obligations and their openness. On the other hand, borrowed funds are allocated to promising areas of the economy, including budget support, energy, agriculture and water management, development of transport infrastructure, healthcare and education, with the help of which we can develop the necessary systems. Given that the real growth of the economy in the coming years is projected at the level of five to six percent, it becomes clear that there will be no problems with the repayment of external debt.
The main part of the state's external debt is directed to the organization of new production facilities in the oil and gas and chemical industries, construction and modernization of thermal power plants, improvement of drinking water supply, development of sewerage systems and financing of new projects in other industries. Thus, the funds involved in the modernization of infrastructure and financing of the social sphere, investments in the construction sector serve to improve the welfare of the population.
On this occasion, I would like to draw attention to another important aspect. According to the World Bank forecast, Uzbekistan's economy is expected to grow by six percent in 2023. Against the background of today's international contradictions, many states are experiencing an economic crisis. Uzbekistan has taken important measures to prevent such a crisis. The World Bank gave them a positive assessment.