Review of Khadiyatilla
Juraboev’s paper
Revealing the Market Hegemony: Automobile Monopoly in
Post-Soviet Uzbekistan through Economic Analysis and
Policy Perspectives
Abstract
• Research argues the economic gain and the role of government
as the key factors for the retention of the automotive monopoly
in Post Soviet Uzbekistan
• Statistics provided by national authorities, the car
manufacturing sector brought a massive amount of taxes for the
government
• There is enough evidence that high rates of employment in this
industry also contribute to its retention.
• The nationalization from private to governmental ownership,
which is the direct in fluence of Soviet policies, and the
government’s role in supporting and nurturing big monopolists
have contributed to the continuation of this system.
Introduction and Literature review
• The majority of entities within the country are either partially or
entirely owned by state institutions or government agencies
(Rasanayagam, 2011)
• The government has initiated measures to reduce state control and
promote a more competitive market environment, which includes
privatization programs and regulatory reforms (Sattarov, 2012)
• Energy Sector, telecommuniications,cotton industry owned by
government
• Mining and Natural Resources. Certain aspects of the mining and
natural resources sector, including uranium and gold mining, have had
significant government involvement (Trushin & Trushin, 2016).
• Scarcity of officially conducted research projects on monopolistic
industries
• The car manufacturer established its firm control over the Uzbek
marketplace by holding more than 60 structural enterprises and achieving
a vertically integrated three-level company. The company officially
employed over 26 thousand workers in all of its systematic establishments.
• In the January-December period of 2022, there were 328,118 total cars
produced in Uzbekistan according to the Agency of Statistics under the
President of Uzbekistan. Among others, the model “Cobalt” stands well
above the other types assembled in Uzbekistan with 101,617 units
continuing its dominating position since 2021. “Gentra” was in second
place with 87,105 units, while “Damas” was third with 72,235 units.
• According to the statistics provided by the Tax Committee Under the
Cabinet Ministers of Uzbekistan in 2022, car monopolist UzAvtoMotors was
listed among 5 of the manufacturing companies that paid the most taxes
for government
• The company has an annual turnover of 2.71 billion dollars and providing a
total of 167.9 million dollars for various taxes for the government
• The specific data about the costs and environmental damages of
UzAvtoSanoat are not readily available
3. Policy Analysis
• The paper argues that, firstly, the nationalization of this foreign
company (formerly called “GM Uzbekistan” and renamed “UzAv
toMotors”, afterward) and, secondly, the number of barriers and
distinctive strat egies are exclusively directed to maintain a monopoly in
the automotive industry presumably because of its significant
contribution to economic welfare.
• Many experts view the government’s role as crucial in providing support
and protection to ensure the continued prevalence of this monopoly
• According to the Index of Economic Freedom—2023, Uzbekistan ranked
109th among 176 countries with 56.5 points and remained on the list of
countries with a non-free economy. Its score is 0.8 points higher than
last year. Uzbekistan is ranked 23rd out of 39 countries in the Asia-
Pacific region, and its overall score is below the world average (The
Heritage Foundation, 2023)
• As for the year 2022, UzAvtoMotors was the second
most tax-exempt manufacturing granted 57 million
dollars in exclusion of all taxes (Kun. uz, News, 2023).
• The current re forms and newly conducted
investigations of anti-monopoly agencies of Uzbe kistan
are greatly affected by the prevalence of corruption.
4. Case Studies
• Retaining the Status Quo of Monopolies
• 1) De Beers
• 2) Standard Oil
• Potential Departure toward Competitive Market
• 1) the Bell System in the United States in the 1980s
Conclusion
• The research findings indicate that the causes behind
the retention of car monopoly in Uzbekistan are twofold.
Firstly, there are economic advantages associated with
the existence of monopolies in the Uzbek economy,
and, secondly, the role of policies imposed by the
government is what preserves this monopoly’s
supremacy.
