Uzbekistan overhauls cotton industry with new decree

President Shavkat Mirziyoyev has issued a decree to reform Uzbekistan's cotton industry, targeting inefficiencies in cotton-textile clusters. The initiative addresses poor management and financial issues, noting that clusters were established without considering applicants' expertise or financial capacity. This oversight led to operational challenges and significant debt.

Clusters have struggled with high debt from the 2023 cotton harvest and failed projects outside their primary activities. Additionally, an incomplete automated system for tracking raw cotton and fiber has hampered efficient management.

Effective August 1, the decree introduces new measures. Cluster founders will now bear personal liability for loans from the Agricultural Support Fund to ensure better loan management. The repayment deadline for preferential loans for the 2023 cotton cultivation is extended to April 1, 2025, easing financial pressure on clusters.

To incentivize prompt loan repayment, clusters that clear their loans by December will be reimbursed for interest payments, excluding the bank's margin. These steps aim to stabilize the cotton industry, promote responsible management, and alleviate financial burdens on clusters.