Publication Details
Abstract
We discuss in this perspective how strong industrial clusters drive economic growth and stimulate foreign direct investment, while minimizing anti-development behaviour. We further demonstrate that fiscal policy governs the short-run emergence and long-run evolution of industrial clusters. According to the IMF and World Bank, there is a credible association between economic performance, investment and capital accretion at the national level. This one more confirms the capital role of the government, particularly based on tax deduction and financing through grants. The more competitive parts of the Uzbek economy, which are subject to modernization, should be considered as clusters. Meanwhile, profits are down and financial pressure is up still, with progress along the path yet to really quicken. It notes lower business costs through reduced corporate, property and land taxes, an improvement in regional competitiveness for both greenfield and existing investments and enhanced industrial performance in general. Further investment would serve to increase exports and buttress the national economy. The paper concludes that a cohesive tax incentive mechanism is critical for securing new investors, upgrading industries, and achieving sustainable cluster development in Uzbekistan.