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EBRD issues new strategy for Uzbekistan
The EBRD’s new two-year strategy for Uzbekistan concludes that while some
economic progress has been made since its last strategy for the Central Asian
country was published in 2003, there has been no comparable political
liberalisation.
The previous strategy described Uzbekistan’s political and economic progress
as slow and characterised by setbacks, and emphasised the importance of the
Uzbek authorities taking a number of critical steps to put the country on a
path of sustained progress towards multi-party democracy and a market economy.
In 2004, the Bank restricted its activity to private-sector projects as well
as public-sector operations that either linked Uzbekistan economically to
other countries in the region or clearly benefited ordinary citizens, such as
by improving a town’s water supply.
The Bank’s new strategy notes that economic progress has been achieved in two
areas since 2003 – current-account convertibility and adjustment of tariffs in
public utilities – but says there has been no progress in Uzbekistan’s
political environment.
As a result, the Bank has decided not to initiate any new projects in the
public sector during the new country strategy period. It will focus on
supporting private-sector development and entrepreneurship, particularly SMEs
and micro-business, provided that there is no direct or indirect link to the
government or government officials. For example, the Bank is considering the
possibility of establishing a microfinance bank and expanding its leasing
operation. The Bank will also continue to support trade through its Trade
Facilitation Programme.
Equally, the EBRD will continue its efforts to engage in policy dialogue with
the authorities, working for improvement in the investment climate and
supporting reform efforts. Only reforms can unlock Uzbekistan’s significant
economic potential and allow the Bank to operate on a full-fledged basis. The
events in Andijan in May, resulting in the indiscriminate use of force against
civilians, as documented in various reports, including this month’s report by
the UN High Commissioner for Human Rights, were a cause of serious concern for
the Bank.
The EBRD, which has invested €509.5 million in Uzbekistan, has had a lower
level of commitments in recent years as a result of the country’s unfavourable
investment climate. In 2004 the Bank signed three projects for a combined €34
million.
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