New EBRD strategy for Uzbekistan

by Andy on 4/6/2004 · 1 comment

The European Bank for Reconstruction and Development has come to a decision about the future of its aid programmes in Uzbekistan. And, to be honest, all it comes down to is a light rap over the knuckles for Karimov. I had hoped that the bank would suspend its aid program for a year, to send a firm message that Uzbekistan really needed to take calls for reform seriously. But instead, all the EBRD has concluded simply that it is “no longer able to conduct business as usual” in Uzbekistan.

Here is what the bank had to say for itself in its official press release

A year after calling for improvement of the political and economic situation in Uzbekistan, the EBRD has concluded that there has been very limited progress and the Bank is no longer able to conduct business as usual. The Bank will stay engaged in Uzbekistan. But it can only focus its activities on the private sector and those public sector projects that finance cross-border activities or clearly benefit the Uzbek people…

Therefore, EBRD investments will focus on private sector activities such as supporting small and medium-sized enterprises and attracting foreign direct investment. The review acknowledges that opportunities for private sector investment will depend on improvement in the investment climate. The Bank pays special attention to transparency and governance aspects of any investments.

In the public sector, under present circumstances, the EBRD is able to focus on only two kinds of projects: local projects that have real and direct benefits for the Uzbek people, such as improved water and heating; and projects that involve neighbouring countries. Regional cooperation is critical for the countries of Central Asia.

The review says that it is important to stay engaged in Uzbekistan, albeit in a more focused programme of activity, because this is the best way for the EBRD to support the people of Uzbekistan. Through continued comprehensive dialogue and engagement, the Bank hopes to encourage Uzbekistan to make further progress towards political and economic reform and eventually realise its considerable potential for investment and growth.

What this means in reality is that the EBRD is likely to simply redirect the money it sends to Uzbekistan into different areas. Money that would have gone to one type of project will simply be shifted to another type of project. In fact, it is still possible that the overall amount of EBRD money going to Uzbekistan in the coming year could be more than last year (which was pretty low).

At its very best, today’s outcome can be described as a public rebuke to Karimov. Not unwelcome in itself, but words alone are not likely to have a whole lot of impact.

Update: One day after the announcement there is very little reaction coming out of Uzbekistan. Nothing on any of the official Uzbek government sites, although that isn’t a huge surprise. About all I could find was this quote, which seems more upset at the grave affront of being compared to Turkmenistan than anything else…

The Uzbek government responded angrily to the EBRD decision: “If they want to write off Uzbekistan and suspend cooperation with us like with Turkmenistan, this odious regime, we will view their decision as an affront to central Asia.”

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{ 1 comment }

Nathan April 7, 2004 at 3:28 pm

I entirely agree that this whole thing, especially because there are no specifics, amounts to not much more than talk.

What’s got me peeved today is that Human Rights Watch looks nearly ready to commission a statue in their honor. I don’t understand why they’re making such a big deal about the EBRD making a nebulous statement of support for what amounts to “human rights ‘n’ stuff” when they always jump down the State Department’s throat for making hollow statements.

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