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Regions and Countries Country Assistance Plans Document
Country Assistance Plans - Uzbekistan
V. Donor Activities and Aid Coordination79. Activities of the multilateral and bilateral donors to Uzbekistan have been complementary and involve close coordination and collaboration. Since December 1996, the IMF program has been suspended due to the Government's introduction of restrictions on the trade and foreign exchange regimes. In the absence of an IMF program, there are no programs involving fast-disbursing assistance from any international funding agency. Japan has limited processing new project assistance. Major donors are particularly keen in the Government's implementation of a credible program of reforms and some concrete steps by the Government towards the establishment of an IMF program. 80. The World Bank group has been the principal source of multilateral assistance to Uzbekistan. The World Bank's strategy for 1998 - 2000 for assistance focused on four areas: (i) liberalizing the trade and exchange rate regimes and minimizing distortions in the financial sector; (ii) improving incentives for increased output and employment, particularly in agriculture; (iii) removing the inefficiencies in resource utilization in municipal services and infrastructure; and (iv) addressing the environmental damage resulting from the mismanagement of natural resources in the Aral Sea Basin. Through its interventions, the World Bank is addressing issues in the water supply, health and sanitation sectors, strengthening social protection and the provision of social services, and the restructuring in agriculture. The World Bank has been taking a lead in health, banking and finance, urban development, environment, and the social safety net, while ADB has taken the lead role in the education, railways, and road sector reforms. In the agriculture sector, ADB and the World Bank have been working closely to provide a consistent set of policy advice. IFC activities complement IBRD's efforts on private sector development through project lending of about $50 - $60 million per year as well as advisory services and policy dialogue in development of the financial sector, capital market, and export-oriented industries. Building on operational experiences in the past, the World Bank is currently initiating a new country assistance strategy for 2001 - 2003. Close coordination activities between the World Bank and ADB continue to be required particularly in the sectors/subsectors of finance, urban social infrastructure, early childhood development, and education. 81. The European Bank for Reconstruction and Development (EBRD)'s key operational priorities include (i) developing an integrated approach towards development of entrepreneurship (lending to micro and small business, and access to equity financing via the Direct Investment Facility); (ii) expanding private sector involvement and strengthening the financial sector; (iii) restructuring of privatized companies; and (iv) investments in physical infrastructure, particularly transport, communication, and energy. ADB and EBRD have coordinated support for the railway sector. Close coordination is also active in the road and financial and SME sectors. 82. The primary objective of the European Union - Technical Assistance for Commonwealth of Independent States (EU-TACIS) is to support the process of the transformation to a market economy and a democratic society. Since 1991 EU-TACIS has provided substantial grant assistance in the areas of agriculture and agro-processing, SME development, energy, human resources development, private sector development, public administration reform, restructuring of state enterprises, and transport. In addition, through the EU-TACIS regional programs, Uzbekistan has benefited particularly in the areas of transportation and environment. The EU-TACIS's new strategy, covering 2000 - 2006 is to take a more focused, dialogue-driven approach, initially concentrating on (i) minimizing the social consequences of transition, (ii) private sector development, and (iii) cross-border infrastructure development. 83. United Nations (UN) agencies are playing an important role in health and population, poverty reduction, environment, development of human resources and management capacities, gender and development, preservation of national cultural heritage, and strengthening of NGOs 84. The Japanese Government's bilateral assistance program has provided the largest international funding for Uzbekistan with a focus on energy, telecommunications, transport, environment, and human development. Support from the Overseas Economic Cooperation Fund [now Japan Bank for International Cooperation (JBIC)] entered a hiatus with the suspension of the IMF program in 1996. Since then, the Japanese Government has limited processing new loan project assistance, although two loans were provided by JBIC to finance phase II extension of the existing local airports and telecommunication projects. From the JBIC's semi-commercial/export credit agency financing resources, JBIC has provided six export credits to finance one gas project, two oil refinery projects and two cotton spinning mill projects, and one polyethylene plant project. The Japan International Cooperation Agency opened a regional office in Tashkent in 1999, providing grant programs covering medical equipment, road construction and maintenance equipment, environment, and training and capacity building. 85. The United States Agency for International Development (USAID) is active in private sector development, banking and finance, fiscal policy reform, legal regulation, taxation, small-scale agriculture development, improving the healthcare system and family planning, and drinking water supply. To support private sector development, the USAID-funded Central Asian-American Enterprise Fund provides loans to private SMEs. 86. The German Government is supporting the Government's program of reforms, aiming at the long-term objectives of encouraging democratic and market-oriented institutions and providing substantial technical assistance in the areas of economic policy advisory services, promotion of private entrepreneurship, restructuring of agriculture, transport, legislation, professional training, and protection of the environment. 87. Despite a lack of formal consultative group meetings since 1996, aid agency activities on the whole have been complementary and involve close coordination and collaboration. Since January 1998, ADB's resident mission in Tashkent has enabled effective coordination and communication with other resident donors. To improve aid coordination and management, the ADB has provided two TA projects to the Ministry of Macroeconomics and Statistics and Department for Coordination of External Economic Activities, Cabinet of Ministers. As a result of ADB-financed TAs, the first in-country donors meeting was held in May 2000, attended by heads of resident donors and the Government's high rank officials. At the in-country donors meeting, for the first time, the country's medium-term development program, the sector specific strategies of the Government, and three reports of the public investment program, the foreign aid report, and the development partners profile were presented in a comprehensive manner to the donor community. The donor community urged the Government to hold such in-country donor meetings on a regular basis. A summary of overall external assistance to Uzbekistan is given in Appendix 3.
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