UZBEKISTAN

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Development Challenge Other Donors FY2001 Program / Activity & Budget Information USAID Search: Uzbekistan Previous Years' Activities 2000, 1999, 1998, 1997 26     Introduction U.S. national interests in Uzbekistan reflect a combination of commercial and strategic concerns. As the largest country and market in Central Asia, Uzbekistan offers trade and investment opportunities through a diverse economic base which includes agricultural, industrial and energy resources. Its oil and gas reserves also provide opportunities for U.S. investors. A prosperous Uzbekistan would be central to the commercial expansion of the region. Uzbekistan aspires to regional leadership, and is increasingly seen as a key player in maintaining stability in Central Asia. It has played a mediating role in the crises in Afghanistan and is a guarantor in the Tajik peace plan. Uzbekistan can contribute to the U.S. national security interest in ensuring that the region remains stable. This is echoed in the U.S. Embassy’s Mission Performance Plan’s strategic goals: the development of a civil society, an efficient and effective health care system, sustainable environmental management, accession to the World Trade Organization (WTO), and increased regional stability. The Development Challenge The reluctance of the Government of Uzbekistan to introduce market-oriented reforms in the financial sector has constrained economic recovery. After a significant movement in the mid-1990's toward free market reforms through pricing and trade liberalization measures and tightened short-term fiscal and monetary management policies, the Government of Uzbekistan retreated in the late 1990's by restricting convertibility and access to foreign currency. This resulted in suspension of its International Monetary Fund (IMF) Standby Arrangement. The lack of convertibility, minimal progress toward privatization, and a near halt in other economic or fiscal reform are having a serious debilitating effect on the Uzbekistan economy, as well as a chilling effect on the international donor community. This led to a termination of USAID’s Fiscal Reform Project in early 2000. Recent IMF consultations revealed deepening financial imbalances. The investment climate continues to suffer from onerous bureaucratic obstacles in registration, licensing, and inspection areas, which increase the cost and unpredictability of private business operations. Uzbekistan receives assistance with energy sector and environmental challenges through USAID’s Central Asia Regional program. Citizens are poorly informed and their participation in economic and political life is limited. Political opposition to the regime is not tolerated. Anticipating that the 1999 parliamentary elections would not meet international standards, USAID halted election-related assistance. The media is increasingly constrained. Several TV stations were closed, and the broadcast of a USAID-sponsored, biweekly TV news exchange was temporarily disrupted. Despite this restrictive environment, USAID was able to help the government pass a new NGO law, and improve sections of the criminal and commercial codes. Currently, government social services critical to maintaining a social safety net are not financially sustainable. However, the Government of Uzbekistan is committed to providing good health services. This is an area in which USAID technical assistance could be effective. The World Bank (IBRD) negotiated a $30 million loan to reform the primary health system in three pilot oblasts. USAID is developing the pilot model for these reforms. The USAID model focuses on new management and payment systems for improved health service delivery and financing. The initial results have been impressive, with 13 primary health care sites already established. Community groups have been organized to improve awareness and participation in health services. Responding to a resurgence of tuberculosis (TB), USAID continues to introduce the new, more effective World Health Organization protocols for TB treatment. USAID programs have significantly improved health for Uzbeks. They have contributed to the eradication of polio, a 50% reduction in abortions, and the training of more than 1,000 health care providers in family planning. A five-year health partnership concentrates on emergency care, the government’s second priority in health care. Partnerships, training and exchanges remained an important component of USAID assistance. USAID trained over 1,520 reform-minded government leaders and professionals, of whom 31% were women, in areas directly related to democracy and a free-market economy. USAID’s successful third country training allows participants to observe, first-hand, positive reform in other Central Asian Republics. Other Donors USAID works closely and coordinates with other donors. The IMF continues to monitor the macroeconomic policies of the Government of Uzbekistan, even though the Standby Arrangement has lapsed. The IBRD is working on privatization and health, and plans to launch a financial sector reform project. The European Union (EU) has the largest program of assistance to the country, after the IBRD. The EU’s program focuses on technical assistance in agriculture, private business development, and energy, and includes support for accounting reform. The United Nations, the Adenauer Foundation, and the Organization for Security and Cooperation in Europe fund training to improve civil society. The European Bank for Reconstruction and Development has made loans for textile plants, energy, and small enterprise development. Country Background Information Resources   CIA Factbook Library of Congress National Geographic Country Maps State Dept. Country Information

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