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Uzbekistan
FY 2001 Program Description and Activity Data Sheets
>> Regional Overview >> Uzbekistan Overview FY 2001 Program
USAID’s assistance will continue to focus on those areas where it can be most effective, such as health and local community development. Other important priorities are targeted activities in education and training, micro-credit, civil society, and water management. USAID will assist those regions where host-country counterparts have shared priorities and potential as development partners. Within the economic area, the emphasis will be on job creation, increased access to and use of credit, including micro-credit, reduced constraints to business, economic and business education, and the empowerment of women.
In health, USAID’s focus will be on quality of care, informed citizenry, allocation of health care resources, and the legislative and policy framework. USAID will seek to reach critical populations by working at the rural primary health care level. In coordination with the IBRD health loan, USAID will continue to provide technical assistance to expand USAID’s successful cost-effective model. In the area of infectious disease, USAID will continue to introduce cost-effective ways to treat TB and strengthen the ability of NGO’s, including traditional groups such as community councils, to deliver social services.
Involving Uzbekistan citizens in public affairs through an active, effective NGO community represents the most viable means of promoting a more participatory political process closely complemented by a strong, independent media. USAID is increasing support for civic education, women’s legal rights, NGO activity, rule of law, and grassroots community issues. It is also working with the more mature NGOs on policy advocacy skills, coalition building, and community development. USAID assistance to commercial non-state media outlets will help address equipment, finance, and management deficiencies and subsequently improve the quality of information.
A significant amount of FREEDOM Support Act resources for Uzbekistan in FY 2000 and FY 2001 will be provided, under the Administration’s Expanded Threat Reduction Initiative (ETRI), for programs designed to enhance border security and export control capabilities. ETRI assistance will contribute to the nonproliferation of weapons of mass destruction, and associated delivery systems, materials, technologies, and expertise.
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ACTIVITY DATA SHEET
PROGRAM: Uzbekistan
TITLE AND NUMBER: Accelerated Development and Growth of Private Enterprises, 122-013
PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $1,200,000 FSA
PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: $1,500,000 FSA
STATUS: Continuing
INITIAL OBLIGATION: FY 1998 ESTIMATED COMPLETION DATE: FY 2004Summary: Private enterprise is dying in Uzbekistan. Much work is necessary to help resuscitate it. A stable, robust market economy is critical to the development of democracy and civil society in the Central Asia region. Furthermore, the country’s integration into the regional and global economies could provide trade and investment that would benefit all. Unfortunately, this growth has been minimal in the past few years. Growth has been impeded by both a slow rate of privatization and by flawed governmental policies; e.g., a non-convertible currency, and non-tariff trade restrictions that give the state wide-ranging control over international trade. As a consequence, the conditions for private sector development in Uzbekistan are extremely bleak.
The direct beneficiaries of USAID’s activities in this area will be the owners of the small and medium enterprises.
Key Results: Three key results are necessary to achieve this objective: (1) an improved operating environment for private sector growth; (2) improved human resources for the functioning of a market economy; and (3) increased availability and accessibility of capital and technological resources for the private sector.
Performance and Prospects: Despite negative economic factors, Uzbekistan has made some progress on reforms. Legislation to encourage foreign direct investment was adopted, and went into effect in May 1998. The Cabinet of Ministers proposed a strategy to reduce bureaucratic procedures faced by small- and medium-sized enterprises (SMEs) in creating, registering, and operating their business activities. Nevertheless, foreign investors continue to face formidable bureaucratic hurdles such as import contract registration, business registration and licensing, and customs delays. The new SME legislation has done little to energize activity in the private sector which is hamstrung by dysfunctional macroeconomic policies.
Continued depreciation in the black-market exchange rate contributed to the decline of Uzbekistan’s currency, the som. The government’s highly disruptive multiple exchange rate regime was institutionalized at the beginning of 1997. This regime supports the activities and investments of the government’s priority sectors, and serves to strengthen the near stranglehold that the government maintains over the economy. The widely used, although illegal, black-market exchange rates are consistently much higher than the official rate.
Restrictive trade practices introduced in 1997 remain in place, including registration and prepayment requirements for imports and high average import tariffs. The state trading monopoly for the export of cotton and gold – which generated over 40% of the country’s foreign exchange earnings in 1998 – also remains in place. Following the Russian crisis, Uzbekistan imposed high import duties on selected items from Kyrgyzstan and Kazakhstan (the latter partly in retaliation against Kazakhstani measures); and introduced barriers to shuttle trade, such as a $300 duty for vehicles entering Uzbek territory from these two countries (except those in transit). Against this background, Uzbekistan’s accession to the World Trade Organization (WTO) is a distant prospect.
The Government of Uzbekistan has recently committed to build a vibrant SME sector. Financing for initiatives supporting the development of private-sector, SMEs is being prepared by the European Bank for Reconstruction and Development (EBRD) and Asian Development Bank (ADB). Additionally, in early 1999, the German Bank for Reconstruction extended a $15.3 million credit line to the Central Bank of Uzbekistan to support SMEs. The most serious impediments to the emergence of a new private sector still remain in place in the form of limited access to foreign exchange, discretionary government intervention, and an unreliable judicial system.
USAID assistance to the Government of Uzbekistan has been instrumental in the drafting of decrees issued to protect SMEs. These decrees limited the inspection authority of government officials. USAID assistance was also instrumental in establishing a "one-stop" business registration process. With USAID assistance, Uzbekistan has made very slow, but positive, progress toward WTO accession. Uzbekistan submitted its Memorandum of Foreign Trade Regime in 1998. More recently, USAID advisors assisted in the development of an Intergovernmental Working Group, consisting of 18 state agencies, charged primarily with the preparation of all necessary materials for accession to the WTO. USAID helped enact three laws that enhance the investment climate: the Law on Investment Activity, the Law on Entrepreneurs, and the Law on Non-Governmental Organizations.
By December 1998, the Government of Uzbekistan had replaced its Soviet style accounting standards with international accounting standards. USAID is assisting the Government of Uzbekistan to introduce a corresponding Chart of Accounts; and now supports enterprise conversion to international accounting standards and practices, accountant training, and accounting curriculum reform.
To date, the private enterprise development work of USAID has had some success despite the difficult business environment. SMEs continue to want and need assistance and credit, as offered by the International Executive Service Corps (IESC) and the Central Asian-American Enterprise Fund (CAAEF). Unfortunately, since August 1998, CAAEF has been unable to make any new loans due to the problem of currency convertibility.
Possible Adjustments to Plans: Given the inability to affect significant reform at the macroeconomic level, USAID activities will focus on the local level in FY 2001. In FY 2000, USAID will begin new micro-credit activities and work with business associations. Also, new activities in economic and business education are envisaged for FY 2000 and 2001.
Other Donor Programs: The World Bank, EBRD and European Union (EU) are all engaged in activities aimed at improving the business climate and promoting private sector growth in Uzbekistan. The German Bank for Reconstruction extended a $15.3 million credit line to the Central Bank of Uzbekistan to support SMEs. The EU has worked with USAID in the early stages of accounting reform. USAID's own technical assistance and training in this area is coordinated closely with these organizations.
Principal Contractors, Grantees, and Implementing Agencies: USAID uses U.S. commercial contractors. Booz Allen & Hamilton works on trade and investment reform and Carana Corporation does accounting conversion and training. IESC provides technical, managerial, and business-planning assistance to private and privatizing enterprises. CAAEF provides equity and credit to the nascent private sector. The Academy for Educational Development coordinates participant training.
Selected Performance Measures:
Baseline (1996)
Actual
(1998)Target
(1999)Target
(2000)Target
(2001)Percentage share of GDP generated by private enterprises 26% 45% 50% 60% 65% Dollar volume of joint venture funds invested (millions)
$13 $18 $20 $25 * Percentage of total capital Investments in private sector
17.3%
25%
30%
*
*
Govt. of Uzbekistan maintains compliance with conditionality of international financial institutions** No __
*Targets have not been determined.
**During FY 1998, USAID programs were being consolidated and a new strategy was being developed. Decisions were made about the relevance of the indicators for the program and therefore data were not collected on these indicators.
ACTIVITY DATA SHEET
PROGRAM: Uzbekistan
TITLE AND NUMBER: Increased Citizens' Participation in Political and Economic Decision-making, 122-O21
PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $2,000,000 FSA
PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: $2,100,000 FSA
STATUS: Continuing
INITIAL OBLIGATION: FY 1993 ESTIMATED COMPLETION DATE: FY 2006Summary: Increased citizen participation is critical in Uzbekistan where democratic reform is challenged by the government’s centralized structure and its lack of political will to reform. The government has displayed no intention to hold elections that meet international standards. Likewise, the independent media continues to face obstructions from the government. These obstructions increase the already apparent self-censorship in the country. Given these restrictions, USAID is devoting much of its democracy assistance to longer-term training and encouragement of local level community development led by non-governmental organizations (NGOs). USAID continues to assist local independent television and radio broadcasters to improve the professionalism and viability of independent media. This support helps to disseminate the quality information on domestic politics and economic policies. USAID’s activities in this sector provide strong support to the Embassy’s Mission Performance Plans’ strategic goal of developing a civil society.
Key Results: Three key results are necessary to achieve the objective. (1) NGO participation in civil society is strengthened. (2) Information on domestic economic policies and politics becomes more widely available. (3) The government becomes more responsive and accountable to citizens and citizens’ organizations.
Performance and Prospects: As a result of USAID-funded training, many NGOs continue to become stronger and more assertive local advocates. A new NGO law provides a legal framework for charitable and civil society organizations. USAID is assisting the development of civil society through the growth of NGOs, especially in areas outside the capital.
With the assistance of USAID-funded Internews, 26 non-state television stations are being strengthened through training and equipment donations. However, some of these non-state, TV stations have recently been subjected to increasing government pressure. In particular, the Government of Uzbekistan ordered two stations to shut down their operations. With USAID support, the stations are compiling documentation for an appeal to this order. Given these restrictions, USAID is focusing much of its democracy assistance over the next year on local level, community development by NGOs to increase citizen participation. Furthermore, USAID will begin its women’s legal rights initiative in three focus regions.
Openings at the local level with traditional leaders have presented increased opportunities to work on civil society participation in community development. Continued programming in Nukus, Bukhara, and Kokand is expected. In independent media, USAID intends to refocus its efforts on supporting journalists associations and discussions of their legal rights to help defend journalists from increasing government harassment.
Possible Adjustments to Plans: No strategic changes identified at this time.
Other Donor Programs: The United States is a major donor working in democracy. The Konrad Adenaur Foundation, the Soros Foundation, Organization for Security and Cooperation in Europe/Office for Democratic Institutions and Human Rights, and the UN Development Program also provide assistance. In addition, the United Nations High Commission for Refugees is co-funding NGO resource centers in conjunction with USAID-financed Counterpart Consortium.
Principal Contractors, Grantees, Implementing Agencies: Several USAID-funded, U.S. private voluntary organizations such as the American Bar Association/Central and East European Law Institute, Internews, and the International Foundation for Electoral Systems are playing a role in promoting democracy and freedom of information in Uzbekistan. The Counterpart International and the International Center for Not-for-Profit Law, which together form the Counterpart Consortium, and Winrock International also participate in local NGO development in Uzbekistan. The Initiative for Social Action and Renewal in Eurasia will also participate in the development of local environmental NGOs. The Academy for Educational Development coordinates participant training.
Selected Performance Measures:
Baseline (1994)
Actual
(1998)Target
(1999)Target
(2000)Target
(2001)Number of NGOs involved in advocacy (media/govt.) 70/52 (1996) 220/60 240/70 250/75 75/80 Average daily minutes of local news programming
2 5* 9 10 12 Number of Parliamentary Hearings and committee meetings addressing legislative/policy issues
0
0
4
2
4
__
*The number reported is low for 1998, because when the data were collected, many of the stations were still in the re-registration process. The stations were not able to broadcast while awaiting the decision from the licensing committee.
ACTIVITY DATA SHEET
PROGRAM: Uzbekistan
TITLE AND NUMBER: Improve the sustainability of social benefits and services, 122-032
PLANNED FY 2000 OBLIGATION AND FUNDING SOURCE: $2,300,000 FSA
PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: $6,400,000 FSA
STATUS: Continuing
INITIAL OBLIGATION: FY 1998 ESTIMATED COMPLETION DATE: FY 2004Summary: In Uzbekistan, as in most parts of the former Soviet Union, the government invests far greater resources in curative health care than for primary health care. While Kyrgyzstan and Kazakhstan moved relatively quickly to reform their health sectors, progress in Uzbekistan has been slow until recently.
The government is now interested in health care reform. At the government's request, USAID initiated health reform activities, modeled on demonstration projects in Kazakhstan and Kyrgyzstan, in 1998. With USAID assistance, the government is training rural primary health care doctors. Rural clinics are introducing new, market-based payment systems to increase efficiency and quality. The government has negotiated a loan with the World Bank to reform the health care infrastructure in three oblasts: Ferghana, Syr Darya and Navoi. The primary health care model and the financing systems introduced by USAID will be replicated elsewhere under the World Bank loan. The health care reform will benefit the entire citizenry, especially the vulnerable populations.
Key Results: The two results are: (1) cost-effective health care services demonstrated in selected oblasts; and (2) cost-effective health sector reforms adopted nationally.
Performance and Prospects: Performance in the USAID demonstration sites, which encompass the rural health care clinics of three rayons in Ferghana Oblast, is on target. The legal basis has been created for the implementation of the reforms in the pilot region, including the development of legal entities for 13 new Family Group Practices (FGPs) and 32 facilities that are being converted into FGPs. Incentive-based payment systems have been designed and are being implemented in 45 primary health care facilities. The health care system is showing early, positive results, and increased efficiency and accountability.
Indigenous NGOs have been supported to increase community awareness and participation in health services. Ten NGOs, linked with primary health care facilities in USAID’s pilot region, received small grants to educate and improve the health of their communities. The focus of the grants, identified by a community assessment, included topics such as reproductive health, nutrition, childhood infectious diseases, and clean water supply.
Training in country and in the United States has been provided to counterparts. Training for family medicine practitioners is continuously being developed and implemented in addition to training for policymakers and local counterparts.
There is a Memorandum of Understanding between the Government of Uzbekistan and the Government of the United States to promote and support the health care reform project. In late 1998, the President issued a Decree that provided the legal basis for implementation of the Health Care Reform Project until the year 2005, making this project a priority for future years. The World Bank loan has been approved for approximately $30 million. Planned collaboration with the World Bank in its model oblasts, however, has been delayed due to the slow rate of loan disbursements.
In addition to the World Bank loan and the Governmental Decree, prospects for expansion are good in Uzbekistan. The government has taken the initiative to create or improve primary health care facilities in rural areas throughout the country. Funds are being made available from the governmental budget for this purpose.
Possible Adjustments to Plans: Integration of vertical health programs (i.e., infectious diseases and reproductive health) into the Family Group Practice health delivery structure will become a key focus.
Other Donor Programs: The Ministry of Health at the national level and local health officials at the implementation level are the primary counterparts. However, various other Government of Uzbekistan entities, such as the Ministries of Finance and Justice, the Cabinet of Ministers and the Presidential Office, are also involved. In addition to the close, collaborative relations with the World Bank, USAID’s work is coordinated with the British Department for International Development and the European Union’s Technical Assistance Commonwealth of Independent States.
Principal Contractors, Grantees, or Implementing Agencies: Abt Associates is the principal contractor implementing this activity. The Academy for Educational Development coordinates participant training.
Selected Performance Measures:
Baseline (1998)
Actual
(1998)Target
(1999)Target
(2000)Target
(2001)Increased number of independent primary care practices - family group practices (FGPs) 0(1997) 13 20 30 50 Percentage of the population openly enrolled in FGPs in pilot sites
0 0 * 25% 60% Percentage of health care providers reimbursed by market-oriented payment systems**
0
__
*The population enrollment process is only beginning in Uzbekistan this year, and information on 1999 target was not available.
**During FY 1998, USAID programs were being consolidated and a new strategy was being developed. Decisions were made about the relevance of the indicators for the program . Subsequently, data were not collected on these indicators.
EXPLANATION FOR SPECIAL INITIATIVES and CROSS-CUTTING PROGRAMS
Title: Special Initiatives, 122-041
Planned FY 2000 Obligation and Funding Source: $10,650,000 FSA
Proposed FY 2001 Obligation and Funding Source: $11,500,000 FSASummary: This objective includes all of the 632 allocations and transfers to other USG entities. The majority of funding in this objective goes to the State Department for public diplomacy, humanitarian transport, international narcotics and law enforcement programs. Other recipients include the Departments of Customs and Justice.
USAID activities under this objective meet criteria oulined in Agency guidance for special objectives and interests. That is, they are of linited scope and/or duration and respond to particular windows of opportunity. For USAID/Uzbekistan, these activities generally support health care improvement.
Title: Cross-cutting Programs, 122-042
Planned FY 2000 Obligation and Funding Source: $1,200,000 FSA
Proposed FY 2001 Obligation and Funding Source: $3,500,000 FSASummary: This objective is designed to accommodate activities that make significant contributions to more than one objective. The activities included in this objective for Uzbekistan are the exchanges and training program, the Eurasia Foundation, and program development and support activities.
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Last Updated on: February 01, 2001 |
