(ADB Press Release, March 24, 2006)
MANILA, PHILIPPINES - ADB's new strategy for Uzbekistan will promote growth that benefits the country's poor while ensuring the maintenance of good governance across its entire program.
The Country Strategy and Program (CSP) covering 2006-2010
focuses on four key areas of assistance: rural development, promotion of
private sector development, regional cooperation in transport and customs
transit, and improved social services with emphasis on early childhood
development and basic education.
The strategy provides for lending about US$100 million a year over the next three years. About $2 million a year is proposed for grant assistance. The actual lending level will depend on Government progress in achieving agreed policy actions in the above areas of ADB assistance.
The CSP proposes 14 projects from 2006 to 2008, including two to support reform in the agriculture sector in 2006. The pipeline also includes projects for an international road link, basic education, and water supply in rural areas in 2007. In 2008, the CSP provides for a Central Asian railway link, an early childhood development project, and projects aimed at developing the agriculture sector and microfinance.
"Our experience in Uzbekistan shows that carefully targeted programs in areas where the Government has made clear commitments, where ADB has strong expertise, and where stakeholders work to improve governance, can enhance the results of ADB's assistance," says Sean O'Sullivan, ADB's Country Director in Uzbekistan.
More than 70% of the lending program is earmarked for environmentally sustainable rural development projects, specifically those supporting increased agricultural productivity, private rural enterprise and rural finance, and rural infrastructure and services.
To encourage private sector development, the program aims to help improve the country's business environment through a series of linked technical assistance projects that will, among others, promote regulatory governance and competition. ADB also aims to catalyze private domestic and foreign investment through its private sector operations.
The regional cooperation projects will focus on helping to develop regional transport corridors and modernizing customs administration, for Uzbekistan to gain access to profitable markets in neighboring countries and to reduce transactions costs.
Uzbekistan has already achieved universal basic education, quality is still a concern. The program will therefore also help build the human capital of the country's poor by supporting projects in early childhood development and basic education, especially in rural areas.
In a discussion of the strategy, several members of ADB's Board of Directors underscored the need for a robust approach to improve governance and combat corruption in Uzbekistan.
Another key feature of the strategy is that governance will be incorporated in all individual projects, supported by technical assistance. For example, ADB assistance will focus on economic governance in its private sector development work that will address the State-business interface, a primary source of corruption.
Since 1996, ADB has approved 21 loans for 19 projects totaling $914.7 million for Uzbekistan, with the largest share going to education. Technical assistance grants amounting to $32 million for 62 projects have also been approved over this period.
ADB prepared its strategy in partnership with the Government of Uzbekistan and in close coordination with other bilateral and multilateral donors, and drew on the findings and recommendations of ADB's recent evaluation of the Country Assistance Program in Uzbekistan.