Reuters
December 3
he Asian Development Bank (ADB) said on Monday that pledges made by Uzbekistan to boost reforms were a good sign to lenders and investors after years of sluggish economic change.
Senior Uzbek officials said last Friday in Washington they were willing to promote economic and social reform in exchange for U.S. aid and a better relationship with the United States.
"This apparent commitment of the Uzbek government to accelerate reform is of course highly welcome," Peter Darjes, ADB resident representative in Uzbekistan, told Reuters.
Tashkent has become a key partner for Washington in ex-Soviet Central Asia after it agreed to assist the U.S. military campaign against Afghanistan's purist Taliban movement.
Apart from the political dividends apparently sought by Tashkent, economists say close cooperation with the U.S. may also push Uzbekistan to embark on serious reforms.
"The agenda for reforms is well known. These would include structural reforms, such as ongoing privatisation and reform of public utilities to improve the efficiency of service delivery to make them more cost-effective," Darjes said.
The ADB remains an important lender to Uzbekistan and has approved loans worth $459 million since 1996. The bank puts its investment commitment for 2002-03 at $225 million.
But many other investors have left the country, accusing it of widespread red tape and a lack of reforms.
The International Monetary Fund had announced in March it was leaving in protest at snail-paced reforms and reluctance to scrap multiple exchange rates.
REFORM HOPES
Uzbekistan has a three-tier system of currency exchange. The steadily falling central bank rate is around 680 soms per dollar, the cash rate at exchange offices floats at some 900, while the thriving black market snaps up the greenback at 1,400.
Official statistics trumpet more than $10 billion invested in Uzbekistan since independence in 1991. But most of this sum, is made up of commercial loans guaranteed by the government, which become burdensome for the economy.
"Another dimension of reforms that need to be accelerated is further changes in the area of foreign exchange management," Darjes said.
"These reforms are seen as key to a general improvement of resource allocation in the economy, as well as increased foreign direct investment to Uzbekistan," he added.
An IMF mission arrived in Tashkent on Monday to review Uzbekistan's economic performance. The mission, which will wrap up its visit on December 15, declined to comment.
Official data shows gross domestic product grew 4.0 percent last year and is set to rise 4.5 percent this year. Inflation is set to dip to 14.4 percent this year from 28.2 percent.
But many experts call into question the accuracy of official numbers. Commentators have also pointed to the potential for rising social tensions and religious radicalism in the mostly Moslem state where salaries average a measly $10 a month.
But the ADB remained optimistic. "As an economist, I certainly believe reforms are inevitable and the government shares the view that it's just a matter of time," Darjes said.