§ The Secretary of State for International Development (Clare Short)On 4 March 2003 the Board of Directors of the European Bank for Reconstruction and Development (EBRD) agreed a new two-year strategy for Uzbekistan, which was supported by the UK. As the strategy clearly states, Uzbekistan has taken some positive measures on economic and political reforms but overall the situation remains serious and progress with reforms has been slow and characterised by setbacks. The country's ability to grow its economy, attract investment and reduce poverty is dependent on the Uzbek authorities making progress with both economic and political (including human rights) reforms.
The UK welcomes the EBRD strategy, which provides a detailed analysis of the current political and economic situation in Uzbekistan. We agree with EBRD that the Government of Uzbekistan needs to take a number of critical steps to put the country on a path of sustained progress towards multi-party democracy and a market economy and we support the decision by the Bank to hold a review after one year, looking for progress against seven key benchmarks.
The EBRD has identified three operational priorities: support for private investment, strengthening financial institutions, and critical infrastructure; but the strategy notes that only through economic and political reforms can Uzbekistan hope to unlock its economic potential, which will in turn allow the Bank to mobilise additional financial support for the country.
Uzbekistan's economy remains generally closed to competition with a high degree of state control. EBRD notes that it is crucial, if the Uzbek authorities are to unlock their country's economic potential, that they embrace more fully the principles of open and free markets and encourage the private sector to drive economic growth. Uzbekistan's human rights record remains very poor. During 2002, Uzbekistan made some limited attempts to address human rights. But the UK shares the widespread and serious concern about the continuing abuse of human rights in the country, including the recent assessment of the UN Special Rapporteur on Torture that torture is systematic in Uzbekistan. The strategy identifies critical areas for progress by the Uzbek authorities. These include implementation of recommendations to be made on the basis of the UN Special Rapporteur's report.
32WSIn May, EBRD will hold its annual meeting in Uzbekistan. This will be the first time that the EBRD annual meeting has been held in Central Asia. Since the collapse of the Soviet Union, Central Asia has largely been neglected. The newly independent countries faced the double challenge of building new institutions and making the transition to a market economy and political pluralism. Their progress has been patchy. Uzbekistan, Tajikistan and the Kyrgyz Republic are all now low-income countries. Desperate poverty, high levels of debt and corruption, and deteriorating infrastructure and public services exist in much of the region. The region's geography means that the countries are co-dependent for trade and natural resources. But relations have been characterised by the isolationism of some states; all the countries stand to benefit from increased regional cooperation and trade.
We hope the annual meeting will focus international attention on the country, and that it will provide a forum for international engagement and an open debate on the opportunities and challenges facing Uzbekistan and the countries of central Asia. The meeting is an opportunity to try to secure social and economic progress, progress with human rights, and improved regional cooperation. It is an incentive for the Uzbek authorities to reform and not an endorsement of current policies. The UK hopes that the Uzbek authorities will consider the strategy carefully and, by the time of the annual meeting, take the opportunity to demonstrate to the international community, progress towards political and economic change.
The strategy was published on EBRD's website www.ebrd.com/ yesterday. I have placed a copy in the Library of the House.