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Unloved and looking for a lift

The hope is that the EBRD’s annual meeting in Tashkent in May will give a much-needed lift to Uzbekistan’s ailing economy. But relations with multilaterals have never been worse, and the country’s human rights record raises questions about why the meeting is taking place there at all.

THE TWO-DAY annual meeting of the European Bank for Reconstruction & Development is taking place in Tashkent, Uzbekistan, in May - the first time the bank has met in central Asia. From May 4-5, some 2000 delegates will travel to the Hotel-Intercontinental in downtown Tashkent, bringing the eyes and - so the EBRD hopes - the wallets of the global financial community to focus on this central country of the CIS region.

Uzbekistan could certainly do with a lift. Foreign direct investment flows are at the moment the lowest of all the transition economies on a per capita basis. In the past four years, GDP per capita dropped from $400 to $300. Wages, in the same period, have fallen 50%, and inflation has obstinately failed to decline from its 30% level.

Although there are some signs of positive growth in the private sector, generally, the economy is still state-controlled, corrupt and inefficient. Although many banks, including Russian, Kazakh and UK financial institutions, have expressed interest in participating in the long-promised privatization process, the government led by president Islam Karimov continues to delay the programme, pleading fears of ensuing Argentina-style social unrest.

Even if privatization does go ahead, the artificially inflated som/dollar exchange rate, set by the government in 1996, makes foreign direct investment practically impossible.

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