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Uzbekistan: EBRD To Decide On Future Relationship

Uzbek authorities blamed the violence on Islamic militants The European Bank for Reconstruction and Development (EBRD) is expected to announce tomorrow whether Uzbekistan has achieved reforms outlined last year by the bank.

Prague, 5 April 2004 (RFE/RL) -- The board of directors of the European Bank for Reconstruction and Development (EBRD) is due to decide tomorrow whether Uzbekistan has met a series of reforms it set out for the government last year.

Jeff Hiday, a spokesman for the EBRD in London, says the bank will decide on the future course of its relationship with Uzbekistan based on the conclusions of that evaluation.

"If you look at the benchmarks one year afterwards, basically none of them has been attained."
"The environment in Uzbekistan has been particularly challenging. So we set seven benchmarks. And we sought for Uzbekistan to demonstrate progress on these benchmarks. The extent to which they made progress would determine the extent to which we continue to invest in the country," Hiday said.

The EBRD's decision will come shortly after violence in the republic that killed at least 47 people. Uzbek authorities blame the violence on Islamic militants. Human rights groups say they fear the violence could serve as a pretext for a further crackdown on non-violent Muslims in Uzbekistan.

The EBRD itself was strongly criticized by human rights groups for holding its May 2003 annual meeting in the Uzbek capital, Tashkent, because of the country's poor rights record. Largely in response to that criticism, the bank set benchmark tests for political and economic reform and gave Uzbekistan one year to meet them.

Some of the benchmarks apply to human rights, including greater political openness, free media, and freedom for civil society groups. The benchmarks also included the convertibility of the Uzbek currency, the state of foreign trade, property rights and privatization, and the pace of banking sector reform.

But Hiday stresses that the issue is not whether the EBRD will decide to pull out of the country.

"Everyone -- NGOs, businesspeople, diplomats -- would like us to stay engaged in Uzbekistan. The question is more how will we characterize the developments in Uzbekistan and is there any extent to which we might restrict our lending. It's more a question in which areas do we focus and what amount of lending do we do?" Hiday said.

The EBRD is the largest private investor in Uzbekistan, with 26 million euros ($31 million) committed last year.

Uzbek Foreign Minister Savik Safayev said yesterday that it would be "unfair and unjust" if the EBRD did not recognize what he called the "impressive" progress made by Tashkent in economic and democratic reforms during the past year.

Speaking to foreign journalists, Safayev said Uzbekistan has begun to implement recommendations on eliminating torture in detention, and has achieved convertibility of the currency and launched a program of privatizations.

However, a report last week from the New York-based Human Rights Watch warned of the continued widespread abuse and persecution of independent Muslims.

The International Crisis Group (ICG), a Brussels-based independent monitoring organization, concluded last month that there had been little progress in meeting the EBRD's benchmarks. Alain Deletroz is an expert on Uzbekistan with the ICG.

"On the economic side, you have all these legislations that are still very much being like a barrier for small and medium business to grow. You have the legislation on the border regulating very heavily all imports. [In the democracy sphere,] Uzbekistan is clearly going backwards. The level of protection of the citizens -- freedom of speech [and] freedom of press -- is much worse than before the independence," Deletroz said.

Deletroz believes the EBRD may suspend lending to Uzbekistan's public sector, except for projects that would directly benefit the population.

"If you look at the benchmarks one year afterwards, basically none of them has been attained. So what we advise the EBRD to do is to suspend any new lending to the public sector and state-owned companies in Uzbekistan, to cut down any lending for any government programs and still carry on to give lending to independent small and medium-sized enterprises," Deletroz said.

A visiting U.S. congressional delegation today urged Tashkent to move forward with reforms. David Dreier, a U.S. congressman from California, said, "I happen to believe that from this tragedy [last week's violence], moving towards the goal of bringing about greater political freedoms and economic freedoms is the natural and correct step."

A U.S. State Department report on human rights in Uzbekistan released in February accused Tashkent of committing "numerous serious abuses." At least four people died in custody last year because of mistreatment by authorities, the report said, and up to 5,800 people were imprisoned for political or religious reasons.

The U.S. administration is due to decide this spring whether to certify Tashkent for continued economic assistance. Uzbekistan has benefited from substantial U.S. aid since its decision to support the U.S.-led campaign in Afghanistan. All direct U.S. assistance to Uzbekistan will be suspended if Tashkent is decertified due to lack of political and economic reforms.

(RFE/RL's Uzbek Service contributed to this report.)

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