Identifier
Created
Classification
Origin
08TASHKENT742
2008-06-27 09:26:00
CONFIDENTIAL
Embassy Tashkent
Cable title:
UZBEKISTAN: EBRD LOOKS TO THE FUTURE
how-toVZCZCXYZ0000 PP RUEHWEB DE RUEHNT #0742 1790926 ZNY CCCCC ZZH P 270926Z JUN 08 FM AMEMBASSY TASHKENT TO RUEHC/SECSTATE WASHDC PRIORITY 9889 INFO RUCNCIS/CIS COLLECTIVE RUEHBJ/AMEMBASSY BEIJING 1103 RUEHLM/AMEMBASSY COLOMBO 0567 RUEHKA/AMEMBASSY DHAKA 0447 RUEHIL/AMEMBASSY ISLAMABAD 4293 RUEHBUL/AMEMBASSY KABUL 2585 RUEHKT/AMEMBASSY KATHMANDU 0606 RUEHNE/AMEMBASSY NEW DELHI 1242 RUEHBS/USEU BRUSSELS RUEATRS/DEPT OF TREASURY WASHDC
C O N F I D E N T I A L TASHKENT 000742
SIPDIS
DEPARTMENT FOR SCA/CEN AND EB
ASTANA FOR ALMATY/USAID
E.O. 12958: DECL: 06/27/2018
TAGS: ECON EFIN EAID EINV UZ
SUBJECT: UZBEKISTAN: EBRD LOOKS TO THE FUTURE
REF: TASHKENT 729
Classified By: Economic Officer Robert McCutcheon for reasons 1.4 (B,D)
C O N F I D E N T I A L TASHKENT 000742
SIPDIS
DEPARTMENT FOR SCA/CEN AND EB
ASTANA FOR ALMATY/USAID
E.O. 12958: DECL: 06/27/2018
TAGS: ECON EFIN EAID EINV UZ
SUBJECT: UZBEKISTAN: EBRD LOOKS TO THE FUTURE
REF: TASHKENT 729
Classified By: Economic Officer Robert McCutcheon for reasons 1.4 (B,D)
1. (SBU) SUMMARY: The head of the EBRD's Tashkent office
briefed the diplomatic community on plans for a new country
strategy for Uzbekistan to replace the one that has been in
place since 2005. The new strategy can be expected to show a
marked increase in EBRD involvement in Uzbekistan compared
with recent years but will still be small compared with
EBRD's role in other countries of operation. END SUMMARY
2. (SBU) On June 25 Fernand Pillonel, Head of the Tashkent
Office of the European Bank for Reconstruction and
Development (EBRD),briefed representatives of EBRD
shareholder countries and countries of operation on the
activities and strategy of EBRD in Uzbekistan. Reviewing the
history of activities in Uzbekistan, Pillonel said that since
the 1990s the EBRD has made commitments of over 500 million
Euros. EBRD's annual business volume (ABV) reached a high
point of 157 million Euros in 1997 but slowed markedly
beginning in 2001 and further still after 2003.
3. (SBU) Pillonel reviewed EBRD's "Strategy for Uzbekistan"
that was adopted in 2005. Under this strategy that remains
in effect today, the EBRD supported private sector investment
and entrepreneurship provided there was no direct or indirect
link to the GOU or GOU officials. The bank focused its
attention on small business lending and on promotion of
foreign investment. In 2007 EBRD supported five corporate
projects ranging from a brewery and an ice cream company to
renovation of a hotel in Khiva. It also supported three
financial projects, one for microfinancing and two for loans
to small and medium businesses (SME). EBRD's 2007 ABV in
Uzbekistan increased to 17 million Euros following its
all-time low of 5.3 million Euros in 2006. In 2008 EBRD's
ABV is expected to reach 20 million Euros, which Pillonel
noted is still quite small compared with the 6 billion Euros
that the EBRD expended in all countries of operation in 2008,
its 1 billion Euro ABV in Ukraine, and its 3 billion Euro ABV
in the Russian Federation.
4. (C) Pillonel said the EBRD is beginning work on a new
"Strategy for Uzbekistan" that it will be ready to present to
the GOU this fall. He noted that Uzbekistan is one of three
countries that along with Belarus and Turkmenistan has
"Article 1" restrictions for failing to demonstrate its
"commitment to and application of the principles of
multiparty democracy, pluralism, and market economics."
Nevertheless, Pilonnel pointed to the trend towards improved
bilateral relations between Uzbekistan and most EBRD
shareholder countries as well as the World Bank's (WB) new
2008-2011 County Assistance Strategy for Uzbekistan.
Pilonnel continued that although the EBRD should not be
expected to follow in the steps of what he described as the
WB's "U-turn" in regards to Uzbekistan, he said that EBRD's
role can be expected to increase. The most likely road for
EBRD will be a "middle path" that will allow for renewed
cooperation with the GOU on public sector projects such as
energy efficiency and municipal projects such as water and
trash. Citing the improvement in the WB's relations with
Uzbekistan following Robert Zoellick's replacement of Paul
Wolfowitz as WB President, Pillonel commented that the EBRD's
selection of Thomas Mirow to replace outgoing President Jean
Lemierre could have the same positive effect on EBRD-Uzbek
relations.
COMMENT
--------------
5. (C) Pillonel's assessment of improved EBRD involvement in
Uzbekistan contrasts with the negative impression given in
our earlier meeting with EBRD Alternate Director Turan Oz
(reftel). The future role of EBRD in Uzbekistan will depend
on whether the "carrots" the EBRD can offer are appetizing
enough to remove it from the bad grace it has been in since
EBRD President Lemierre publicly humiliated Uzbek President
Karimov in 2003.
NORLAND
SIPDIS
DEPARTMENT FOR SCA/CEN AND EB
ASTANA FOR ALMATY/USAID
E.O. 12958: DECL: 06/27/2018
TAGS: ECON EFIN EAID EINV UZ
SUBJECT: UZBEKISTAN: EBRD LOOKS TO THE FUTURE
REF: TASHKENT 729
Classified By: Economic Officer Robert McCutcheon for reasons 1.4 (B,D)
1. (SBU) SUMMARY: The head of the EBRD's Tashkent office
briefed the diplomatic community on plans for a new country
strategy for Uzbekistan to replace the one that has been in
place since 2005. The new strategy can be expected to show a
marked increase in EBRD involvement in Uzbekistan compared
with recent years but will still be small compared with
EBRD's role in other countries of operation. END SUMMARY
2. (SBU) On June 25 Fernand Pillonel, Head of the Tashkent
Office of the European Bank for Reconstruction and
Development (EBRD),briefed representatives of EBRD
shareholder countries and countries of operation on the
activities and strategy of EBRD in Uzbekistan. Reviewing the
history of activities in Uzbekistan, Pillonel said that since
the 1990s the EBRD has made commitments of over 500 million
Euros. EBRD's annual business volume (ABV) reached a high
point of 157 million Euros in 1997 but slowed markedly
beginning in 2001 and further still after 2003.
3. (SBU) Pillonel reviewed EBRD's "Strategy for Uzbekistan"
that was adopted in 2005. Under this strategy that remains
in effect today, the EBRD supported private sector investment
and entrepreneurship provided there was no direct or indirect
link to the GOU or GOU officials. The bank focused its
attention on small business lending and on promotion of
foreign investment. In 2007 EBRD supported five corporate
projects ranging from a brewery and an ice cream company to
renovation of a hotel in Khiva. It also supported three
financial projects, one for microfinancing and two for loans
to small and medium businesses (SME). EBRD's 2007 ABV in
Uzbekistan increased to 17 million Euros following its
all-time low of 5.3 million Euros in 2006. In 2008 EBRD's
ABV is expected to reach 20 million Euros, which Pillonel
noted is still quite small compared with the 6 billion Euros
that the EBRD expended in all countries of operation in 2008,
its 1 billion Euro ABV in Ukraine, and its 3 billion Euro ABV
in the Russian Federation.
4. (C) Pillonel said the EBRD is beginning work on a new
"Strategy for Uzbekistan" that it will be ready to present to
the GOU this fall. He noted that Uzbekistan is one of three
countries that along with Belarus and Turkmenistan has
"Article 1" restrictions for failing to demonstrate its
"commitment to and application of the principles of
multiparty democracy, pluralism, and market economics."
Nevertheless, Pilonnel pointed to the trend towards improved
bilateral relations between Uzbekistan and most EBRD
shareholder countries as well as the World Bank's (WB) new
2008-2011 County Assistance Strategy for Uzbekistan.
Pilonnel continued that although the EBRD should not be
expected to follow in the steps of what he described as the
WB's "U-turn" in regards to Uzbekistan, he said that EBRD's
role can be expected to increase. The most likely road for
EBRD will be a "middle path" that will allow for renewed
cooperation with the GOU on public sector projects such as
energy efficiency and municipal projects such as water and
trash. Citing the improvement in the WB's relations with
Uzbekistan following Robert Zoellick's replacement of Paul
Wolfowitz as WB President, Pillonel commented that the EBRD's
selection of Thomas Mirow to replace outgoing President Jean
Lemierre could have the same positive effect on EBRD-Uzbek
relations.
COMMENT
--------------
5. (C) Pillonel's assessment of improved EBRD involvement in
Uzbekistan contrasts with the negative impression given in
our earlier meeting with EBRD Alternate Director Turan Oz
(reftel). The future role of EBRD in Uzbekistan will depend
on whether the "carrots" the EBRD can offer are appetizing
enough to remove it from the bad grace it has been in since
EBRD President Lemierre publicly humiliated Uzbek President
Karimov in 2003.
NORLAND