Uzbekistan: U.S.-Uzbekistan Working Group Discusses

UNCLAS SECTION 01 OF 04 TASHKENT 001201 SENSITIVE SIPDIS DEPARTMENT FOR SCA/CEN, USDA/FAS FOR OCBD/MIRELES AND CROUSHORN, OCRA FOR NENON, ANKARA FOR FAS E.O. 12958: N/A TAGS: EAGR ECON ECIN SOCI PREL PGOV UZ SUBJECT: Uzbekistan: U.S.-Uzbekistan Working Group Discusses Agriculture Cooperation REF: 08 TASHKENT 385 ¶1. (SBU) Summary: The U.S.-Uzbekistan Joint Working Group (JWG) met on June 24 for an update on the implementation of 38 projects funded by U.S. Food for Progress programs. Despite the apparent benefits that these jointly-agreed projects on irrigation, improving agricultural productivity, and enhancing sanitary conditions would bring to Uzbekistan, implementation of these projects continues to languish (ironically, during President Karimov's "Year of Rural Development.") Millions of dollars in funding simply collect interest in Uzbek banks. Because several years have elapsed since the list of 38 projects was created, both sides agreed to revisit the original proposals and replace them as needed with more relevant projects. End summary. ¶2. (SBU) The U.S-Uzbekistan Joint Working Group (JWG) met for the twelfth time on June 24 in Tashkent at Uzbekistan's Ministry of Finance. Ministry of Finance Deputy Minister Tursunov and Ankara-based Agriculture Counselor Ralph Gifford jointly co-chair the JWG, which reviews implementation of 38 jointly-agreed funded with 16.75 billion UZS (11.22 million USD) from FY 2003 and FY 2004 USDA Food for Progress programs. (Note: As of June 30, 2009, one dollar is equivalent to 1,493 soum. End note.) Four other Government of Uzbekistan officials attended, including Alisher Mursaliyev of the Ministry of Foreign Economic Relations; Oybek Shagazatov of the Ministry of Foreign Economic Relations; Tulkin Mirzaev of the Agriculture Department of the Ministry of Finance; and Asatilla Salimov, Deputy Minister of the Ministry of Economics. The U.S. side included Political Officer Steven Prohaska and Agricultural Specialist Nizam Yuldashbayev. ¶3. (SBU) Deputy Minister Tursunov first apologized for the late response to the Embassy's May 7 diplomatic note requesting this meeting. He then reviewed an April decision by Uzbekistan's Cabinet of Ministers to finance three of the USDA Food for Progress projects: construction of three bracken (forage)-producing lines by local companies (at a cost of 175 million soum); developing new cotton varieties with greater resistance against wilt disease (25 million soum); and increasing the efficiency of providing emergency medical assistance (450 million soum). The Ministry of Health and the non-governmental organization Medical Teams International (MTI) have a schedule for the financing of projects, and funds for such projects are transferred into a special account that MTI has opened. Cabinet Refuses to Approve Certain Projects -------------- -------------- ¶4. (SBU) AgCounselor noted that Uzbekistan has not fulfilled its promises, particularly with regard to the implementation progress reports for 12 projects that it had agreed to provide to the United States "within a month" at the previous meeting in March 2008 (reftel). Tursunov said that the Ministry of Foreign Affairs was supposed to provide them with reports on the implementation of these projects, and he pledged to follow up with his colleagues on this issue. He noted that both sides had agreed last year that these 12 projects should be financed, and so the Ministry of Finance had submitted a draft proposal to the Cabinet of Ministers. The Cabinet had asked the project initiators for presentations on implementation of these projects, and found several presentations insufficiently compelling. The Cabinet then asked for new presentations defining their goals and justifying their funding. Tursunov explained that project No. 11-aimed at constructing "Havast-Gallakor" water pumping stations in Syrdarya Province-had TASHKENT 00001201 002 OF 004 been rejected because it would have required the construction of facilities on Tajikistan's territory. He alluded vaguely to problems from the Tajikistani side. Noting that Project No. 27 listed USAID as the initiator, Gifford asked if representatives from USAID had been invited to the interview. He asked whether the Ministry of Agriculture and Water Resources (MAWR) has been in touch with them. Tursunov indicated that he didn't know, and that a MAWR representative was not present today because he was on a trip. Delays in Responding to Embassy Requests -------------- -------------- ¶5. (SBU) Gifford further noted that he has been in Tashkent for one week now. He had indicated in a May diplomatic note that he would be available to visit a project site-the Rezakasay Water Reservoir in the Ferghana Valley-that Tursunov had invited the United States to inspect last year, but the Government of Uzbekistan had never responded. This very meeting had not been confirmed until Gifford's last day in Tashkent. Nevertheless, U.S. Embassy staff would still like to have the opportunity to visit one of these projects. Tursunov expressed regret that the project site visit had not been arranged. He indicated that the Cabinet of Ministers had given its approval to Post's diplomatic note only yesterday. Tursunov proposed that both sides work out a mutually convenient date for a project site visit, and noted that he himself would accompany any Embassy representatives on this trip. Status of Funds -------------- ¶6. (SBU) Tursunov presented some additional data regarding the current status of Food for Progress funds: That the 16.8 billion soum to be used for projects had earned an additional 2.346 billion soum in interest; there are now 19.146 billion soum available for project funding; and of the 16.8 billion soum, 7.236 billion soum have been approved to be disbursed, leaving 9.7 billion soum from the original sum that have been undisbursed. ¶7. (SBU) Gifford indicated that, according to his calculations, 30 percent of the total project funds have been disbursed for completed projects and 10 percent have been allocated to incomplete projects, but 60 percent of the funds have not yet been assigned. He requested that Uzbekistan assign someone to work with Embassy's Agricultural Specialist to ensure that both sides are working with the same financial data. Gifford expressed hope that the remaining projects be funded as soon as possible and that Uzbekistan had made many promises in the past, but results are necessary. MTI Project -------------- ¶8. (SBU) Gifford also asked for the GOU's opinion on a recent proposal from Medical Teams International (MTI) to shift funds from a project to develop commercial production of broiler chickens to one involving cervical cancer screening and HPV vaccinations. TASHKENT 00001201 003 OF 004 (Note: MTI is not permitted to be involved in commercial projects. End note.) Tursunov said he supports the idea and had discussed the matter with Alisher Sharipov of MTI. They had discussed leaving the poultry project for local governments to administer and using interest accumulating from the Food for Progress funds currently residing in bank deposit accounts to finance this new vaccination project, which would cost some 500-600 million soum. Uzbekistan Proposes Replacing Some Projects -------------- -------------- ¶9. (SBU) Tursunov said that the current list of 38 Food for Progress projects had been approved in April 2006, and thus had been originally developed in 2004-2005. Given how much time has elapsed, some of these projects are not as important now as they had seemed then. Tursunov proposed replacing some of these projects with new proposals. Gifford agreed that much has changed over the past several years, and the it would be worthwhile to review some of the U.S.-proposed projects. Tursunov stated that both sides can retain the earlier 50/50 division of U.S./Uzbek-proposed projects. ¶10. (SBU) By that evening, the Government of Uzbekistan had faxed a preliminary list of three new projects to Post. These include: (1) the improvement and monitoring of sanitary conditions in Chirchik city, to be implemented by the Ministry of Health; (2) improvement in the monitoring of air pollution in Chirchik, to be implemented by UzGidromet; and (3) screening and treatment of women's cervical cancer, to be implemented by the Ministry of Health and MTI. Tursunov mentioned incidentally that a high-ranking official comes from Chirchik. In addition, they want to fund two previously-approved projects: expanding the water supply system of the Urgut district center and supplying microfinance to small and private businesses in Syrdarya and Jizzakh Provinces. Tursunov had suggested earlier that day that projects (1) and (2) would cost 310 million and 500 million soum respectively, and would be implemented during the 2009-2011 timeframe. He also indicated that Uzbekistan might decrease the total number of projects by consolidation. Improving Communication -------------- ¶11. (SBU) The U.S. side proposed that the Embassy double-track communications with the Ministry of Finance and Ministry of Foreign Economic Relations rather than rely exclusively on the Ministry of Foreign Affairs to relay communications between them. Moreover, it would be helpful if the Ministry of Finance and Ministry of Foreign Economic Relations could inform Post when it has transmitted information to MFA to be delivered to the United States. Tursunov pledged to try to work more closely with Embassy staff. Further Steps -------------- ¶12. (SBU) Gifford requested that the Government of Uzbekistan provide detailed information on its new project proposals so the TASHKENT 00001201 004 OF 004 United States can review them. Meanwhile, the United States will review its own previously proposed projects. Both sides will recommend funding MTI's HPV vaccination proposal using accumulated interest on deposited funds. The United States also wants a commitment from Uzbekistan to assign someone to work with the U.S. to coordinate all financial data. Tursunov said Uzbekistan will try to provide Post with a progress report on the implementation of projects in 10 days and will share a new list of projects. Comment: -------------- ¶13. (SBU) It is very difficult to distinguish incompetence from malfeasance in this frustrating process, and the failure to get this meeting scheduled until the very last minute was particularly egregious. We will try, nevertheless, to identify what little bit of the glass is full: as usual, the GOU apologized for not keeping the promises it had made at the previous meeting and then made a new series of promises-but it actually kept one promise before the day was through. Furthermore, we were able to verify that Tursunov's description of the unsuccessful presentations to the Cabinet of Ministers was candid, and therefore his suggestion that we basically start over on a list of projects for the remaining funds makes sense. We intend to follow up on this meeting with a series of diplomatic note reminders, to see if constant follow-up may be more effective than sporadic follow-up. AgCounselor will discuss updating the U.S. project list while in Washington in July. ¶14. (U) AgCounselor has cleared this cable. Post appreciates his visit and support. NORLAND