Uzbekistan - Country Assistance Strategy (CAS)

Uzbekistan is an upper low income resource rich, doubly-landlocked country, strategically located in the heart of Central Asia. It is the world's fifth largest cotton producer and second-largest cotton exporter.

Major raw materials exports include gold, natural gas, copper and other non-ferrous metals and construction materials. The country possesses a young and educated labor force, rich agricultural resources and has significant economic potential.

Uzbekistan accounts for one-third of the region’s population, and its economic and social prospects are critical both for the 27 million Uzbeks, and for the neighboring region comprising of Afghanistan, Kazakhstan, Kyrgyz Republic, Tajikistan and Turkmenistan.

Executive Summary

Full Report

Annex 1, 2
Technical Annexes

Executive Summary

The Government of Uzbekistan has been following a gradual approach to economic reform to minimize the social costs of transition. Market-oriented reforms have been slow and selective and focused on a few areas. In recent years, the Government improved its macroeconomic performance and significantly diversified exports.

Introduction

The proposed Country Assistance Strategy (CAS) builds on the experience of three previous CAS’s and intensive dialogue during the Interim Strategy period.

Country Context

Uzbekistan has a strong executive system with few checks and balances. After the break-up of the Soviet Union in 1991, the ruling Communist Party of Uzbekistan was restructured as the People's Democratic Party of Uzbekistan, with Islam Karimov retaining the leadership.

Country Development Program

The Government of Uzbekistan has endorsed the MDGs. For Uzbekistan, the main goal under the MDGs translates into a reduction of the poverty rate from 27.5 percent in 2000 to 14 percent in 2015. The Government has been increasingly concerned by the disconnect between the impressive economic results of recent years and the relatively modest reduction of poverty. In response to this challenge, the Government approved its first Poverty Reduction Strategy paper (PRSP) – the Welfare Improvement Strategy (WIS) - in September of 2007.

Bank Engagement in Uzbekistan: Lessons Learned

The operational environment for the Bank in Uzbekistan has been difficult for many years. The previous CAS (2002-2004) attempted to establish a framework for policy dialogue and set policy triggers for various scenarios. This approach proved to be ineffective.

The WBG Support for Implementation of the WIS

There is broad agreement between the Government, the WBG the donor community and other stakeholders on the overall direction and end-result objectives of the economic strategy of the Government expressed in the WIS. There is also a consensus on the need to accelerate the pace of poverty reduction and persistent socio-economic inequalities.

Monitoring in a Results Framework

The Bank’s AAA and project supervision and preparation work during the initial CAS period will be closely tied to the results framework contained in Annex 1. Table 4 summarizes the main elements of the results-based framework agreed between the WBG and the GoU.

Potential Risks and Mitigation Measures

Uzbekistan made some good progress in public financial management through the introduction of a modern treasury system, which will greatly improve financial reporting and transparency for the use of public resources. With support from an IDF grant, the Ministry of Finance is also implementing a project aimed at establishing an institutional framework for modern internal audit function.

Data&Figures

Resources

Results video

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Impact of WB Work

Reference