Traditionally, the European Bank for Reconstruction and Development's (EBRD) annual meeting has served as a showcase for the host nation. But this year's gathering, set for May 4-5 in Uzbekistan, appears to be different. The Uzbek government's unwillingness to implement reforms, as well as its poor human rights record, has left international lenders chagrined, placing the EBRD in the awkward position of distancing itself from Tashkent's policies. Even so, the bank continues to face criticism for not doing more to exert reform pressure on Uzbekistan.
Headquartered in London, the EBRD aims to stimulate private-sector activity across the former Communist bloc through its lending activity. Previous annual meetings have convened in East and Central European countries, including Lithuania, Ukraine and Romania. The Tashkent meeting will be the first large-scale EBRD function in Central Asia.
In 1999, when the bank selected Tashkent as the site of the 2003 meeting, Uzbekistan seemed to hold more economic promise than has turned out to be the case. Indeed, following a bombing attack in February 1999, President Islam Karimov's administration has dramatically curtailed freedom of political and religious expression, while maintaining tight state control over the economy. [For additional information see the Eurasia Insight archive].
Over the past 18 months, Karimov has vexed international financial institutions by repeatedly pledging to implement reforms, yet doing little to make good on each promise. [For additional information see the Eurasia Insight archive]. Over the same period, the Uzbek economy has remained stagnant, possibly even contracting. Tashkent's intransigence has emerged as a growing source of embarrassment for the EBRD, which in recent months has quietly sought to spread a message that it does not condone the Karimov administration's behavior.
Says one regional investment expert who has discussed the matter with EBRD representatives: "The EBRD is trying to do what they can to make clear that holding their annual meeting there should not be perceived [or used by the Uzbekistanis] as any sort of validation of economic or any other policies."
The EBRD's actions seem to have been influenced by the negative publicity that has hounded the Tashkent meeting since Human Rights Watch began a campaign in the fall of 2002 to change the gathering's venue. The widely respected British publication The Economist lambasted the EBRD in October, running a short editorial titled "The European Bank for Repression and Dictatorship?" In criticizing the decision to meet in Tashkent, the editorial asked: "What on earth can the European Bank for Reconstruction and Development have been thinking of?"
The bank has responded to international pressure by limiting the Uzbek government's ability to use the meeting as a public relations platform. Among the meeting's initial scheduled media events, for example, is a session in which Human Rights Watch representatives will discuss the rights environment in Uzbekistan. The EBRD's intention is to turn this Tashkent meeting into "a forum for open debate."
In addition, the EBRD revised its Country Strategy for Uzbekistan on March 16, stating plainly that "executive power is not sufficiently balanced by the legislature or judiciary," criticizing "pervasive corruption" and noting that "systematic violations of the freedom of religion, expression, association and assembly have been documented by human rights monitors." The new strategy pledges the bank to "look for progress" in among other things press freedom and political pluralism.
Human rights organizations are cheered by the tougher stance on the Uzbek government. Nevertheless, they remain dissatisfied with the EBRD, saying the bank missed an opportunity during the run-up to the meeting to use all of its leverage to press Karimov for political and economic change.
"They [EBRD officials] failed to link improvements to the annual meeting, but did at least spell out that something is seriously wrong and they will do a review in one year's time," said Veronika Szente-Goldston, who has led Human Rights Watch's campaign to challenge the location.
"That's all fine," she said, referring to the EBRD's revised Country Strategy position. "But we want to hear these benchmarks reiterated over and over again [at the meeting and afterwards] by governors and senior bank officials and hear officials question the government on what Uzbekistan plans to do."
For the time being, Uzbek officials are acting as if there is no controversy over Uzbekistan's economic performance. On April 23, the Uzbek government presented a report on the country's financial performance for the first quarter of 2003 that claimed "a trend in which stable economic growth was ensured," Uzbek radio reported. On May 1, Karimov welcomed John Odling-Smee, a top International Monetary Fund (IMF) official responsible for European activity. Uzbek state television characterized the meeting as "a sign of growing cooperation between Uzbekistan and the IMF." In reality, IMF officials have grown increasingly exasperated with Uzbekistan over the past year. [For additional information see the Eurasia Insight archives].
While state-controlled media outlets have blocked much of the international criticism from reaching the Uzbek public, Karimov has taken steps in recent weeks that have tacitly recognized international concerns. On April 22, the cabinet issued a resolution that aims to stimulate private sector activity. It also calls for the development of a "plan for the gradual handover on a competitive basis in 2003-04 of state share packages to professional management companies." Two days later, Karimov proposed a constitutional change that would reduce the authority of the president.
Given Uzbekistan's implementation record, most observers are taking a wait-and-see approach on Karimov's latest commitments. In the meantime, observers wonder whether the EBRD's strategy will succeed in persuading Uzbek authorities of the "significant benefits that would flow from a more open approach."
Szente-Goldston is calling on the EBRD to maintain its strategy after the annual meeting ends. Human Rights Watch wants the EBRD to educate major investors about how charges of torture are documented. It also urges the bank to link future loans explicitly to human rights reforms.
During the meeting, Szente-Goldston will watch to see how authorities behave when nongovernmental organizations try to stage protests in Tashkent. The Human Rights Society of Uzbekistan, one of the best-established dissident groups in the country, has announced plans to protest continuing imprisonment of its members.
"We are concerned about the potential setting up of roadblocks around Tashkent, though obviously the official reason will be to protect the meeting from terrorists," Szente-Goldston said. [For background, see the Eurasia Insight archives]. "It will be an important test to see what happens when nongovernmental partners try to get into Tashkent."
Alec Appelbaum is a contributing editor to EurasiaNet.