UZBEKISTAN

Country Overview

U.S. FOREIGN POLICY AND FOREIGN ASSISTANCE OBJECTIVES & PRIORITIES

The U.S. strongly supports the development of independent, stable, prosperous, and democratic countries in Central Asia. Uzbekistan, as Central Asia’s most populous country and its geographic center, should play a pivotal role in that development. It is also strategically located immediately north of Afghanistan. The U.S. has sought to develop a multi-faceted relationship with Uzbekistan covering a broad spectrum of issues including political and human rights, military-to-military cooperation, nonproliferation, economic reform, trade, assistance, and related issues. Until 2005, Uzbekistan was a strong partner of the U.S. on foreign policy and security issues, ranging from nuclear proliferation to narcotics trafficking. Uzbekistan viewed its ties with the U.S. as balancing regional influences, helping Uzbekistan assert its own regional role, and encouraging foreign investment. Uzbekistan also sought active participation in Western security initiatives under the OSCE and NATO’s Partnership for Peace and the Euro-Atlantic Partnership Council. However, Uzbek Government (GOU) relations with the U.S. and the West have been strained since the tragic events at Andijan in May 2005.

U.S. Government (USG) foreign assistance programs in FY 2007 were designed to promote market reform and to establish a foundation for an open, prosperous, democratic society. Priorities in FY 2007 included promoting educational and professional exchanges and other programs that offer Uzbeks the opportunity to study in the U.S. and to establish professional contacts with U.S. counterparts and offering technical support for Uzbekistan’s efforts to restructure its economy assisting Uzbekistan to improve its environment and health care system. Other priorities were improving drinking water availability and quality in the Aral Sea region and supporting nascent Uzbek non-governmental organizations (NGOs).

OPERATING ENVIRONMENT

The promotion of political rights and democratic reform remained top priorities for USG assistance Uzbekistan. However, in-country implementation of democracy programs was hampered by lack of GOU cooperation. In 2007, several U.S. implementing partners closed their offices in Uzbekistan, particularly in the economic development and civil society sectors. With a few notable exceptions, most of the USG partners implementing activities in the area of Governing Justly and Democratically have been closed. The USG continued to work with the remaining partners on innovative approaches that comply with local law and USG policy guidance. The USG will continue to focus on protection of human rights, strengthening civil society, expanding citizen participation in local government, and increasing access to information and will continue to seek windows of opportunity in the operating environment for programs that advance the goals in the area of Governing Justly and Democratically.

Assistance programs in other areas were also influenced by the degree to which Uzbeks were willing to work with us. Activities in the area of Investing in People occasionally encountered operational hurdles which delayed their implementation, but did not significantly lessen their overall impact. The GOU continues to value U.S. assistance in health. While some major programs in maternal and child health, family planning/reproductive health, and drug demand reduction closed at the end of 2007, some elements of these programs have either been extended into 2008 by the original partner or will be continued by other partners. Despite the strain in bilateral relations, the successful credit union strengthening program also gained GOU support.

In the last quarter of FY 2007 the GOU signaled its intention to slowly re-engage on programs in various areas including: economic reform, vocational education, work with the disabled, responding to trafficking in persons, secondary education, and human rights programs focused on working with prisoners.

FY 2007 Country Program Performance

PEACE AND SECURITY

Uzbekistan faces several significant challenges to its security created by its proximity to the burgeoning Central Asian narcotics trade and by the presence within its borders of dangerous remnants of Soviet chemical and biological weapons programs. In FY 2007 the U.S. sought to advance mutual U.S-Uzbek security interests and to maintain a meaningful and productive security relationship with Uzbekistan, despite unproductive actions by the GOU. USG projects in this area were carefully designed to avoid enhancing the GOU’s ability to repress its citizens or threaten its neighbors. USG objectives in FY 2007 in the Peace and Security area focused on improving Uzbekistan’s ability to monitor and interdict the transit of terrorists, WMD materiel and narcotics across its borders and working with Uzbek law enforcement and security structures to foster reform and facilitate necessary interactions in support of NATO operations in Afghanistan. Other objectives included assisting the GOU in the destruction and proper management of dangerous special weapons stockpiles; and supporting the GOU to creating policies and infrastructure to discourage youth drug use and trafficking-in-persons.

Combating Weapons of Mass Destruction (WMD) - During FY 2007 the objectives for USG WMD proliferation prevention programs were to improve Uzbekistan’s ability to detect radioactive materiel entering its borders, increase the capacity of Uzbekistan’s border service to interdict WMD and illegal shipments of conventional weapons; and improve the protection and safety procedures for biological warfare agents under GOU control.

To strengthen Uzbekistan’s ability to detect radioactive materiel entering its borders, the USG continued to install WMD radiation portal monitoring systems and associated communications upgrades at the busiest international ports of entry in Uzbekistan; in FY 2007eight international ports of entry received these installations. At year-end, the USG was in the final stages of delivering three mobile radiation portal monitoring units to the State Customs Committee. Thanks to USG support, Uzbekistan now has a sophisticated network of portal monitors among the most advanced in the world and compares favorably with the networks of most OSCE countries.

To improve Uzbekistan’s control over illegal shipments of weapons, the USG refurbished four border crossing points at remote locations in Uzbekistan, which were flagged as needing improvement during previous site inspection visits. In addition, the USG conducted a bilateral licensing procedures and practices workshop in Tashkent in November 2006 for ten officials from the Customs Service, Border Guards, and the Ministry for Foreign Economic Relations, Investments, and Trade. The USG bio-threat reduction program completed renovation of two GOU biological laboratories and began work on a combined human and veterinary facility. The renovations included state-of-the-art diagnostic equipment to assist in the safe and secure research of hazardous diseases.

Stabilization Operations – Defense and Military Reform - The objective of USG defense and military reform programs in FY 2007 was to improve U.S. – Uzbek defense cooperation and understanding by developing partner relationships and planning and implementing joint military training operations. In spring 2007, the GOU denied visas to key U.S. visitors for joint projects between the U.S. Department of Defense and the Uzbek Ministry of Defense (MOD), canceling several military-to-military events. However, after August 2007, bilateral military cooperation improved and a military-to-military plan was developed and approved. Two previously unscheduled military-to-military events took place in the early fall with less than a month’s notice. In FY 2007 the GOU approved a protocol for commercial military over-flight in support of operations in Afghanistan. The Uzbek MOD also hosted a delegation from U.S. Central Command and provided access to two military facilities.

As a result of improving military–to-military cooperation, in late FY 2007 the GOU extended the over flight protocol in support of NATO efforts in Afghanistan for another year without renegotiating the terms. In addition, preparation for FY 2008 military-to-military events was unusually ahead of schedule as the GOU diligently tried to fulfill the military-to-military plan.

Security Sector Reform - Law Enforcement Restructuring, Reform, and Operations - In FY 2007, the U.S. sought to improve the professionalism and effectiveness of GOU criminal forensic laboratories and technicians. The USG continued to upgrade the main forensics laboratory at the Ministry of Health (MOH), which carries out analyses for criminal investigations. A visiting Department of Justice forensic expert trained 53 lab employees, conducted a needs assessment, provided an overview of the use of physical evidence in criminal cases in the U.S. and discussed how physical evidence replaces testimonial evidence when necessary. Based on the needs assessment, the USG provided electrical and other equipment to enhance the analytical capability of the lab, including microscopes, a new light source for stereomicroscopy, and a generator. Lab technicians now understand their role in the Uzbek criminal justice system and use improved equipment. The MOH laboratory managers have a better appreciation of the deficiencies in the laboratory’s technical capabilities and its physical plant and the need to update many standard operating procedures that are more than 30 years old.

Counter-Narcotics - The objectives of USG assistance programs in this area in FY 2007 include improving the ability of Uzbek authorities to detect and intercept the traffic of illegal narcotics and increasing awareness among schoolchildren and parents of the dangers of drug use. The USG supported a visit by U.S. Customs Officers who trained more than 40 Uzbek counterparts in railroad and river operations and assessed the Uzbek Customs Institute. Based on the assessment’s recommendations, the USG donated basic equipment for distribution to Uzbek Customs Officers assigned to remote posts near the Afghanistan and Tajikistan borders.

During FY 2007 officials from the Uzbek Drug Control Center reported an increase in the number of large narcotics seizures and credited U.S.-provided training programs and equipment donations with building their capacity. In the first six months of 2007, Uzbek law enforcement officials seized 1,104 kilograms of illegal narcotics, which is an increase of eight percent compared to the same period in 2006, which in turn was a significant increase compared to 2005.

The USG funded a drug demand reduction project from November 2006 to May 2007 that provided awareness training to 2,376 schoolchildren and 1,000 parents and neighborhood leaders. The project designed produced and distributed five educational posters and a counter-drug brochure to schools and other institutions throughout Uzbekistan. As a result of the U.S. drug demand reduction efforts, the U.N. Office of Drugs and Crime documented a 7.3% increase in drug and HIV/AIDS awareness in participating schools as well as a decrease in drug use among fifth through ninth grade students from 0.42% in 2006 to 0.008% in 2007.

Transnational Crime - Countering Trafficking-in-Persons and Migrant Smuggling - The State Department’s Annual Report ranked Uzbekistan as Tier 3 in Trafficking in Persons (TIP). The GOU cooperated well with the UGS on anti-trafficking assistance programs. USG-funded programs in FY 2007 worked to improve GOU performance on protection, prosecution, and prevention of human trafficking as well as migrant worker abuse.

During FY 2007 the USG assisted 556 human trafficking victims in Uzbekistan, supported hotlines that averaged over 4,000 calls a quarter, and raised the Uzbek population's awareness of trafficking through a variety of mediums – from theater plays to public service announcements on television. The USG supported a network of 10 NGOs engaged in counter-trafficking activities throughout the country. In order to tackle the growing population of persons trafficked from Uzbekistan, the USG developed new informational materials to raise awareness among labor migrants going to Kazakhstan. USG local partners distributed a brochure printed in both Uzbek and Russian at key border crossings. Programs also focused on increasing understanding of TIP among conservative religious communities and youth. Youth programs held at 85 summer camps reached over 7,000 minors.

The USG supported an anti-TIP law enforcement-training project administered by the main International Organization for Migration-affiliated NGO working in Uzbekistan. Ten training programs and seminars were conducted from March to September 2007, involving more than 200 law enforcement officials from several agencies throughout the country.

The past years of USG-sponsored human trafficking awareness-raising programs, including targeted training to law enforcement personnel, have had an impact. In August 2007, a high-ranking Ministry of Internal Affairs official reported increased awareness of the trafficking problem among officers and a marked increase in the number of successfully prosecuted TIP cases. Statistics from the Office of the State Prosecutor indicated that the GOU increased the documented complaints for TIP-related crimes by 35% because of the sustained training efforts. The same NGO reported on multiple occasions during FY 2007 that increased awareness of human trafficking among law enforcement officers, and particularly greater sensitivity to victims, has made it much easier to successfully prosecute traffickers and care for victims.

GOVERNING JUSTLY AND DEMOCRATICALLY

Uzbekistan consistently remains in the lowest quarter of international indices measuring protection of human rights and rule of law, receiving the lowest rating of 7.0 in the 2007 Freedom House Report on International Freedom. Imprisonment and harassment of human rights activists and journalists and the GOU’s continued closure of all but a few NGOs, made efforts to encourage democratic reforms in Uzbekistan especially challenging. Despite this restrictive environment, the USG supported projects to promote and protect human rights, build the capacity of civil society organizations, and expand civic participation.

Human Rights and Rule of Law - The objectives of USG human rights programs in Uzbekistan in FY 2007 included supporting and improving the ability of private groups to monitor and report on GOU human rights practices and increasing law enforcement awareness and implementation of international standards for suspect and prisoner treatment as well as other international human rights obligations.

Despite Uzbekistan’s highly restrictive environment, the USG in FY 2007 facilitated linkages among Uzbek human rights defenders as well as between Uzbek and other Central Asian human rights defenders, NGOs, and international public and private organizations. The USG also supported internships in regional human rights organizations to improve the technical skills of Uzbekistan's human rights activists, and youth in particular, to better monitor and report on abuses. The USG supported a number of Uzbek NGO-led initiatives to promote human rights. The USG funded an Uzbek youth human rights group, which trained 168 activists, journalists, and youth leaders from throughout Uzbekistan. A USG-supported NGO also trained dozens of doctors how to collect information about human rights abuses from prison inmates receiving medical treatment after possible torture. The USG continued to support a network of four legal resource centers and opened a new legal resource center in FY 2007. These centers collectively provided legal support to over 230 individuals and were the impetus behind improved monitoring of human rights cases, particularly the exploitation of children in agriculture. Women ran three of these pro bono clinics. As a result, human rights groups became more active. They expanded their Internet coverage of politically motivated trials and prisoners of conscience, monitored dozens of trials of people prosecuted for their religious beliefs, established a “human rights hot-line,” and more effectively advocated for improvements in the human rights environment in their communities.

The USG fostered dialogue between GOU law enforcement and human rights communities through informal consultations. These discussions provided law enforcement with a greater understanding of human rights issues and greater exposure to international standards and practices.

Uzbekistan implemented several important legal reforms in FY 2007 including the abolition of the death penalty and passage of a habeas corpus law. The USG assisted officials and working groups on these issues with exchanges, trainings, and technical assistance.

Civil Society – Civic Participation - USG objectives in this area in FY 2007 included increasing the capacity of local civil society groups and expanding civil society’s awareness of current legislation and their legal rights. Despite the constrained environment, the USG worked directly with NGOs, civil society leaders, and alumni of U.S. exchanges to develop skills and practices vital to their sustained operation in Uzbekistan. The USG provided legal consultations through a network of lawyers on compliance with local law and regulations to more than 175 organizations, reducing their vulnerability to closure and providing strategies to deal with harassment. The USG provided advice on how organizations could take advantage of new tax incentives, including the new law governing charitable donations.

The USG supported 25 civic education training/debate programs for 500 youths in Karakalpakstan, a region in Western Uzbekistan. One hundred and fifty youth participated in a civil society and leadership workshop in Kokand, located in the Ferghana Valley. The USG also provided small grants, enabling numerous NGOs to carry out activities that benefited their communities.

The USG also provided small grants to alumni of USG exchange programs to implement community service projects in their towns and villages. A former Muskie grantee used one of these grants to organize a job fair, which attracted more than 170 exchange alumni and 15 companies seeking qualified young professionals to join their workforce. Over 70 USG alumni attended the USG-organized, first annual alumni conference, “Bridging Oceans, Building Futures.” The conference included participant-led discussions on the importance of community service, grant writing, and best practices for alumni organizations in Uzbekistan. A large group of USG alumni marked Earth Day by planting 200 fruit trees to help prevent landslides on the steep slopes of the town of Chimgan. USG exchange alumni also led scout camps and clean-up days in Ugam-Charvak National Park and Shilpik, bolstering environmental conservation and volunteerism among Uzbek youth.

The USG sent 38 participants, including farmers, health care specialists, teachers and NGO leaders on three-week tours to the U.S. to introduce education, medical, and agricultural systems.

Civil Society – Media Freedom and Freedom of Information - In FY 2007 media freedom in Uzbekistan remained extremely constrained, characterized by the lack of any independent print or broadcast media, and significant obstruction of access to information via the Internet. In 2007, even transporting information in electronic form across borders came under GOU scrutiny. USG objectives in FY 2007 for these activities included increasing the public’s access to objective news and information and improving the skills of journalists.

The USG expanded access to objective information through support for the operation of websites, Internet centers, and satellite broadcasting throughout the country. In FY 2007 the U.S. supported the launch of independent satellite broadcasting for Central Asia. The broadcast, which reaches an estimated 2.3 million households, provides locally produced-content in Uzbek and Russian as well as documentaries from Russia, the U.S., and elsewhere. Because much of the content is produced locally, it provides space for independent content un-influenced by regional political entities or by the U.S..

The USG supported the expansion of analytical news websites, enabling tens of thousands of Uzbeks to gain access to information on current events. The USG also provided small grants to TV stations, news websites, and journalists to improve their professional capabilities and expand their programming. In addition, the USG helped to establish the Association of Young Journalists, which taught journalism in Uzbek schools and produced youth programs for Uzbek State TV’s Yoshlar (Youth) Channel. Due to these activities, over 800,000 people in Ferghana City were able to view monthly-televised talk shows on problems facing women, while over 600,000 Ferghana Valley residents watched ten talk shows about the upcoming December 2007 presidential elections. These broadcasts broadened the political discourse, highlighted important issues for voters to consider, and instilled a better understanding of the important role elections play in a democracy.

INVESTING IN PEOPLE

A responsive social sector, by delivering essential services to the country’s population, protects the public health, improves productivity, mitigates poverty, and empowers participation in civil society. In FY 2007 USG assistance objectives in the area of Investing in People included improving financing, management, and overall quality of primary health care services as well as promoting health policy reform. Other objectives included improving surveillance and control of key infectious diseases and bolstering young people’s knowledge base and leadership skills.

HIV/AIDS and Tuberculosis (TB) - U.S. assistance in FY 2007 sought to minimize the impact of HIV/AIDS and TB on the Uzbek population. To further this goal, the USG worked with the GOU to increase public awareness of HIV/AIDS and TB to slow their spread and work with vulnerable populations to improve implementation of prevention methods. The USG also worked with the GOU to improve policies and the quality of care and strengthen the ability of the MOH to monitor and counter the spread of infectious disease.

USG assistance slowed the spread of HIV/AIDS by reducing domestic demand for illegal drugs, increasing public awareness, and working with vulnerable populations. The USG sponsored peer education, counseling, alternative activities, and outreach to at-risk youth, prisoners, sex workers and drug users. Eighty-seven outreach workers were trained in the “Break the Cycle” program, designed to discourage injecting drug users from being persuaded by non-injectors to start using drugs. More than 47,000 youth and 9,505 sex workers (including 722 drug-using sex workers) participated in USG-funded training and outreach events on HIV/AIDS prevention and drug-demand reduction. Almost 2,600 drug users, including 48 sex workers, received rehabilitation counseling, life skills training, and vocational education. The USG trained prison staff in methods to prevent the spread of HIV/AIDS and trained civilian staff in treatment readiness and rehabilitation. More than 1,000 prisoners received information on healthy behaviors and the risks of opiate use, and 34 medical and non-medical prison staff received training on drug-demand reduction and counseling. The USG funded the integration of HIV prevention materials and case studies into training for 450 future teachers of visiting nurses. More than 100 people were trained in maternity and primary-care facilities on HIV prevention. USG technical assistance also allowed the National Reference Laboratory to conduct nationwide anti-HIV proficiency testing in 29 laboratories.

The USG also supported efforts to reform national HIV/AIDS policies andimprove the quality of HIV/AIDS services. The USG partnered with the Global Fund for AIDS, Tuberculosis & Malaria and the World Bank to finance HIV/AIDS sentinel surveillance nationwide, training 300 epidemiologists and 18 lab specialists from all HIV/AIDS centers on sentinel surveillance and quality assurance, respectively. The USG also drafted a groundbreaking agreement with the Ministry of Internal Affairs to conduct HIV/AIDS sentinel surveillance among prisoners in FY 2008; data collected will help the GOU to make informed policy-related decisions. In addition, the USG trained 18 laboratory staff in diagnosis and case management of HIV and supported the Asian Development Bank’s blood safety project.

USG TB programs identified best practices for implementing the World Health Organization (WHO) standards, managing HIV-tuberculosis co-infection, treating multi-drug-resistant TB, maintaining adequate drug supplies, and improving TB program supervision and surveillance. The USG assisted the GOU to develop a national Directly Observed Therapy Short (DOTS) course and train at least one TB specialist in each district to supervise DOTS implementation at primary health-care facilities. The USG produced and delivered 13,100 copies of a TB booklet in Russian and Uzbek to train visiting nurses in coordination with the Asian Development Bank. In collaboration with the national TB DOTS centers, the USG also developed a curriculum for post-graduate health specialist education. The USG helped develop a logistics management information system training program, for which 53 TB program staff, representing 10 regions received training. These trainees then taught all region-level TB specialists to use this logistics management information system. The USG-supported TB epidemiological surveillance and case management software system went into operation at the national level, and 172 health professionals were trained to use it. In addition, the USG completed a groundbreaking study of 258 TB treatment defaulters.

U.S. HIV/AIDS and TB programs in Uzbekistan continued to show positive results. The MOH approved and disseminated to surveillance sites around the country USG-financed guidelines on fingerstick blood testing for HIV/AIDS, which significantly improve current laboratory practice. USG leadership in drug-demand reduction activities shaped the GOU’s strategy to target vulnerable groups with HIV prevention activities, and led to the prison administration’s first-ever request for assistance in gauging the magnitude of HIV infection and high-risk behavior in the prison population.

The GOU used TB data collected through the USG-funded TB epidemiological surveillance and case management software system to produce its annual report to the Global Fund (GFATM). In addition, the GOU used funding from the Damien Foundation to replicate laboratory quality control procedures developed by the USG in Samarkand to three additional regions: Kashkadarya, Surkhandarya, and Bukhara.

The GOU used data from the completed USG-funded TB defaulters study to improve Uzbekistan’s treatment success rate. USG assistance provided critical training to the MOH that improved Uzbekistan’s implementation of the WHO’s “Stop TB” strategy and helped prepare the national HIV/AIDS response plan. The national DOTS center commissioned a USG implementer for the first time to assist in the development of new approaches to improve Uzbekistan’s TB treatment success rate.

Improving Health Financing and Service Delivery - Objectives for U.S. assistance in this sector in FY 2007 included increasing the use of primary health care financing and service delivery models in Uzbekistan, decreasing the number of patients unnecessarily entering hospitals and improving the overall quality of health services in Uzbekistan.

The USG provided the GOU technical assistance in a number of public health areas including: management reform for urban clinics, implementation of a national rural primary-care reform model, evidence-based clinical training for nurses and doctors, improving medical education standards to meet international norms, and building consensus for a national quality improvement strategy. Urban primary health-care finance and management reforms now include 25 facilities in four pilot cities, including the capital of Tashkent. The USG trained five epidemiologists and supported program graduates to conduct field research studies. With USG assistance, epidemiologists helped to prepare a protocol and began a study of the impact of rubella vaccination on the incidence of congenital rubella.

As a result of U.S. assistance, 10% of Uzbekistan’s population, or 2,630,291 people, is currently covered by the complete USG-supported health financing package. With four new regions includedIn FY 2007the USG expanded rural primary health-care finance and management reforms to nine of Uzbekistan’s 13 regions. Sixty-six percent of rural primary health-care providers are paid under these financing systems, up from 25% in FY 2006. In addition, the number of primary health-care facilities implementing the quality improvement process increased from 112 to 174. Results on a composite indicator measuring screening for hypertension, provider diagnostic practices, patient education, and blood pressure under control improved from 72% in 2006 to 74%In FY 2007a significant improvement in overall health service delivery.

USG programs demonstrated that involving civil society in health care improves the overall health system, and that mobilizing communities around health issues is an effective catalyst for civil society development. In FY 2007 the USG continued to mobilize communities around health campaigns through local government, social service organizations, indigenous community organizations, parent-teacher associations, women’s groups, visiting nurses, and volunteers. USG activities increased community participation in local priority-setting, decision making, and problem solving. USG programs increased transparency and accountability of public services through on-site technical assistance. USG assistance leveraged relatively small investments in technical and management expertise to greatly extend the effectiveness and impact of major funding from international donors with limited in-country oversight capacity. Reform of health care finance and management enabled rural clinics to raise their credibility with community members, resulting in fewer patients reporting unnecessarily to hospital-based specialists and fewer informal payments for care. USG programs advanced the profession of general practice by improving the general practioners’ retraining curriculum and upgrading the skills of general practitioners’ trainers, and working to unify and improve the undergraduate curricula of the Tashkent Medical Academy and the Pediatrics Academy to ensure future high-quality general practitioners. An institutional culture of health-care quality improvement, supported by USG programs, was gaining momentum in primary health-care facilities. USG technical assistance began transforming Uzbekistan’s 10,000 visiting nurses into a effective force for community health education.

Maternal and Child Health - The objectives of U.S. maternal and child health assistance in FY 2007 were to increase the quality of maternal and child health services provided in Uzbekistan, improve the training of doctors and other healthcare professionals and improve GOU reporting on infant mortality. The USG trained service providers in evidence-based prenatal, perinatal and postnatal care, infection prevention, and management of early childhood illness. The USG trained health professionals to register infant births and deaths using international definition for live births. The USG sponsored a multi-sectoral working group that informed the GOU on maternal healthcare issues and led directly to a re-drafting of crucial legislation on infection prevention, safe motherhood, and pediatric care. The USG helped adapt the “Making Pregnancy Safer” maternal and newborn care module, and in collaboration with the United Nations Population Fund (UNFPA), trained general practitioners to serve as trainers to make pregnancy safer. The USG supported new module on “Integrated Management of Childhood Illnesses” that was incorporated into the retraining curriculum for general practicioners. In addition, the USG developed a new clinical practice guideline on anemia in women and children and continued anemia improvement projects.

The USG trained 758 individuals on topics related to maternal or newborn health and community volunteers conducted 3,253 health education sessions for 61,386 participants. A database for recording and analyzing community behavior-change communications activities was developed and installed. Nearly 800 health professionals from four regions received training to register infant births and deaths using the international live birth definition, bringing the proportion of health professionals trained to approximately 80% of the total requiring training. As a result of USG assistance, the MOH issued a directive expected to significantly improve medical care for children at the hospital level.

Family Planning and Reproductive Health - The objectives of U.S. assistance in this sector in FY 2007 was to improve service provision and increase awareness of the Uzbek population of the full range of modern family planning alternatives.

USG assistancestrengthened reproductive health services through provider training, community mobilization, policy support, and distribution of family planning materials. Contraceptive commodities imported by the USG were distributed at the sites where midwives provide intra-uterine device insertion services. A contraceptive logistics system developed by the USG is helping to ensure that contraceptives are correctly stored and distributed in a timely manner. Twenty-nine new health providers in pilot districts were trained on reproductive health topics, resulting in a total of 94 individuals trained and monitored by quality assurance visits. The USG provided technical assistance to design the reproductive health course currently being rolled out across the country as a continuing education module for general practitioners. The USG also financed the update and integration of modules on reproductive health into Uzbekistan’s general practice retraining curriculum. USG-supported community volunteers conducted 978 health education sessions attended by community members on family planning and sexually transmitted infections. The USG also distributed more than 100,000 booklets on the aforementioned topics to women and men of reproductive age.

The USG continued to increase access to quality family planning services for Uzbek women, and supported training of midwives providing of the full range of reproductive health services, including the insertion of intra-uterine devices in remote rural areas where adequately trained physicians are not available.

Education - In spite of restrictive GOU policy, the USG continued its support in basic education through informal meetings and consultations with GOU partners in the areas of teacher training and education finance. USG-trained Uzbek trainers facilitated the development of interactive teaching and learning methodology modules in neighboring countries and helped launch a new GOU project funded by the World Bank. The USG supported the development of manuals on community and parent involvement in education decision-making and practical guidance for school administrators on education finance and management. These manuals will be distributed to pilot schools and key stakeholders.

In the higher education area, the USG funded three full, four-year scholarships for Uzbek students at the American University-Central Asia in Bishkek, the Kyrgyz Republic, and the Tashkent-based International Business School “Kelajak Ilmi.” In addition, alumni of U.S. exchange programs won small grants to teach “Dynamic English” courses to 100 Uzbek youth and dozens of teachers. Alumni also expanded their English textbook collection and created a student-centered interactive classroom. An alumnus of a high-school exchange program organized an English Language Leadership Summer School for dozens of youth in Jizzakh. Over 240 secondary school students in the Ferghana Region expanded their computer literacy skills through an USG alumnus-led training session. USG alumni also launched on-line “learning circles” about democracy and civic education, involving over 20 teachers and 1000 students from throughout Central Asia.

ECONOMIC GROWTH

Macroeconomic stability remained vital for economic growth in Uzbekistan, but neither the political environment nor the stated GOU policy supported the reforms needed to encourage private sector growth and investment. The GOU has moved warily toward a market system and has made certain progress controlling inflation and budget deficits. However, the GOU’s restrictive trade regime, particularly import barriers, reduced economic opportunities. The GOU also placed obstacles in the way of banking reform and micro-finance activities. Uzbekistan’s economy still needs structural reforms.

The overall USG objective was to promote wider understanding of key issues that affect the environment for small and medium enterprises, investment, and trade. USG economic growth assistance at the fiscal year’s end focused on increasing opportunities for rural populations in the agricultural sector, reducing policy barriers to agricultural trade and investment, supporting credit unions and fostering linkages to promote regional integration and mitigate economic isolation.

Because the GOU did not meet the conditions required for certification as specified in the FY 2006 Foreign Operations Appropriations Act, the USG provided no direct economic assistance to the central government of Uzbekistan. USG programs remained engaged with NGOs and local partners, however. The GOU continued to restrict foreign NGOs in Uzbekistan, which directly affected overall USG activity. Despite these obstacles, the USG continued technical assistance in this area through non-government think tanks, universities, and other entities that have the potential to influence GOU economic policy-making indirectly and to improve public discourse on reform issues.

Macroeconomic Reform and Financial Sector Programs - The banking sector in Uzbekistan remained weak and monetization low, despite limited GOU reforms designed to increase lending for real estate, consumers and SME. The GOU undertook efforts to stimulate microfinance development and expand non-bank financial institutions, but these efforts were inadequate in comparison with needs of the economy. Last year, 2007, was a challenging year for the Uzbek microfinance sector. The GOU adopted two new laws for the sector and as a result prosecuted several microfinance institutions (MFIs) for alleged tax evasion and other violations. The country’s two largest and U.S. supported microfinance institutions, FV Mard, and FINCA Uzbekistan, were forced to close down.

USG objectives in this area in FY 2007 included enhancing the ability of the private sector to influence the GOU’s fiscal and economic policy, improving the skills of Uzbek accountants, diversifying the Uzbek financial services market to broaden access to credit and provide choices for Uzbek consumers and increasing the security of existing financial service providers.

To enhance the ability of the private sector to influence the GOU’s fiscal and economic policy, USG assistance in FY 2007 supported six research projects that addressed key economic issues such as improving the efficiency of public utility services, land use rights, and the competitive development of chemical fertilizer production. Other research areas included the agricultural machinery sector and the export capacity of the food and vegetable sector in view of changes needed for World Trade Organization accession. Another key accomplishment was continued publication of the periodic analytical journal “Uzbekistan Economic Review” in collaboration with a leading Uzbek think tank, the UNDP-financed Center for Economic Research. USG assistance provided training and networking opportunities for more than 30 researchers from Uzbek universities and research institutes, including a lecture series attended by dozens of Uzbekistan’s top researchers and economic officials.

To improve the skills of Uzbek accountants and thus foster enterprise efficiency and integration, the USG supported a training and exam for accountants and auditors to meet the internationally recognized Certified Accounting Practitioner (CAP) and Certified International Professional Accountant (CIPA) certification requirements. In 2007, 287 accountants became CAPs, and eight accountants became CIPAs. In recognition of the importance it places on the USG accountant training program, the GOU required graduation from the program as a prerequisite for obtaining an auditor’s license. USG accountant training programs improved implementation of reliable accounting practices throughout the economy and helped to improve corporate governance by promoting effective financial management, transparency, accountability and professional values, principles and ethics.

Despite regulatory and political constraints, the USG diversified the Uzbek financial services market by providing limited technical assistance to an unregistered microfinance association. The association in turn successfully conducted a number of activities to improve the legislative framework and help several MFIs to re-register under the newly adopted microfinance laws. In addition, the USG supported the Uzbek Savings and Credit Unions (SCU). USG assistance in this area shifted focus from individual SCU-level assistance to building the capacity of the SCU Association. Due to U.S. support, the SCU Association is financially and operationally sustainable. Income from financial services exceeded 50% of the Association’s total income and the Association created its own audit department that controls the quality of operations and the financial soundness of the insured SCUs. To ensure long-term financial and operational sustainability, the Association, with USG support, started deposit insurance services for member-SCUs. At the end of FY 2007, 11 SCUs had met conditions for participating in the deposit insurance scheme.

Previous U.S. investments in the SCU sector continued to show results in FY 2007 and the sector has grown into a viable alternate source of financial services for underserved populations in Uzbekistan. During FY 2007, membership in credit unions increased from 47,876 to 63,390 and the aggregate amount of total deposits (shares and savings) grew from $10.5 million to $25 million. This significant growth is a reflection of the high quality of savings services offered by credit unions and growing recognition and awareness of the sector among the general population.

Agriculture - Uzbekistan has vast agricultural production, processing, and export potential for fruits and vegetables. Historically a major source of fresh and processed fruits and vegetables for the Russian market, Uzbekistan has been able to capitalize on favorable climate conditions and it is now evolving into a major supplier for Kazakhstan. However, the challenges are many, including policies that force farmers to grow cotton with very low, or even negative, returns. Other constraints to agricultural development in the country include limited access to inputs and markets. The USG’s assistance in the agricultural sector has been limited in Uzbekistan due to a difficult working environment. Primary objectives in FY 2007 included increasing farmers’ capacity to manage on-farm irrigation and drainage systems and improving individual farmer production and profitability.

In April 2007, the USG found an appropriate local partner and was fully able to resume activities with Water Users Associations (WUAs) in Uzbekistan after the forced withdrawal of the previous project implementer in July 2006. The overall objective of USG-supported efforts in Uzbekistan was to create and strengthen WUAs so that farmers can operate, manage, and make the investment decisions needed to maintain and improve on-farm irrigation and drainage systems. Seven new WUAs were established in 2007. Since April, more than 6500 participants have received training in WUA management and governance. Twenty-three WUAs now have increased capacity to prepare and implement water distribution plans and schedules, to prepare and manage annual budgets and finances and to collect fees from members to cover services and operating costs. These WUAs also organize irrigation system rehabilitation and maintenance, mobilize labor and in-kind contributions from WUA members, use transparent and democratic processes for decision-making, and inform members about WUA issues and activities.

WUAs have increased their investment in the irrigation and drainage infrastructure, due to capacity building and technical assistance. Irrigation service fees increased to more than $86,400; up from $70,366 in 2006. Water management and delivery has improved on twenty-three WUAs covering an area of more than 56,000 hectares. This resulted in reduced conflict over water delivery and scheduling and increased income. Irrigation infrastructure rehabilitation along with training has led to increased agricultural productivity. Data from 2006 to 2007 indicates that the average increase in profitability of farmers has increased by 36%, largely due to improved water rehabilitation and management. The increase might have been much higher if GOU had not interrupted the program, causing a loss of almost one full growing season.

The USG also funded a number of agricultural exchanges during FY 2007. Project participants traveled to the U.S. for four-week intensive study tours in a number of agricultural disciplines. The USG also continued faculty-level agricultural faculty exchange programs. GOU pressure had an increasingly negative effect on the pace of these exchanges; in some cases, participants were harassed upon returning home.

Private Sector Competitiveness - USG private sector assistance programs in FY 2007 sought to improve the public discourse on subjects related to economic growth and demonstrate the power of private investment through targeted small-scale pilot projects. USG assistance was limited to informing key audiences of economic policy and discrete investment activities. Given the constraints of USG assistance in Uzbekistan, the USG worked with non-governmental think tanks, universities, and other entities to conduct and disseminate economic research on topics identified by key business sectors, as described in the section of the report on macroeconomic reform and the financial sector.

During FY 2007, the USG made a number of small but surprisingly successful investments through the Central Asia Small Enterprise Fund. The Semurg Estates - Semurg Hotel, Aqua Tudakul integrated fish business, and the company Business Leasing out-performed expectations. New Business World pharmaceutical investment, locally registered as Summit Trading, met expectations despite local currency conversion problems. In addition, the USG funded a small number of professional exchanges for Uzbek businesspeople. Participants traveled to the U.S. for a number of weeks to study U.S. practices in various commercial sectors.

Environment - USG assistance in this sector in FY 2007 increased public awareness of environmental conservation. Programming included pilot projects using clean energy technology, demonstration of waste management and recycling methods, and promoting environmentally conscious water management. In late FY 2007, the USG began five small projects aimed at promoting the use of sustainable natural resource management practices in local communities and organizations. More than 50 families learned about their individual impact on the environment and strategies for conservation during their participation in USG-funded environmental conservation seminars. In addition, a solar panel demonstration project at an orphanage near Tashkent taught the community about the advantages of environmentally friendly technology.

The USG funded the distribution over 1,000 manuals on family environmental safety and conservation in rural areas of Ferghana and Samarkand and produced a ten-minute radio program on best practices for recycling waste that reached nearly 120,000 inhabitants of Angren (Tashkent Region). The USG funded a series of environmental seminars throughout Uzbekistan that taught 60 community leaders in Angren about recycling and the safe management of industrial waste, 80 community leaders, journalists, international NGOs directors, and government officials about the benefits of renewable energy, and 100 neighborhood representatives and 360 local government officials best practices for sustainable water use.

Another USG program in the mountainous town of Nanai helped the community form a local water committee to improve the quality and supply of potable water distributed to its 1,800 residents. The USG also trained thirteen environmental specialists who traveled the country and educated teachers on environmental protection issues. Participants in these programs came from a diverse set of organizations including those specializing in women's issues, the rights of the disabled, environmental protection and other areas.

HUMANITARIAN ASSISTANCE

The goal of the USG humanitarian program is to improve the welfare of isolated, vulnerable populations throughout Uzbekistan. The program also sought to support U.S. donors working with vulnerable populations in the country.

In FY 2007, the humanitarian program delivered one medical airlift and 36 containers of supplies to Uzbekistan, via a number of U.S. partners and various local partner groups. The total value of commodities shipped was $14.6 million, and the total support cost, including transportation, was $590,000. Commodities delivered included medical supplies, medicines, and foodstuffs to reduce food insecurity among vulnerable population groups. The USG closely monitored all delivered commodities and worked with local officials to ensure medicines and other items are delivered to those who really need them.

The USG also continued a program to provide free shipping to qualified, registered U.S. charitable organizations that wished to send humanitarian commodities to proven local partners in Uzbekistan. Humanitarian programs do assist local health officials identify areas in need of improvement and act as a blueprint for how to begin solving critical social welfare and social service delivery problems.

FY 2007 Measures of Country Performance

The following data are based on the Monitoring Country Progress in Europe and Eurasia system developed by the United States Agency for International Development (USAID) to measure and track progress in the region. The system uses four different indices to monitor progress, drawing on readily available standardized country-level data on economic reform, economic structure and performance, democratic reform, and human capital. The primary data sources are the European Bank for Reconstruction and Development (EBRD), the World Bank, the United Nations Children’s Fund (UNICEF), and Freedom House. The data for each of the four indices are converted and standardized to a 1-to-5 scale, with a “5” representing the best performance of the Eastern Europe and Eurasia region, and a “1 the least advancement of the region.

Uzbekistan’s Democratic Reform* Scores in 2006 compared to Romania and Bulgaria in 2002

The graph to the left shows Uzbekistan’s democratic reform scores in 2006* (the grey shaded area) as compared to the average of Romania’s and Bulgaria’s democratic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership. *Actual 2007 scores not yet available

Uzbekistan’s Democratic Reform Scores in 2006 compared to its Reform Scores in 1999

The graph to the left shows Uzbekistan’s democratic reform scores in 2006* (the grey shaded area) as compared to its democratic reform scores in 1999 (the bold line). *Actual 2007 scores not yet available

*Democratic reforms include the electoral process (the extent to which elections are free, fair and competitive), civil society (primarily NGO development), the independence of media, public governance and administration, rule of law (primarily judicial reform) and the scope of corruption as well as anti-corruption income.

Uzbekistan’s 1^st Stage Economic Reform* 2007 Scores Compared to Bulgaria and Romania in 2002

The graph to the left shows Uzbekistan‘s stage one economic reform scores in 2007 (the grey shaded area) as compared to the average of Romania’s and Bulgaria’s economic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership.

Uzbekistan’s 1^st Stage Economic Reform 2007 Scores Compared to its Scores in 1999

The graph to the left shows Uzbekistan’s stage one economic reform scores in 2007 (the grey shaded area) as compared to its economic reform scores in 1999 (the bold line).

Uzbekistan’s 2^nd Stage Economic Reform 2007 Scores Compared to Bulgaria and Romania in 2002

The graph to the left shows Uzbekistan’s stage two economic reform scores in 2007 (the grey shaded area) as compared to the average of Romania’s and Bulgaria’s economic reform scores in 2002 (the bold line) when they were invited to join NATO and received favorable indications of future EU membership.

Uzbekistan’s 2^nd Stage Economic Reform 2007 Scores Compared to its Scores in 1999

The graph to the left shows Uzbekistan’s stage two economic reform scores in 2007 (the grey shaded area) as compared to its economic reform scores in 1999 (the bold line).

*Economic reforms include “first stage” reforms of privatization, stabilization, and liberalization (domestic price liberalization and trade liberalization), and “second stage” reforms in the financial sector, infrastructure (physical and energy), corporate governance and competition policy.

Uzbekistan’s Progress on the USAID Country Progress Indices between 1998 and 2007

(1) Economic reforms index include “first stage” reforms of privatization, stabilization, and liberalization (domestic price liberalization and trade liberalization), and second stage reforms in the financial sector, infrastructure (physical and energy), corporate governance and competition policy.

(2) The economic structure and performance index tracks indicators such as the size of the private sector as % of GDP, export share of GDP, and the size of the small and medium enterprise sector as % of GDP, economic growth, inflation, debt, and foreign direct investment.

(3) The Democratic reforms index include the electoral process (the extent to which elections are free, fair, and competitive), civil society (primarily NGO development), the independence of media, public governance and administration, rule of law (primarily judicial reform), and the scope of corruption as well as anti-corruption efforts.

(4) USAID tracks progress on the Human capital index by analyzing trends in health (life expectancy, under five mortality rates, and public expenditures on health), education (secondary school enrollment rates and public expenditures on education) and per capita income.