The Asian Development Bank (ADB) has endorsed a new Country Partnership Strategy (CPS) for Uzbekistan. The 5-year partnership strategy, from 2019–2023, supports the government’s ongoing reforms to help the economy’s transition towards a more inclusive and market-driven growth path.
Although Uzbekistan is experiencing economic growth, it faces significant challenges, including tackling growing youth unemployment, creating quality jobs, developing the private sector, improving public infrastructure, and maximizing the country’s potential as a hub for transport, trade, and regional cooperation in Central Asia.
Under the new CPS, ADB will support the government’s long-term objectives to improve the quality of people’s lives and enable the creation of quality jobs. Its country operations will support private sector development, reduce economic and social disparities, and promote regional cooperation and integration.
ADB will help make cities and villages outside Tashkent more livable through rural development and improving access to finance of small and medium-sized enterprises, particularly those owned or led by women. ADB will also support the livestock, horticulture, and irrigation sectors to create jobs and improve sources of income. ADB will boost its support for regional cooperation initiatives, benefiting Uzbekistan. It will promote regional power trade within the Central Asia Power System and regional connectivity along major corridors of the Central Asia Regional Economic Cooperation (CAREC) countries.
“ADB’s new partnership strategy is closely aligned with the government’s objectives to provide a more inclusive and sustainable future to the people of Uzbekistan. Through the CPS, we will continue our support in improved water supply and sanitation, better roads and railways, enabling horticulture production and export, efficient irrigation systems, and supply of reliable electricity for homes and businesses,” said ADB Country Director for Uzbekistan Ms. Cindy Malvicini. “People will have improved health care services, particularly for mothers and children. ADB will also help the government provide young people with the latest skills needed to find jobs.”
ADB will support efforts to create a more conducive environment for the private sector through public–private partnership projects. Uzbekistan’s economy is heavily dominated by state-owned enterprises, limiting opportunities for the private sector. ADB will also help key state-owned companies to improve their financial management and governance.
The CPS is in line with ADB’s Strategy 2030, which sets the course for the bank to effectively respond to the changing needs of the Asia and Pacific region. In Uzbekistan, ADB will strengthen governance and institutional capacity; address remaining poverty and reduce inequalities; promote rural development; and foster regional cooperation and integration.
Since joining ADB in 1995, Uzbekistan has received 72 loans totaling $7.7 billion, including two private sector loans totaling $225 million. ADB also provided $6 million in equity investment, $218 million in guarantees, and $93.1 million in technical assistance grants. In 2018, ADB committed five loans totaling $1.1 billion to improve power generation efficiency, primary health care services, access to finance for horticulture farmers and businesses, access to drinking water in the western part of Uzbekistan, and economic management in the country.
Afghanistan: EU reinforces humanitarian support with €40 million as crisis worsens
The European Commission has allocated an additional €40 million in emergency assistance for those affected by the worsening humanitarian situation in Afghanistan, as well as for Afghan refugees in neighbouring Pakistan and Iran. This brings total EU humanitarian aid for the Afghan crisis to €77 million in 2019: €61 million in Afghanistan, €9 million in Pakistan and €7 million in Iran.
“The humanitarian outlook in Afghanistan is as bleak as ever. Not only has the conflict between the government and non-state armed groups intensified since the beginning of the year, but devastating floods have also hit this war-torn country. The EU is boosting humanitarian aid to help those most in need, especially children,” said Commissioner for Humanitarian Aid and Crisis Management Christos Stylianides.
The new funding will get aid to the most vulnerable families across the country, focusing on the victims of war, forced displacement and natural disasters, as well as returning Afghan refugees. This includes providing emergency healthcare, shelter, food, access to clean water and sanitation facilities, and protection services, targeting women and children. The EU will also continue to provide education for children who have had to leave their schools.
In Pakistan, the EU funding will provide assistance to Afghan refugees, as well as internally displaced Pakistanis. In Iran, EU aid will ensure the delivery of vital assistance, including protection and access to basic services such as education and healthcare, to Afghan refugees in the country.
The EU has funded humanitarian operations in Afghanistan since 1992, providing up to €872 million to date. Funds are allocated strictly on the basis of the humanitarian principles of independence, impartiality and neutrality to ensure access to those in need and are only provided to humanitarian organisations.
Afghanistan is one of the most violent crisis-ridden countries in the world. The worst-hit communities are those that have been displaced or have lost access to basic services due to the conflict between government forces and armed opposition groups, which has worsened since the beginning of 2018. While the conflict continues to limit people’s access to basic services and lifesaving assistance, the total number of displaced people has risen to almost 3.4 million. Meanwhile, at least 6 million Afghans still live as refugees in neighbouring Iran and Pakistan, many of them without registration or legal status.
The risks of natural hazards further aggravates the humanitarian needs. The aftermath of the 2018 drought and 2019 floods continue to affect over 6.2 million people in 22 out of 34 provinces across Afghanistan.
Regional Conference on Air Quality Management in the Western Balkans
Government representatives from North Macedonia, Kosovo, Bosnia and Herzegovina (BiH) and Serbia met today in Skopje for a regional conference on Air Quality Management – Issues, Solutions, and Financing Approaches. Jointly hosted by the Government of North Macedonia and the World Bank, the conference was an opportunity to learn from experiences from the Western Balkans and from EU and other countries (such as India and China) about innovative ways to approach air quality management, mobilize knowledge, and encourage stronger regional cooperation in this area.
Ambient air pollution (AAP) is a serious global health problem that accounts for an estimated 4.2 million premature deaths per year worldwide. Exposure to fine particulate matter (PM2.5) is especially dangerous to human health because these particles find their way deep into lungs and bloodstream resulting in serious health effects. Premature deaths and illnesses caused by air pollution can result in increased health expenditures and labor productivity losses. People in Eastern Europe and the Western Balkans are frequently exposed to extremely high air pollution in urban areas often exceeding the levels considered safe by the WHO.
“Addressing air pollution in the Western Balkans is an environmental and public health challenge that needs to be urgently addressed and it is high on the agenda of the World Bank as well as many other partners working in the region,” said Marco Mantovanelli, World Bank Country Manager for North Macedonia and Kosovo. “We are pleased to be a part of these discussions today and are committed to continuing to support action to reduce air pollution and establish credible Air Quality Management systems in the region through advisory services, technical assistance, and mobilizing financing for investments.”
“We value the analytical support from the World Bank and are looking forward to working with them and other development partners to mobilize the needed financing to help improve our air quality and reduce the impacts poor air quality has on people’s health,” said Jani Makraduli, Deputy Minister of Environment and Physical Planning, also emphasizing the need for regional collaboration. “These discussions help to strengthen cooperation in the Western Balkans, which is particularly important given that a significant portion of air pollution is transboundary.”
The conference provided an opportunity to the World Bank to catalyze regional exchange and knowledge sharing and to present analytical findings from upcoming studies on the health and economic damage from air pollution in Bosnia and Herzegovina, Kosovo, and North Macedonia.
The conference also discussed that a comprehensive approach to tacking air pollution in the Western Balkans could be composed of three core components: (a) Data, knowledge, and strategy, including development of comprehensive air quality management plans and investment strategies; (b) Measures to reduce exposure to air pollution in short-term, especially for the young, weak, and vulnerable; and (c) Measures and investments into the persistent medium- to long-term reduction of pollution levels below internationally accepted standards.
Ambitious Reforms for Stronger Economic Growth in Ukraine
Economic growth in Ukraine picked up to 3.6 percent in the first half of 2019 and 4.2 percent in the third quarter driven by a strong agricultural harvest and consumption growth from higher wages, remittances, and a resumption of consumer lending, according to the World Bank’s latest Ukraine Economic Update. At the same time, investment growth has not yet picked up to levels needed for stronger and sustained economic growth.
“Delivering on the ambitious reform agenda of the new government to boost investment and economic growth will help create jobs and improve living standards,” said Satu Kahkonen, World Bank Country Director for Belarus, Moldova and Ukraine. “The key reforms include establishing a transparent and efficient agricultural land market, demonopolizing the gas sector through ownership unbundling of Naftogas, and increasing the efficiency of bank lending to the private sector by reducing non-performing loans in state-owned banks.”
If the key reforms move forward expeditiously, economic growth is projected at 3.6 percent in 2019, 3.7 percent in 2020, and 4.2 percent in 2021.
Sound fiscal and monetary management, including efforts to keep current public expenditures under control, are helping reduce public debt, inflation, and interest rates in 2019. Public and publicly guaranteed debt is projected to decline to 52 percent in 2019 from a peak of 81 percent in 2016. Inflation declined to 6.5 percent in October 2019 from 9.8 percent at end-2018, which has allowed the National Bank of Ukraine to reduce the key policy rate to 15.5 percent in October from 18 percent in April.
Continuing the prudent fiscal management going forward by addressing expenditure pressures from wages and social benefits will be important to further reduce inflation and interest rates and support stronger economic growth and higher living standards.
It will also be important to mobilize adequate external financing to meet significant public debt repayments in 2019-2021.
Establishing a land market for agricultural growth
According to the World Bank’s Special Focus Note, lifting the moratorium on agricultural land sales and establishing a transparent and efficient market for agricultural land has the potential to boost economic growth in Ukraine by 0.5 to 1.5 percent per year over a 5-year period.
Ukraine has the largest endowment of arable land in Europe, but agricultural productivity in Ukraine is a fraction of that in other European countries.
The moratorium on agriculture land sales is a major impediment to attracting investment and unlocking productivity in agriculture. The moratorium undermines the security of land tenure and incentives to undertake productivity enhancing investments such as irrigation, move into higher value-added crops, and adopt new technologies.
“The Draft Land Turnover Law passed the first reading in Rada last week in an important breakthrough,” said Faruk Khan, World Bank Lead Economist for Belarus, Moldova, and Ukraine. “Enactment of the land turnover law, along with complementary legislation needed to safeguard transparency and efficiency, will be a major milestone in strengthening Ukraine’s growth prospects going forward.
Access to financing for small, credit-constrained farmers will be important to enable them to participate in the market and improve their productivity. Financing instruments should be effective and sustainable, which means targeting them to small farmers and designing them in a manner that provides incentives to improve productivity and adopt higher value-added crops and new technologies, at an affordable fiscal cost.
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