Report no. 106465




                                           Republic of Uzbekistan

                                    Country Partnership Framework

                                               June 14, 2016

                                             Chair Summary*

        Executive Directors discussed the Joint IBRD/IFC/MIGA Country Partnership Framework
(R2016-0098[IDA/R2016-0112, IFC/R2016-0152, MIGA/R2016-0032]) for Uzbekistan for the period
FY2016-2020. Directors welcomed the approach to Uzbekistan’s ambitious reform agenda and movement
toward a market-based economy to help create a more sustainable path of income growth and job
creation. Directors supported the strategy and its three focus areas: private sector growth; agricultural
competitiveness and cotton sector modernization; and public service delivery.

         Directors noted that meeting the job creation and governance challenges would require addressing
priorities that affect development outcomes, such as improving data availability, capacity building,
enhancing competitiveness, diversifying agriculture, improving service delivery, as well as commitment
and progress in private sector development. While noting the importance of the new dynamism in
agriculture modernization as an anchor for economic reform, they recognized the trade-offs and possible
adverse social impacts from the diversification efforts, and urged the Government to develop a
sequencing and path for transition, strengthen social safety nets and promote a cross cutting approach to
ease the transition for smaller farmers, women and girls.

        Directors underscored the importance of consultations with citizens to ensure transparency and
accountability of public spending and appreciated the increased focus of this CPF on enhancing citizen
engagement and trust building through public consultation and participation in policy making. In that
regard, Directors underscored availability of quality data to help ensure transparency and to make
informed policy decisions. Directors also called for improved resource revenue management collected
from the extractive industries, monitoring results from new energy operations, prioritizing infrastructure
asset management and maintenance.

        Directors emphasized close collaboration across the Bank, IFC and MIGA, in particular on
addressing distortion, such as exchange rate policy and foreign exchange regulation convertibility,
improvements in the regulatory and business environment and private sector development. The
opportunity for regional cooperation was highlighted. They also recognized the role of champions in
helping to sustain private sector commitment and stimulate a culture of collaboration and trust. Directors
urged the IFC to target SMEs, entrepreneurship, financial sector, oil and gas, chemical, cotton, and
privatization in SOEs.

         Directors recognized that the strategy faces significant risks. In particular, they noted governance
challenges, macroeconomic stability, institutional capacity for implementation, fiduciary concerns, and
environmental and social safeguards may impact achieving strong CPF results. They also urged improved
Bank portfolio performance and disbursement and supported the CPF’s focus on analytical and advisory
services. Directors urged the Uzbekistan authorities and the World Bank Group to continue to engage in
addressing controversial labor practices in the agriculture sector and ensure the gains from the ongoing
dialogue with CSOs and the ILO continue to improve portfolio performance, address the drivers of forced
labor, and promote productive employment.

_________________________________
*This summary is not an approved record.