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                      UZBEKISTAN: COUNTRY ASSISTANCE STRATEGY

                              CHAIRMAN'S CONCLUDINGREMARKS

                                     Meeting of Executive Directors

                                              June 12,2008


       The Executive Directors welcomed the joint BankfiDAIIFC Country Assistance Strategy (CAS)
for Uzbekistan for FY08- 11. They noted the broad consultation with stakeholders that had informed the
preparation of the CAS and the candid discussion of the areas where there was convergence and
divergence of opinion between the Bank Group and the authorities.

       Directors acknowledged Uzbekistan's encouraging economic performance, but noted that it faces
significant challenges to further improve the living conditions of its citizens, including reducing the high
incidence of poverty, high unemployment rate and regional disparities. Directors welcomed the greater
role accorded to market principles within a gradualist approach to structural reforms, but noted that
medium term growth prospects would be enhanced by creating more space for the private sector through
consolidating improvements in the business climate, reducing transaction costs through diminishing the
role of the state in economic management, promotion of flexibility in the financial sector and gradual
liberalization of trade. They also urged the authorities to eliminate delays in routine provision of
economic information, as per the requirements of the World Bank Group. Directors were encouraged by
the introduction of arrangements for the enhanced accountability and citizens' participation during the
design, implementation and monitoring of projects, and expressed hope that these could be increased
further.

       Many Directors urged staff to elaborate further the proposed program, and in particular the lending
projections for the whole CAS period. Directors noted that the IDA allocation will be in line with the
established Performance Based Allocation methodology and IDA rules, and once IDA 15 allocations are
confirmed the authorities and the Bank staff will finalize the proposed program and project amounts.
Directors agreed with the emphasis of the core program on key human development issues and on
improving governance and accountability. They also urged stronger focus on gender issues. Directors
also noted that in addition to the core program, the World Bank Group proposes to focus its analytic
work on areas to increase consensus with the authorities, including through activities promoting regional
cooperation.

       Directors observed that the current strength of the economic performance presents the authorities
with an opportunity to undertake reforms in critical sectors, particularly agriculture in order to increase
rural incomes.    They highlighted the importance of improving governance and noted the approach
proposed in the CAS to demonstrate the central role of better governance and accountability through
concrete results in service delivery. Directors encouraged greater openness and transparency in public
access to economic and social information and publication of data. Some Directors expressed concern
about the Financial Action Task Force's recent public statement regarding weakening of the AMLJCFT
framework in Uzbekistan and urged the authorities to ensure its compliance with international standards.

       Directors were supportive of IFC's efforts in private sector development through advisory services
and noted IFCYswillingness to expand its operations subject to improvement in the business environment
and transparency. Directors encouraged continued collaboration with other donors and welcomed the
strengthened Bank Group presence in Uzbekistan to facilitate portfolio improvement and quick response
to client needs.