Press Release: IMF Deputy Managing Director Shigemitsu Sugisaki's Statement at the Conclusion of a Visit to Uzbekistan

November 12, 2003

Shigemitsu Sugisaki, Deputy Managing Director of the International Monetary Fund, made the following statement today in Tashkent:

"I came to Uzbekistan for discussions with the Uzbek authorities about recent economic performance and the challenges for the period ahead, as well as to attend the second Ministerial Conference on Central Asia Economic Cooperation. During my visit, I have had the privilege to meet with His Excellency President Islam Karimov, Deputy Prime Minister Rustam Azimov, Chairman Faizullo Mulladjanov of the Central Bank of Uzbekistan, and Minister of Finance Mamarizo Nurmuradov. I also met with other senior members of the government of Uzbekistan, as well as with representatives of the diplomatic and business communities.

"I welcome the recent introduction of free convertibility of the sum for current international transactions, and the associated acceptance by Uzbekistan of the obligations of Article VIII, Sections 2(a), 3, and 4, of the IMF's Articles of Agreement. I am also encouraged by the progress made by Uzbekistan in reducing inflation, as well as with the initiation of reforms in agriculture and the energy sector.

"Despite these achievements, I am concerned that much remains to be done to improve the business climate and achieve the government's objective of creating a market economy. In particular, the external and domestic trade restrictions imposed since mid-2002 are dampening growth and will limit the beneficial economic impact of the exchange liberalization. Cash shortages, as well as government wage and pension arrears, are also depressing economic activity.

"The Uzbek authorities indicated to me that they intend to promote economic growth through trade liberalization and reforms in the banking, agricultural, and public enterprise sectors, and in the civil service. I welcome these plans, and also Uzbekistan's commitment to regional cooperation on trade, transport, energy, and water issues. Uzbekistan's large balance of payments surplus and comfortable external reserves position provide ample room for taking decisive steps to liberalize the trade regime, including the re-opening of the borders with neighboring countries, and to introduce other reforms. Key measures should include enabling banks to fully meet the public's increased demand for cash and prompt elimination of all outstanding government arrears.

"President Karimov appreciated the good relationship with the Fund. I emphasized to the President that the Fund stands ready to assist Uzbekistan in its economic reform efforts, including through technical assistance. We both look forward to continued close cooperation.

"The second Ministerial Conference on Central Asia Economic Cooperation provided an opportunity for me to emphasize the importance of trade liberalization and improving the business climate for increasing growth in the region, building on the progress made in economic stabilization."


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