Press Release No. <a name="P16_75"></a>05/60

The following statement was issued on March 12, 2005 in Tashkent, by a staff mission from the International Monetary Fund (IMF) jointly with the authorities of the Republic of Uzbekistan:

"A mission of the International Monetary Fund (IMF) visited the Republic of Uzbekistan from February 24-March 12, 2005, to hold discussions with the Government of Uzbekistan within the framework of the 2005 Article IV consultations. The mission was headed by Mr. John Wakeman-Linn, advisor in the IMF's Middle East and Central Asian Department.

"The discussions between the Government and the IMF mission focused on economic developments in 2004, the outlook for 2005 and the medium-term, and the economic reform program of the Government.

"The mission confirms that economic performance was generally very good in 2004 as reflected in GDP growth of roughly 7.5 percent, a 30 percent growth of gold and foreign currency reserves, and a trade surplus of US$1 billion, largely due to a 30 percent growth in exports. These results were supported by the introduction of sum convertibility, following the acceptance by the Government of the obligations of Article VIII of the IMF Articles of Agreements, and an acceleration of the privatization of state owned farms.

"The mission was encouraged by the comprehensive economic reform program announced by the President of the Republic of Uzbekistan in January 2005, aimed at deepening the process of economic liberalization and promoting the rapid growth of the private sector. Key elements of this reform program include an acceleration of large scale privatization, improving the environment for private businesses by enhancing the systems for protecting their rights, further reforming banking, financial and communal service systems, and improving tax legislation and tax administration.

"The mission noted that these measures, combined with continuing macroeconomic stability and further structural reforms, including rapid progress on converting shirkats to private farms and reforms in the pension system, would enhance Uzbekistan 's medium-term growth prospects.

"The mission welcomed the recent decision of the Central Bank of Uzbekistan to ensure that commercial banks have unrestricted access to their correspondent accounts, including for cash withdrawals, which should permanently eliminate cash shortages.

"The mission made a number of recommendations for further deepening the process of reforms. In particular, the mission urged the government to accelerate progress on the privatization of the remaining banks with a share of state ownership, deepen the liberalization of the agricultural sector, and liberalize domestic and international trade. These recommendations will be considered by the Government in the elaboration and implementation of economic policy.

"The mission expressed its gratitude to the authorities for their excellent cooperation, and for the constructive and open dialogue."