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Political and Economic Overview

Uzbekistan, which became an independent country in 1991, is an authoritarian state with limited civil rights. The Constitution provides for a presidential system with separation of powers between the executive, legislative, and judicial branches. In practice, President Islam Karimov and the executive branch that serves him dominate political life. First chosen president in a 1991 election, Karimov had his stay in office extended to 2000 by a 1995 plebiscite. The Oliy Majlis (Parliament) subsequently voted to make the extension part of Karimov's first term, thus making him eligible to run again in 2000. He was elected to a second term in January 2000 against token opposition with 92.5 percent of the vote, and on January 27, 2002 the government held an advisory referendum on extension of the term of the President from five to seven years. The referendum passed by a large margin and was judged to be neither free nor fair by observers. The Parliament consists almost entirely of officials appointed by the President and members of parties that support the President.

While the Government of Uzbekistan?s (GOU) record on human rights and democratic reforms remains poor overall, there have been some significant improvements during the past year. Despite a constitutional guarantee of freedom of speech, political opposition to the government has not been permitted in practice; however, this past year a political movement, Birlik, has started holding local congresses that the GOU has not blocked.

A July 3, 2002 presidential decree officially abolished prior censorship and the state censor was ?retired.? In addition, now only a court has the authority to rescind a media license. The GOU also rescinded Decree 52, which had provided for monopoly control over Internet access. However, independent media do still practice self-censorship. While programming now addresses issues like homelessness, drug abuse, and the collapse of many services, the press is noticeably reticent about criticism of the government. Civil society is beginning to develop in Uzbekistan. There are more than 500 grassroots non-governmental organizations (NGOs), many of which have developed partnerships with local governments.

While a national human rights organization was registered this past year (Independent Human Rights Organization) and some local human rights organizations are active, abuses of human rights are frequent in Uzbekistan. Human rights groups estimate that the Uzbek Government holds approximately 6,500 persons for political reasons, principally individuals suspected of religious extremism. Police routinely beat and torture detainees to obtain confessions, and there were several deaths in custody due to beatings and mistreatment this past year. However, in 2002, some eight police and security officers were convicted on charges of torture and murder. Sentences for these officers ranged from four years to 20 years, with four receiving 20 years in prison. Prison conditions remain poor. The GOU conducted an amnesty in late 2001 that led to the release of approximately 860 political prisoners. Also in December 2002, the GOU announced that it had begun another amnesty that, when completed, should affect half of the overall prison population. One prominent political prisoner has already been released under this amnesty and more information on this amnesty should be forthcoming. The International Committee of the Red Cross (ICRC) has resumed visits to prisons and pre-trial facilities. In addition, the GOU invited the UN Special Rapporteur on Torture, who stated during a press conference after he concluded his visit in November 2002, that torture is systemic in Uzbekistan. His official report will be released in March 2003.

• From 1991 to 1996 Uzbekistan made tangible progress in moving towards a market economy. However, substantial drops in prices for cotton and gold, the country?s main foreign exchange earners, prompted the GOU to reverse liberalization efforts by restricting access to foreign exchange. Lack of convertibility led to the existence of multiple exchange rates ? official for business transactions, commercial for exchange booth operations, and the black market, which is illegal, but nonetheless widely used both by businesses and individuals. In 1999, the gap between the official and black market rates was as high as 400 percent, contributing to rampant inefficiencies and corruption. Lack of tangible reforms led to the IMF?s decision to remove its resident representative in April 2001, and all major donors, including the U.S. Government, significantly reduced their assistance in the policy area.

After September 11, 2001, Uzbekistan assisted the United States in Operation Enduring Freedom and has gained increased political attention and support from the international community. Uzbekistan has been a key strategic partner in the global war on terrorism and allowed the U.S. and Coalition forces to use their bases as well as opened its border with Afghanistan for humanitarian shipments. Its new relationships and the improved security situation on the ground gave GOU officials the impetus to begin economic reform. In November 2001, the GOU took a major step forward by devaluing the official rate, setting it almost identical to the commercial rate, and transferring all import transactions to the commercial rate. In January of 2002, the GOU entered into a Staff Monitored Program (SMP) with the IMF. According to the IMF, progress on these reforms has been uneven. It has presented the GOU with a number of pre-conditions that it must meet in order for the IMF to begin negotiations on a stand-by agreement. As of January 2003, the GOU has not met these conditions. While uneven progress has been made, the GOU has indicated a commitment to speed up accession to the World Trade Organization (WTO), establish a single Treasury system, and simplify the tax system, to cite a few examples.

Overview of U.S. Government Assistance

In FY 2002, U.S. Government assistance to Uzbekistan increased almost fourfold, from approximately $85 million in FY 2001 to almost $300 million in FY 2002.

In FY 2002, the U.S. Government provided an estimated $297.84 million in assistance to Uzbekistan:

• $124.46 million in FREEDOM Support Act (FSA) assistance, including $35.21 million in regular FY 2002 FSA funds, $54.50 million Emergency Response Fund (ERF) supplemental funds, $34.50 million in Emergency Supplemental funds, and $250,000 in prior-year funding;

• $44.18 million in U.S. Department of Agriculture (USDA) food assistance;

• $36.21 million in Foreign Military Financing (FMF), including $25 million in Emergency Response Fund (ERF) supplemental FMF and $11.00 million in Emergency Supplemental FMF;

• $14.98 million in other U.S. Government assistance, including $4.00 million in ERF supplemental funding for the Export Control and Related Border Security (EXBS) Program; and

• U.S. Defense Department excess and privately donated humanitarian commodities valued at $78.24 million.

U.S. assistance was focused on economic reform, energy and environment, health-care reform, counter-terrorism, counter-narcotics, counter-proliferation of weapons of mass destruction, and democratic transition. Assistance funds were spent in areas where success was deemed most likely. However, U.S. Government assistance programs achieved mixed results in Uzbekistan.

The U.S. Government increased security-related assistance in FY 2002 for Uzbekistan to enhance Uzbekistan?s ability to cooperate with U.S. and Coalition forces to counter the flow of weapons, narcotics, and terrorist insurgents across borders and to enhance Uzbekistan?s ability to protect its sovereignty and territorial integrity. Security assistance programs coordinated under the Central Asian Border Security Initiative (CASI) laid a strong foundation for cooperation with Uzbekistan?s Ministry of Defense, Border Guards and other security forces after September 11. Under supplemental appropriations, increased assistance was provided for Export Control and Related Border Security, Foreign Military Financing, International Military Education and Training and a number of nonproliferation programs to enhance Uzbekistan?s capabilities to prevent proliferation of weapons, weapons technology and expertise.

USAID implemented its program to develop Small and Medium Sized Enterprises (SMEs) through improving provision of business education and training to entrepreneurs of small and medium sized businesses in order to improve their skills in marketing, management, and accounting. In addition, USAID supported university-level business and economics education, under the Business and Economics Education Initiative. USAID also promoted business advocacy associations and began a pilot microcredit program. Finally, late in FY 2002, based upon progress made in the SMP by the GOU, USAID re-started its program to promote macroeconomic reform in Uzbekistan by establishing technical assistance programs in the areas of WTO accession, development of economic think-tanks, and technical assistance in banking reform. Treasury's Office of Technical Assistance also tapped Freedom Support Act funding to provide, on a part-time basis, an overall macroeconomic reform advisor to the Minister of Macroeconomics and Statistics and full time advisors in the areas of Budget Policy and Management, Financial Institutions Policy and Regulation, Government Debt Issuance and Management, and Tax Policy & Administration, most of whom began their residence in Uzbekistan during FY 2003.

USAID continued to expand its NGO development activities and to promote civic education for youth, in close collaboration with the U.S. Embassy's Office of Public Diplomacy and the Peace Corps. Peace Corps volunteers were evacuated from Uzbekistan in October 2001 following the attacks on the World Trade Centers and the Pentagon. In April 2002, six volunteer returnees arrived in Uzbekistan and in August 2002, 50 trainees arrived. Forty-eight were sworn in as Peace Corps Volunteers in November 2002. The volunteers taught English language and health. The Peace Corps awarded four grants in support of education and youth development during FY 2002.

USAID?s democracy portfolio also emphasized NGO coordination with mahallas (neighborhood committees) and an extensive women's legal rights initiative. USAID expanded its primary health care practice and infectious disease control programs. Two new USAID-funded health partnerships were developed and expanded throughout the year. In addition, USAID training programs continue to support reforms in all sectors. However, since the currency convertibility issue was not resolved, pharmaceuticals continued to be in short supply, jeopardizing health care reform.

Training, Exchange, and Educational Reform Programs

Since 1993, U.S. Government-funded exchange programs have brought over 2,400 citizens of Uzbekistan to the United States for short-term professional or long-term academic training, including some 340 in FY 2002. These programs give participants an opportunity to develop their skills and establish valuable contacts with U.S. counterparts.

U.S. Department of State ? Public Diplomacy Exchanges: In FY 2002, over 280 Uzbekistani citizens traveled to the United States on academic and professional exchange programs administered by the U.S. Embassy?s Public Affairs Section, in collaboration with the Bureau of Educational and Cultural Affairs. A total of 127 citizens of Uzbekistan participated in one to two-year academic exchanges through the Muskie/FSA Graduate Fellowship Program (29), Humphrey Program (1), Junior Faculty Development Program (4), FSA Undergraduate Program (18), and Future Leaders Exchange Program (75) for high school students. Approximately 15 scholars traveled to the United States under Fulbright, Regional Scholar and Contemporary Issues Fellowships. Some 25 high school teachers and administrators traveled to the United States under the Partners in Education and Teaching Excellence Awards Programs.

In FY 2002, supplemental funding was provided for the opening of the Community Connections program for Uzbekistan, giving 40 Uzbekistani entrepreneurs and professionals internship and training opportunities in the United States. In addition, 45 of Uzbekistan?s leading professionals traveled to the United States under the International Visitors (IV) Program. These IV visits focused on a range of issues, including defense and security, economic development, human rights, and freedom of the press. Two IV programs conducted in FY 2002 broke new ground for Uzbekistan. Seven leading Muslim imams representing various regions of Uzbekistan visited the United States to learn about Islam and religious diversity in America. In addition, eight mayors (hokims) from throughout Uzbekistan traveled to the United States to learn about local, state, and national government in the United States. Both of these programs gave the participants a favorable impression of pluralism and tolerance in the United States.

U.S. Department of State ?English Language Program: In FY 2002, the Regional English Language Officer (RELO) based in Tashkent organized and carried out, with the assistance of an English Language Fellow and English Language Specialists from the United States, over 50 teacher training events at the 11 Uzbekistan Teachers of English Association branches and major universities throughout the country. The RELO Office also worked closely with the University of World Languages to provide resources for ten teachers piloting a new teacher education curriculum for 150 first and second-year students. The highlight of the year for the RELO office was organizing the first Central Asian Teachers of English conference in Samarkand. At this conference, over 250 teachers from all five Central Asian countries found common professional ground and attended 150 presentations and workshops on developments in English teaching methodology given by regional and U.S. experts.

USAID Training Programs: Through the Global Training for Development (GTD) and Strategic Technical Assistance for Results with Training (START) projects, USAID trained nearly 1,790 citizens of Uzbekistan, approximately 42% of whom were women, through 70 U.S.-based, in-country, and third-country training programs in FY 2002. Training focused on the mass media, health care reform, international accounting standards, and NGO development. As a result of training programs on credit union development, participants organized five credit unions, three of which have received licenses from the Central Bank. Other training on this subject led to the adoption of an improved law on credit unions, which incorporated several recommendations made during the training. A three-day training session designed to improve operations of real estate proprietors led to a decree that reformed registration and repair regulations. Training on the roles and responsibilities of community-based nurses in the context of primary health care reform in Ferghana region led to the appointment of primary health nurses in each district of the region. Participants in a training program on media and government relations worked with private television stations to form their own association.

USAID Business and Economic Education Program (EdNet): USAID?s Education Network (EdNet) provided 46 member universities with modern business and economics curricula. It also provided re-training of professors in business and economics and improved teaching methods, research and equipment grants on a competitive basis, and textbooks and teaching materials and professional workshops. Six Visiting International Professors taught courses in modern business and economics, helped develop the economics and business departments of host institutions, and trained 265 Uzbekistani professors. As a result of EdNet activities, over 8,000 students in Uzbekistan have received information on market economics and business.

U.S. Department of Agriculture (USDA) ? Cochran Fellowship Program: In FY 2002, the Cochran Program provided training for 13 participants. Areas of training included agricultural credit and finance, agricultural economics education, farmer association development, agriculture extension education, agricultural policy, agribusiness development, fruit and vegetable processing, and biotechnology.

U.S. Department of Agriculture (USDA) ? Faculty Exchange Program (FEP): FEP provides long-term practical training to qualified university educators from progressive agricultural institutions to increase their capability to develop academic programs and curriculum to teach agricultural economics, marketing, agribusiness, and agrarian law in a market-based economy. The FEP began activities in Uzbekistan for the first time in FY 2002. Three Uzbekistani participants began a six-month program in July 2002.

Democracy Programs

USAID Democracy Programs: In FY 2002, USAID substantially bolstered its democracy program. In particular, USAID initiated a new national-level civic advocacy program as well as a program to increase the professional skills of Uzbek human rights defenders. The latter program is undertaken with Freedom House. USAID is concentrating in the following areas:

• USAID Independent Media Programs: USAID supported broadcasts by independent television stations on issues of interest to local communities. Several of these broadcasts prompted local government officials to respond to issues raised in the broadcasts. The number of stations working with USAID implementing partner Internews has increased. Internews works closely with 18 independent television stations in Uzbekistan, providing extensive training and technical assistance. Many stations in small towns outside provincial capitals have increased their weekly news broadcasts after receiving technical assistance. In addition, these regional stations produce an information program that provides an alternative to state-sponsored news. The program reaches a potential of 15 million viewers or 63 percent of the population.
  
  
• USAID NGO Development Programs: The strength of Uzbekistan's NGO sector, including its sustainability, development, and capacity to implement programs, improved in FY 2002. Over the past year, the International Center for Not-for-Profit Law (ICNL), a USAID grantee, has conducted a series of seminars throughout Uzbekistan on social partnership in an effort to help establish a dialog between government, NGOs, media, and business During the spring session of Parliament, President Karimov made a speech in support of NGOs and the need for new NGO legislation. ICNL provided commentary and consultations on the legislation. Also, ICNL is an official member of the drafting committee of the Law on Charities, which is expected to be passed in 2003. ICNL?s commentary was also incorporated in the Law on Public Foundations. USAID?s NGO development program, which includes support for local initiatives, has increasingly focused on community-oriented projects. In FY 2002 many NGOs embraced local advocacy as part of their agenda and interfaced more with local government officials. Building on these initiatives, USAID initiated a national-level civic advocacy project at the end of FY 2002. USAID continued to encourage Uzbek NGOs to work with mahallas (neighborhood committees) to involve the community in the resolution of neighborhood problems. A USAID-funded women's rights initiative has encouraged the development of a women's NGO movement in Uzbekistan, particularly in rural areas. The Women's Integrated Legal Literacy Program supports girls? clubs. Trainers in the program work in schools to promote tolerance, non-violence and gender equality. USAID has also worked to promote the Uzbek Government's understanding and support of NGOs, assisting with social partnership ventures at the local level and promoting NGO-oriented legislative reform at the national level.
  
  
• USAID Rule-of-Law Programs: The American Bar Association's USAID-funded Central and East European Law Initiative (ABA/CEELI) continues to work with the Union of Judges of Uzbekistan. ABA/CEELI also is working with advocates on increasing professionalism, credibility, and legal standing to effectively protect the public?s interests. USAID?s judicial reform program is also working with law students and law student associations. In September 2002 a human rights clinic was opened at Tashkent State Law Institute (TSLI); this clinic will combine training in human rights for the students with consultations with clients. The dean of TSLI has also invited ABA/CEELI to assist in revamping the entire law school curriculum, something that could have a very positive, long-term impact on legal education and the legal profession.

U.S. Department of Commerce ? Good Governance Program (GGP): Together with the domestic private sector, NGOs and U.S. businesses, the GGP launched a business ethics initiative in Uzbekistan to promote the use of ethical business standards and to strengthen integrity in the private sector through development of codes of conduct. The GGP held a roundtable with members of the American Chamber of Commerce in Uzbekistan on developing business ethics programs and the importance of transparency and accountability in business. The program also engaged professionals and entrepreneurs from Uzbekistan visiting the United States to participate in SABIT and International Visitors Council programs. The GGP will work with the Organization for Security and Cooperation in Europe (OSCE), American Chamber of Commerce, the World Bank Institute, and other organizations on implementation of the business ethics program in Uzbekistan. Also, in cooperation with the OSCE, American Chamber of Commerce and other organizations, the GGP recruited four Uzbek professionals for its 2002 Business Ethics ?Train-the-Trainer? program. Uzbek training program alumni have conducted business ethics seminars for several private sector organizations.

U.S. Department of State ? Democracy Funds Small Grants Program: In FY 2002, the U.S. Embassy?s Democracy Commission awarded 35 small grants (less than $24,000 each) for a total of approximately $210,000 to local NGOs working in such areas as human rights, women?s rights, trafficking in persons, and business development.

U.S. Department of State ? Internet Access and Training Program (IATP): In FY 2002, IATP opened eight new public-access Internet centers in Uzbek cities including Angren, Jizzak, Gulistan, Navoii, Andijan, Urgench, Karshi, and Termez. There are currently 17 IATP centers operating in Uzbekistan. Internet access continues to be prohibitively costly for most Uzbeks, and the free access and Internet training offered by IATP make this one of the U.S. Embassy's most popular programs.

U.S. Department of State ? Human Rights and Democracy Fund (HRDF): The Bureau of Democracy, Human Rights, and Labor (DRL) used HRDF resources to support a human rights defenders program, which is an integrated package of assistance including in-country training, financial and technical support, and exposure to successful strategies used by human rights defenders in other countries. This project, implemented by Freedom House, will open a number of human rights NGO resource centers that will provide meeting space for human rights activists; access to computers, Internet, international and local newspapers; training on human rights monitoring; and small grants for projects related to human rights. Through HRDF, DRL also funded the establishment of a Human Rights Clinical Program at Tashkent Law School. Implemented by ABA/CEELI, this project focuses on developing a practical legal education that trains law students and law school faculty to better understand and promote adherence to international human rights standards. Beyond institutional capacity building and curriculum development, this program includes the creation of a human rights legal clinic that provides legal consultation to the public on human rights matters and cases.

U.S. Department of State ? Support for the National Endowment for Democracy (NED): In FY 2002, the Department provided $341,000 in FSA and Human Rights and Democracy Fund (HRDF) funding to NED to supplement its grant-making activities in Uzbekistan. NED grants were used to support a number of major civic education initiatives. Funds have been used to support an ongoing program of curriculum development for Uzbekistan's middle schools, including lesson plans and teaching guides. Regional civic education programs have included the creation of libraries of literature and materials on civic education and have supported consultations for teachers and NGOs on civic education issues. NED grants have also supported human rights organizations that monitor and report on the situation in the region, provide free legal advice to victims of human rights violations, and represent victims before various courts, tribunals and other institutions to seek redress for violations. NED grants have contributed to the publication and dissemination of a major independent journal, both in its paper and Internet formats. NED grants have also been used for public opinion polling focused on youth. Uzbekistan also benefits from NED regional and cross-border programs that support important journals of discussion such as Tsentralnaya Aziya i Kavkaz, as well as programs conducted by Central Europeans to spread experience and training in democratic development.

Economic Development Programs

U.S. Department of the Treasury ? Technical Advisors: After the break-up of the Soviet Union, Uzbekistan pursued a ?gradualist? reform strategy that postponed the significant macroeconomic and structural reforms necessary for the country to integrate into the global economy. However, in December 2001 the Government of Uzbekistan sought advice from the IMF and other financial institutions and embarked on program of liberalizing foreign exchange regulations and reducing or eliminating a number of trade restrictions. The reforms were intended to reduce distortions in the economy, promote export growth, and stimulate foreign direct investment. While progress has been uneven, Treasury macroeconomic technical assistance during FY 2002 supported GOU efforts to modernize its system of economic governance. Beginning in January 2002, Treasury fielded a macroeconomist who served as policy advisor to the GOU on negotiations with the international financial institutions (IFIs) and on economic reform initiatives. The advisor?s focus has been to help develop mutually acceptable ways to proceed with economic reforms and assist the GOU in crafting strategies to meet IFI conditionalities. A major thrust of this work is to review with GOU officials what the proposed reforms will accomplish, advise them on the likely economic consequences, and recommend strategies for dealing with the these consequences. In addition, the advisor is encouraging mutually beneficial relationships and dialogue between the GOU, the USG and the IFIs. In FY 2003, Treasury will provide additional technical advisors in the areas of Budget Policy and Management; Financial Institutions Policy and Regulation; Government Debt Issuance and Management; and Tax Policy & Administration.

USAID Small and Medium-Sized Enterprise (SME) Development Programs: USAID's Enterprise Development Project provides training and other services to small and medium firms in Uzbekistan. More than 1,500 businesspeople throughout Uzbekistan received training, helping them upgrade skills in marketing, management, accounting, and other business competencies. During the year, our business advisors assessed about 225 enterprises, primarily in food processing, of which 60 received direct assistance from local and international consultants.  As a result, all of these companies have improved internal operations and many have established new commercial relations both inside and outside Uzbekistan. An example is Muzimpex, a fruit and vegetable flash-freezer and jam producer, which established an export-import relationship starting with a small purchase of 20 tons of apricots for $10,000 in the spring of 2002, later signing a contract for 1,200 tons of frozen vegetables and fruits worth $465,000 to be delivered over the next year. While business associations have not traditionally enjoyed much autonomy or power in Uzbekistan, they have increasingly gained strength. USAID?s efforts have focused on training association leaders in association development. In collaboration with the Business Fund, the State Property Committee, and representatives of the tax inspectorate and banks, associations now hold monthly business clubs in each of the capital city's districts, providing information on issues relating to taxes, businessmen?s rights, and the process and opportunities for obtaining credit. USAID technical assistance and support for the Uzbek professional accounting and audit associations helped spur Uzbekistan's Ministry of Finance to launch a two-year transition program for implementation of Uzbek accounting standards, which are based on International Accounting Standards (IAS). This improvement will contribute significantly to improved corporate governance and sound private sector growth. Other advocacy initiatives include an association of family business owners nominating a candidate for parliament, four women's associations working with parliament to develop the law on credit unions and the three accounting and audit associations working with the Ministry of Finance on implementation of Uzbekistan's new enterprise accounting reform. Under the Enterprise Development Program, USAID partners set up a Regional Trade Promotion network that provides Central Asia's SMEs with an Internet-based marketplace that links buyers and sellers to increase regional and international trade. One example is an Uzbek-Bulgarian trade linkage, which resulted in an initial $18,000 export deal to supply 50 tons of Uzbek plum puree. Advisors continue to work with producers to secure a regular supply of 400 tons of plum puree per year to meet the identified market demand, as well as exploring export possibilities for other fruits from Andijan's suppliers. This type of trade linkage is vital for stability in rural areas of Uzbekistan that rely on agricultural products as a main source of income. While only responsible for nine deals totaling $27,000 by the end of FY 2002, promising trade leads for Uzbekistan businesses have been steadily increasing. In cooperation with the Swiss Economic Cooperation Organization, International Finance Corporation (IFC), and the Eurasia Foundation, USAID is also supporting the Central Asian Small Enterprise Fund (CASEF), an affiliate of the Small Enterprise Assistance Fund, to provide equity, debt, and lease financing as well as technical assistance to small businesses in Central Asia, including Uzbekistan.

USAID Microcredit Program: With input from USAID and other donors and stakeholders, the Uzbek Government (GOU) adopted a long-awaited resolution that allows development agencies to implement microcredit activities legally. Before then, the law limited lending to banks, and from April 2002, to credit unions. Despite the inadequate legal foundation, several donor agencies, including USAID, had already started pilot microcredit operations to demonstrate to the GOU the benefits and advantages of providing financial services to the poor and microentrepreneurs. The next step will be to develop a comprehensive legal framework for microfinance institutions, which is the objective of a new program to be implemented by the IFC with USAID financing. USAID?s microfinance activity operates in two cities of the Ferghana Valley, Khojand in Tajikistan and Andijan in Uzbekistan. While lending only began in March, the number of clients in Uzbekistan has already reached 405 (69% women) with $59,000 in loans disbursed. These results have been achieved without compromising the quality of loans, and arrears remain at zero. Some groups are already into their second loan, and members report increased sales and financial security as a result of their participation in the loan program.

USAID Credit Union Program: In collaboration with the Asian Development Bank (ADB), USAID is supporting the development of credit unions in Uzbekistan. A significant benchmark was achieved with the adoption of a Credit Union Law in April 2002. The law establishes the necessary legal foundation for the credit union system?s development. Since its passage, five credit unions have been created. Three have already received licenses to operate and total membership exceeds 2,500. Through its implementing partner, the World Council of Credit Unions (WOCCU), USAID provides training and technical assistance to the credit unions to ensure their rapid start-up and sound operation. Sound, business-minded credit unions that are managed by their members have the potential to fulfill the role of market-oriented financial intermediaries by offering competitive deposit terms to the population, and attractive, hassle-free lending to businesses. USAID and the ADB are continuing to collaborate to develop credit unions.

USAID Macroeconomic, Fiscal, and Banking Support: USAID partnered with Bearing Point to provide support to key research centers that generate economic policy analysis and advice to the GOU in order to strengthen their capacity and improve the quality of research and recommendations. Through this program, USAID will also be able to respond to immediate needs of the GOU for short-term targeted technical assistance in areas critical to implementing economic reform. This program will also provide support to the Central Bank in full implementation of International Accounting Standards at banks.

USAID Farmer-to-Farmer (FTF) Program: A total of 22 Uzbek host institutions have benefited from the current round of FTF volunteer assistance, which has reached approximately 4,000 women and 4,500 men. In collaboration with Ohio State University, the FTF Program assisted the Andijan Networking Center to organize a student internship program. Seventeen young Uzbek agribusiness professionals obtained long-term internships in the United States and earned an average of about $27,000 in wages. The FTF volunteers conducted credit union training for 53 members of the Women?s Business Association (WBA) in Ferghana City and five outlying regions of Uzbekistan. The FTF volunteers helped the Ferghana WBA secure a $10,000 grant from the Swiss government for credit union development. Other FTF volunteers mitigated last year?s drought by helping farmers in Karshi to maintain good crop yields using a grant from the Eurasia Foundation to the Karshi Private Farmer?s Extension Service. The FTF volunteers provided training on agronomy, alternative crops and technical assistance on extension development. The FTF program coordinates a number of new activities and assignments with the World Council of Credit Unions, Eurasia Foundation, Mercy Corp, and Winrock International.

U.S. Department of Commerce ? Special American Business Internship Training (SABIT) Program: Uzbekistan was represented by 15 individuals who participated in SABIT?s Transportation Infrastructure, Standards, Technology Commercialization, and SABIT Grant Program. Well-attended alumni events were held in Tashkent, Bukhara, and Samarkand, and alumni reported on various activities in the course of FY 2002. These included a seminar on certification, organized by two interns after their training in standards, receiving promotions, receiving patents for new technologies, and establishing and developing new contacts with U.S. companies.

Trade and Investment Programs

U.S. Department of Commerce ? Business Information Service for the NIS (BISNIS): Although BISNIS had no representative in Uzbekistan, in FY 2002, BISNIS helped organize the first delegation of 20 high-level Uzbekistani Government officials and business executives who visited with local and state officials in Richmond, Virginia. BISNIS also arranged a session with 45 U.S. company representatives during a visit to the United States for Uzbekistan's Minister of Communications.

USAID WTO Accession Support: At the request of the GOU, USAID expanded its regional WTO project to include Uzbekistan and relocated its WTO advisor to Tashkent to facilitate Uzbekistan?s accession. The GOU responded with appreciation for the quick and positive response, and reiterated its strong commitment to join the WTO. While accession appears to be a distant goal for Uzbekistan, changes that the accession process could bring imply substantial improvements in the overall business climate and foreign trade regime.

U.S. Export-Import (Ex-Im) Bank: Ex-Im Bank approved two long-term transactions and one medium-term transaction in FY 2002. The first was a $50 million Credit Guarantee Facility to the National Bank for Foreign Economic Activity (NBU) to facilitate exports of U.S. goods and services to small and medium-sized enterprises in Uzbekistan in a variety of sectors, including construction, food processing, agricultural processing, chemicals, pharmaceuticals, and other manufacturing. The second transaction was a long-term guarantee of $15 million for the export of farm machinery and equipment by Case Corporation. The medium-term transaction approved in FY 2002 was under a guarantee for $4.9 million for the sale of telecommunications equipment with a guarantee from the Ministry of Finance.

U.S. Department of Agriculture (USDA) ? Emerging Markets Program: With support from the Emerging Markets program, the U.S. Rice Producers? Association conducted an evaluation and study of the rice market in Uzbekistan.

U.S. Trade and Development Agency (TDA): TDA helps U.S. companies pursue business opportunities in developing and middle income countries. Through the funding of various forms of technical assistance, training grants, feasibility studies, orientation visits, and business workshops, TDA helps American businesses compete for infrastructure projects in emerging markets. In addition, the agency promotes capacity building initiatives and supports U.S. government trade, economic policy and development objectives around the world. TDA committed almost $3.5 million for nine projects in Uzbekistan in fiscal year 2002. The grants covered projects in the rail, information technology, fertilizer, power, and water resources sectors, as well as assistance in small and medium enterprise development and will be used to contract with U.S. firms to perform feasibility studies and provide technical assistance. Uzbekistan was the second largest recipient of TDA grants in 2002.

Energy and Environmental Programs

USAID Water Management Programs: Water activities funded by FY 2002 Emergency Response Funds for Uzbekistan have enabled USAID to mount a special water program that is helping the country more effectively manage its water resources. For example, the Uzbekistan Cabinet of Ministers issued Resolution No. 81 in January 2002 to privatize state farms. This resolution also provides for the establishment of private water users associations (WUA) and financial mechanisms to supply the necessary materials and equipment. USAID has organized demonstration models for self-sustainable WUAs and provided technical assistance to farmers. The Ministry of Agriculture and Water Resources has adopted these USAID models, but has the overwhelming task of privatizing 57,000 additional farmers and organizing viable farmers associations. USAID is providing assistance for improved water district management through enhanced communication between key water dispatch centers, providing infrastructure needed for measurement and management of water flow and procurement of equipment needed to clean the canals and maintain the infrastructure. Examples of this component are the Surkhandarya Canals Pilot Project and Zaravshan River Basin Pilot Project, which will provide improved management of water used to irrigate more than 650,000 hectares of farmland. Additionally, FY 2002 Emergency Response Funds are improving access to potable water in Karakalpakstan. More than 3,000 residents of poor rural communities between Nukus and the Aral Sea will benefit from this assistance. Emergency Response funds have allowed USAID to continue assistance initiated to implement automation and data communications activities in the two major water basins, the Syr Darya and Amu Darya. Finally, USAID will assist the Uzbek Hydrological and Meteorological Agency to improve its digital radio communication system for transmitting water data throughout the nation.

USAID Natural Resources Management Project (NRMP): In FY 2002, NRMP continued to strengthen Uzbekistan's public water institutions through implementation of demonstration projects, training and policy dialogue. The demonstration projects and training have been successful in promoting improved water management. Dialogue has lead to initial policy reforms in the water and agriculture sectors. As part of ongoing NRMP activities, the Pakhtaabad Canal demonstration model was completed and introduced new flow-management concepts in Uzbekistan. As a result of the introduction of improved water control technologies, improved data communications, and training, government officials responsible for the management of the Pakhtaabad system have been able to deliver water to farmers in a more timely fashion while simultaneously decreasing overall water consumption. USAID provided technical and financial assistance to the Tashkent Institute for Irrigation and Agricultural Engineers to establish a joint training center that is used extensively for preparing the next generation of water specialists. In addition, USAID is helping establish a technical working group with the participation of Uzbekistan and the other Central Asian countries for improving the collection, analysis and exchange of data critical to water resource management. USAID completed the final stages of a National Weather Service River Forecasting System that began several years ago under a contract with the National Oceanic and Atmospheric Administration, and provides the flow calibration for seven river basins within the Aral Sea Basin. In addition, USAID provides technical assistance to Uzbekistan and the rest of the Central Asian Republics in transboundary water and related energy cooperation aimed at reducing the potential for conflict in the region. This initiative is directed at helping build consensus for water/energy agreements and activities in conjunction with other donors, such as the World Bank, Asian Development Bank, and Swiss Development Corporation. For example, USAID recently facilitated a power trade relations agreement between the governments of Tajikistan and Uzbekistan. This agreement was negotiated and agreed to by ministerial delegations from each country. The agreement will provide political commitment to implement a major loan by the Asian Development Bank (ADB) and European Bank for Reconstruction and Development (EBRD) aimed at modernizing the Central Asian electricity grid.

Social-Sector and Humanitarian Programs

USAID Health Programs: USAID?s health programs significantly expanded as a result of supplemental funding, including activities in three new regions. Supplemental funds are being used to further strengthen TB control, initiate a blood safety program, develop HIV/AIDS surveillance, prevent an increase in the drug use that is fueling the HIV epidemic, improve care of pregnant women and their newborns, start much needed educational programs for health managers, and prevent border community conflict through inter-community activities.

USAID Primary Health Care Programs: USAID?s quality primary health care (PHC) objective is aimed at creating a higher quality, user-friendly, more cost-effective PHC system in select regions. The program retrains doctors and nurses in family medicine, provides information to patients who use the system about their health care and implements incentive-based payment systems. In Uzbekistan, children die of pneumonia or diarrhea, or need to be hospitalized because their parents seek treatment only after the diseases are advanced. USAID is working with local health authorities and communities to increase information about appropriate, timely care. A winter campaign reached an estimated 800,000 people in Ferghana region on care of children with acute respiratory infection. The Stop Diarrhea campaign increased parents? knowledge of how to successfully treat their children who suffer from diarrhea. Children from grades one through eight will be better educated on health through a new curriculum developed by USAID and counterparts. The curriculum has been piloted in several schools. Its interactive approach has proven to be so popular with students that additional teachers are requesting this curriculum. The health curriculum will be extended throughout Ferghana Region and discussions are in progress with the Ministry of Education for national expansion. USAID is closely coordinating with the World Bank on health system restructuring. Reformed PHC practices now cover approximately 12.7% of the population. Families in pilot areas are using PHC practices for their outpatient care. PHC?s outpatient visit share in pilot regions ranged from 28% to 46%, a significant rise over last year. When compared with national data, in which only 5% of outpatient care is given in PHCs, it is clear that efforts in reform areas are paying off. Under-equipped PHC practices in the Ferghana Valley benefited from a welcome infusion of equipment provided by the U.S. Department of State. A significant portion of the $54 million donation reached 160 PHC clinics and 320 family doctors in the form of clinic supplies, equipment and doctor bags. To plan more relevant programs, USAID is implementing a Health Examination Survey to collect information on the health status of women and children. In addition, the survey will obtain data for both men and women on hypertension and diabetes awareness, risk factors and treatment, as well as testing of cholesterol and other blood fats. USAID started cross-border soccer and volleyball competitions among youth in the Kyrgyz Republic, Tajikistan, and Uzbekistan. Cross-border sports promote cooperation between different ethnic communities, undermine myths and rumors, and build self-esteem for young people. Communities have eagerly organized half-time entertainment, prepared playing fields and spruced up their schools. Anti-drug and healthy life-style messages are part of ?game days? with more extensive health education efforts to be developed during the next year.

USAID Infectious Disease Programs: USAID is actively supporting Uzbekistan?s effort to develop and approve national programs to control tuberculosis (TB) and HIV-AIDS. Throughout 2002 USAID has conducted a regular policy dialogue with the Cabinet of Ministers and Ministry of Health. USAID has also facilitated a number of technical workshops on standardizing national requirements for both TB and HIV-AIDS control.

• Tuberculosis: USAID continues to provide technical assistance to the Ministry of Health in implementing the WHO-recommended Directly Observed Therapy, Short Course (DOTS) strategy for TB control in ten pilot sites. The activity focuses on conducting clinical and laboratory DOTS training with monitoring and evaluation to follow. Laboratory equipment and anti-TB drugs are being provided during the training program. As part of its overall effort, USAID will provide approximately 100 binocular microscopes for placement according to DOTS implementation plans developed by the National TB Center. USAID also provides training in quality control of laboratory diagnosis and use of EpiNet software, which allows for better analysis of TB statistics.

• HIV/AIDS: By global standards, HIV prevalence remains relatively low in Uzbekistan with the disease primarily striking intravenous drug users. By September 2002, Uzbekistan reported 1,675 cases of HIV infection although the true figure is estimated ten times higher. In order to improve information about the epidemic, USAID and CDC are helping establish four sentinel surveillance sites in Tashkent, Termez, Andijan and Samarkand, where the largest HIV-positive populations are currently found. Blood safety equipment and HIV test kits will be supplied to 17 blood banks around the country to protect the blood supply. To strengthen the capacity of the Infectious Disease Reference Laboratory, USAID has provided additional supplies and helped to improve management of laboratory operations in 52 infectious disease laboratories throughout the country. USAID awarded grants to four NGOs that are working with intravenous drug users and sex workers to help them establish healthy behavior norms, get access to medical care and testing sites, as well as obtain free condoms and social and legal services. USAID initiated a condom social marketing program in Tashkent to target vulnerable groups including at-risk youth. Forty youth peer educators conducted school-based peer education sessions for around 200 pupils and students to date. Based on the findings of formative research among vulnerable groups, brochures on behavior change, HIV/AIDS, and its prevention have been developed. Around 50,000 copies have been produced in Russian and Uzbek.

USAID Maternal and Children?s Health Programs: USAID has awarded a five-year, $22.5 million Cooperative Agreement to improve maternal and children?s health in Uzbekistan and Tajikistan. The project commenced work in November 2002, focusing first on the southern regions of Surkhandarya and Kashkadarya.

USAID Drug Demand Reduction Program: USAID has awarded a five-year, $16.5 million Cooperative Agreement to combat drug abuse in Uzbekistan and Tajikistan that began in November 2002.

Security, Regional Stability and Law Enforcement Programs

U.S. Department of Defense (DoD) ? Cooperative Threat Reduction: In FY 2002, the CTR program continued the demilitarization of the former chemical weapons facility in Nukus, with total funding since FY 1997 at $8.5 million. Per the "Agreement Between the United States of America and the Government of the Republic of Uzbekistan Concerning Cooperation in the Area of the Promotion of Defense Relations and the Prevention of Proliferation of Weapons of Mass Destruction", signed by Secretary Powell and Uzbek Foreign Minister Kamilov June 5, 2001, DoD has cleaned up the biological weapons testing facility on Vozrozhdeniye Island, eliminated the infrastructure of the test facility, and improved the security of dangerous pathogen collections stored at scientific institutes throughout Uzbekistan. The implementing agreement for these projects, signed October 22, 2001, allocated up to $6 million for the joint work. Uzbek cooperation in this program has been excellent.

U.S. Department of Defense (DoD) ? Cooperative Threat Reduction/ Defense and Military Contacts: These programs seek to promote our counterproliferation, demilitarization, and defense reform objectives by fostering dialogue and cooperation with NIS militaries. In FY 2001, 11 CTR-funded defense and military contacts took place and in FY 2002, the number was ten. Operation ENDURING FREEDOM caused some cancellations of CTR-funded events in the first quarter of FY 2002. Significant events included: Special Operations exercises with Uzbek special forces unites; Commander, USCENTCOM visits to Uzbekistan to discuss defense cooperation and reform; NCO Corps development; information exchanges at U.S. Air Force bases; and discussions on furthering military contacts between the U.S. and the United States.

U.S. Department of Defense (DoD) ? Warsaw Initiative Funds (WIF):  In FY 2002, $139,600 in DOD Warsaw Initiative funding was appropriated, and $45,719 expended to support Uzbekistan's participation in NATO Partnership for Peace (PfP) exercises, eighty percent of which was funded by NATO and twenty percent by the US Government. Uzbekistan fully participated in exercise Combined Endeavor. Uzbek representatives also participated as observers in several other PfP exercises.

U.S. Department of State ? Foreign Military Financing (FMF): In FY 2002, the Uzbekistan Ministry of Defense received $0.2 million in Foreign Military Financing (FMF), plus $36 million in Emergency Response Funds and funds from the Emergency Supplemental. This assistance allowed the Uzbeks to purchase encrypted Harris radios in line with Uzbekistan's priority for consistency and interoperability. FMF also supported the purchase of night vision equipment and other equipment needed for counterterrorism capabilities. Funds will also be used to support maritime border control equipment. In FY 2003, FMF will focus a great deal of resources on enhancing the readiness and capabilities of Special Forces. Assistance will be provided in the form of training and personal gear for specific Special Forces Units. A training center may also be upgraded.

U.S. Department of State ? International Military Education and Training (IMET): Under the International Military Education And Training (IMET) Program, in FY 2002, Uzbekistan received a $1,000,000 allocation, of which $720,000 was spent. This training and education is critical to U.S. objectives of security and military reform in Uzbekistan. English language training in past years has enabled closer, more fluid cooperation -- particularly in relation to Operation Enduring Freedom (OEF) and current cooperation on counterterrorism. Further, Western concepts of civilian control of the military and human rights are a strong component of all training and education offered under IMET.

U.S. Department of State ? Nonproliferation and Disarmament Fund (NDF): The NDF permits rapid response to unanticipated non-proliferation opportunities or emergencies worldwide. In Uzbekistan in FY 2002, NDF initiated one new project and continued funding on another project from a prior year. The first project provided additional physical security upgrades at Uzbekistan?s Institute of Nuclear Physics. The second project supported the conversion of weapons grade uranium at the Uzbekistan Institute of Nuclear Physics and the transportation of Russian-origin nuclear materials from Uzbekistan to Russia. Both projects were conducted by the U.S. Department of Energy.

U.S. Department of State - Export Control and Related Border Security (EXBS) Program: EXBS assistance is one of the largest of the six assistance programs under the Central Asian Border Security Initiative established in April 2000. In FY 2002, the State Department allocated $3.3 million in FREEDOM Support Act (FSA) and Nonproliferation, Antiterrorism, Demining and Related Activities (NADR) funds for EXBS assistance to Uzbekistan. In addition, in the aftermath of the September 11 terrorist attacks, an additional $18 million was provided under the Emergency Response Fund supplemental appropriation to enhance Uzbekistan's border security: $4 million in NADR funds and $14 million in FSA funds. The $4 million in supplemental NADR funds is being used for standard EXBS assistance activities. The $14 million in supplemental FSA funds is being used to support the EXBS - Aviation/Interdiction Project (EXBS-AIP) to enhance air patrol and interdiction capabilities of Uzbekistan's Ministry of Defense and Border Guards to prevent weapons proliferation and complement counter-terrorism assistance. An additional $5 million was appropriated under the FY 2002 Supplemental for Further Recovery for EXBS-AIP to enhance Uzbekistan?s maritime border patrol/interdiction capabilities on the Amu Darya River.

In FY 2002, under the EXBS program, the United States continued to provide equipment, training and infrastructure support to develop and strengthen the detection, interdiction and enforcement capabilities of Uzbekistan's Customs Service, Border Guards and other border security and law enforcement organizations. A long-term advisor was placed in Tashkent in January 2001 to implement and provide in country oversight of EXBS-related assistance. In February 2001 discussions between U.S. and Uzbek security and law enforcement agencies, EXBS Program assistance priorities were identified and agreed. Communications equipment remained the highest Uzbek priority, followed by, transportation/patrol assets, surveillance and detection equipment, maritime border guard assistance, border control and export control training, and protective and medical equipment. The first significant shipment of EXBS equipment began in January 2001 with delivery of high-frequency radios and related equipment. Since then, assistance has included communications equipment (including encrypted radios), detection equipment, protective gear, patrol vehicles and aviation assets, spare parts, repairs and critical consumables for air patrols and transport, body armor and basic surveillance equipment, including night-vision goggles, binoculars, global positioning systems (GPS), sensors, protective equipment and mountaineering gear. The Central Asia Regional Communications Link (CACL) equipment Uzbekistan received in March 2001 to enhance regional communications capabilities has continued to be useful throughout FY 2002. Radiation detection equipment provided to Uzbekistan also facilitated Uzbek Customs interception of three shipments of radioactive material bound for third countries. Uzbekistani officials have continued drafting export control legislation in close consultation with U.S. counterparts and have participated in legal/regulatory technical training and enforcement workshops and conferences sponsored by the U.S. Department of Commerce. Uzbekistan has also participated in drafting a Regional Transit Agreement for Central Asia and the Caucasus.

U.S. Department of State ? Science Centers/Other Nonproliferation Programs: Uzbekistan is an active member of the Science and Technology Center in Ukraine (STCU). In FY 2002, the Department of State funded civilian research projects proposed by former WMD scientists valued at $1 million, and expects to maintain this level of spending in FY 2003. Projects funded during the fiscal year included research into thermo-radiation methods for increasing parameter stability of silicon; multiphase jet apparatus for heat regeneration and food processing; development of a cryogenic optical sensor for gravity meters; microrelief photo converters; immobilization of concentrated radioactive waste in cement and natrolite; and biosensors for pesticides.

U.S. Department of Agriculture ? Agricultural Research Service (ARS) ? Collaborative Research: After becoming a Partner to the Science and Technology Center in Ukraine (STCU) and visiting key Uzbek research institutes in FY 2001, ARS initiated its program with Uzbekistan. Based on recommendations from the U.S. Departments of State and Defense, ARS actively developed projects with scientists from five target institutes in Uzbekistan. Those institutes are the Samarkand Veterinary Institute; the Institute of Genetics and Experimental Biology of Plants; the Institute of Bioorganic Chemistry; the Institute of Zoology; and the Institute of Physiology and Biophysics. In January 2002, ARS approved 10 proposals for development involving 164 Uzbek scientists (46 with BW background) in the areas of animal and plant disease. Visits to the U.S. by the Uzbek collaborators to develop these proposals were completed in FY 2002. Examples of research proposals under development include the discovery, synthesis and evaluation of new pheromones for insect pests, improving water use efficiency and water quality, and the development of baculovirus-based pesticide technology in Uzbekistan.

U.S. Department of State ? Support for the Civilian Research and Development Foundation (CRDF): In FY 2002, the CRDF activated three awards to Uzbekistan under its Cooperative Grants Program, totaling $1.86 million. In addition, CRDF received 15 proposals from Uzbek-U.S. research teams in response to the Special Competition for Research on Minimizing the Effects of Terrorist Acts on Civilian Populations. In FY 2002, CRDF also made 13 Travel Grants to applied scientists from Uzbekistan. To date, 62 Uzbek researchers have received travel grants. One award was provided to Uzbek scientists under the Next Steps to Market Program in FY 2002. The CRDF is working with the Academy of Sciences of Uzbekistan on an Internet Connectivity Program that will provide Local Area Networks to scientific institutions in Uzbekistan. This is a result of a proposal submitted by the Academy of Sciences to the State Department in 2001, requesting $1 million to support this project. In FY 2002 CRDF solicited bids to establish the LANs in Uzbekistan and a grant award is expected in early 2003. Finally, 2 Regional Experimental Support Centers operate in Uzbekistan with CRDF support.

U.S. Department of State ? Anti-Terrorism Assistance (ATA): Since the Republic of Uzbekistan was introduced into the ATA program, representatives of the Uzbek Government have actively participated in the annual Regional Counter-terrorism Conference hosted in Washington, D.C. A great deal of ATA training has also been integrated into Uzbek operational procedures. As an illustration, the Vital Installation Security course provided in FY 2001 has resulted in the acceptance of recommendations for improved security at the Ministry of Foreign Affairs building, including the installation of suggested technical equipment, and resulted as well in a training program authorized and implemented by the Ministry of Internal Affairs. During FY 2002, over 200 Uzbek officials from the Ministry of Internal Affairs, National Security Service, Committee for State Border Protection and other law enforcement agencies received training in the following seven course topics: Post-Blast Investigation, Crisis Response Team; Explosive Incident Countermeasures; Rural Border Operations; Terrorist Crime Scene Investigation; WMD Awareness; and Consultation/Information Management in Case Investigation. ATA does not anticipate any program changes during FY 2003.

U.S. Department of Energy (DOE) ? Nuclear Material Protection, Control & Accounting (MPC&A) Program: The Institute of Physics in Tashkent is receiving support from DOE/NNSA?s MPC&A Program to upgrade nuclear facilities safeguards in accordance with IAEA?s 1999 revised guidelines.

U.S. Department of Energy ? Reduced Enrichment for Research and Test Reactors (RERTR): In FY 2002, the RERTR program activities continued to support testing of LEU fuel elements, which can be used for HEU to LEU conversion of reactors in Uzbekistan.

U.S. Department of Energy ? Russian Research Reactor Fuel Return Initiative (RRRFRI): The core objective of this initiative is to reduce nuclear proliferation risks posed by the presence of HEU fuel and materials at former Soviet-supplied research reactors and research facilities by repatriating that material to Russia. The first candidate for a pilot shipment of fuel back to Russia is Uzbekistan, whose government has expressed a strong interest in participation in the RRRFR program. On March 12, 2002, DOE/NNSA and Uzbekistan?s Ministry of Foreign Affairs signed an Agreement to facilitate cooperation between the parties for the return of Uzbekistan?s Soviet- or Russian-supplied nuclear fuel to Russia.

U.S. Department of State ? Anti-Crime Training and Technical Assistance (ACTTA) Program:
In FY 2002, the U.S. Government provided more than one million dollars in law enforcement training and technical assistance to Uzbekistan?s law enforcement and security agencies through ACTTA, U.S. military counter-drug training, and anti-terrorism assistance (ATA) programs, with the goal of enhancing their ability to combat narcotics trafficking and organized crime while promoting the rule of law and human rights. This assistance has helped the Uzbek Government to more effectively stem the flow of narcotics from Afghanistan. During FY 2002, nearly 800 officers from Uzbekistan?s Ministry of Internal Affairs, National Security Service, State Customs Committee, Committee for State Border Protection, and Procuracy attended training courses given by instructors from the U.S. Justice Department?s International Criminal Investigative Training and Assistance Program and Office of Overseas Prosecutorial Development, Assistance and Training, the Federal Bureau of Investigation, the U.S. Drug Enforcement Administration and other U.S. federal law enforcement agencies. There were also several assessment visits by U.S. Government representatives to plan future courses and exchanges, as well as to develop advanced courses to ensure continuation of a train-the-trainer approach. The Drug Enforcement Administration opened its first resident office in Uzbekistan in July 2002 and the Justice Department assigned an OPDAT Resident Legal Advisor (RLA) to Uzbekistan with funding provided through INL, the second RLA assigned to the Central Asian region. Projects in FY 2002 included the establishment, with DEA coordination, of a Sensitive Investigative Unit, as well as border security projects, demand reduction programs and continued technical assistance. For FY 2003,programs for border security, judicial programs, and law enforcement institution improvement are planned. Funding provided by FY 2002 supplemental appropriations will be employed to enhance counter-narcotics efforts, given Uzbekistan's location on the border of Afghanistan, a major source of illicit narcotics.

U.S. Department of Justice ? Overseas Prosecutorial Development Assistance and Training (OPDAT): In FY 2002, OPDAT initiated a criminal justice assistance program in Uzbekistan, including the posting of a Resident Legal Adviser (RLA) to the US Embassy in Tashkent to administer technical legal assistance and skills development training on criminal justice issues to the Uzbek legal and law enforcement community in the following: reform of the Prosecutor?s Office and other appropriate law enforcement agencies, criminal procedure, and combating narcotics trafficking and terrorism. CEELI continued to post a Criminal Law Liaison in Tashkent. In FY 2002, CEELI initiated a defense advocacy training program focused on the principles contained in and the practical implementation of the International Covenant on Civil and Political Rights (ICCPR), as well as provided institution building assistance to Uzbek advocates in creating a criminal defense bar association. In addition, with the goals of enhancing transparency and improving appellate practice, CEELI installed court-recording equipment in 99 courts in the capital of Tashkent and in the regions. As a result, court participants demonstrated better preparedness for trial; public interest in court proceedings increased; and accurate transcripts upon which to appeal court rulings were produced, of particular significance in sensitive cases.

Humanitarian Programs

U.S. Department of Agriculture (USDA) ? Food Assistance: In FY 2002, USDA donated a total of 162,000 metric tons of commodities valued at $44.12 million to Uzbekistan. Proceeds from the sale of commodities went to the Government of Uzbekistan and private organizations for agricultural and rural development projects including: improving nutrition and attendance among primary school students; providing training and technical assistance to the Uzbek dairy industry; and implementing agricultural and public health activities such as emergency medical services training, reforestation and drought mitigation, micro-credit lending, water supply renovation and agricultural development.

U.S. Department of State ? Coordinator?s Office Humanitarian Assistance: In FY 2002, the Humanitarian Programs Division of the Office of the Coordinator for U.S. Assistance to Europe and Eurasia delivered approximately $78 million in humanitarian commodities to Uzbekistan at a cost to the U.S. Government of approximately $4.90 million. This assistance, which consisted of a joint Department of State/Department of Defense (DoD) hospital upgrade project, privately donated high-value pharmaceuticals, other donated commodities and DoD excess property, was provided primarily through the U.S. private voluntary organizations (PVOs) Heart-to-Heart, the Association of American Family Physicians, AmeriCares, Project Hope and Counterpart International.

• Operation Provide Hope ? Hospital Upgrade Project: A joint State Department/DoD hospital upgrade project delivered over $50 million in humanitarian assistance to Uzbekistan, including $16 million in DoD excess medical equipment and supplies and $36 million in privately donated medicines that were airlifted into Tashkent in conjunction with this project. The medical equipment and supplies were distributed to hospitals and clinics in the Ferghana Valley region and the medicines were delivered to health facilities throughout Uzbekistan. A U.S. Armed Forces medical team installed the equipment and trained Uzbek medical personnel on its proper use. The medicines were obtained by the U.S. PVOs, Heart to Heart, Project Hope, Counterpart and Northwest Medical Teams, from U.S. pharmaceutical manufacturers including; Eli Lilly, Merck, Johnson and Johnson, and others. Counterpart International took a primary role in coordinating the collection, in-country distribution and subsequent monitoring of donated medicines.

Partnership Programs

USAID Health Partnership Program: In the second year of this program, primary health care nurses who received training through a nursing partnership with MASHAV (Israeli Ministry of Foreign Affairs, The Israeli Center for International Cooperation) are being recognized for their enhanced professional status by clients and physicians. Nurses are working with one-third of the district?s hypertension patients to check blood pressure, provide needed health education and assist in managing chronic diseases. The nurses also work with pregnant women and monitor child development. Uzbekistan?s health managers will benefit from a new partnership with the University of Kentucky that will develop health management education in several Uzbek medical education institutions.

Cross-Sectoral Programs

Eurasia Foundation: In FY 2002, the Eurasia Foundation awarded 42 grants totaling approximately $974,000 to NGOs in Uzbekistan, with an average grant size of nearly $16,000. More than half of these grant funds supported private enterprise development, with the remainder targeting civil society. The Foundation is expanding its Ferghana Valley Initiative to provide targeted grants to increase dialogue and cross-border linkages in this region. An example of the Foundation?s work in FY 2002 was a grant awarded to the Center of Social Technologies to improve the quality of municipal services, promote the professional development of municipal workers, introduce new service delivery mechanisms, and advance citizen involvement in the decision making process in Uzbekistan. The grantee is establishing an informational resource center for municipal workers, setting up a professional club for municipal workers, and publishing the professional journal "Local Self-Governance".

USAID Conflict-Mitigation Activities: USAID initiated two community based peace-building initiatives in FY 2002. The Peaceful Communities Initiative began activities in 18 communities across the Ferghana Valley, and supported a number of small infrastructure projects (repair of school roofs, natural gas pipelines and drinking water systems). To build on these efforts, the Community Action Investment Program was initiated in southern Uzbekistan and the Ferghana Valley. This project aims to prevent conflict by working with communities to solve problems identified by residents. The project helps establish community initiative groups, conduct training modules, and review community-developed proposals for infrastructure projects such as school repairs, water and heating systems, and natural gas pipelines, with an overarching goal of encouraging communities to identify their own needs, advocate for assistance from local authorities or find solutions within the communities. Conflict prevention programs are active in 33 communities in the southern Uzbekistan regions of Kashkadaryo and Surkhandaryo, as well as in the Ferghana Valley regions of Namangan, Ferghana, and Andijan.

Programs Promoting the Objectives of the Silk Road Strategy Act (SRSA) of 1999

In FY 2002, a number of U.S. Government-funded assistance programs contributed to the objectives laid out in the SRSA?promoting reconciliation and recovery from regional conflicts; fostering economic growth and development; promoting infrastructure development; increasing border control capabilities; and promoting democracy, tolerance, and the development of civil society. Please see the above sections for numerous examples of programs that contributed to one or more of these objectives.

Preview of FY 2003 Programs

USAID, the U.S. Embassy?s Public Affairs Section, and the Peace Corps will continue to expand NGO development activities and to promote civic education for youth. Specific programs will focus on strengthening a network of civil society support centers, which in turn will provide assistance and training to NGOs. Particular emphasis will be given to community involvement and advocacy at both the local and national levels. USAID will provide training and assistance to independent media to increase their professional skills and to increase the objectivity and scope of their news coverage. USAID will provide training and support for human rights defenders. USAID will continue its support for an improved legal education, a professional and independent judiciary, and advocates who can effectively protect the public?s rights. USAID is launching a new basic education program in the beginning of 2003. This program will target Uzbekistan?s primary and secondary schools through teacher retraining, curriculum development, mobilization of school communities, and limited infrastructure rehabilitation. A related effort by the U.S. Department of State seeks to increase access to computers and Internet in selected primary and secondary schools. Throughout the implementation of these programs, USAID will seek the maximum coordination and cooperation with other international donors, as well as the Peace Corps and the U.S. Embassy?s Public Affairs Section.

In FY 2003, the Peace Corps plans to bring 113 new trainees to Uzbekistan, bringing activities back to the level existing following the evacuation in October 2001. Also in FY 2003, the Treasury Department's Office of Technical Assistance resident advisors will swing into full gear. In total five advisors, funded by FSA, will provide desperately needed policy advice to Uzbek senior policymakers on how to implement economic liberalization and reform. The success of their efforts will depend on the Government of Uzbekistan's political will to continue with market-oriented reforms.

NATO plans to work with Uzbekistan's Ministry of Defense to establish a regional military training center in Uzbekistan. This center, which should be established in FY 2003, will be funded by Partnership for Peace funds. The U.S. Government plans to continue working to improve Uzbekistan's ability to prevent the proliferation of weapons of mass destruction and to clean up biological and chemical weapon-development sites, such as Vozrozhdeniye Island and Nukus. EXBS Program priorities for FY 2003 include equipment for communications and power generation (radios, generators, telephone systems), transportation (heavy duty vehicles), maritime border guards (patrol boats and associated gear and safety equipment), surveillance and detection equipment for border guards, maritime officials and customs personnel (binoculars, night vision goggles, spotlights, metal detectors, video surveillance, interdiction kits, video spectral comparators, probes, and other surveillance and detection equipment), and computer servers (for customs). Training will include riverine operations and patrol boat familiarization on the Amu Darya river; anti-corruption (phase one and two); equipment maintenance; x-ray van operation & maintenance; International Border Interdiction Training (IBIT) phase one in Hidalgo, Texas, phase two in Uzbekistan; and training at the Radiation Academy Program (RADACAD) in Richland, Washington.