This Mission attempts to design a program of technical cooperation that will improve the Government of Uzbekistanís capacity to formulate and implement macroeconomic and microeconomic policy measures. The program will seek to broaden the experience of Uzbek officials responsible for policy innovations, and to organize short training programs on macroeconomic and economic management issues of interest to policy-makers.


Kiev, on  postcard

A.            BACKGROUND

          Uzbekistan is a country with a sound basic and technical education system, strong and experienced leadership, and established processes of making and implementing economic policy decisions. The country is, however, facing economic policy and economic management challenges, associated with the assumption of sovereignty and the decision to change economic systems, which are beyond its prior experience.

          In the past, the public sector was mainly concerned with implementing policies designed at the level of the Union. Now, the Government must design its own policies, establish international economic relationships, set up new economic management systems in such fields as taxation, banking, joint ownership of enterprises and the management of unemployment, and create a legal framework for private enterprise activities in most areas of the economy. In addition, the civil service must develop new skills and attitudes to enable its members to facilitate the economic transition effectively.

          In seeking solutions to its wide range of problems there are few reliable models to follow. The Government of Uzbekistan is determined to avoid the economic and political instability that often accompanies profound and rapid changes of systems. Consequently, Government officials need to be fully informed about the experience of other countries of the former Soviet Union and Eastern Europe, but they also need access to successful experience in other parts of the world. Even though old relationships will remain close, openings to the outside world are necessary in order to have as wide a choice of innovations as possible.

          The Government has established significant policy and operational dialogues with international and bilateral agencies that can provide substantial assistance to Uzbekistan. Although firmly committed to shift its economic system from a command to a market economy, the Government has chosen to chart its own course on economic liberalization and privatization in order to minimize hardship and instability during the transition period.

          Under these circumstances, the UNDP seeks to devise a program with distinctive attributes that the Government will find unusually responsive to its needs. We have therefore sought to identify the characteristics of a program Government officials seem to value most. Those characteristics can be summarized briefly as follows:

         The program should not have preconceived positions concerning the pace or style of reforms; instead, it should support Government policy and enhance its ability to articulate its positions;

         The program should be innovative and responsive to the changing agenda of problems that arise to confront officials in dealing with transition issues;

         The program should have the ability to respond quickly to requests for exposure to different ways of analyzing policy objectives and different means of managing or implementing policy choices.


          The Mission has held useful discussions with officials from the Committee of State Property and Privatization, the Ministry of Finance, the Ministry of Labor, the Central State Taxation Board, the Ministry of Higher Education, the State Committee on Economic Forecasting and Statistics, the Central Bank, the Tashkent State Economics University, the University of World Economy and Diplomacy (UWED), and the Tashkent Financial Institute.

          The types of cooperation needed cover a very wide range of activities, but most of them center around the desire to improve access to the experience of other countries through visits by Uzbek officials, consultants coming to Uzbekistan, attending courses abroad, and presenting courses here. All of these activities involve the transfer of knowledge and experience in one form or another.

          The topics on which information and experience appear to be needed cluster around the policies and systems needed to perform new economic tasks. Prominent topics include tax administration, savings institutions, unemployment services, labor exchanges, private and public sector management techniques, systems of national accounts, national currency issues, money circulation analyses, credit policy, foreign debt management, measures for valuing enterprises, commercial law drafting, foreign investment management procedures, development of private consulting firms, antitrust legislation, budget policy, accounting and auditing techniques, computerization, commercial bank regulation, and how to create a stock exchange. In each case, the need is not only for policy information and management techniques, but also for computer equipment and training.

          The list of topics on which the Government is called upon to devise new policies and management systems is extensive and still incomplete. Every day or every week new challenges will confront decision makers as unforeseen issues arise from domestic developments or events abroad. In this situation, the UNDP can be of most assistance to the Government not by simply providing expert advice on a particular issue, but by helping the Government to organize itself to examine policy issues as they arise.

          In the long run, the new orientation of Government policies will require major changes in central structures, civil service practices and procedures, and methods of dealing with the private sector. The more immediate priority, however, is to improve the capacity of existing institutions to understand the nature of the challenges confronting them and the range of policy and management alternatives available in dealing with them. Only when the most important policy options have been decided will the Government need to consider the detailed structural and procedural reforms necessary to institutionalize the changes. 


          The proposed program would have three major objectives: to broaden the experience of senior Uzbek officials and economists responsible for the analysis of critical economic policy and economic management issues; to provide a mechanism for conducting background studies and economic analysis relative to policy options; and to provide training on the techniques of economic analysis and public sector management as practiced in market economies.

          Few methodologies or systems found elsewhere are likely to be suitable for direct adoption by Uzbekistan. Most will need to be tailored to the circumstances, traditions, resources, and preferences of Uzbek leaders before they can be implemented. For this process of adaptation, Uzbek academicians, senior officials and economists need the means of analyzing the economic implications of policy options, and considering the responses of other countries to similar policy problems. For this reason, the program will contain the possibility of providing consultants on priority policy issues, in addition to sponsoring visits abroad by economic policy makers and analysts. In addition, the program will seek to adapt imported course curricula to the needs of the country.

          The program would thus consist of four sets of activities, in two clusters, as follows:

            A. Economic policy and management issues

          1. Visits to other countries by senior Uzbek officials to provide first-hand exposure to the policy framework and managerial mechanisms through which those countries deal with comparable issues. Since other sources of funding will be available for visits to a number of countries, the UNDP program will emphasize visits to countries without strongly established technical cooperation programs, such as a number of newly industrialized Asian countries, and possibly successful experiences in Eastern Europe or the CIS.

          2. Study groups composed of academicians and government officials would consider the implications of policy alternatives, through comparative research on the experience of other countries and through economic analysis. Consultants from abroad would, where appropriate, work with the study groups to provide comparative experience and employ the sort of economic analysis used in market economies. The consultants would also, when requested, assist Uzbekistan officials to select and adapt appropriate strategies to deal with problems. Suitable consultants might, for example, be identified during trips abroad by senior officials.

            B. Short courses on priority issues

          1. Short courses dealing with techniques for analyzing policy options and utilizing managerial methodologies could be offered at UWED with appropriate curricular and instructional support from training institutions abroad. Initially the program would rely upon existing courses offered by multilateral institutions and high-quality development studies centers in advanced countries. Although these courses will not generally be available in the Russian language, some may have already been translated. Others could be taught by Uzbek instructors sent abroad to attend the courses and then supported by a senior instructor from the originating institution.

          2. Imported courses could be translated and adapted to local conditions by faculty of the UWED assisted by the UNDP. A locally based training expert would offer courses for training of trainers. The translated and adapted courses could be given broader dissemination through other institutions, such as the Tashkent State Economics University or the Tashkent Financial Institute.

          Government already has a number of special committees designed to cut across ministerial boundaries in order to consider problems from multiple points of view. These committees are task forces or action agencies, however, not research or study groups. In order to generate analyses and comparative research in support of the work of such task forces, a small unit based in a university could organize study groups of academicians and government officials, which could conduct comparative studies and analyses related to these topics. The unit could also be enabled to provide workshops, seminars and short courses on priority topics, with support from appropriate institutions abroad.

          This kind of unit would allow the Government the opportunity to study policy alternatives carefully, without being forced to reach a conclusion simply on the basis of urgency or outside pressures. The unit could not only examine issues in depth, it could also articulate its conclusions in professional terms, to improve the understanding of external agencies of the positions adopted by the Government.

          The unit should be issues-oriented; that is, it should focus its efforts on a selected number of priority issues selected for attention in consultation with the Government.

          If the program is to be responsive to the priority concerns of the Government in a timely fashion, its staff will need access to senior economic policy-makers and managers. For this reason, consideration could be given to locating the project within one or another of the economic agencies of government. This would facilitate government economistsí participation in study groups while continuing to perform their regular duties, and it would provide the unit with convenient access to official data.

          Another option would be to find a base in a university such as UWED, with close relations with government departments. Clearly, the training aspects would benefit from such a base, but it might also have advantages for the aspects of the program involving the consideration of policy options. Applied research generally can best be conducted somewhat removed from the pressures of day-to-day decision-making. If it is too far removed from the policy process, however, it can quickly become irrelevant. To ensure regular interaction between the unit and the economic agencies of Government, a program committee of economic policy makers could guide the unitís work.

          To create such a unit, the full cooperation of the faculty of the UWED would be required, as well as the part-time secondment of qualified staff from Government agencies, made possible on a case by case basis. The unit would have the services, initially, of a senior expatriate economist and an experienced trainer supplied by the UNDP.

          It can be anticipated that if this unit succeeds in performing a useful applied research and analysis service for the Government, other donor agencies may be willing to add to its resources. If this were to happen, the unit could grow into an economic policy institute able to undertake a broader range of activities in support of policy makers and policy implementers. Such an institute could, for example:

         conduct seminars, lectures and short courses;

         conduct research for and advise policy makers as requested;

         facilitate cooperation between western experts and local policy makers and academics;

         develop a library of economics texts, historical studies of policy reforms, policy analyses, etc;

         translate economics materials into Russian and/or Uzbek;

         publish and disseminate materials to policy makers, academicians, and other opinion leaders; and

         build a database of economic information on Uzbekistan.

          The creation of this sort of an institute would take time and substantial resources. We believe it would be better to begin with a relatively modest program and expand it if the Government finds the approach useful. A Project Steering Committee on which the Government, the University, and all participating donor organizations were represented could be established to guide the evolution of the organization.

          If the Government desires a program along these lines, the UNDP would be asked to provide the following types of support:

         Arrange and provide funding for visits abroad, especially to Asian countries, to observe alternative means of dealing with economic policy and economic management issues;

         Supply the services of short-term consultants on priority economic and management issues of interest to the Government;

         Arrange for the participation of Uzbek academicians and government officials in selected short courses, workshops and seminars abroad, related to priority economic policy and management issues;

         Arrange for the presentation of short courses and workshops in Uzbekistan on topics of priority interest, with the assistance of development institutions abroad;

         Assist in the translation and adaptation of imported short courses and workshops to meet the needs and circumstances of Uzbekistan;

         Supply the services of a senior economist with broad knowledge of development experience, who would be attached to an Uzbek institution, where he would assist his local colleagues to identify priority policy and systems problems suitable for inclusion in the program. They would together determine the advisability and itinerary of visits abroad by Uzbek officials, and/or of consultation requirements for foreign specialists. They could also organize study groups to analyze the implications of policy alternatives and to compare the experience of other countries;

         Supply the services of a training expert, to be based at the UWED, to help schedule and arrange for courses for senior officials to be held at the Management Development Institute. The trainer would be knowledgeable of sources of appropriate courses abroad, and would arrange for participation in them by UWED instructors, or their presentation with the assistance of interpreters. The trainer would also conduct Training of Trainers courses, and assist in organizing the translation and adaptation of imported courses by UWED staff;

         Provide equipment including computers and audio-visual equipment for training activities to UWED; and

         Provide funds for holding seminars and workshops at UWED, and for employing staff from UWED, other universities and the Government for part-time participation in program activities.

          The UWED would need to provide office space for the UNDP experts, space for meetings and classes, secretarial support, and office supplies.

          If the Government of Uzbekistan finds that a program along these lines would address some of its priority concerns, guidance on the issue of location of the activities would be appreciated. We assume that the training and retraining of senior officials and economists would be based in a university, and that the University of World Economy and Diplomacy would be an appropriate location. The choice of location for the macroeconomic analysis study groups between UWED and a central government Ministry, Committee or Department remains to be made.

          Attaching the unit directly to a government department would ensure that its efforts would focus on topics of high priority. Policy-makers would have ready opportunity to review its work, and the program committee task of maintaining the unitís focus would be relatively simple.

          If the unit was attached, with the training component, to UWED on the other hand, it could more readily involve university researchers along with government officials in the study groups. Moreover, it is often advantageous to conduct studies in a place slightly removed from day-to-day activities because the urgency of the latter tends to overshadow the former. The function of the program committee in keeping the unit focused upon priority topics would be very important in this case.

          If the decision is taken to attach the analytical unit to a department of government, it would be important to receive an early indication as to which department that would be. As soon as a positive decision is taken about the general outlines of the program, and the location of its activities, the Mission will devote its remaining time to an attempt to quantify the assistance described above, and to work out a detailed plan of cooperation with appropriate institutions. The UNDP will give its highest priority to the process of completing the preparation of the program and achieving its approval by the Government and the UNDP governing process. It is anticipated that the program could be launched within six months from the date of approval in principle by the Government.

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