The European Bank for Reconstruction and Development has no plans to restart lending in Russia, but is upbeat on Central Asia following Uzbekistan’s move to implement long-delayed market reforms, its president told Reuters.
In recognition of Central Asia’s importance to the bank and its commitment to Kazakhstan, one of the bank’s top five markets, the EBRD plans to put a managing director for the region next year based in the former Soviet republic.
And it may buy a minority stake in Kazakhtelecom KZTK.KZ, Kazakhstan’s biggest telecoms firm, EBRD executives said, which could make it more attractive to potential foreign investors.
Regional game changer
Chakrabarti welcomed Astana’s proposal to create a “Central Asian Schengen zone”, an area foreigners could visit on a single visa. Kazakhstan made the proposal to Uzbekistan, its neighbor with a smaller economy but bigger population, this month.
“That would be a game changer for the region”, he said.
The EBRD restarted its operations in Uzbekistan last year after more than a decade of absence in Central Asia’s most populous nation. Things changed following the death of veteran Uzbek leader Islam Karimov in 2016.
His successor, Shavkat Mirziyoyev, has sought to reform the stagnating economy and mend ties with Western governments and institutions to attract foreign investment.
Chakrabarti said the bank had invested more than 100 million euros in Uzbekisran last year and had a strong project pipeline.
“I’m very pleased with our new beginning in Uzbekistan,” he said, adding that he planned to visit Tashkent in September to finalize a country strategy which the EBRD board is due to approve the following month.
“There are more reforms to come... but i’m very very confident that we have a team, from the president (Mirziyoyev) down, who are very committed to that,” Chakrabarti said. Speaking of sectors that could be privatized by Tashkent, he said it was important that banking was among the first to open up, as that would help efficiently allocate resources. Still, Uzbekistan has a long way to go before it overtakes Kazakhstan in terms of EBRD investment, Chakrabarti said, adding that the bank did not regard the two as competitors.