Uzbek human rights campaigners will appeal to EBRD president Jean Lemierre tomorrow to toughen the bank's stance against the Karimov regime, by withdrawing EBRD funding from partially state-owned enterprises and urging international economic sanctions.
Talib Yakubov of the Human Rights Society of Uzbekistan told Emerging Markets: "In view of the killing of peaceful protesters in Andizhan, the EBRD should stop financing not only state entities but even those with joint ownership.
"Unfortunately the Russian and US governments continue to support Uzbekistan in important ways. So it's important for international institutions such as the EBRD to take a tougher line. Economic sanctions need to be considered."
Yakubov says human rights organizations are assembling information that indicates a death toll of "thousands" in the infamous Friday massacre. The veteran human rights activist – who in 1992 was sacked from the Tashkent pedagogical institute, where he had taught maths for 29 years, after criticizing Karimov – will join NGO representatives meeting Lemierre tomorrow.
The Human Rights Society has been refused registration six times by the Uzbek government, Yakubov said. The opposition political grouping Bilik (Unity), has been turned down six times.
NGOs argue that the authorities' refusal to agree to an international inquiry into the Andizhan deaths, and the registration issue, shows that Uzbekistan is moving further away from the political benchmarks set by the EBRD under its country strategy adopted in 2003. The EBRD also set four economic benchmarks, and the NGOs say that progress has only been made on one, currency convertibility.
Many in the business community in Tashkent also believe that the country is moving in the wrong direction. The closure in March of Business Bank, the country's most successful private financial institution, for alleged violation of laws carried over from Soviet times, was "a demoralizing blow", a banker familiar with the region said.
An EBRD spokesman said: "We have seen little improvement on the political and economic benchmarks. And we cannot but be shocked by the shedding of blood in Andizhan. These matters will be considered in the lead-up to our review of our country strategy, due in July."
The EBRD has declined to work directly with Uzbek state institutions since 2003. But it considers funding municipal projects and those with positive social impact, including those with minority state stakes.
Were the EBRD to toughen its stance, borrowers such as Uzjilsberbank, a state-controlled mortgage bank that last year received a E3.66 million loan under the EBRD's Japan-Uzbekistan small business programme and a E568,000 loan under the EBRD trade facilitation initiative, could be affected.
So could municipal borrowers such as the city of Tashkent, which last year borrowed E7.3 million from the EBRD for a water supply improvement scheme, or private borrowers with small state stakes such as Bursel Tashkent Textile, which borrowed E9.5 million from the EBRD last year to build a textile plant.