Uzbekistan – World Bank -- South Karakalpakstan Water Resources Management 

Improvement Project

June 12, 2014

U.S. Position

The United States welcomes the discussion of the South Karakalpakstan Water Resources 

Management Improvement Project (SKWRMIP) and the World Bank’s engagement in 

Uzbekistan’s agricultural sector. The United States recognizes the central role that agriculture 

plays in efforts to reduce poverty in Uzbekistan, particularly in poorer regions of the country 

such as Karakalpakstan. The proposed objectives of this project – better management of 

Karakalpakstan’s water resources, crop diversification, and increased mechanization of the 

cotton harvest – are important components of socially and environmentally sustainable 

improvements in the agriculture sector. However, the project takes place in the context of a long 

and troubling history of forced and child labor in Uzbekistan’s cotton sector, therefore requiring 

exceptional care and vigilance in implementation.

With regard to child and forced labor, the United States appreciates the Bank’s frank 

identification and discussion of these risks in the project documentation given its past reluctance 

to address this issue more directly. The United States welcomes the improved coordination 

between the ILO and World Bank in country and encourages continued dialogue between the 

two institutions. The United States also notes the measures that the Bank will take to help 

mitigate these risks, such as the use of Third Party Monitoring (TPM) and a Feedback 

Mechanism (FBM). The United States has strongly advocated for greater use of third party 

monitoring and feedback mechanisms in Bank projects generally and welcomes their use in this 

project. The United States encourages Management to redouble its efforts to identify financing

for the TPM from its development partners and expects continued cooperation with the

International Labor Organization on its design and implementation. The United States strongly 

urges the authorities to cooperate fully with the Bank in the implementation of these measures. 

Any interference with independent, credible TPM or FBM – which are central to the success of 

this operation – is unacceptable and, in such an event, the United States would expect Bank 

management to invoke the remedies at its disposal under this loan.

Moreover, sustainable improvements in the sector will ultimately depend on the efforts by the

Government of Uzbekistan to undertake reforms in the cotton and wheat sectors, including

dismantling the quota system. Without progress on developing a more liberal, market-based

agricultural sector in Uzbekistan, the United States remains uncertain that the Bank’s 

interventions – even innovative approaches such as SKWRMIP and the related Horticulture 

Development Project – can deliver tangible and lasting improvements in the lives of the project 

beneficiaries.

Finally, given the risks present in this project, the United States would like to request that 

Management return to the Board in approximately six months to provide an update on efforts to 

mobilize resources for the TPM, on the outcomes of the 2014 cotton harvest and ILO 

cooperation, and on other developments in the implementation of the project.

The United States wishes to be recorded as abstaining based on these concerns.