This program comprised 29 policy actions: 11 for subprogram 1 and 18 for subprogram 2. The total number of policy actions was significantly large, particularly in subprogram 2, and represented a challenge in monitoring and implementation. The number of policy measures should be limited so that ADB can monitor compliance with them effectively throughout the program.
PFM and SOE reforms to ensure fiscal sustainability, like those in the program, have political and economic implications and are difficult to undertake without strong ownership. The implementation success of such policies resides in (i) a good understanding of vested interests; (ii) the government’s strong commitment; (iii) the institutional capacity of government agencies; (iv) effective partnership and coordination between ADB and the government; and (v) a strong appreciation for overall program benefits. All these were observed in the program.
This program was developed in close consultation with the government and development partners including the International Monetary Fund, World Bank, Agence Française de Développement, and United Nations Development Programme, and was designed through a holistic approach. It demonstrated that a holistic consultation process can ensure effective diagnosis of the issues, leading to a relevant policy matrix that prioritizes reform measures in collaboration with the development partners.
This program supported the preparation of the medium-term framework (MTBF) and MTBF manual, including gender-responsive budgeting tools at the MOF. Program experience has highlighted that institutionalizing change-management practices among those charged with implementing reforms requires enhancing both technical and change management competency. It is also necessary to enable the government to sustain capacity development programs beyond the life of a program for instance, by providing training experts, particularly to develop soft capacities.
This program successfully tackled a wide range of highly complex, interlinked issues. In addition to the appropriate sequencing of reforms, its success was attributable to the development of adequate capacity among key stakeholders, including the Ministry of Finance (MOF), Central Bank of Uzbekistan, and State Asset Management Agency. Capacity development was made possible by the provision of ADB technical assistance.
In addition, to achieve good project performance, the project design needs to include continuous policy dialogue and knowledge sharing of international best practices.
ADB should have taken a more cautious stance in the selection of PCBs, especially when Agrobank had earlier failed to meet the covenant on return on assets.
A project such as this one can be successful in easing the constraints to local currency cash loans, loan terms, and the capacity of participating commercial banks for MSE lending. However, it cannot address other constraints identified at appraisal such as restrictions on dollar-denominated cash loans, and those encountered during implementation, such as restrictions on microcredit organizations and cash balances of banks. Incremental measures aimed at easing constraints and eventually dismantling credit market distortions need to be included in the project design.
Benchmarking of district and provincial water utilities’ performance is an invaluable tool in monitoring performance and identifying strengths and weaknesses, allowing problems to be addressed in a timely manner. However, sustained support is required to ensure these benchmarking systems are effective. It is suggested that MHCS reviews the benchmarking system in all provincial water utilities and develops a plan for filling any gaps.
More attention needs to be given to sanitation components, including continuing hygiene awareness campaigns. Improved designs are needed for school toilet blocks, and schools need support for operation and maintenance.
The grant component of this project developed a sector strategy and road map that was successful in supporting necessary WSS reforms nationally. Similar projects can leverage their added value to the sector through this kind of targeted support for sector reform. Sequencing sector reform support in advance of loans may maximize the benefits.
The project suffered from project readiness issues that resulted in significant cost overruns and delays. While ideally these would be captured before project approval, if they are not, it is imperative that identified flaws are acted on as soon as possible during implementation to allow for course correction. In particular, the reluctance of farmers to repay investment costs provided from ADB financing should have been identified much sooner than 4 years into implementation by conducting willingness-to-pay surveys or through similar means. Similarly, the uncertainty over crop yield baselines and the causal link between the project activities and crop yields (as opposed to between the activities and the increase in the crop area) could have been captured earlier and reflected in the midterm review.
In this case, the farms achieved more efficient drainage through the project, but the project did not pay enough attention to ensuring the prudent use of water. Overwatering is still practiced by farmers, exacerbating the inefficient transfer of water from sources to farms (40% reported water loss). A parallel project from a development partner or a government program that focused on irrigation efficiency, agricultural extension services, better seed quality, and other inputs would likely have yielded a wider range of benefits than is possible through a single subsector approach. This is particularly the case in the project area, given the projected impacts that climate change is expected to have on the Amu Darya River Basin. When irrigation becomes more efficient, the water savings could be allocated to environmental projects such as supporting the rehabilitation of the Aral Sea and allowing flows to smaller wetlands and salt lakes in the region to improve habitats and attract international tourism.
The project supported the enhancement of the GIS capabilities of the Hydrogeological Melioration Expeditions (HGMEs), primarily through the GEF grant. Local HGMEs have benefited from the institutional capacity building provided through the project. Through the use of GIS, they are able to map drainage and irrigation infrastructure and facilities in the project areas, to support their O&M planning and implementation.
The new sector reform strategy seeks to reduce farm quotas, support other high-value crops (including horticulture), and introduce more resource-efficient agricultural methods (e.g., drip irrigation). While enabling policies and strategies may help bring about modern agriculture practices, it is also imperative that the benefits that have been achieved through traditional interventions such as the Land Improvement Project are sustained.
Procurement of IT systems—including hardware, software, and related communications equipment— requires the involvement of specialized personnel. However, this is not a full-time job, and on-call consultant support could have been considered for the executing agency.
The DMF was not well designed and had deficiencies in the measurement of performance indicators for the project impact and outcome. Target dates should have been indicated; and the five outputs of the project involved the implementation of three components. These should have been integrated more closely with the outputs of the DMF.
Knowledge of procurement procedures is a key aspect of most ADB funded projects and a lack of understanding of the two-stage process should have been rectified earlier. Further training should have been provided to the executing agency, especially since it had limited exposure to ADB procedures and to the prices of the goods and services to be procured under the project.
PFMR is multifaceted and requires sufficient time to implement. Supporting TA and project implementation should go hand in hand. The PMO was established to manage the procurement process with TA support. However, central treasury staff had to carry out both project-specific tasks and their day-to-day functions. This led to competing priorities between their own jobs and project requirements, and delays in dealing with project issues.
Although the supporting TA addressed issues related to budget preparation and execution, continued support for the entire PFMR process is needed.
The bid price for the GFMIS application and main servers should have been better estimated. The bid was 43% above the price.
There were issues associated with working with the Ministry of Foreign Economic Relations, Investments and Trade (MFERIT) during the project. MFERIT is responsible for registering all construction contracts in the country, but it appears that there are slow processes within MFERIT, which delayed the process and led to significant detrimental effect on the progress of the contractor mobilization. ADB can work with MFERIT to improve processes generally, or at least identify a fast-track approach for externally funded projects.
Another lesson is that, within former Commonwealth of Independent States (CIS) countries, it is often the case that ADB relies on traffic intensity forecasts and designs produced by technical institutions.