Banking on cooperation

Unusually among international financial institutions the European Bank for Reconstruction and Development has a political mandate.

Its remit is not just to ensure countries in the former Soviet bloc make the change from command to market orientated economies, but also to ensure the process goes hand in hand with political reform.

That mandate is about to face its biggest challenge. Next weekend the EBRD will hold its annual meeting in Tashkent, capital of Uzbekistan - a country with an appalling record on human rights.

So appalling that earlier this year, after a visit to Uzbekistan, UN rapporteur Theo Van Boven declared: "Torture is institutionalised, systemic and rampant."

According to Mathilda Bogner, Uzbekistan researcher for Human Rights Watch, Uzbekistan is "a country full of fear".

The economy is scarcely in great shape either. Though good prices for gold and cotton have provided something of an underpinning, state control remains tight, corruption endemic, enterprise stifled, and trade hampered by closed borders.

The EBRD has come under fire for its decision to hold the annual meeting in Tashkent. However, the bank's president, Jean Lemierre, who took over after the Uzbek capital had been chosen, is trying to make the best of it.

His strategy is based on a mixture of the symbolic and the pragmatic. He believes the bank has reached an understanding with the Uzbek government that will see the country's president, Islam Karimov, use his opening address to the annual meeting to issue what Mr Lemierre describes as "a clear condemnation of torture".

While the message may be aimed at an international audience, the EBRD has insisted the president's address be broadcast domestically.

The bank has also invited a record number of non-governmental organisations to attend the meeting and hopes that it will provide a forum for a real debate about civil society. It is promising to monitor what happens to them after the annual meeting is over.

At a more pragmatic level Mr Lemierre will host a lunch for the heads of state of some of Uzbekistan's neighbours to discuss regional cooperation.

It's a crucial issue. Without closer ties the neighbours will remain on bad terms, closing borders, squabbling over water and - with the exception of oil-rich Kazakstan - unable to attract significant amounts of foreign investment.

Compared with the scale of the problem, the EBRD's programme looks modest, yet risks being overambitious.

It does not command much by way of sanction. True, if Mr Karimov does not deliver a public condemnation of torture, the EBRD is promising to make its disappointment very public which would knock some of the gloss off Mr Karimov's coup in getting the bank to come to Tashkent in the first place.

It can - as it has done elsewhere - stop lending to Uzbekistan but that would hardly bring the economy crashing down or undermine those who control the economic high ground.

Yet the EBRD has few options. In choosing Tashkent for the annual meeting it opted for constructive engagement and must see it through, at least for the time being, in the hope that Mr Karimov will deliver enough to justify its stance.

Keep your fingers crossed - but don't hold your breath.