The New Yorker has a profile of Paul Wolfowitz, erstwhile neocon and now President of the World Bank (but not for much longer, maybe …). Few people divide opinion quite like Wolfowitz, but he didn’t shy away from cutting off funds to Uzbekistan following Andijan (h/t: Oxblog). This was in line with his own beliefs about transparency in lending:

‘Under the World Bank’s articles of agreement, it is prohibited from interfering in politics. For many years, this stricture was taken to mean that the bank shouldn’t discuss the bribery and graft that afflicted many of the bigges beneficiaries of its aid. In 1996, James Wolfensohn, Wolfowitz’s predecessor, violated this taboo by publicly referrin to the “cancer of corruptionâ€? in developing countries. Two years later, the bank’s research department published a influential paper, “Assessing Aid,â€? which argued that aid is effective only when it is given to countries with hones governments and efficient economic policies
Wolfowitz was determined to follow Wolfensohn’s lead. In one of his first board meetings, he asked, “Why are we lending to Cambodia? It’s such a corrupt country.â€? Previous bank presidents, including Wolfensohn, had been reluctant to cut off lending, for fear of harming the people whom the bank’s projects were intended to help. Wolfowitz wasn’t persuaded by this argument—according to some estimates, up to twenty per cent of economic aid is misused or stolen—and a few months after he arrived at the bank he appointed Suzanne Rich Folsom as head of the Department of Institutional Integrity, the bank’s internal-investigations unit, which follows up allegations of fraud in bank projects.’

Subsequently, when Uzbekistan popped up on the radar and decisions had to be made about whether or not to lend, Wolfowitz brought down the guillotine:

‘Before long, Wolfowitz became personally involved in the anti-corruption campaign. In September of 2005, he told a reporter for the Financial Times, “I think I feel even more strongly than before that you can’t talk intelligently about development if you exclude anything that sounds political.â€? That May, the government of Uzbekistan had violently suppressed an uprising in the city of Andijan, in which as many as seven hundred people, including women and children, were killed. In July, Islam A. Karimov, Uzbekistan’s dictatorial ruler, ordered the United States to remove its troops and aircraft from the Uzbek base it had been using to support the military campaign in Afghanistan. Around the same time, the Uzbek government expelled a number of Western nongovernmental organizations. Since joining the World Bank, in 1992, Uzbekistan had received more than five hundred million dollars in loans, mostly for rural water and health projects. In September, 2005, Wolfowitz withdrew an assistance package for Uzbekistan that was about to be presented to the bank’s board for approval. “It came out of the blue,â€? Dennis de Tray, who was country director for central Asia at the time, told me. “I got a call while I was on vacation and was told that he just did it. He didn’t even talk to the regional vice-president. We were all pretty shell-shocked.â€? Wolfowitz told me that his action had nothing to do with military bases or the U.S. government. “Nobody was instructing me to get out of Uzbekistan,â€? he said. “My one concern, pure and simple, was that, given the human-rights violations, we couldn’t have any confidence in what was happening to our money.â€?

Nathan at Registan has blogged regularly on the EU’s diplomatic relations with Central Asia (latest post here), but arguably the most active links were those between the international financial bodies (World Bank, IMF, EBRD etc) and the region’s governments. Now they won’t touch Uzbekistan with a barge pole and EU diplomats are headed in the same direction. Are we witnessing a de facto isolation of Uzbekistan?