This spring one of London's premier financial institutions will, briefly, swap the Square Mile for the Silk Road. The European Bank for Reconstruction and Development holds its annual meeting in Tashkent, the capital of Uzbekistan and one of the great cities along that historic trade route.  Tashkent may symbolise east-west trading links but the EBRD's foray to the farther reaches of the former Soviet Union, also highlights a dilemma facing the bank. As countries such as Poland, Hungary and the Czech Republic head for membership of the European Union, the EBRD is being forced to look ever further south and east - deep into the former Soviet territories of central Asia; a region where concerns about human rights and the absence of economic reform present serious challenges.  The EBRD lends to 27 countries in the old Soviet Union to aid their transition from central planning to the free market. Based on the bank's 2002 figures, its cumulative investment in and lending to the eight first wave EU accession countries in which it operates has amounted to euros 7.6bn (pounds 4.75bn), more than a third of the total. Add in Romania and Bulgaria, which are aiming for EU membership by 2007, and the figure rises to euros 10.6bn, close to half the total. By contrast, direct EBRD support for the central Asian "stans" - Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, all close to Afghanistan - is euros 1.9bn, less than 10% of the total.  A crude analogy would be a company which is losing between eight and 10 of its best markets and, as result, is forced to put a lot more effort into half a dozen of its most challenging.  The EBRD and its backers do not see it that way. The British government's position is clear. "We strongly support the bank's move to do more in Russia and the poorer countries in the Balkans, Caucasus and central Asia, which have benefited least from transition," said a spokeswoman for the Department for International Development, whose boss, Clare Short, will chair the meeting in Tashkent.  Accession  "There will still be important transition challenges in central Europe and the Baltics after accession, and the EBRD will continue to have an important role supporting the new EU states in their transition," added the spokeswoman.  Certainly the EBRD is not giving up its work in the accession countries. Lending in what it terms the advanced countries - Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia - is expected to run at about euros 1bn over the next few years, down on the recent past but not by much.  But should it? The EU already has plenty of experience with accession countries and has an institution through which to channel funds. The European Investment Bank was active in Spain, Portugal and Greece as they went through the transition process and is already operating on the EBRD's turf. In 2001, for example, it lent the 10 accession countries (the EBRD eight plus Cyprus and Malta) euros 2.7bn, more than double the EBRD total for that year.  EBRD officials argue that the two institutions target different areas: the EIB is big on infrastructure projects, for example, but is by no means limited to the sector. The EBRD is supposed to have a bias towards the private sector but as the accession countries mature that must change. It would hardly be a ringing endorsement of accession if the EBRD were forced to prop up the efforts of private sector lenders rather than letting them get on with it.  EBRD president Jean Lemierre insists there is still plenty of work for the bank to do in the accession countries. "The needs are so huge there is room for all of us; that's a view shared by the countries themselves, the (bank's) shareholders and by the European commission.  "The EU wants our help to build projects using a mixture of (EU) subsidies and our own funds. We've agreed."  Nevertheless, there has to be a time limit. As one non-European shareholder which applauds the EBRD's work in central Europe and central Asia notes: "We consider the bank's role in accession countries should become more limited over time. There is no point in a multilateral institution remaining in the region after private sector and domestic financing could provide (what is required)."  The EBRD has plenty of work to do elsewhere. Russia is a central part of its strategy, with reform of the banking system, and the knock-on effect on the rest of the economy high on the agenda. The Balkans is another area where the bank is needed.  The choice of Tashkent, made years ago, may be symbolic of the bank's changing focus but it has attracted controversy. Uzbekistan has been under fire for the lack of reform since independence more than 10 years ago. Recently the EU expressed concern over the reported use of torture in Uzbek jails. A forthcoming United Nations report is expected to be sharply critical.  So what is the difference between holding a high profile meeting in Tashkent and playing cricket in Zimbabwe? Ms Short will have none of that. "In Zimbabwe seven million people are starving and there is great repression. It is unimaginable to play cricket, eat cucumber sandwiches and shake hands with those responsible. Central Asia is desperately poor, highly indebted, badly governed and corrupt. The region was in receipt of considerable resource transfers before the collapse of the Soviet Union and has been in trouble since. External engagement, as with other highly indebted poor counties, is needed to drive reform spending and an improvement in standards of governance."  Economic progress is hindered by regional tensions. Uzbekistan and its neighbours are often at loggerheads; the Associated Press last month reported Uzbekistan was reviving a railway project which would link several regions, connect with Tajikistan - but bypass Turkmenistan.  The lack of reform coupled with the political tensions mean the region, about the size of Europe but with a population of some 50m, is hardly spilling over with projects which the EBRD could back and still meet its criteria of encouraging the private sector while only taking on deals which represent sound banking practice.  On the plus side, the bank's founding charter made it clear that the EBRD was not simply an instrument of economic growth. It has always had a mandate to encourage political change, too.  Mr Lemierre says he has raised the issue of torture with Uzbekistan's president, Islam Karimov, despite an apparently reluctant interpreter. "The message has to be delivered. There are questions of the legal position, of human rights, of the capacity to create business. These are serious questions and progress has to be made."  Even some of those critical of the choice of Tashkent acknowledge that it can be used as a lever to prod the Uzbek government along the path to reform.  Steve Crawshaw at Human Rights Watch argues: "We are not against the meeting as such. But merely saying tough things on arrival in Tashkent is a second or third best option to setting basic benchmarks now, ahead of the meeting.  "That would really make sure that this is an incentive towards democracy and not, as the Uzbekistan (government) sees it at the moment, an endorsement of what they are doing."  Monitor  In particular his organisation would like to see the Uzbek government register non-governmental organisations, which would give them legal status, as well as releasing a number of political prisoners.  Mr Lemierre has already met NGO representatives in Tashkent and is keen to see the EBRD meeting used as a forum for such issues. He is adamant, too, that the EBRD will monitor strictly what happens once the annual meeting is over.  He believes in what could be called constructive engagement, telling the region's governments that respecting the democratic process and developing a civil society are an integral part of the transition process. He is keen to see the bank use its expertise in trade finance to bring aid to the region, helping to break down barriers between the different countries.  "You have to improve the situation of the people day after day. It is a long term process, a very long term process. You can't drop them." Classification Language: ENGLISH Subject: EUROPEAN UNION (90%); DEVELOPMENT BANKS (90%); INTERNATIONAL ECONOMIC ORGANIZATIONS (90%); INTERNATIONAL ECONOMIC DEVELOPMENT (89%); TALKS & MEETINGS (77%); EMERGING MARKETS (76%); EUROPEAN UNION ACCESSION (75%); ECONOMIC POLICY (69%) Company: EUROPEAN INVESTMENT BANK (50%); EUROPEAN INVESTMENT BANK (50%); EUROPEAN BANK FOR RECONSTRUCTION & DEVELOPMENT (93%); EUROPEAN UNION (91%); EUROPEAN UNION (91%) Organization: EUROPEAN BANK FOR RECONSTRUCTION & DEVELOPMENT (93%); EUROPEAN UNION (91%); EUROPEAN UNION (91%); EUROPEAN BANK FOR RECONSTRUCTION & DEVELOPMENT (93%); EUROPEAN UNION (91%); EUROPEAN UNION (91%) Industry: DEVELOPMENT BANKS (90%); BANKING & FINANCE (89%); (78%) Geographic: TASHKENT, UZBEKISTAN (94%); LONDON, ENGLAND (79%); EUROPEAN UNION MEMBER STATES (94%); CENTRAL ASIA (93%); ASIA (93%); UZBEKISTAN (92%); POLAND (92%); CZECH REPUBLIC (92%); HUNGARY (92%); EUROPE (92%); TURKMENISTAN (79%); ESTONIA (79%); SLOVENIA (79%); KAZAKHSTAN (79%); SPAIN (79%); PORTUGAL (79%); ROMANIA (79%); TAJIKISTAN (79%); CROATIA (79%); KYRGYZSTAN (79%); UNITED KINGDOM (79%); LITHUANIA (79%); RUSSIAN FEDERATION (79%); SLOVAKIA (79%); BALTIC STATES (79%); LATVIA (78%); AFGHANISTAN (69%); BULGARIA (54%)