Tajikistan

Tajikistan: World Bank discussed new country assistance

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Washington, July 26, 2005 - The World Bank's Board of Executive Directors today discusses the new Country Assistance Strategy for Tajikistan for the period of fiscal years[1] 2006 to 2009. The Country Assistance Strategy (CAS) is the World Bank's work plan that guides its operations in the country, which includes lending, analytical work, and technical assistance. It describes the country's economic and social performance, its main development challenges, government's development strategy and the ways of the Bank's contribution to the realization of the country's development program.

Under previous strategies, the World Bank has helped the country restructure collective farms on some one third of the country's arable land. Pilot poverty-alleviation projects have also improved the lives of over one-half million people in the poorest areas of Tajikistan, reduced the number of school dropouts, and improved the quality of primary healthcare services in the selected districts of Tajikistan.

Tajikistan is a small land-locked economy with 6.7 million inhabitants, a gross domestic product of USD 2.1 billion, and gross national income per person of around US$300. Tajikistan is among the few post-conflict countries that moved quickly from war to internal stability and to a functioning government. It has achieved remarkable economic success averaging 10 % growth a year for the past four years.

Notwithstanding all the achievements of past years, Tajikistan remains the poorest and among the most fragile of the CIS countries, and its development agenda remains daunting with failing infrastructure, tenuous health and education systems and weak market and public institutional frameworks. More than two thirds of the population continues to live on less than USD 2.15 per day. The Government is, however, committed to move forward reforms in key areas and strive towards reaching Millennium Development Goals.

"Tajikistan is seen now by many as one of the most stable countries in the Central Asia", said Cevdet Denizer, the World Bank Country Manager for Tajikistan, adding that "right now there is the best opportunity for Tajikistan to differentiate itself from the unsettled regional picture: with decisive policy reform in such areas as public administration and expenditure reform, accountability improvements in the management of key state owned enterprises, equitable cotton farm debt solution and land reform, and support in terms of policy reforms for private sector development, the country would send a strong signal to the international community about its commitment to raise the welfare of its citizens."

It is expected that the new results-based CAS will continue the World Bank's focus on maintaining short-term growth and building a foundation for sustainable long-term growth. It focuses itself on reaching the following strategic objectives aimed at assisting the Government of Tajikistan to further its development agenda and reduce poverty:

Improving business opportunities in rural and urban areas through strengthening the financial sector, reducing the cost of doing business, supporting the measures to improve the access to agricultural land and reducing rent seeking in the cotton sector.

Enhancing and preserving the quality of human capital. The World Bank will help improve the system of resource allocation to education and health, create conditions for better teaching and primary school attendance, increase utilization of primary healthcare, and increase supply of safe water in selected areas.

Exploiting the country's hydropower potential. The World Bank intends to support efforts to increase efficiency of the domestic energy sector through improved cost recovery, and assist the government in attracting foreign investment in the hydropower sector.

Underpinning, the above strategic objectives, the Bank will work with the Government to improve government capacity and efficiency, and reduce corruption by giving special emphasis to measures that increase transparency of resource use, reduce excessive controls and encourage the participation of users in the provision of services.

The indicative envelope of the funding under the new CAS is USD 120 million. Funding for new projects approved in fiscal year 2006 will be allocated on a 100% grant basis.

The overall expected outcome of the CAS is halting the decline in the public service delivery, including health and education and starting to build the institutional capacity for more substantive development outcomes in the long run. Given the IDA resource constraint, the CAS will seek to increase donor collaboration, and the Bank will use its comparative advantage of global knowledge institution to broaden donor harmonization and coordination.

The Republic of Tajikistan joined the World Bank in 1993. Since that time, commitments to the country total approximately US$345 million for projects approved on both a lending and grant basis. At the moment, the active portfolio of Bank-supported projects consists of 9 investment operations for a total commitment of US$130 million, of which about 50% has been disbursed.

[1] Fiscal year in the World Bank is July 1 to June 30.

Contacts:

In Washington: Miriam Van Dyck (202) 458-293, mvandyck@worldbank.org

In Dushanbe: Dilya Zoirova 21 07 56, 21 67 43,dzoirova@worldbank.org