80168 Tajikistan: An Overview ECA PEG BRIEF SERIES 2012 PEG BRIEF: TAJIKISTAN Tajikistan is the poorest country in ECA while also having the most remittance-dependent economy in the world. While it recovers from the civil war that ended in 1997, it faces a number of other development challenges. Energy security and poverty are also areas of concern, as of 2009, the poverty rate was 47%. The main political economy drivers include the post-war recovery, centralization of authority and CONTENTS: geopolitical forces. Governance indicators show while Tajikistan ranks Overview: 1 below the ECA averages, improvements have been made in areas of Basic Governance Facts: 1 corruption and the business environment. Tajikistan continues to face Governance at-a-Glance: 2 several governance challenges, including corruption, transparency and Political Economy accountability, enhancement of capacity and developing demand for Background: 5 better governance. The World Bank Country Partnership Strategy in Key Governance Challenges: 6 Tajikistan addresses some of these issues, particularly accountability World Bank Strategy and enhancing capacity through training and institutional reform and Activities: 8 projects. Notes: 9 This brief summarizes Tajikistan’s performance on various governance indicators and summarizes recent developments in political economy along with a discussion of challenges identified by Bank Staff. BASIC GOVERNANCE FACTS Government Type: Tajikistan holds periodic Table 1: Rankings for Key Governance Indicators elections but is classified (Lower ranks indicate better performance) as a consolidated authoritarian regime by EIU Doing Transparency Heritage WEF Global Democracy Business International Foundation Competitiveness Freedom House and the Index Index Corruption Index Index 1,2 EIU. Power is 2011 2012 Perceptions 2012 2011 centralized at the (of 167 (of 183 Index (of 179 (of 142 countries) presidential level. The countries) countries) 2011 countries) current president, (of 183 countries) Emomali Rahmon has been in power since 1994, Tajikistan 151 147 152 129 105 and was re-elected to 119.9 85.9 134.4 95.6 93.2 FSU-S Average another 7-year term in November of 2006. EU-25 Average 24.7 36.3 32.4 40.1 33.9 ECA Average 80.6 72.4 93.1 78.8 72.6 Administrative Divisions: Tajikistan is a unitary state divided into 2 provinces and 1 3 autonomous province . The regional government in Tajikistan is comprised of other smaller units: oblasts, cities, rayons and Each level of local governance has its own characteristics and coverage of jamoats. three year responsibility. There are also Rayons of Republican Subordination which do not belong 4 to oblasts but are directly subordinate to the central government. Jamoats, included in terms . However, regional governments the rayons, are the lowest level of local government. These jamoats are self-governing have strong control over and exist primarily in the rural areas and villages or settlements. 5 local governance. The Political Economy and Governance (PEG) Brief Series, developed by the governance team in ECSP4 and supported by the Governance Partnership Facility, aims to inform World Bank Country Teams on the governance, institutional, and political economy environmentFOR WORLD relevant BANKBank to the World INTERNAL USE work in all ONLY sectors. . PAGE The 1 Briefs are classified for INTERNAL USE ONLY and are not to be cited, publically disseminated nor circulated. The information in this Brief is current as of September 2012 and is to be updated annually. For more information, please contact Jana Kunicova or Kimberly Johns, ECSP4. Constitution: The Tajik Constitution was established SECTION 1: GOVERNANCE AT A GLANCE November 6, 1994, and amended on June 30, 1999. The Amendments to the constitution adopted in 1999 included a The Republic of Tajikistan is a small, landlocked country change in the length of the electoral term of the President characterized by mountainous terrain. A low-income country, from 5 to 7 years. Amendments also included the creation of it is the poorest country in ECA measured by GDP per capita, an upper house of Parliament (Majlisi Milli), changes in the and faces numerous challenges in terms of domestic politics, powers of the President, and increased rights of citizens to and external relationships with neighboring Russia, China, associate, among others. and Uzbekistan. This section provides an overview of governance indicators for Tajikistan. Executive Branch: Head of State: President Emomali Rahmon (since November Key Governance Indicators 6, 1994; head of state and Supreme Assembly chairman since •Democracy Index (EIU 2011) 151 out of 167 November 19, 1992). The Democracy Index of the Economist Intelligence Unit measures democracy via five categories (electoral process Presidential Elections: The president is elected by popular and pluralism; civil liberties; functioning of government; vote for a seven-year term and is eligible for multiple terms. political participation; and political culture). Tajikistan is The last presidential election was held in November of 2006, considered an “authoritarian regime� by the EIU . 8 the next is to be held in November 2013. Authoritarian regimes per the EIU have characteristics including the absence of political pluralism, a disregard for Head of government: The President is considered the head of civil liberties, and fundamental weaknesses of democratic government as well as head of state. The Prime Minister Oqil 9 institutions . Oquilov has been in office since January 20, 1999. The prime minister is appointed by the president. • Global Integrity Index (GI 2007) Overall Score 53 of 100 This score corresponds to an overall rating of “very weak�. Cabinet: Council of Ministers appointed by the president, Tajikistan earned a “moderate� score of 75 of 100 for its legal approved by the Supreme Assembly. framework, but a “very weak� score of 33 of 100 for 10 implementation . Legislative Branch: Tajikistan has a bicameral legislature, the Majilisi Oli or Supreme Assembly is comprised of an upper • Government Accountability (GI 2007) 31 of 100 chamber Majlisi Milli and a lower chamber Majlisi This indicator captures executive, legislative, and judicial Namoyandagon. The members of the upper house are accountability, asset disclosure requirements, auditing appointed by the president, 25 members are selected by local practices, and checks and balances across branches of deputies and one seat is reserved for the former president. government. Tajikistan earns a “very weak� rating for this The lower chamber representatives are chosen by the indicator due to an absence of checks and balances in the percentage of the vote each party garners. The last Tajik government structure. The judicial branch does not parliamentary elections took place in February of 2010, the serve as a competent check and balance mechanism, as next are to be held in February of 2014. judges are appointed by the president. Major Political Parties: The primary political party is the • Doing Business (2012) 147 of 183 People’s Democratic Party (PDP) headed by President 6 Tajikistan improved 5 rank positions from 2011, initiating Emomali Rahmon. The Islamic Renaissance party is seen as reforms in the area of starting a business. Tajikistan also the primary opposition party in Tajikistan, and it is the only 11 7 initiated reforms making it more difficult to get credit. opposition party to have representation in the parliament. These reforms impacted the rankings on sub-indicators: Judicial Branch and Legal System: Judges at the Supreme Tajikistan improved 67 rank positions on starting a business. Court, Supreme Economic Court, and Constitutional Court are However, Tajikistan still faces barriers in the areas of getting th appointed by the president for ten year terms. electricity (ranking 178 ), dealing with construction permits, th getting credit, and trading across borders (ranking 177 on 12 each.) •ICRG Country Risk Ranking (2011) NA This indicator is not available for Tajikistan. •Transparency International Corruption Perceptions Index (2011) 152 of 180 Tajikistan improved 2 positions in the ranking in 2011 as compared to 2010. Of ECA countries, Tajikistan ranks above FOR WORLD BANK INTERNAL USE ONLY. PAGE 2 Kyrgyz Republic (164), Turkmenistan (177) and Uzbekistan SUMMARY OF GOVERNANCE INDICATORS: 13 (177). Tajikistan • Freedom House Political Rights Index (2011) 6 out of 7 Governance Indicator Score This indicator measures political freedoms based on an (source, year) evaluation of the electoral process, pluralism and functioning 14 Democracy Index (EIU 2011) 151 of 167 of government. Tajikistan is rated as “not free�. Global Integrity Index (2010) NA •Heritage Foundation Economic Freedom Rank (2012) 129 of Government Accountability (GI 2010) NA 179 Tajikistan had an overall score of 53.4, which corresponds to Doing Business Rank (2012) 147 of 183 a rating of “mostly unfree�. From the previous year, Tajikistan ICRG Country Risk Rating (2011) NA improved in the areas of business freedom, monetary freedom, labor freedom, freedom from corruption, and fiscal Transparency International Corruption 152 of 183 freedom while declining in government spending and Perceptions Index (2011) 15 property rights. Freedom House Political Rights Index 6 out of 7 (2011) •Global Competitiveness Index (WEF 2011) 105 of 142 The Global Competitiveness Index captures 113 indicators Heritage Foundation Index Rank (2012) 129 of 179 impacting economic development and competitiveness. In Global Competitiveness Index (WEF 105 of 142 th the global rankings, Tajikistan is 105 , below the ECA average 2011) ranking. Global Competitiveness Index 63 of 142 Institutions Pillar (WEF 2011) • Global Competitiveness Index Institutions Pillar Rank (WEF 2011) 63 of 142 Quality of Public Administration (CPIA 3.0 out of 6 This indicator captures aspects of the roles and quality of 2011) institutions on competitiveness and growth, including costs of Quality of Economic Policies 3.5 out of 6 corruption and bureaucracy. Tajikistan betters the ECA (CPIA 2011) average rank of 84. Efficiency of Revenue Mobilization (CPIA 3.0 out of 6 • Quality of Public Administration (CPIA 2011) 3.0 out of 6 2011) Tajikistan scored 3.0 out of 6 in 2011. This indicator measures Quality of Budgetary and Financial 3.5 out of 6 the extent to which central government staffs are structured Management (CPIA 2011) to design and implement policy and deliver services Transparency, Accountability and 2.5 out of 6 effectively to its constituency. Corruption in the Public Sector (CPIA 2011) • Quality of Economic Policies (CPIA 2011) 3.5 out of 6 Bribe Frequency (BEEPS 2008) 20.3% This indicator is an average of indicators of macroeconomic management covering fiscal policy, debt policy, trade and the Bribe Frequency: Dealing with Taxes 23.5% financial sector (CPIA questions 1-5). (BEEPS 2008) Bribe Frequency: Dealing with Customs 17.2% • Efficiency of Revenue Mobilization (CPIA 2011) 3.0 out of 6 (BEEPS 2008) This indicator assesses the pattern of revenue mobilizations via tax policy and tax administration. The revenue structure Bribe Frequency: Dealing with Courts 13.3% for Tajikistan earns a mid-level grade from CPIA. Tax rates are (BEEPS 2008) relatively low; however, corruption in the tax administration Rule of Law (WGI 2010) 11.4 out of 100 reduces efficiency. It appears progress is being made through Voice and Accountability (WGI 2010) 10.0 out of 100 reforms, see BEEPS below. Political Stability (WGI 2010) 17.5 out of 100 •Quality of Budgetary and Financial Management (CPIA 2011) 3.5 out of 6 Government Effectiveness (WGI 2010) 18.2 out of 100 This measures the extent that a country has a comprehensive budget, and an effective financial management system with Regulatory Quality (WGI 2010) 15.8 out of 100 appropriate fiscal control, audited public accounts and Control of Corruption (WGI 2010) 8.6 out of 100 accurate reporting. Tajikistan earned a mid-level grade on Statistical Capacity (2011) 72 out of 100 this indicator, and improved from 2009, when it scored a 3.0. FOR WORLD BANK INTERNAL USE ONLY. PAGE 3 •Transparency, Accountability, and Corruption in the Public Chart 1: World Governance Indicators (2010) Sector (CPIA 2011) 2.5 out of 6 Scores for Tajikistan (0-lowest, 100-highest) This indicator captures several facets that currently pose challenges to Tajikistan, including the limits on press freedom 60 47.1 48.2 51.2 57.1 47.7 43.7 and access to information, opaque nature of decision making 50 and limited accountability of government officials. Tajikistan 40 improved on this indicator from 2.0 in 2010. 30 • Bribe Frequency (BEEPS 2008) 20.3% 20 Tajikistan exceeds the ECA average of 12.8% on this indicator, 10 11.4 10 17.5 18.2 15.8 8.6 but experienced a 16% improvement over the 2005 value. 0 • Bribes are Frequent in Dealing with Taxes (BEEPS 2008) 23.5% Tajikistan exceeds the ECA average of 8.6% on this indicator, but experienced a 43% improvement from 2005. • Bribes are Frequent in Dealing with Customs (BEEPS 2008) 17.2% Tajikistan exceeds the ECA average of 7.1% on this indicator, Tajikistan ECA Average but experienced a slim improvement from 2005. • Bribes are Frequent in Dealing with Courts (BEEPS 2008) •Government Effectiveness (WGI 2010) 18.2 out of 100 13.3% This indicator captures perceptions of the quality of public Tajikistan exceeds the ECA average for bribery in the judiciary services, civil service, policy formulation and implementation (6.0%), but results show a small improvement from the 2005 and credibility of the government’s commitment to policies. value. Tajikistan’s government structure is perceived as being ineffective in addressing some of the main issues troubling •Rule of Law (WGI 2010) 11.4 out of 100 the country including poverty, high unemployment, food Tajikistan ranked in the 11th percentile on this indicator, 18 supply, and infrastructure-related issues . On this indicator, below the ECA average of 47.1. This reflects limited Tajikistan falls below the ECA average of 51.2. confidence in the adherence to rules and laws, as well as limited separation of powers between the three branches of •Regulatory Quality (WGI 2010) 15.8 out of 100 government. This indicator captures perceptions of the government’s ability to formulate and implement regulations that promote •Voice and Accountability (WGI 2010) 10.0 out of 100 private sector development. Tajikistan falls below the ECA Tajikistan ranks in the 10th percentile on Voice and average of 57.1. Tajikistan has taken additional steps to Accountability, below the ECA average of 48.2. Few improve private sector development; however, has work to independent media outlets currently operate in Tajikistan, do to catch up to other countries in ECA. and there have been reports of government harassment of journalists, particularly those who are critical of the • Control of Corruption (WGI 2010): 8.6 out of 100 administration or voice opposition. Additional laws were put th Tajikistan only ranked in the 8 percentile for control of in place which requires journalists to pay for public corruption, lower than ECA average of 43.7. Corruption is 16 information and to access officials for interviews. Tajikistan common in Tajikistan in many contexts as noted by the th ranked 115 of 178 countries on the 2010 Reporters without Economist Intelligence Unit and other sources. The opaque 17 Borders Press Freedom Index. nature of the government structures and procedures fosters corruption. •Political Stability (WGI 2010) 17.5 out of 100 Tajikistan falls below the ECA average of 47.7 for this •Statistical Capacity (2011) 72 out of 100 indicator, which captures the likelihood that the government Tajikistan falls below the ECA average of 81 for this indicator. may be destabilized by unconstitutional or violent means. Summary The indicators above highlight a number of opportunities for governance improvements in Tajikistan. These include improving service delivery, enhancing the business environment, combating corruption, and improving political stability and rule of law. (See Section 3). FOR WORLD BANK INTERNAL USE ONLY. PAGE 4 While Tajikistan has taken steps to improve the business The strongest geopolitical relationships include those with climate; they have not been substantial enough to raise the Russia, China, Iran, and increasingly, Turkey. Russia provides indicator values to the average level of the ECA region. Tajikistan with necessary military security, as well as Despite making reforms in starting a business, overall opportunities for migrant workers. At times, however, this Tajikistan has considerable work to do in order to foster relationship has been strained, as Russia has threatened to 23 business growth. While the indicators may reflect other close its borders to Tajik workers. China has been a leading countries making greater advancements, they also indicate source of financing of large scale infrastructure projects in limited reform progress. Tajikistan. Infrastructure and roads are in disrepair as they are the remains of the old Soviet system. Due to the Corruption indicators show progress. Tajikistan improved on mountainous terrain, rebuilding roads and transport becomes the Transparency International Corruption Perceptions Index even more costly, and the funds from China have afforded and on the Heritage Foundation Freedom from Corruption new opportunities for import/export across the Tajik indicator. In addition, despite being above the ECA averages, 24 border. the 2008 BEEPS show Tajikistan experienced a significant decrease in bribe frequency from 2005. Further efforts to A more tenuous relationship exists between Tajikistan and improve the regulatory framework and continue public Afghanistan. Tajikistan shares its longest border with administration reforms are needed in Tajikistan. Afghanistan, which poses threats to security and provides opportunity for increased drug trafficking. The potential for militant organizations and Islamic terrorist sects to penetrate SECTION 2: POLITICAL ECONOMY BACKGROUND the border also prompted ongoing border security assistance by the United States, Russia, and European Union. There are several key political economy drivers in Tajikistan Relations with Uzbekistan are tense, as Uzbekistan is which help shape economic outcomes. These include: concerned about Tajikistan's plans to develop hydropower, geopolitical forces; the post-civil war recovery; centralization particularly the proposed Rogun HPP, which Uzbekistan views of authority, and migration and remittances. This section as a threat to downstream irrigation. There has been a provides a brief background of these issues and describes growing conflict between these countries over payment for some of the implications of these challenges. water supplies and misuse of water resources. The conflict has led to rail border closings in 2010 and in 2012. Currently, Background Fifteen out of seventeen crossing points are closed by Tajikistan is the poorest country in ECA, in terms of GDP per Uzbekistan. Per outside sources, although relations are 19 capita (US$820 in 2010 ). In 2009, the poverty rate was 47 strained, they remain peaceful. 25 20 percent of the population. The key economic sectors in Tajikistan are services, agriculture, industry and construction. Post-Civil War Recovery and Decentralization Services are the largest component of the economy, Tajikistan continues to recover from the civil war that ended 21 accounting for nearly 60% of GDP. Agriculture accounts for in 1997. The war between the Moscow-backed government 22 nearly 20% of GDP. Although the landlocked country faces and a number of opposition groups began less than a year barriers in import/export, primary exports are cotton, after Tajikistan declared its independence. The largest aluminum, and electricity. Tajikistan is also reliant on imports opposition group was that of the Islamic Renaissance Party, from Russia, China, Kazakhstan, Uzbekistan and Azerbaijan. but other groups were supported by the regions. The war had a tremendous impact on Tajikistan’s economic and Energy security is a major concern for Tajikistan. Despite government structure as well as administrative operations. great potential for hydroelectric energy production, Tajikistan The war resulted in a major loss of life and led to remains a net energy importer. There are a number of displacement of Tajiks, 60,000 of whom fled to Afghanistan obstacles to overcoming the winter energy shortfall that for safety. required concerted Government attention and improved regional cooperation. Failure to resolve the crisis may lead to This displacement of citizens and workers had a major effect further social unrest. on the economy of Tajikistan, the effects of which continue to be felt today. In addition, the Government has progressively Geo-Political Relations consolidated its authority through constitutional The geographic location of Tajikistan, bordering Afghanistan, amendments and military actions, leading to dominance of China, Russia, and Uzbekistan places Tajikistan in a position of the President’s party. Nevertheless, the Government is both opportunity and risk. Tajikistan is seen as a gatekeeper seeking technical assistance from outside organizations for for peace and stability in Central Asia by China, Russia, the improvements in law, governance, and administration. European Union and the United States. These relationships affect policy decisions and economic stability, as well as The interrelationships between the national, subnational, and provide opportunities for development. local government levels have been a primary area of interest FOR WORLD BANK INTERNAL USE ONLY. PAGE 5 and reform by donors and external stakeholders. One of the financial transparency, which poses many governance goals of reforming these relationships is the decentralization challenges that are discussed in the next section. of government, with the assumption that it will provide greater autonomy to the regions, reduce corruption, increase transparency and accountability, and greater efficiency and SECTION 3: KEY GOVERNANCE CHALLENGES effectiveness. Because of the power structure and centralized authority, Strengthening governance is necessary to improve the dissent and opposition is limited which can hinder reform economic conditions of the country. The key challenges facing implementation, as it may reduce demand or incentives for Tajikistan are corruption, transparency and accountability, reform. With the president responsible for many and enhancement of administrative capacity, as well as appointments, officials opposed to administration or policy developing demand for better governance and increasing decisions can be and are replaced, which exacerbates political public participation. divisions. Given the structure of the government and opacity of decision-making, it is often difficult to discern the primary Corruption remains a key issue in Tajikistan per the 28 sources of pressure and influence. Economist Intelligence Unit reports , Freedom House and BEEPS, and is fostered by institutional arrangements. Per the The structure of regional governments remaining from the 2008 BEEPS, corruption is seen as the number two obstacle to Soviet era focus on “clan� power, not formal institutions, and doing business in Tajikistan, just behind tax rates. These are the power of the clan arguably determines negotiations. The correlated, as more firms in Tajikistan report unofficial idea of decentralization of regional and local government payments are made for taxes more often than other purposes systems is not fully embraced by the executive branch, and such as customs and dealing with the courts. See Chart 2. the current arrangements on revenue-sharing between the national and subnational structures encourages bargaining, Chart 2: BEEPS Corruption Indicators for Tajikistan 2005- further undermining the scope of governance reforms. 26 2008 While the political leadership considers some aspects of Bribes are Frequently 24 reforms as positive and desirable, while areas of the country Needed to Get Things Done 20 are controlled by remnants of the civil war opposition, (%) leadership will remain very cautious about a potential Unofficial Payments are delegation of power that could change the political 14 Frequent in Dealing with: landscape. 13 Courts (%) Migration and Remittances Unofficial Payments are 19 Russia and Kazakhstan provide opportunities for migrant Frequent in Dealing with: 17 workers within its borders, and Tajikistan is the most Customs (%) remittance-dependent country in the world, with 40% of GDP Unofficial Payments are 27 coming from remittances in 2010 . There are mutual 41 Frequent in Dealing with: incentives to keep a constructive relationship with Russia. 23 Taxes (%) After the civil war, more workers went abroad in order to seek greater economic opportunity, and have predominantly Percent of Contract Value 1.3 remained in Russia and more recently in Kazakhstan. Paid for Government 3 However, the recent financial crisis demonstrated the Contract vulnerability of remittance inflow into Tajikistan. 0 10 20 30 40 50 As the nation initiates structural reforms following recovery from both the civil war and financial crisis, these aspects require attention. The geopolitical relationships with Russia 2005 2008 and China provide economic opportunities if they continue to strengthen. The relationship with Russia is of particular importance in terms of security and employment. If Russia imposes barriers to Tajik migrant workers, remittance flows Tajik firms also have the highest ratio of informal payments to may continue to decrease. The assistance from China in the annual sales in the ECA region: of those firms reporting areas of infrastructure may provide better opportunities for payments, the payments averaged 11.3 percent of annual import/export. sales. This is over double the FSU and ECA region averages of 29 5.8 percent and 5.3 percent respectively . The prevalence of The primary area of concern is the linkage between unofficial payments decreased from 2005 to 2008 in most centralization of authority and the lack of full fiscal and areas with the exception of unofficial payments for government contracts. There are many new investments FOR WORLD BANK INTERNAL USE ONLY. PAGE 6 particularly aimed at transport and infrastructure projects, necessary to link the budgetary system across all levels of and the prevalence of institutional bribery makes government. By introducing new technologies and processes, procurement an area vulnerable for corrupt activity. accountability could be improved and spending could be However, there is government interest in reform of public better monitored. However, this is one piece of the procurement, including the implementation of e- accountability puzzle. Tajikistan also could benefit from procurement systems. implementation of basic building blocks of public finance and reforms to the treasury systems, and adoption and adherence Energy utilities are also prone to corrupt behavior. Firms in to clear fiscal rules. Tajikistan report informal payments were requested for 26 percent of new electrical connection applications. Over 50% Despite the limitations in accountability, public trust remains of firms surveyed in BEEPS stated that electricity is a major or relatively high in Tajikistan, per the Life in Transition Survey, 27 very severe obstacle to doing business. with the presidency, government, and parliament enjoying the largest shares. See Chart 3. The data from the 2006 and Administrative and human capacity limitations are 2010 LITS show that trust in the presidency had increased extensions of this problem. The civil service is in need of over time, as well as courts, armed forces, and the police. greater professional expertise, technical knowledge and Trust in political parties, banks, foreign investors, NGOs, trade educated officials in the middle and upper management of unions and religious institutions declined over the same public administration. Educational capacity is lacking and period. However, with the exception of trust in the police, premiums are placed on those with qualifications from Tajikistan exceeds the Western European average of all the foreign institutions. There has been a shift in the demand for trust indicators. better educated professionals in the civil service; however, the generally low wages offered by the civil service often Chart 3: LITS Trust Indicators for Tajikistan 2006-2010 drive these professionals into more lucrative positions in the (percentage of respondents who have trust in institutions by category) private sector or international agencies. Outside organizations have undertaken several programs to increase human capacity through educational and training programs. This training may foster organizational changes, which may increase buy in for training programs further up the chain. Stakeholder groups have focused their training at local levels, as there is higher demand and a smaller amount of resistance to change at these levels. By increasing capacity at the local levels, service provision has improved, and these incremental changes may pave the way for decentralization in the future. The limits in human capacity not only pose a challenge to the development of a professional bureaucracy, but also overall economic development. Increasing access and quality of Public participation in governance and policy is lacking in education and skills development is a growing priority for Tajikistan, however, there is a growing demand for good Tajikistan. Tajik firms note the availability of qualified workers governance. By fostering greater demand for accountability in terms of skills and education as a problem, 54% of firms and transparency, reform efforts may be more successful. In identified this as a moderate, major, or severe problem doing order for citizens to become more informed, they need 30 access to quality information. This access is affected by the business in 2008. Training in the private sector is not prevalent: the percentage of Tajik firms offering training for capacity and skills of the media. Currently the media and their workers is far below the ECA average per the 2008 news outlets for Tajikistan are informally limited by BEEPS. government. There are few independent television and radio stations operating in Tajikistan, and many journalists self- 31 Accountability in terms of budgeting, allocation, and censor . Taken in tandem, censorship and limited access of reporting on utilization of budget funds is an area targeted the media to government compound the problem of public for reform. This is closely tied to lack of transparency in policy participation. However, improving access to information and and decision-making in fiscal processes, but also to technical informing the public of their rights to information has been limitations. Local governments do not have the technical and an area of activity by civil society and other actors. Increased technological capacity to streamline budget processes. Local access to the internet has led to greater societal participation governments continue to rely on non-computerized systems, in disseminating information through blogs and other outlets. and relay information often by phone to the larger budget In addition, government is improving access to information offices. This antiquated system increases the potential for through its own websites, publishing data on the budget, errors in reporting and limits the ability to check for data audited financial statements, and other information. accuracy and quality. Improvements in technology are FOR WORLD BANK INTERNAL USE ONLY. PAGE 7 SECTION 4: WORLD BANK STRATEGY AND coordination; budget management; regulatory management, ACTIVITIES and monitoring of reform implementation. Salary increases for civil servants, recommended by the project, went into The World Bank’s engagement is supported by the Country effect in September 2012. Partnership Strategy (CPS) for 2010-2013, extended by the The Tajikistan Institutional Governance Review (IGR) focuses CPS Progress Report to 2014. The objectives of the CPS are on national-subnational relations, as they affect the two-fold: (i) reducing the negative impact of the crisis on development outcomes in key sectors: energy, rural poverty and vulnerability; and (ii) paving the way for post- development, and provision of social services. crisis recovery and sustained development. Activities focus on The report addresses both the formal (de jure) fiscal and strengthening the business environment and access to institutional relationships among different levels of finance, boosting agricultural productivity, improving the governments, and the informal (de facto) arrangements, reliability of electricity and water supply, expanding the bargaining process, power balance, and the overlay of formal country’s energy production and export potential, and local governments with traditional societal structures, as they enhancing human capital through higher-quality education affect service provision at the local level. The report analyzes and health services. the governance constraints that impact development in key The CPS includes efforts to improve governance in the sectors and formulates recommendations, particularly in context of the Country Governance and Anti-Corruption public financial management, to ease these constraints. (CGAC) strategy. Weak governance is identified in the CAS as 32 a major constraint on development . Within the CGAC The Public Financial Management Modernization Project strategy, three forms of governance interventions are (PFMMP) aims to improve the effectiveness and transparency underway: measures for transparency and accountability; of public financial management in Tajikistan. The project capacity development, and supporting demand for good goals focus on management of public expenditures and the governance. Enhancing governance is an expected externality development of institutional capacity to implement and of many of the anticipated results, via increased transparency sustain an automated financial management information in public financial management; strengthening the quality of system. Currently, the budget execution is decentralized into public services, and incorporating political economy the 73 districts. The budgets are prepared manually, which assessments into operations. poses problems with reliability and coding of budget information, as well as relaying information back to the The Mainstreaming Governance in Tajikistan Country central budget office. The lack of telecommunications and program (Governance Partnership Facility Grant) aims to help internet access forces districts to relay budget information by ease the governance constraint on development in Tajikistan phone. This project addresses the core foundations of a through interventions at the country, sector, and project modern public finance system, including Unified Chart of level. The program includes multiple components, which Accounts, budget classification, and Treasury functions that include activities to gather and analyze information such as are central to improving accountability and transparency the Governance Data Platform and the Implementation of a challenges currently facing the nation. Governance Checklist which includes political economy analyses. Other components such as the Transparency and The Tajikistan Programmatic Development Policy Grant Accountability Measures and Activities in Sectors and (PDPG-4-6) are a series of development grants to support Budget Processes target improvements in budget information policy reforms to protect the delivery of essential social transparency and accountability, and sectoral interventions in services, further develop the private sector and strengthen energy, agriculture, and PSD. The Client Capacity government effectiveness. Service-related issues include Development and Fostering Demand for Good Governance improving targeting and efficiency of social spending, and components support capacity building. The Parliamentary activities in health and education sectors. Private sector Oversight of Public Finance Support component aims to work development activities include those to restrict introduction with members of Parliament and Budget Committee staff to of new permits and new laws on bankruptcy law for credit build understanding and capacity to fulfill Parliament’s institutions as well as a draft National Bank of Tajikistan law independent role in approving budgets and reviewing consistent with IMF advice. To enhance government expenditure. effectiveness, the series supported continued implementation of financial management improvement plans The Public Sector Reform Project (PSRP) closed in 2011, for Barki Tajik and Tajiktransgas. assisted the Tajikistan Government in implementing its Public Administration Reform Strategy (PARS). Five project Enhancing capacity and reducing poverty are also targets of components focused on civil service management the Tajikistan Social Safety Net Strengthening Project. It (highlighting merit-based human resource management, aims to improve the capacity of the Government of Tajikistan including incentive systems and training); public to plan, monitor, and manage social assistance for the poor administration reform, focusing on policy planning and through the development of a national registry of social FOR WORLD BANK INTERNAL USE ONLY. PAGE 8 protection and the provision of training, equipment and financial viability of utilities. Project components focus on related items for improving capacity. It would establish a electricity and gas utilities, and include replacement and National Registry for Social Protection, train government installation of new electrical and gas meters, new billing personnel and build other kinds of capacity to operate and systems (including IT installation and support) and policy sustain the National Registry for Social Protection, and advice on tariff and social protection policies. support project management. The Tajikistan Land Registration and Cadastre System The Tajikistan Strengthening the National Statistical System Project aims to expand farmland restructuring to enable concluded successfully in 2012. A second phase is under more rural people to become independent farmers and take preparation that will continue to increase the efficiency and management decisions in response to market forces. The effectiveness of the national statistical system. The project project focuses on the expansion of land use rights as well as includes activities to strengthen institutional capacity and capacity building. It also supports efforts to establish spatial human capacity through human resource development, databases, strengthen policy development, and provide improve the infrastructure and equipment for data collection information for farmers among other activities. and management including information technology hardware and software programs, and adaptation to international Enhancing agriculture, particularly cotton is the focus of the standards of data collection, compilation and validation. Tajikistan Cotton Sector Recovery Project. It aims to assist the Government of Tajikistan to resolve the cotton debt crisis The Tajikistan Municipal Infrastructure Development and rejuvenate the cotton sector through debt resolution, an Project, recently extended with additional financing, improved policy environment, and increased cotton output increases basic services for repair and rehabilitation of and profitability. The objective is to create the conditions for communal services infrastructure provided by Khochagii sustainable growth of cotton production in low income areas Manziliu Kommunali (KMK) and local utility companies. of Tajikistan through an improved policy environment and Based on a decentralization strategy and preparation of a better access to finance. Communal Services Development Fund, it will scale up access to finance and improvement of management capacity for Other governance and administrative projects are in the service delivery throughout the country. pipeline. For more information on new projects and status of those presented here, visit the Tajikistan Projects page. The Tajikistan Grant for Strengthening Results-Based Monitoring and Evaluation for Better Migration Management (IDF grant) contributes to the overall improvement of national planning and decision making in the NOTES: area of labor migration management. The objective of the IDF grant is to help create an operational results-based monitoring and evaluation (M&E) system. It includes 1 Schkolnikov, V. 2009. “Nations in Transit 2009: Democracy’s components to strengthen existing systems, build capacity for Dark Year�. Freedom House. Available from: M&E activities, and enhance participation of Civil Society http://www.freedomhouse.org/uploads/nit/2009/Overview- partners in M&E in migration. WEB.pdf. Accessed February 24, 2010. 2 Economist Intelligence Unit. 2008. “Tajikistan Country Additionally, there are many sector-based projects focusing Profile 2008�. Available from on energy, agriculture, education, and health. In the area of http://www.eiu.com/report_dl.asp?issue_id=663450251&mo energy, the Energy Emergency Recovery Assistance Project de=pdf aims to increase the amount of and reliability of the national 3 The provinces are: Viloyati Khatlon (Qurghonteppa), Viloyati energy supply, with special attention paid to the winter Mukhtori Kuhistoni Badakhshon [Gorno-Badakhshan] season. The energy crisis of 2008 pushed energy supply and (Khorugh), Viloyati Sughd (Khujand) security to the forefront. This project aims to enhance 4 Freedom House Nations in Transit 2010: Armenia p.77 capacity and provide preventative measures by enabling 5 Freedom House Nations in Transit 2010: Armenia p.77 better reservoir management at Nurek reservoir to assist in 6 Other parties include the Party of Economic Reforms (PER), prevention of future crises. This project works in tandem with the Agrarian Party, the Social Democratic Party, the the Energy Emergency Mitigation Action Plan (EEMAP). Communist Party, the Socialist Party, and the Democratic These projects focus on increasing energy supply (particularly Party. thermal and heat energy) in a short timeframe through 7 Economist Intelligence Unit, 2008. Tajikistan Country Profile technical and institutional measures, including policy and 2008, p.6. Available from technical advice. Additional energy infrastructure support is http://www.eiu.com/report_dl.asp?issue_id=663450251&mo provided through the Energy Loss Reduction Project, which de=pdf seeks to assist in reducing the commercial losses in the 8 Economist Intelligence Unit, 2011. “The Economist electricity and gas systems, and to take steps to improve Intelligence Unit’s Index of Democracy�. Available from: FOR WORLD BANK INTERNAL USE ONLY. PAGE 9 29 http://www.sida.se/Global/About%20Sida/S%C3%A5%20arb BEEPS At-A-Glance 2008 Cross Country Report (2010). etar%20vi/EIU_Democracy_Index_Dec2011.pdf http://intresources.worldbank.org/INTECAREGTOPANTCOR/R 9 Economist Intelligence Unit, 2011. “The Economist esources/Cross_Country_Report_2010.pdf 30 Intelligence Unit’s Index of Democracy�. Available from: BEEPS At-A-Glance 2008 Cross Country Report (2010). http://www.sida.se/Global/About%20Sida/S%C3%A5%20arb http://intresources.worldbank.org/INTECAREGTOPANTCOR/R etar%20vi/EIU_Democracy_Index_Dec2011.pdf esources/Cross_Country_Report_2010.pdf 10 31 Global Integrity Report Scorecard Russia 2010 Economist Intelligence Unit, 2008. Tajikistan Country http://www.globalintegrity.org/report/Russian- Profile 2008, p.8. Federation/2010/scorecard http://www.eiu.com/report_dl.asp?issue_id=663450251&mo 11 Doing Business: Business Reforms in Tajikistan de=pdf 32 http://www.doingbusiness.org/reforms/overview/economy/t Tajikistan Country Partnership Strategy, 2010-2013: p.9 ajikistan 12 Doing Business in Tajikistan http://www.doingbusiness.org/data/exploreeconomies/tajiki stan 13 Transparency International Corruption Perceptions Index 2011. http://cpi.transparency.org/cpi2011/results/ 14 Freedom House. Freedom in the World 2010: Erosion of Freedom Intensifies. http://www.freedomhouse.org/uploads/fiw10/FIW_2010_Ta bles_and_Graphs.pdf 15 Heritage Foundation 2012 Index of Economic Freedom. http://www.heritage.org/index/country/tajikistan 16 Economist Intelligence Unit, 2010. Tajikistan Country Report 2010, p.16. 17 Reporters Without Borders Press Freedom Index 2010. http://en.rsf.org/press-freedom-index-2010,1034.html 18 Economist Intelligence Unit, 2009. Tajikistan Country Report December 2009, p.9. 19 World Bank Data, 2010 20 World Bank Data, 2009 21 CIA World Factbook 2011 https://www.cia.gov/library/publications/the-world- factbook/geos/countrytemplate_ti.html 22 CIA World Factbook 2011 https://www.cia.gov/library/publications/the-world- factbook/geos/countrytemplate_ti.html 23 Economist Intelligence Unit, 2008. Tajikistan Country Profile 2008, p.10. Available from: http://www.eiu.com/report_dl.asp?issue_id=663450251&mo de=pdf 24 Economist Intelligence Unit, 2008. Tajikistan Country Profile 2008, p.10. 25 United States Department of State, Background note on Tajikistan, 2012. Available from: http://www.state.gov/r/pa/ei/bgn/5775.htm 26 Tajikistan Country Partnership Strategy, 2010-2013 p.9 27 IMF Balance of Payments, World Development Indicators 2011. 28 Economist Intelligence Unit, 2008. Tajikistan Country Profile 2008, p.12. http://www.eiu.com/report_dl.asp?issue_id=663450251&mo de=pdf FOR WORLD BANK INTERNAL USE ONLY. PAGE 10