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Tajikistan Country Economic Memorandum

Begins:   Jun 22, 2011 06:00
Ends:   Jun 22, 2011 

Tajikistan’s Quest for Growth: Stimulating Private Investment

On June 22, 2011, the World Bank presented the Country Economic Memorandun on Tajikistan titled "Tajikistan’s Quest for Growth: Stimulating Private Investment". The report was presented to the Government and civil society representatives in Dushanbe by Mr. Sudharshan Canagarajah, the World Bank Lead Economist and key author of the study. 

"The past two years have not been easy for any country in the Europe and Central Asia region as the global financial crisis has had a major impact on the growth momentum of all countries around the globe. Tajikistan, however, was able to experience positive growth rates during this period albeit quite modest",  said Mr. Sudharshan Canagarajah. "We believe that despite the negative effects of the crisis, Tajikistan has done well due to the reforms implemented within the last two years. Nonetheless, it goes without saying there is more reforms that need to be carried out to which the Government of Tajikistan is committed and seeks support from various stakeholders, including the donor community, to move them forward."

The main findings of the Country Economic Memorandum demonstrate that Tajikistan clearly has the potential to grow at more than seven percent a year as it has done in the recent past, but it is not going to be easy. The potential for 'catch-up' growth from the depths of the recession of the 1990s is largely exhausted, the external environment is now less favorable than it was in the 2000s, and some drivers of past growth are unlikely to be sustained.

Nevertheless, efforts by the government to create better conditions for higher private investment, exports, and employment, as well as strong support from the Tajik business community and development partners, could make this target a reality. In the 2000s, the Tajik economy recovered from the severe transition-related recession and civil conflict of the 1990s. Macroeconomic performance improved: inflation fell from 30-40 percent in the late 1990s to six-seven percent in the mid-2000s, fiscal deficits were lower, and the current account deficit and external debt moved to more manageable levels. Real GDP growth averaged nearly eight percent a year in 2000-08. The poverty headcount fell sharply, from 72 percent in 2003 to 54 percent in 2007, with more than a million people moving out of poverty; during the same period, the share of the extremely poor population fell from 42 percent to 17 percent. Key social indicators (for example, primary and secondary school enrollment rates, infant mortality, maternal mortality, and child malnutrition) also improved.

CEM launch June 22, 2011
Presentation of Tajikistan Country Economic Memorandum in Dushanbe, June 22, 2011

In the last five years, reforms have been characterized as more in-depth and difficult ones compared to the previous period. The Country Economic memorandum shows that the growth rates of 8-10 percent experienced by Tajikistan between 2001-2010, cannot be repeated if some of the remaining deep rooted reforms are not carried out and some of the reforms that had been started are fully implemented. Hence, the prospects for the economy without reforms spelt out in the Country Economic Memorandum do not appear to be quite favorable. These reforms are mainly aimed at improving investment climate, creating incentives for broad-based agriculture growth, energy domestic supply improvements with export oriented investments, management of migration benefits and improved governance across the economy. If the reforms are carried out successfully, Tajikistan has all chances to become a middle income country in the next two decades, which would require tripling of Tajikistan's current per capita income.

For more details, please access the full report.



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