The World Bank's Strategy in Tajikistan: 2006-2009
Tajikistan faces a daunting development agenda - failing infrastructure, tenuous health and education systems, and weak institutions, especially the financial system and the civil service. Magnifying these challenges are Tajikistan’s geography, its demography and a reputation for corruption.
While Tajikistan’s challenges and needs are enormous, it has limited resources to address them. Given resource and capacity constraints, the results framework developed with the Government sets modest goals for the next four years. Achieving even these modest results with the limited available resources and weak institutional environment will be a considerable challenge - but one the Government is determined to take on.
Tajikistan has done well since the signing of the peace accord in 1997. It is among the few post-conflict countries that moved quickly from civil 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. Inflation is under control, the exchange rate stabilized, external debt cut in half, and poverty markedly reduced. Yet, Tajikistan remains the poorest and among the most fragile of the CIS countries, and a continuation of this bright picture is by no means assured.
The Government’s vision for poverty reduction i s outlined in its 2002-05 Poverty Reduction Strategy Paper. The four primary objectives of that strategy are: (i) to encourage equitable, labor-intensive economic growth, with an emphasis on exports; (ii) to support the efficient and fair provision of basic social services; (iii) to target support to the poorest groups o f the population; and (iv) to improve governance and security. These objectives are at the base of the strategy outlined in this document. The key aspects of the strategy under revision include public sector reform, business development, education and health financing, agriculture modernization, and infrastructure.
The Bank Group and the Government will need to be extremely creative to ensure that the limited resources produce a sizeable impact. The strategy going forward is meant to be selective, effective, and practical. The Government and the Bank Group agreed to focus this CPS on three narrow goals: (i) to improve business opportunities in rural and urban areas; (ii) to enhance andpresewe the quality of the human capital; (iii) to exploit the country’s hydropower potential.
This strategy carries significant risks. The main external risks are the volatile political and security situation in the region and the potentially corrosive effects o f the drug transit from Afghanistan. Recent events in the Kyrgyz Republic and Uzbekistan have increased these risks. The main risk to the Bank Group is that the donor assistance it i s able to generate in support of the Government’s programs may not be sufficient to help Tajikistan overcome its formidable development challenges. Unless the intemational community is prepared to increase its support to Tajikistan, this risk will persist even if implementation of the current CPS proceeds as planned.
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