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The World Bank's Strategy in Tajikistan: 2010-2013

Tajikistan has enjoyed relative political stability and strong economic growth since its civil war ended in 1997, but these impressive gains are at risk in the face of an ongoing global financial and economic crisis. Structural reforms have been undertaken in areas such as agriculture, energy, transport, and private and financial sector development. However, there is a need to speed up these reforms. To unleash the potential of assets such as land, water, hydropower, and human capital, Tajikistan will need to mitigate the effects of the crisis while working to build capacity towards post-crisis recovery and sustained development.

The World Bank Group’s Country Partnership Strategy (CPS) seeks to address these challenges through a constructive partnership with Tajikistan’s government, people, and donors. The CPS supports the government in responsibly developing hydropower to secure the country’s energy supply and gradually generate electricity export revenues. The CPS program has been designed in the context of strong and growing partnerships among Tajikistan’s donors.

Executive Summary
Full Report
Full Report [русский]
I. Introduction
This Country Partnership Strategy presents the World Bank Group’s strategy for Tajikistan during the period FY10-13. The CPS is anchored in the government’s own national development priorities as expressed in the National Development Strategy (NDS) and Third Poverty Reduction Strategy (PRS III). The focus of the proposed CPS builds on the lessons learned in implementing the Bank’s previous CPS for FY06-09. The objectives of the CPS are two-fold: (i) reducing the negative impact of the crisis on poverty and vulnerability; and (ii) paving the way for post-crisis recovery and sustained development.

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II.Country Context
Tajikistan is small, land-locked, and 93 percent mountainous, making it one of the least accessible countries in the world. Tajikistan is vulnerable to natural disasters, external economic conditions and is the poorest country in the Europe and Central Asia region. Tajikistan faces diverse and complex geo-political forces. Soon after the civil war, peace and political stability were restored, and the economy began to register robust growth. Macroeconomic performance weakened in the mid 2000s due to an increase in external public debt, the quasi-fiscal activities of the central bank and external shocks.

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III. Development Agenda and Priorities
In 2005, Tajikistan adopted the NDS for 2006-2015. A follow-up PRS III for 2010-2012 presented a medium-term program to implement the NDS vision, building on the lessons learned under PRS II. 30. The PRS III updates key reforms to support economic growth and poverty reduction and reflects lessons learned from implementation of the PRS II. The government will need to refocus its efforts on addressing critical near-term challenges: mitigating the negative impact of the crisis on poverty and vulnerability, and reducing the medium-term constraints to reaping the full benefits of a sustainable post-crisis recovery.

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IV. World Bank Group Engagement

The size of the Bank’s portfolio has remained stable over the last four years, with the agriculture, energy, and water supply infrastructure sectors receiving almost 70 percent of total financing. In line with government priorities and the lessons learned through past implementation, the CPS is designed to focus on two objectives: (i) reducing the negative impact of the crisis on poverty and vulnerability; and (ii) paving the way for post-crisis recovery and sustained development. The CPS will rely on a mix of instruments, including the continuation of the PDPG series, investment activities, and targeted AAA.

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V. Managing Risks
Implementation of the CPS could be delayed by a slow recovery in Russia and other developed countries as well as by violation of the commitment to scale down the financing campaign for Rogun rehabilitation. Weak government commitment to deeper reforms in productive sectors could delay reforms envisaged under the CPS program. The deteriorating security situation in Afghanistan and Pakistan could result in an influx of refugees to Tajikistan.

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