Tajikistan Country Brief

About Tajikistan-2001

Population: 6.4 million
Population per sq. km: 43.9
Population growth: 1.6%
Life expectancy: 68.4 years
Population below national poverty line: 83%
GDP per capita(current US$): 161
GDP(current US$): 1,033 million
GDP Growth: 10.3%
Sources: National Statistical Offices, IMF, IFS, WDI 2002 and Staff estimates

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Overview

Soon after independence in 1991, Tajikistan was engulfed in a civil war which continued with varying intensity until mid-1997, when a peace agreement was signed between the government and the opposition.

The country is rich in natural resources, namely minerals (gold, silver, and uranium), water and hydropower. Two commodities account for the bulk of Tajikistan’s output and exports - aluminium and cotton. The country’s other main products are silk, fruits, vegetables and wheat. However, with GNP per capita of US$161 in 2001 and over 80 percent of the population below the poverty line, Tajikistan is the poorest among the countries of the former Soviet Union.

The terrain is mainly mountainous, making communications between regions difficult, especially in winter, and arable land is scarce (0.07 hectares per capita). Nevertheless, the agricultural sector accounts for about 60 percent of employment and 20 percent of GDP. Industrial production contributes another 20 percent to GDP, of which the aluminium smelter accounts for 45 percent. The other major component of the industrial sector is textile production, which accounts for some one third of industrial output.

Focus of World Bank Assistance

Tajikistan joined the World Bank and the International Development Association (IDA) in 1993. The Bank supports Tajikistan in its transition from conflict to peace and from a planned to a market economy. The Bank’s program focuses on:

Reducing poverty. The Bank provides financial assistance targeted at the poor (two investment projects,the Pilot Poverty Alleviation Project and the Second Poverty Alleviation Project, have been approved), analysis (a poverty assessment study) and advice in preparing the Poverty Reduction Strategy Paper (PRSP). An Interim PRSP was completed and endorsed by the Board of Directors of the Bank and the IMF in October 2000. The full PRSP was approved by the Parliament of Tajikistan in June 2002 and is expected to be considered by the Bank and the International Monetary Fund in October 2002.

Investing in human capital. The Bank is helping Tajikistan improve the delivery of basic services in education and health and better target social protection through two projects: Education Learning Innovation Loan and Primary Health Care Project. The Bank also plans to scale up both projects based on the lessons learned.

Fostering economic growth. The Bank is supporting the country in achieving macroeconomic stability through a prudent fiscal and monetary policy and a flexible exchange rate. Price and trade liberalization, privatization of small and medium enterprises (SMEs), banking sector reform, promotion of private sector development, and restructuring of state and collective farms into private farms are also at the heart of the Bank’s assistance program for Tajikistan.

Increasing agricultural productivity. Given that agriculture is key to economic development in Tajikistan, the Bank is supporting the country in improving agricultural productivity through farm restructuring, rehabilitation of irrigation infrastructure, liberalization of prices and marketing.

Post-conflict rehabilitation. Rehabilitation of infrastructure damaged during the civil war (roads, bridges, clinics and schools) and reintegration of ex-soldiers into the society have been the focus of the Bank.

Impact on the Ground

Poverty has been reduced. The Pilot Poverty Alleviation Project has improved the living conditions of local communities and has generated employment. Over half a million people in the poorest areas have benefited from 184 micro-projects. A pilot social protection project in three districts has reduced the drop out rates of the poorest 20 percent of school children.

The quality of education has improved. Some 20 schools have been rehabilitated on a pilot basis under the ongoing Bank education project. The school curriculum has been reformed, teachers have been trained, and 18 new textbooks have been printed and distributed countrywide. This has improved the quality of education in the two pilot districts and reduced the number of dropouts. Under the second education modernization project, the IDA-supported program will be scaled-up to cover a larger number of schools.

Reforms have led to a turnaround in economic growth. Two structural adjustment credits have supported economic reforms, which along with the peace agreement led to a turnaround in GDP in 1997, and cumulative growth since then of 33 percent, ( including 10.2 percent in 2001). Inflation has dropped from 164 percent in 1997 to 12.5 percent in 2001. The credits have focused on macroeconomic stability, banking, privatization, agriculture and social protection.

Agricultural productivity has increased. Three thousand thriving private farms, with twice the productivity of collective farms, have been created with the support of Bank projects (Farm Privatisation Support and Rural Rehabilitation Project ) and adjustment lending (SAC 1 and SAC 2). In all, some 300 state and collective farms, representing 30 percent of the arable land have been restructured. Some 14,000 families have been issued certificates of rights for use of land. In pilot areas, the quality of land has improved and farmers now have better access to markets, are able to purchase inputs and have been helped through the consolidation of various taxes. With World Bank assistance (SAC1), all 23 state owned cotton ginneries have been privatized resulting in improved efficiency and performance.

Infrastructure has been rehabilitated. Infrastructure in the Karategin Valley, which was damaged during the civil war, has been rehabilitated under the Post-Conflict Emergency Rehabilitation project. Some 35 bridges, 106 educational facilities, 40 health care related facilities, 25 community facilities, irrigation canals providing water to about 16,000 hectares, and various power systems affecting 85 villages have been rehabilitated in the most war-torn areas of Tajikistan. The project has improved the market access of the rural valley with better connections to Dushanbe. Under a similar project, the Emergency Flood Assistance, the government has rehabilitated a total of 6 bridges, 105 kilometers of roads, over 13 kilometers of river embankments, 4 escape canals, and 11 kilometers of power transmission lines which were damaged by floods and land slides.

For details of World Bank projects in Tajikistan please click here.

Challenges Ahead

Tajikstan faces the following challenges:

ž Maintain macroeconomic stability, with emphasis on better tax collection and expansion of the tax base.

Reduce the debt burden and attract grants and concessional resources to implement the PRSP.

Widen and deepen structural reforms, particularly in public sector management and governance, financial sector, agriculture and social sectors.

Improve the institutional capacity to implement reforms.

Encourage private sector development, create incentives, and improve the investment climate so as to generate growth and employment, and thus reduce poverty.

Reverse the collapse in the delivery of social services and better target assistance to the poorest.

World Bank Partners in Tajikistan

SECTOR	LEAD NATIONAL AGENCY	PARTNERS
Poverty Reduction	PRSP Steering Committee, Unit on PRSP monitoring and Evaluation under the Office of the President	IMF/ AsDB / UNDP
Health	Ministry of Health	WHO/ UNICEF/ MSF/ PSF/ IDB/ ECHO/ ACTED/ CARE/ MERLIN
Education	Ministry of Education	UNDP/SDC/UNICEF/AKF/OSCE/ ACTED/OSI
Social Protection	Social Protection Fund, Ministry of Social Protection and Labor	AsDB/ UNDP/ USAID/ UNHCR/ ECHO/ CARE/ ORA
Agriculture	Ministry of Agriculture, Land Reclamation Committee	FAO/ UNDP / WFP/ EU/ USAID/ ECHO/ GAA/ MCI
Energy	Ministry of Energy, Barqi-Tajik, Tajik Gas	AsDB/ IDB/ IFC/ AKF
Private Sector	Ministry of Economy and Trade	CAAEF/ USAID/ EBRD/ IFC
Environment	Ministry of Nature Protection	GEF/ SDC/ UNDP
Financial and banking Sector	National Bank, Ministry of Finance	IMF/ USAID/

World Bank Lending to Tajikistan

Total IBRD/ IDA Commitments from FY96 to FY02: US$ 302 million
(by fiscal year,in nearest US$ millions)

	up to 1995	1996	1997	1998	1999	2000	2001	2002	Total
Commitments	-	5	62	20	93	28	53	41	302
Disbursements	-	-	51	14	31	34	24	35	189

Total Commitments by Sector* since 1996
(in nearest US$ millions)

* A new Bank sector and thematic coding system was introduced in FY02. Under this new system, themes represent the development objectives of the operation, whereas sector codes for investment operations reflect the parts of the economy receiving direct support, and for adjustment operations, the sectors being impacted by the operation's conditionalities. Thus, a given adjustment operation may span a number of sectors depending on the reform measures being implemented by the loan and may, for example, show up in education, health, trade and industry or other categories, even though there may not be a direct investment in that sector.

Fiscal year from July 1-June 30.

For more information please contact:

In Dushanbe: Dilya Zoirova, phone: + (992) 372 21 03 81, 21 07 56
E-mail: dzoirova@worldbank.org

September 2002