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Regions and Countries Country Partnership Strategy Document
II. Implementation of the Country Strategy and Program13. The current Country Strategy and Program (CSP) Update for Tajikistan is prepared based on the Interim Operational Strategy (IOS), which was endorsed by the Board in 1998. The objectives of the IOS are to (i) facilitate the country’s transition to a market economy, (ii) assist in the postconflict rehabilitation and reconstruction, and (iii) support natural disaster rehabilitation. To maximize the development impact of ADB’s assistance, the IOS focuses on three priority areas: (i) agriculture; (ii) infrastructure rehabilitation, especially roads and power; and (iii) the social sector. 14. While the current IOS remains broadly appropriate, a full CSP is scheduled to be prepared in 2002. The CSP will reflect lessons learned from the IOS and priorities to be identified in a poverty partnership agreement. A. Poverty Reduction15. With Tajikistan’s high incidence of poverty, there is an urgent need to establish an effective national poverty reduction strategy. In March 2000, a special working group was created to begin work on a national poverty reduction strategy. In October 2000, the Government completed an interim national poverty reduction strategy to promote employment and economic growth, reform the social safety net, and improve governance. 16. ADB is providing TA to finalize the national poverty reduction strategy by September 2001, in coordination with the World Bank (WB), IMF, United Nations Development Programme (UNDP), and other funders. Based on the findings of the national poverty reduction strategy, ADB and the Government are expected to sign a poverty partnership agreement in late 2001. B. Thematic Priorities1. Economic Growth17. ADB supports the pro-poor economic growth of Tajikistan through investments in agriculture and rehabilitation of infrastructure, particularly in the road and power sectors. ADB will fund agriculture rehabilitation projects in 2001 and 2004 to support farm privatization and mitigate the effects of drought, and the development of rural financial systems in 2001 and 2003. The first road sector investment was approved in 2000, and the two additional road rehabilitation projects are scheduled for 2002 and 2004. The power sector rehabilitation investment was approved in 2000, and the second power rehabilitation project is planned for 2003. ADB also supports reforms in the transport and power sectors to develop a sound market-based economy. 2. Human Development18. With the high human cost of economic transition, which was exacerbated by the civil war and natural disasters, Tajikistan’s human development index (HDI), declined from 0.620 in 1992 to 0.528 in 1997. Despite continuous difficulties, the country’s HDI increased to 0.601 in 1999 (Appendix 2). To urgently support recovery of human development conditions, ADB’s first social sector loan for the Social Sector Rehabilitation Project was approved in 1999. ADB plans to support the social sector reform through the social sector development project in 2002. Social sector activities have been pursued in coordination with other funders, especially with the UN and WB, to ensure consistent policy advice. The agriculture rehabilitation project, under processing in 2001, will substantially rehabilitate and improve water supply of rural communities in the project area. ADB intervention in the urban water supply and sanitation sector will be also considered in the course of CSP preparation in coordination with other funders. 3. Gender and Development19. Like those of other Central Asian republics of the former Soviet Union, Tajikistan’s legal and administrative systems protect women from discrimination. However, the civil war created 26,000 widows, and the drastically changed social situation in transition has made it more difficult for women to balance their public and private roles. ADB’s country briefing paper, Women in Tajikistan (April 2000), provides basic information on and analysis of gender issues. The Social Sector Rehabilitation Project, approved in 1999, includes components that specifically benefit women, including the Women’s Development Fund designed to support women’s initiative in improving community infrastructure. The Power Rehabilitation Project, approved in 2000, particularly considers the plight of returnees, many of whom are women who now head families. A rural financial systems development project, currently being processed, will also support women’s access to micro credit facilities. 4. Good Governance20. Improving governance is key to keeping the postconflict society on the road to recovery and development by addressing poverty reduction and structural reform to promote transition to a market economy. The fight against economic crime, including corruption and drug smuggling through the Afghan border, has become a major challenge for the Government since the peace process ended. Presidential decrees to tackle corruption and drug trafficking were issued in May 2000. Promotion and dissemination of laws and regulations are necessary. 21. The Government places high priority on improving governance, which has been an area of ADB focus since the early interventions. Most ADB loans and TAs incorporate significant governance work and contribute to governance reforms, particularly in the transport, power, agriculture, and social sectors. With ADB assistance, the Government established the Law Reform Commission in April 1999 to review the consistency of laws and other legislation and to publish them. ADB assistance in the legal area will be continued under the TA for strengthening the legal and judicial system planned for 2001. TA for Aid Coordination and External Debt Management, approved in 2000, and a loan for rural financial systems development, planned for 2001, will also have a direct impact on improving governance. With the Government’s cooperation, a governance assessment will be carried out in 2001. The study will identify areas of focus and opportunities for ADB’s medium-term involvement in this area, and will serve as a key input in the preparation of the CSP in 2002. 5. Private Sector Development22. The development of the private sector is critical to further revitalize Tajikistan’s economy. However, private domestic investment and foreign direct investment have remained extremely low due to the weak banking sector and the high perceived country risk, despite the existence of a relatively liberal legal regime. Private sector development is so far limited mainly in the service, trade, and craft sectors. The rural financial systems development project planned for 2001 will support private sector initiatives in rural areas. Possible areas of assistance will be explored to improve the environment for entrepreneurial activities. 6. Environmental Protection23. ADB’s Tajikistan Environmental Profile of 1999 is the basis for ADB support for Government initiatives on environmental protection, emphasizing (i) environmental legislation and institutional strengthening; and (ii) improved management of water, land, energy, and other natural resources by integrating environmental considerations into projects. To help implement the Government’s National Ecological Program, approved in 1998, TA for Capacity Building for Environmental Assessment and Monitoring was approved in 2000. ADB has also focused on disaster management to address Tajikistan’s particular susceptibility to natural disasters. The Emergency Flood Rehabilitation Project loan was approved in 1999, and a strategy for improved flood management is being prepared under a TA. Depending on the TA’s findings, a loan for water resources development and rehabilitation will be processed in 2003. 7. Regional Cooperation24. Political stability of neighboring countries and favorable economic relations with them will continue to be necessary for the sound development of this landlocked country. ADB’s focus on promoting subregional cooperation in Central Asia should strengthen the developmental potential of Tajikistan. Since 1997, ADB has developed assistance to promote regional cooperation in Central Asia and the Xinjiang Uygur Autonomous Region of the People’s Republic of China, focusing on transport and energy sectors, and trade facilitation. In 2001, a high-level conference on economic cooperation and a study on the regional power transmission modernization project in Central Asia are scheduled. In addition, several ongoing regional TAs aim to promote cooperation among Central Asian countries in the areas of education, nutrition, and environmental protection.
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