Countries and Regions

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p. 4 of 4 BACK | NEXT I. Current Development Trends and Issues II. Implementation of the Country Strategy and Program III. Portfolio Management Issues IV. Country Performance and Assistance Levels

Country Strategy and Program Update 2003-2005: Tajikistan

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IV. Country Performance and Assistance Level

A. Lending Level Proposed

27. Starting in 2002, the actual annual lending level has been determined in accordance with ADB's performance-based allocation policy. The assessment of performance for Tajikistan is linked to (i) security and macroeconomic stability, (ii) social development and poverty reduction, (iii) governance, and (iv) portfolio performance. Under a base case scenario, ADB assistance would be expected to be about $120 million in 2003-2005, while a high case scenario could raise lending by up to 20%, and a low case scenario would lower lending below the base case by the same percentage. However, uncertainty about the absorptive capacity of the Government, in conjunction with the public investment plan ceiling agreed with IMF, may warrant a reduction in total lending levels. This issue will be explored fully in the CSP when more details about operational constraints are known.

28. For 2002, the Government has met the base case requirements (see 2001 CSPU for more details on the triggers), resulting in a lending level of $40 million, although there was a slight delay in fulfilling one of the conditions. While IMF's PRGF was offtrack due to the repeated misreporting of external debt levels, this was redeemed by a strong macroeconomic performance that was considerably better than anticipated. As Tajikistan is a postconflict country, the Asian Development Fund allocation was increased to $52 million in 2002. This also took into account the fact that lending in 2001 only amounted to $3.6 million, as project processing during the last quarter of the year had to be stopped due to the war in Afghanistan.

29. For 2003, the same triggers as identified in the 2001 CSPU will guide the lending levels. The lending level for 2004 will be determined against the performance triggers as set out in Appendix 1, Table A1.9. Under the base case scenario for 2004, the Government will need to (i) keep the ongoing macroeconomic program largely on track and have its external debt management system under control, (ii) commit to poverty reduction based on the NPRS, (iii) undertake reforms in the energy sector and improve governance, and (iv) improve foreign aid planning and coordination. However, due to the uncertainty of the lending levels for 2003, the new triggers for 2004 may be revised during the preparation of the new CSP.

30. The loan program for 2003-2005 is shown in Appendix 1, Table A1.10. Preparatory work for 2003 loans, the road rehabilitation for Dushanbe-Kyrgyz border (first phase) project, social sector development project, and customs modernization project is under way. In addition to the country-specific projects, a subregional project is planned for 2004. Concept papers for all projects listed in the program are in Appendix 2.

B. Nonlending Program

31. Continued assistance through TA is critical to support structural reforms and capacity building, and to prepare investment projects. The 2003-2005 TA program covers 16 TAs totaling $7.4 million under the country program and 8 TAs are planned for subregional cooperation. The TAs focus on reforms and governance improvements in power, transport, trade, and social sectors. Capacities for environmental and water management will also be strengthened. Concept papers for stand-alone advisory TAs are in Appendix 3.

C. Summary of Changes to Lending and Nonlending Program

32. In the aftermath of September 11th, two loans planned for 2001 slipped to 2002 and only the Emergency Restoration of Yavan Water Conveyance System Project loan was approved in 2001. As a result, most of the projects initially planned last year for 2002-2004 have been reprioritized and been shifted to the following years as shown in the table below. Program loans for 2002 are being prepared in coordination with the Government, IMF, and WB. Changes to the TA program, which correspond to the changes in the lending program are reflected in Appendix 1, Table A1.11.

Proposed Changes in the Lending Program

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