|Project Name||Strengthening Public Resource Management Program|
|Project Type / Modality of Assistance||Grant
|Source of Funding / Amount||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Governance and capacity development
|Sector / Subsector||
Public sector management - Public administration - Public expenditure and fiscal management - Social protection initiatives
|Gender Equity and Mainstreaming||Effective gender mainstreaming|
|Project Rationale and Linkage to Country/Regional Strategy|
|Description of Outcome|
|Progress Toward Outcome||The program results have improved public resource management capacity in Tajikistan. Tajikistan achieved robust economic growth of 7.5% in 2012. Slightly above the 7.4% recorded in 2011, the gain was mainly due to strong growth in remittances and ensuing private consumption. Services, particularly retail trade, remained the key driver of economic growth (expanding by 14.5%). Construction, industry, and agriculture also grew but at a slower pace. Industry expanded by 10.4%, backed by continued growth in mining and light processing. Textiles grew by 30%, as weak external demand and lower international prices for cotton prompted firms to focus on local processing. Fiscal policy tightened in 2012, leaving an overall budget surplus (including all investment spending) of 0.1% of gross domestic product (GDP) that reversed the 2.5% deficit in 2011 (Table 1). The state budget surplus, which excludes foreign-financed investment, rose to 1.8% of GDP from 0.5% in 2011. Revenue performance was on track, reflecting a 22.6% rise in tax revenue and a more than 7.3% increase in nontax revenue as the restructuring of the Tax Committee and better tax administration improved collections. Total expenditure rose by 21.9%, reflecting a 21% increase in spending for social protection. Pensions increased by 30% and social sector wages by 30% 40%, reflecting the government's commitment to improve social services. However, infrastructure spending fell by 10.1% following the completion of projects commissioned to celebrate Tajikistan's 20 years of independence. Public investment including outlays by state enterprises also declined, as investment in energy, transport, and communication fell by 20.2% due to limitations imposed on new projects. Overall, more than half of budgetary spending in 2012 targeted social sectors. The two pilot initiatives in social protection have been implemented as planned and independent evaluation shows that the prospects for better use of public resources in the sector are promising due to better targeting of the poor, improved transparency, and reduced transactions costs. The government's internal audit system has been strengthened. The new internal audit units in several government bodies are now conducting technical audits to ensure the efficient use of public resources. Procedures and instructions have been developed to align the medium-term expenditure framework with the annual budget. After succesful completion of agreed actions, the second (and last) tranche of $13,000,000 was released on 4 October 2013.|
|Description of Project Outputs|
|Status of Implementation Progress (Outputs, Activities, and Issues)||
1. Selected aspects of tax policy and administration improved:
Tax reforms have remained a high priority area for the government and an important foundation for achieving the country's development goals of reducing poverty and ensuring growth. In line with program objectives, the government's fiscal capacity has continued to expand. With the exception of 2009 during the global financial crisis, the ratio of tax revenues to GDP has grown steadily since 2006. The ratio of tax to GDP increased from 19.4% in 2011 to 21.1% in 2012. During the program period the Tax Committee has shown strong commitment to reforming tax policy and administration. The key improvements include to (i) organizationally restructure the Tax Committee along functional lines, (ii) create a reform and donor coordination division to streamline communication with development partners, (iii) introduce an electronic tax filing (e filing) system for all taxpayers, (iv) prepare an information technology strategy, (v) improve tax policy and the valued-added tax (VAT) regime, (vi) expand the Large Taxpayers Inspectorate to include additional corporate entities, and, (vii) reduce the number of taxes from 21 to 10 with a new tax code approved by the Parliament in September 2012.
2. Social safety net pilots designed, implemented, and evaluated by the Ministry of Labor and Social Protection:
The program supported two initiatives from the Ministry of Labor and Social Protection of the Population (MLSPP) aimed at improving the effectiveness, efficiency, and accountability of public expenditure in social protection. These were (i) the new electronic card-based pension payment system, and (ii) the new targeted social assistance (TSA). The initiatives fundamentally change the pension payment system and targeting of social assistance programs. Since 2009, the state-owned Amonatbank and the State Agency for Social Insurance and Pensions, under the coordination of MLSPP, have introduced noncash mechanisms for payment of pensions. The new system places pensions into special individual bank accounts and enables pensioners to withdraw these from ATMs and POS terminals using plastic bank cards. The system has been gradually implemented and now serves 206,000 pensioners (one-third of the total number of pensioners). The TSA initiative has been in place since 2011. The TSA benefit is unconditionally allocated to poor households based on proxy means-testing. ADB provided critical interim support to the pilots in Istaravshan (Sugd region) and Yovon (Khatlon region) by improving MLSPP's business processes and developing and implementing a new management information system. In 2011, more than 19,000 households applied for TSA. Of these, 10,265 households were eligible and received TSA (4,820 in Yovon and 5,445 in Istaravshan). Totals of TJS3.80 million ($0.83 million) and TJS 4.15 million ($0.91 million) respectively were paid in TSA subsidies in 2011 and 2012. The government is rolling out the TSA initiative to 10 new districts (including Khujand and Kurgonteppa).
3. Selected aspects of public financial management improved:
The program required implementation of a new law on internal audit in the public sector enacted in 2010, as well as enactment and implementation of a new law on public finance to unify the medium-term expenditure framework with the annual budget process. Internal audit units were established in several government bodies, including the Ministry of Finance (MOF), MLSPP, Ministry of Health, Ministry of Education, Ministry of Transport, and the Tax Committee. The internal audit units regularly conduct technical audits of the relevant government entities. The internal audit system has completed a full budget cycle and the internal audit units have submitted 2011 annual reports to the MOF using the approved template. The medium-term action plan for implementation of the new internal audit system in the government foresees a gradual migration (by 2015 2016) from a comprehensive audit approach to a risk-based audit approach. The government also made progress in public financial management reforms in 2012. Clear procedures and instructions (including a budget call circular) have been developed by MOF. These procedures integrate the medium-term expenditure framework with the annual budget process, increasing the transparency and control of public finances. A new public expenditure and financial accountability assessment was prepared in 2012. Areas requiring further support and progress include accounting standards and external audit.
|Stakeholder Communication, Participation, and Consultation|
|During Project Design||Consultations were held with the President's office; Ministry of Finance; Ministry of Education; Ministry of Health; Tax Committee; Agency for Financial Control and Combating Corruption; National Committee of Women and Family Affairs; State Agency for Social Insurance and Pensions; UNICEF; WHO; European Commission; IMF; IFC; USAID; World Bank; health professionals and women's groups and pensioners.|
|During Project Implementation||
Regular and extensive discussions with the EA and IAs as well as other relevant agencies (IMF, WB, EU) on the reforms under the program and the TA.
As of 25 September 2014:
The program was closed on 4 September 2014 after submission of audited project financial statements (APFS).
The MOF is the executing agency for the TA. MOF, the MOLSP and the Tax Committee are the implementing agencies.
Six national individual consultants and two international individual consultants were recruited under the TA. All the contracts have been completed. Two consulting firms have been recruited; one is PDP Australia, it supported the Tax Committee in implementing agreed reform actions for the incentive and second tranche conditions and another one is Zerkalo, a survey firm, it was recruited to provide relevant data to conduct an independent evaluation of the impact of the initiative to pay pensions through individual bank accounts being implemented in selected areas of Tajikistan.
An international editor has been recruited (Feb 2013) to edit the evaluation report on pension payments produced by Zerkalo.
Update as of 24 Mar 2014:
All consultants had been engaged (firm and individual). All contracts closed and TA project was financially closed in December 2013.
The following equipment were procured under the TA: ASA 5510 appliance with SW, 5FE, 3 DES/AES (server), DELL PowereRdge R510 (firewall), Inverter Tripplite, and internet connection. Total amount TJS42,308
Update as of 24 Mar 2014:
All equipment procured under the TA were turned oover to the EA after completion in Dec 2013.
|Responsible ADB Officer||Michiel Van der Auwera|
|Responsible ADB Department||Central and West Asia Department|
|Responsible ADB Division||Public Management, Financial Sector and Trade Division, CWRD|
Ministry of Finance
3, Academic Rajabovs
|Concept Clearance||21 Jan 2011|
|Fact Finding||22 Sep 2010 to 01 Oct 2010|
|MRM||10 Feb 2011|
|Last Review Mission||-|
|Last PDS Update||26 Sep 2014|
|Approval||Signing Date||Effectivity Date||Closing|
|12 Apr 2011||13 Apr 2011||26 Apr 2011||30 Apr 2013||31 Oct 2013||04 Sep 2014|
|Financing Plan||Grant Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||45.00||Cumulative Contract Awards|
|ADB||45.00||12 Apr 2011||45.00||0.00||100%|
|Cofinancing||0.00||12 Apr 2011||45.00||0.00||100%|
|Status of Covenants|
|Approval||Signing Date||Effectivity Date||Closing|
|12 Apr 2011||05 May 2011||05 May 2011||31 May 2013||15 Aug 2013||-|
|Financing Plan/TA Utilization||Cumulative Disbursements|
|600,000.00||500,000.00||25,000.00||0.00||0.00||0.00||1,125,000.00||12 Apr 2011||1,094,406.28|
|Status of Covenants|