Tajikistan's economy enjoyed about 8% growth annually over the past decade thanks to a favorable external environment and high prices for its main exports, but following the crisis it now faces challenges related to energy and to job creation.
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Washington, D.C., October 29, 2014 - A new World Bank Group report finds that 85 percent of economies in Europe and Central Asia implemented at least one regulatory reform aimed at making it easi... Show More +er for local entrepreneurs to do business in 2013/14, a larger percentage than in any other region.Doing Business 2015: Going Beyond Efficiency shows that in the past year, economies in Europe and Central Asia further improved the regulatory environment for local entrepreneurs, adding to the gains recorded in the past decade. For example, 10 years ago, starting a new business took a Macedonian entrepreneur 48 days. Today, the process can be completed in 2 days.“Economies in Europe and Central Asia have consistently led the world in the pace of regulatory reform,” said Rita Ramalho, Doing Business report lead author, World Bank Group. “Governments’ commitment to improving the regulatory environment for entrepreneurs has allowed them to close the gap with the top performers in some areas. For example, the average time to register property in the region has fallen by 14 days since 2010, making the process faster than in OECD high-income economies.”Doing Business finds that Azerbaijan and Tajikistan were among the top improvers worldwide in 2013/14 in the areas of business regulation measured by the report. Challenges continue in both countries, however. For example, obtaining an electricity connection takes longer for entrepreneurs in these two countries than it does for their counterparts in most other economies in Europe and Central Asia.Challenges persist across the region’s economies even as the regulatory framework for entrepreneurs continues to improve, emphasizing the need for further regulatory reforms. This is particularly so in such areas as construction permitting, getting electricity, and trading across borders, all areas in which the region’s economies are in the bottom half of the global ranking on average.This year, for the first time, Doing Business collected data for a second city in the 11 economies with a population of more than 100 million. In the Russian Federation, the report now analyzes business regulations in both Moscow and St. Petersburg. Differences between cities are common in indicators measuring the steps, time, and cost to complete regulatory transactions where local agencies play a larger role, finds the report.The report this year expands the data for three of the 10 topics covered, and there are plans to do so for five more topics next year. In addition, the ease of doing business ranking is now based on the distance to frontier score. This measure shows how close each economy is to global best practices in business regulation. A higher score indicates a more efficient business environment and stronger legal institutions.The report finds that Singapore tops the global ranking on the ease of doing business. Joining it on the list of the top 10 economies with the most business-friendly regulatory environments are New Zealand; Hong Kong SAR, China; Denmark; the Republic of Korea; Norway; the United States; the United Kingdom; Finland; and Australia.About the Doing Business report series The annual World Bank Group flagship Doing Business report analyzes regulations that apply to an economy’s businesses during their life cycle, including start-up and operations, trading across borders, paying taxes, and resolving insolvency. The aggregate ease of doing business rankings are based on the distance to frontier scores for 10 topics and cover 189 economies.Doing Business does not measure all aspects of the business environment that matter to firms and investors. For example, it does not measure the quality of fiscal management, other aspects of macroeconomic stability, the level of skills in the labor force, or the resilience of financial systems. Its findings have stimulated policy debates worldwide and enabled a growing body of research on how firm-level regulation relates to economic outcomes across economies.Each year the report team works to improve the methodology and to enhance their data collection, analysis and output. The project has benefited from feedback from many stakeholders over the years. With a key goal to provide an objective basis for understanding and improving the local regulatory environment for business around the world, the project goes through rigorous reviews to ensure its quality and effectiveness.This year’s report marks the 12th edition of the global Doing Business report series. For more information about the Doing Business reports, please visit doingbusiness.org and join us on doingbusiness.org/Facebook.About the World Bank GroupThe World Bank Group plays a key role in the global effort to end extreme poverty and boost shared prosperity. It consists of five institutions: the World Bank, including the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID).Working together in more than 100 countries, these institutions provide financing, advice, and other solutions that enable countries to address the most urgent challenges of development.For more information, please visit www.worldbank.org, www.miga.org, and ifc.org.Regional Media Contacts - Europe & Central Asia:Nezhdanan Bukova +7 (985) 411-3986, Email: email@example.comSlobodan Brkic +381 (11) 30-23-750, Email: firstname.lastname@example.orgKristyn Schrader +1 (202) 458-2736, Email: email@example.comElena Karaban +1 (202) 473-9277, Email: firstname.lastname@example.org Show Less -
The National Testing Center was founded by the Government of Tajikistan in 2008 as a first step in establishing a national education assessment system, with the goal of contributing to improved access... Show More + to and quality of education in the country. In addition to the READ grant, the World Bank supported the NTC through the Education Modernization Project with a US$2 million International Development Association (IDA) grant for the construction of the NTC building and provision of furniture and equipment. The Open Society Foundation provided US$1.5 million for capacity building of the national experts and the NTC staff in the assessment area.After stages of design, evaluation and pilots in 2012 and 2013, the NTC launched the UEE process in December 2013, and in May 2014 it was administered nation-wide for the first time, including the allocation of university places. More than 52,500 applicants were registered for the exams (including 17,500 females), 30 percent more than in the previous year, by all higher education institutions in the country. Around 46,000 registered applicants took the exam and around 30,000 have passed the minimum score needed to participate in the competition.In addition to the university admission test, the NTC is expected to administer other types of large scale national and international student learning assessments to provide key information to policy makers and citizens on what children are learning in school, and to help identify areas for improvement.The World Bank portfolio in Tajikistan comprises 13 investment operations with net commitments of US$220.6 million. The largest share of the portfolio is in urban, rural and social development (21%), followed by agriculture (18%), energy (16%), governance (10%), environment and natural resources (7%), health, nutrition & population (7%), education (7%), water (7%), trade and competitiveness (5%), social protection and labor (2%). Show Less -
Tajikistan’s economic growth moderated to 6.7 percent in the first half of 2014, down from 7.5 percent a year earlier, as activity slowed in almost all sectors.Weaker world economic growth a... Show More +nd lower prices for cotton and aluminum adversely affected the major export-oriented industries, pushing total industrial growth below 3 percent from nearly 7 percent a year earlier.Lower inflows of remittances, due to the slowdown in Russia, have translated into lower domestic demand and slower growth in services and housing construction. Though growth in agricultural output also moderated, due to heavy rains and low temperatures, it was still a healthy 6 percent. Fixed investment grew swiftly as the public investment program got underway.Inflation began to pick up as food prices rose and tariffs for utilities were adjusted, reaching 4.7 percent for the first half of 2014, compared with 1.6 percent a year earlier.GDP growth is projected to ease to 6.5 percent in 2014, because of the spillover effect from the slowdown in Russia and in export sales.A Russian slowdown affects Tajikistan largely through remittances channels. A slackening in remittances weighs heavily on household demand, particularly demand for services and housing construction.Inflation pressures are expected to increase, but stable global food prices should help to keep growth in inflation within a single digit. Despite slower economic growth, the fiscal deficit is projected to remain unchanged in 2014, because of higher than expected revenues from foreign trade, reforms in revenue collection, and spending restraint.The current account deficit is projected to widen to 3.7 percent of GDP, due largely to sluggish export growth and the slowdown in remittances.Tajikistan could potentially benefit from the Russian ban on imports of food from the West, but fragile market links, limited economies of scale, poor access to credit, and barriers to entry and expansion limit Tajikistan’s ability to benefit from increased Russian demand. Both domestic and external risks face the country. The main risks to the near-term outlook relate to serious vulnerabilities and governance issues in the financial sector, fiscal risks from state-owned enterprises (SOEs), a slower recovery in the prices of aluminum and cotton, and a further slowdown in activity in Tajikistan’s main trading partners.The pace and financing of large infrastructure projects are also highly uncertain. The main transmission channels through which adverse external shocks could impact the Tajikistan economy are remittances (partly because migrants may return) and external trade.Reinforcing fiscal and external buffers will be critical to mitigating the impact of external shocks, particularly in light of Tajikistan’s strong links with Russia and other important trading partners such as Kazakhstan, Turkey, and China.In the near-term, prudent macroeconomic policies, such as greater exchange rate flexibility, could help the country absorb any shocks. A comprehensive structural reform program is needed in order to bolster growth, create jobs, and reduce poverty – especially as risks are intensifying.Reforms to improve the business-enabling environment need to go hand-in-hand with comprehensive public sector reform. Among the highest priorities are to address financial sector vulnerabilities and assure proper SOE governance to minimize fiscal risks and deliver cost-efficient services to consumers.Beyond general reforms, specific challenges need to be addressed in many sectors where SOEs operate, such as energy, infrastructure, and delivery of other services. Policies to facilitate absorption of returning migrants into the local labor market will also be important.Over the medium-term, prudent macroeconomic management and structural reforms directed towards diversification and better integration into global and regional markets could create more economic opportunities and reduce Tajikistan’s vulnerability to shocks.Investing in human and institutional capital could support productivity improvements and job creation, and ultimately speed up the transition to a more sustainable growth model. Show Less -
Dushanbe, October 27, 2014 – Tajikistan’s economic growth is slowing and vulnerability to shocks is increasing while Tajikistan faces a range of external and domestic risks, according to the latest Ta... Show More +jikistan Economic Report by the World Bank. Tajikistan’s economic growth moderated to 6.7 percent in the first half of 2014, down from 7.5 percent a year earlier, as activity slowed in almost all sectors. Weaker world economic growth and lower prices for cotton and aluminum adversely affected the major export-oriented industries, pushing total industrial growth below 3 percent from nearly 7 percent a year earlier. Lower inflows of remittances due to the slowdown in Russia have translated into lower domestic demand and slower growth in services and housing construction. Though growth in agricultural output also moderated due to heavy rains and low temperatures, it was still a healthy 6 percent. Fixed investment grew swiftly as the public investment program got underway.According to the report, GDP growth is projected to ease to 6.5 percent in 2014 because of the spillover effect from the slowdown in Russia and in export sales. The main risks to the near-term outlook relate to vulnerabilities and governance issues in the financial sector, fiscal risks from state-owned enterprises, a slower recovery in the prices of aluminum and cotton, and a further slowdown in activity in Tajikistan’s main trading partners.“Given increasing risks, it would be important for Tajikistan to put in place a comprehensive structural reform program to improve the business-enabling environment, while addressing challenges in the public and financial sectors,” said Patricia Veevers-Carter, World Bank Country Manager for Tajikistan. “This is the essential foundation for Tajikistan to meet its ambitious growth and poverty reduction objectives.”“Reinforcing fiscal and external buffers will be critical to mitigate the impact of external shocks, particularly in light of Tajikistan’s strong links with Russia and such other trading partners as Kazakhstan, Turkey, and China,” said Marina Bakanova, World Bank Tajikistan Senior Economist. “In the near term, prudent macroeconomic policies, such as greater exchange rate flexibility, could help the country absorb any shocks.”The World Bank’s Economic Report on Tajikistan concludes that over the medium-term, prudent macroeconomic management and structural reforms directed towards diversification and better integration into global and regional markets could create more economic opportunities and reduce Tajikistan’s vulnerability to shocks. Investing in human and institutional capital could support productivity improvements and job creation, and ultimately speed up the transition to a more sustainable growth model.The active portfolio of the World Bank consists of 13 investment operations with net commitments of US$220.6 million. The largest share of the portfolio is in urban, rural and social development (21%), followed by agriculture (18%), energy (16%), governance (10%), environment and natural resources (7%), health, nutrition & population (7%), education (7%), water (7%), trade and competitiveness (5%), social protection and labor (2%). Show Less -
The Programmatic Public Expenditure Review (PPER) is the part of the World Bank's ongoing analytical and advisory activities, which provide a solid platform for policy dialogue and discussions with th... Show More +e Government of Tajikistan and other stakeholders on a range of key issues and reforms. The PPER consists of three policy notes – “Government Expenditures: Size, Composition and Trends”, “Review of Public Expenditures on Health”, “Review of Public Expenditures on Education” - completed in 2013, and three policy notes - “Key Issues in Public Finance Management”, “Fiscal Risks from State-Owned Enterprises”, “Capital Expenditures and Public Investment Management” - completed in 2014. The Policy notes aimed to inform fiscal policy and expenditure prioritization in key areas of the budget to improve the efficiency and quality of public spending and to support the structural transformation of the economy.More specifically, they are:1) The Policy Note No. 1 “Government Expenditures: Size, Composition and Trends” sets a stage for the further in-depth discussion of the issues, identified in the note, based on the analysis of trends and composition of public spending during the last six years. It begins with a brief review of macroeconomic context to provide the background for analysis of fiscal policy during the last six years and implications for fiscal policy going forward; presents the overall fiscal picture and highlights the fiscal risks to be addressed to sustain the recent progress in fiscal consolidation; shows composition and trends of expenditures and revenues and provides brief conclusions.2) The Policy Note No. 2 “Review of Public Expenditures on Health” examines public expenditures on health in Tajikistan. The note describes the institutional and administrative structure of the health sector; presents health outcomes and health care utilization indicators; describes health financing and presents the main options to expand fiscal space for health; reviews the health financing and organizational reforms implemented in Tajikistan.3) The Policy Note No. 3 “Review of Public Expenditures on Education” examines public expenditures on education in Tajikistan, focusing on assessing efficiency and equity of general education spending. It reviews the characteristics of Tajikistan’s educational system, including access and equity in enrollment and quality of education; analyzes overall public spending on education and a breakdown by financing source, subsector, and expenditure category, as well as unit costs by level of education; examines general education financing—the largest spending unit within the education sector—in more depth; covers demographic trends and enrollment projections and their implications on education spending.4) The Policy Note No. 4 “Key Issues in Public Finance Management” describes the current state of public finance management (PFM) reform in Tajikistan; examines the amount and nature of public spending; and explores the objectives the Government aims to accomplish through its spending. This note provides a number of recommendations to the Government to help achieve its stated PFM reform objectives.5) The Policy Note No. 5 “Fiscal Risks from State-Owned Enterprises” reviews the role of state-owned enterprises (SOE) in Tajikistan's economy and identifies key issues. It assesses the fiscal risks posed by SOEs, especially those in the energy sector; and provides possible solutions. The Note also benchmarks SOEs governance framework and practices in Tajikistan against OECD principles and provides recommendations for strengthening the SOE governance and transparency.6) The Policy Note No. 6 “Capital Expenditures and Public Investment Management” analyzes the composition and trends in capital expenditures; reviews a public investment management process in Tajikistan along the capital budgeting cycle (planning, budgeting, implementation, and audit) and provides recommendations for improving efficiency of capital spending and strengthening public investment management. Show Less -