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World Bank Financing Promotes Key Policy Reforms in Tajikistan

November 1, 2012

Washington, November 1, 2012 – The World Bank’s Board of Executive Directors today approved a US$ 20 million grant for the budgetary support to the Government of Tajikistan.  The sixth Programmatic Development Policy Grant (PDPG6) is part of a series of grants provided since 2009, which support the Government of Tajikistan’s efforts to mitigate the impacts of the global economic crisis, promote sustained growth and reduce poverty.

The main policy areas supported under the current grant are: 1) maintaining budget allocations for health, education, and social protection services; 2) improving the environment for private sector development; and 3) strengthening government effectiveness and efficiency of public resources use.  Implementation of per capita financing reforms in the education and health sectors and improvement of management capacity and effectiveness of such key state agencies as the Barqi Tojik and Tajiktransgas are among the reforms supported under the PDPG.

As the activities under the series of PDPG series are central to the Tajikistan and the World Bank Country Partnership Strategy (CPS) for 2010-2013, the Board of Executive Directors also reviewed the Progress Report of the Strategy. Prepared in the wake of the 2008-2009 global economic downturn, the Strategy focused first on reducing the negative impact of the global crisis by maintaining social expenditures and providing emergency funding to bolster food security and increase fuel imports.  It also paved the way for post-crisis recovery by piloting reforms to target social assistance, issue land use rights, and reduce transaction costs on businesses. 

The CPS Progress Report highlights the importance for Tajikistan to shift focus from crisis mitigation to more sustained reforms to build shared prosperity.  Based on solid progress in these programs and positive economic growth achieved by Tajikistan in recent years, the Progress Report recommends a shift to scale-up pilots in land, agriculture, and water reform, deepen private and financial sector development, and improve quality of social and municipal services, while making the country more resistant to external economic shocks.  A recommendation in the Progress Report extends the Strategy to 2014.

As Tajikistan is a recipient of a Governance Partnership Facility grant, the Strategy mainstreams governance in the portfolio through measures to increase public accountability and transparency in key sectors, such as agriculture and energy, while engaging civil society in building demand for good governance.  In addition to operations that expand services for maternal and child health and women’s land rights, the Strategy will explore means to reduce the gender gap in earnings and education. 

The active portfolio of the World Bank in Tajikistan currently consists of 14 projects with a net commitment of US$ 236 million. The largest share of the portfolio is in agriculture and rural development (27 percent), followed by energy (24 percent), water (18 percent), human development – education, health and social protection (24 percent), the private sector (4 percent) and the public sector (2 percent).

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