WASHINGTON, July 19, 2007 – The World Bank Board of Executive Directors today endorsed the Progress Report on the World Bank Group's Country Partnership Strategy for the Republic of Tajikistan covering the period 2006-2009. The Board also approved a USD10 million Second Programmatic Development Policy Grant, which will help improve the environment for private sector development as well as the overall functioning of the public sector in the country.
The Country Partnership Strategy (CPS) maps out the collaboration between the World Bank Group and the Republic of Tajikistan over a four year period. Today’s progress report comes at roughly mid-term of the implementation period and presents results achieved in all three CPS areas—(i) improving business opportunities in rural and urban areas; (ii) enhancing and preserving the quality of human capital; and (iii) exploiting the country’s hydropower potential.
The Second Programmatic Development Policy Grant (PDPG2) continues to support the Government’s reform program as outlined in its Poverty Reduction Strategy (PRSP). More specifically, the grant will help the authorities improve the environment for private sector development in the cotton, energy and aviation sectors, and provide service delivery improvements in the health and education sectors.
PDPG2 is the second in a series of three grants through which the World Bank is assisting the Government with improving governance, transparency and good economic management in the public and private sectors. A third PDPG grant is currently under preparation, and all three grants are closely aligned with investments and technical assistance programs of the World Bank and other development partners in related areas. The grants are provided by the World Bank Group’s International Development Association (IDA), and are an important addition to Tajikistan’s efforts to sustain strong growth, improve governance, and reduce poverty.
The proposed reforms in health and education are expected to result in improved access and quality of services to the poor in the short term, while reforms in public administration should yield benefits through improved public sector management in the medium term. Meanwhile, sustaining long term economic growth in Tajikistan will require accelerating export growth and diversification of the domestic economy by stimulating investment, improving productivity and strengthening competitiveness.
Tajikistan is a small economy in Central Asia with 6.7 million inhabitants and a per capita income of USD360. Over the past two years, the country has made progress in achieving macroeconomic stability, implementing important policy reforms, and combating poverty. The economy, which has been growing nine percent on average in 2001 – 2005, depends heavily on cotton and aluminum exports, the major part of which is destined for countries from the Commonwealth of Independent States (CIS) and Europe. Remittances are another significant contributor of economic growth, conservatively estimated at 35 percent of GDP in 2006. While poverty has been declining steadily over the past few years, it remains a serious concern.