Tajikistan Country Economic Memorandum : Nurturing Tajikistan’s Growth Potential
This Country Economic Memorandum (CEM) analyzes a set of the critical constraints to domestic private sector-led and outward-oriented growth in Tajikistan, by examining the structural bottlenecks to private sector investment and exports. The report...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/283081560956198220/Tajikistan-Country-Economic-Memorandum-Nurturing-Tajikistan-s-Growth-Potential http://hdl.handle.net/10986/31936 |
| Summary: | This Country Economic Memorandum (CEM)
analyzes a set of the critical constraints to domestic
private sector-led and outward-oriented growth in
Tajikistan, by examining the structural bottlenecks to
private sector investment and exports. The report is
selective in looking at key public policies needed to
improve Tajikistan’s macroeconomic resilience and foster
private sector development to ensure sustainable growth.
This CEM should be seen as the first of a series of
programmatic work intended to provide advisory support to
the Tajik authorities over the medium-term as they update
the National Development Strategy. The report focuses on two
important areas of public policy: first, the role of the tax
system in encouraging investment and entrepreneurship,
examines the principal deficiencies in the tax regime and in
its administration, and proposes reforms to improve the
incentives for investment. Second, in view of the dominance
of the state and of state-owned enterprises in the economy
and regulatory gaps to ensure level playing field, the
report analyzes the competition policy framework, with the
aim of identifying policy reforms that will encourage firm
entry and create a competitive market in goods and services.
The two interrelated objectives – macroeconomic incentives
for investment and savings and the domestic competition and
tax regime - reinforce each other. The choice of the above
thematic areas is guided by the team’s preliminary
discussions with various stakeholders within the government
and outside the government. The CEM builds on the World
Bank’s previous reports on Tajikistan, namely on the Jobs
Diagnostics and Systematic Country Diagnostics. The Jobs
Diagnostics proposes the government to consider a jobs
strategy based on the following three pillars: i) facilitate
the creation of more jobs, particularly in the formal
private sector; ii) improve the quality of existing jobs,
especially in the informal sector; and iii) facilitate
better access to jobs including transitions from inactivity
to employment and from low to higher quality jobs, with a
focus on vulnerable workers. The focus of the CEM is well
aligned also with the new Country Partnership Framework
(CPF) for 2019-23 currently in making. This report will be
followed by analytical and policy work on other critical
constraints to private sector-led growth: the establishment
of a rules-based policy setting and creating
market-supporting institutions that promote greater economic
formalization; building upon areas of high potential for
transformative change such as the financial strengths of the
energy sector and macro-fiscal implications of investments
to Rogun HPP; gains from deeper international integration
and infrastructure access provided by the Belt and Road
Initiative (BRI); and investing in human capital. This
chapter of the CEM analyses the main causes of macro-fiscal
vulnerabilities and suggests policy recommendations to
improve resilience of the Tajik economy. |
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