Analytical materials / Tajikistan

Is it Possible to Achieve the Set Goals of the National Development Strategy until 2030?

21.12.2016

On the matter of how realistic it is to achieve the set goals of the National Development Strategy until 2030, its particulars and mechanisms of implementation, specially for CABAR.asia, shared their opinions experts from Tajikistan, Parviz Mullojanov and Khursand Khurramov.

CABAR.asia: The National Development Strategy (NDS) of Tajikistan is the main strategic document of the country, which aims to achieve sustainable economic growth and poverty reduction. At the end of September 2016 the Government adopted a new version of the NDS until 2030 (the previous one was until 2015). The primary objectives of the National Development Strategy of Tajikistan have been announced – freeing the country from communicational isolation, achieving energy independence and food security. How, in your opinion, is it possible to achieve progress in these three areas?

Parviz Mullojanov: In regard to freeing the country from communicational isolation, in many ways significant progress has already been made. If in the 1990s the main transportation routes traversed through the territory of Uzbekistan, today other routes exist and function. These, above all, are transportation routes towards China; trade turnover is growing on the southern, Afghan direction, as well as on the northern course, via the territory of Kyrgyzstan. In the future, there is potential for the development of transportation routes both towards Afghanistan and Iran, and the north-east.

As regards the energy independence, it would be unsound to link all hopes only with the construction of the Rogun hydropower station. Tajikistan must develop in parallel small and medium-size, as well as alternative power industry. Priorities must also be changed – the main emphasis needs to be made on the full provision of the population and regions of the country with electricity; the questions of export of electricity abroad need to be addressed only after the population ceases to suffer from shortages and lack of electricity supply. Otherwise, there can be no industrialization possible in the country – how can one develop the industry and create jobs in the circumstances of energy supply shortages, when in most regions electricity supply is intermittent? In achieving this goal, there is also a need to restructure the industry’s management system, reform the state company Barki Tojik, which does not bring the state budget sufficient income, and therefore raise its efficiency.

It is necessary to revise the tax base and the system of benefits for a number of state monopolies and large enterprises, because today the main burden of payments for electricity falls on the shoulders of small and ordinary consumers, which is unfair, and is a major cause of the industry’s unprofitability. Tajikistan has the potential for the development of oil and gas industry, but it will be necessary to create a favorable investment climate and effective investment security.

With regard to food sovereignty, its achievement will necessitate acceleration of the agricultural reform. As of today, most of the rural residents prefer to work abroad – this means that working on the land does not bring people sufficient income and confidence in the future. How can it practically be possible to achieve food sovereignty under the conditions when the Tajik farmer is not interested in working on the land?

 Khursand Khurramov: The formulated issues and the set tasks are adequate indeed and reflect in themselves the challenging reality Tajikistan faces at this stage of its development. The worked out strategy is comprised of two main points: it is the creation of an unified transportation network in the country and its linkage to international transportation corridors; accession of the Republic of Tajikistan to the international conventions and agreements in the field of transportation.

The strategy to date found its manifestation in a number of transportation projects, such as: Murghab-Kulma, Shagon-Zigar, Kulyab-Kalai-Khumb (the main route-line ensuring Chinese imports), Dushanbe-Chanak highway, the construction of a number of tunnels connecting the capital with the northern part of the republic, the construction of several bridges across the Panj river, which link the republic with Afghanistan, as well as many other internal infrastructural projects. In the future, it is expected to lay a motorway of Tajikistan-Pakistan via Afghanistan. Also, there are a number of initiatives on the part of the West, Iran and Russia, as well as China. However, all of them, one way or another, practically depend upon the barriers associated either with interstate issues (in the case of Tajikistan, and Uzbekistan), or internal conflicts that hinder the implementation of the projects (in the case of Afghanistan).

Here success depends, first and foremost, on the Tajik diplomacy, on how it will be able to reach an agreement with the neighbors, mainly with Uzbekistan on the establishment of infrastructure and cross-border cooperation, especially now that, more than ever before, after the change of power in Uzbekistan, there is a favorable climate for this. On the settlement of these issues depends the profitability of multi-million dollar transportation projects, which otherwise are at the risk of remaining to be the roads of internal significance. A striking example of this is the road Aini-Penjikent, which has the potential to link Dushanbe with Samarkand. In the case of Afghanistan, the problem is more complex and, is unlikely to find its solution in the near future.

The issue of food security, among other things, is a consequence of the transportation impasse, but is not limited to it. Food security of the country is undermined by the low efficiency of agriculture, the complete failure of the reform in this sector, among others, due to the ineffective lending policies, high taxes and lack of preferences and incentives for those working in this field, as well as due to the high degree of corruption. It requires a complete overhaul of the republic’s agricultural policy with due consideration for the existing systemic problems.

Energy security of the republic has been brought to the level of the national idea in Tajikistan. For several years now, the entire propaganda machine of the state has been directed at the Rogun project. However, the high cost of the project (2 billion dollars) in view of low prices for electricity leaves the profitability of the project in doubt.

Thus, success in this area can be achieved by establishing a close partnership with Uzbekistan and preparedness for certain concessions on a reciprocal basis, a complete revision of the republic’s agricultural policy, as well as adequate assessment of hydropower projects, taking into account existing and future financing opportunities.

CABAR.asia: The Minister of Economic Development and Trade, Nematullo Hikmatullozoda, speaking at a meeting of the lower house of parliament, stated that the implementation of NDS will need about $118 billion, 100 million. Whence to attract such funds and can they solve all the problems of Tajikistan?

Parviz Mullojanov: In order to ensure a decent life for the people, our country needs reforms first, only then money. Nobody will give us money in an environment where the country stands the last in the rankings of the region for investment security, for the level of corruption, for the conditions of business development. Unless we improve our international rankings, such funds (which are more than 9 billion a year, if you calculate up to 2030) will not be given to us by the international financial institutions. Thus, in the new Index of Transparency International, Tajikistan took 136 place, gaining 26 points. At that, a country which scored less than 30 points is considered a country in which the situation with corruption is a deeply-rooted systematic one. On the ranking of business operations, Tajikistan occupies the lowest place (132) among the former Soviet republics – even Uzbekistan, which is usually cited as a classic example of pressure on enterprise, occupies 82 place. In these circumstances, the international financial institutions can only continue to give loans only to the extent that helps the country avoid a complete collapse of the economy, in which nobody is interested today. One can, of course, borrow money from China, but today this country is already our main creditor – Chinese loans account for almost half of our external debt. How and with what will we pay them back, and how will it then affect the independence of the country? In the end, the Chinese are unlikely to give us credit for nothing in return – especially since the Chinese economy itself is now also experiencing serious problems.

Khursand Khurramov: In the circumstances when the republic’s budget is just over $3 billion, attracting the indicated amount is completely unrealistic. At this point in time, it is not known whether there will be any investor available for the Rogun hydroelectric power station, who will be prepared to invest $2 billion in it.

The main investors of transportation projects to date include the World Bank, the Asian and Islamic Development Bank, the European Bank of Reconstruction and Development, the OPEC Fund, Abu Dhabi, the Aga Khan Foundation, and countries such as China, Iran, Japan, USA, France. The total value of projects implemented through public-private partnerships, according to the information provided by the Ministry of Transport for 2015, amounted to $1billion, 307million, which once again confirms the unattainability of the sum indicated by the Minister.

The lack of transparency and high level of corruption do not allow to draw potential investors to the republic, and, judging by the personnel policy and the annual ranking, the trend is not decreasing, which means that no investment inflows are forthcoming in the near future.

CABAR.asia: In my view, these kinds of documents are very similar and are aimed at bringing the country’s development to a higher level. What is the particularity of this document in the realities of Tajikistan?

Parviz Mullojanov: I do not see much of a particularity – the main provisions repeat the previous versions of the National Development Strategy. I have not noticed any particularly new idea, except for the new figure of $118 billion. And then, it is unclear how and in what way calculations were made and this particular figure was identified and substantiated.

Khursand Khurramov: In the realities of the country, any procedure or document issued that has an official status, is essentially a façade. Economic processes, as well as political, proceed in an informal atmosphere. Based on the previous document of NDS until 2015, one can observe that the declared principles of operation are far from actual practice. It ascertains all the existing issues, but there is no comprehensive mechanism for solving them. In view of this, practically all of the objectives set to reform the main sectors of the economy have not been realized.

Up until now, as in 2007, there is a demand for reform in the industry, in agriculture, in transport and communications sectors and in the energy sector.

CABAR.asia: Is there any chance for this document to turn from being a “declaration of intentions” into a “road map” with specific mechanisms of solving issues and bringing the necessary resources for this purpose? Is it possible to achieve the objectives pronounced by the NDS until 2030?

Parviz Mullojanov: The chance is always there, but so far there are no particular signs of a more or less specific “road map”, nor any relevant mechanisms or methods of task implementation. It is unclear to me what the government’s anti-crisis strategy is – it is no secret that the post-Soviet space today is enveloped by a large-scale financial and economic crisis. At present, the Tajik financial institutions are executing a reasonably effective fiscal policy, trying to avoid further devaluation of Somoni and the collapse of the economy. But these are temporary measures, which do not solve the systemic problems of the Tajik economy.

Thus, my overall impression is that the new version of the Strategy does not provide for large-scale and fundamental reform, the restructuring of the current economic model. Meanwhile, the attainment of the objectives of the Strategy without the implementation of such large-scale economic reforms seems to be a rather dubious prospect.

Khursand Khurramov: At the moment, there are no preconditions to assert that the adopted NDS until 2030 will differ substantially from the previous one. The elaboration of the document took place under the same conditions and with the same personnel; the state system, which is to implement the strategy has not undergone any changes, hence no particular headways are to be expected on the new NDS.

Experts: Parviz Mullojanov, Khursand Khurramov (Tajikistan, Dushanbe)

Interview conducted by Editor of CABAR.asia Nargiza Muratalieva

The opinions of the authors may not reflect the position of the periodical CABAR.asia

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