Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).
TAJIKISTAN
FY 1997 FY 1998 FY 1999 Actuals Estimate Request FREEDOM Support Act............... $5,000,000 $10,200,000 $18,750,000 P.L. 480 Title II........................... $9,476,900 -- -- Introduction
The United States supports an independent and stable Tajikistan, and endorses Tajikistan's development as a market democracy. The fragile peace and potential disintegration of Tajikistan could still threaten regional stability and deflect attention within the region from economic and political reforms. USAID's overall goal is sustainable economic growth based on democratic principles. The U.S. Mission to Tajikistan has identified three major goals for Tajikistan: to support the peace process; to encourage democratic reform; to assist economic reform and alleviate human suffering.
The Development Challenge
Tajikistan is the poorest of the five Central Asian Republics and the only one of the five in which underlying ethnic, regional, economic and ideological strains have led to open warfare and major population displacements. The June 27, 1997 Peace Accord opened a new phase in Tajikistan's history, formally ending a civil war begun in 1992. The civil war left at least 50,000 dead, 700,000 displaced within the country, and resulted in an outflow of at least 75,000 refugees to Afghanistan. Many returning refugees are faced with rebuilding their homes, and the harsh economic consequences of civil war continue to exact a heavy toll. Thousands of homes and hundreds of schools and medical units were destroyed. The war also left 55,000 orphans, 25,000 widows and a legacy of hatred and suspicion that makes reconstruction tenuous and difficult. Likewise, Tajikistan continues to suffer from poor health infrastructure and periodic epidemics.
The task for 1998 is to see the Peace Accord implemented. By the end of FY 1997, significant progress had taken place. Virtually all of the Tajik refugees who had fled to Afghanistan returned home. Proposed amendments to the constitution are under review, and parliamentary elections are tentatively planned for mid-1998. Despite these signs of progress, security has deteriorated and groups outside the peace process have carried out terrorist bombings and kidnappings in and around Dushanbe, including the death of an aid worker.
Progress on economic reform faltered in 1997. Macroeconomic stability suffered, and the Tajik ruble, which had hovered at a rate of around 300 per U.S. dollar for most of 1996, fell to almost 810 per U.S. dollar. By October 1997, the GOT was again accepting IMF advice, and the macroeconomic situation made up some lost ground. Whereas progress in privatization remained slow, there have been some hopeful signs, such as changes proposed to the antiquated Russian tax laws.
The focus for U.S. assistance in FY 1997 was humanitarian relief. Food, including U.S. Department of Agriculture supplies, makes up over three-quarters of U.S. Government assistance to Tajikistan. Some private voluntary organizations (PVOs), such as the World Food Programme, have been innovative in using food commodities to begin the transition from humanitarian relief to development.
Support for the peace process is a new priority. At a United Nations (UN) convened donors conference for Tajikistan in November 1997, the United States pledged to increase its technical assistance to Tajikistan to over $10 million. This assistance will support the peace process through reconstruction, assistance for war affected areas, and help with constitutional and electoral reform. The United States also plans to donate $27 million in food aid in response to a forthcoming UN appeal for humanitarian assistance. Much of the food aid is targeted at alleviating the distress of internally displaced persons,returned refugees, and former combatants returning to civilian life. Food assistance will also provide a limited source of funding for micro-lending.
Programs continue to move away from short term humanitarian relief as the foundation is laid for long term sustainable development. In 1997, USAID provided advice on privatization and bank supervision with plans to expand this significant effort in 1998, the security situation permitting. Modest technical assistance and in-country-training related to economic restructuring, democratization, and health and family planning have been provided to expose Tajiks to alternative approaches and mechanisms for introducing democratic processes and market-based economic reform.
Other Donors
While the U.S. took the lead in responding to the humanitarian crises following the civil war, the IMF and World Bank (IBRD) provided substantial resources to support macroeconomic stability and reform beginning in 1996 ($22 million from the IMF and $60 million from the IBRD). Their assistance dropped in early 1997, with IBRD financing only a $12 million Poverty Alleviation Project. However, at the end of the year each organization came forward with $10 million of assistance in support of the peace process. UNHCR provided significant assistance during refugee repatriation from 1993-95 and in 1997, with UNDP moving into the field in an increasingly significant manner in 1995-96. The European Union (EU), individual EU countries, Turkey, Russia and Iran have also aided Tajikistan, as has the Red Cross, supported in part by the U.S. Government. U.S. and other PVOs are active in Tajikistan, with excellent coordination among donors.
FY 1999 Program
The overall strategy for U.S. involvement in Tajikistan assumes progress in the inter-Tajik peace talks leading to national reconciliation and free and fair elections, and seeks to capitalize on strong Tajik interest in economic and democratic reform.
Under economic restructuring, USAID will focus on two strategic objectives: growth and development of private enterprise and development of a legal/regulatory structure for sound operations of a private banking sector. The breadth and duration of these programs will be calibrated to Tajikistan's commitment to market reforms.
The democracy program will be refocused to support the peace process. USAID will continue to support the development of non-governmental organizations, but only those with activities that contribute directly to the peace process. USAID will also assist the development of independent electronic media, focussing on how media stations can contribute to public understanding of the peace initiatives, upcoming elections, proposed constitutional changes, etc. Earlier assistance to the Judiciary will be shifted to the parliament and passage of laws and constitutional amendments that advance the peace process and new elections.
In the social sector, USAID will work closely with other donors and continue development-oriented activities which support the peace and reconciliation process. Selected USAID assistance to other international organizations (e.g., United Nations Mission of Observers in Tajikistan, UNDP, and World Bank) is anticipated to secure a favorable environment for USAID interventions and to maximize impact. Assistance to the Tajikistan Social Investment Fund's poverty alleviation program provides an opportunity for USAID to support community mobilization around water use issues, institute measures to prevent water-borne diseases, and address policy issues related to water charges and consumer use. Special initiatives in reproductive health, infectious disease, and health partnerships will be programmed, to the extent possible, to contribute to promoting citizen and community involvement in addition to achieving specific technical results.
TAJIKISTAN
FY 1999 PROGRAM SUMMARY*
(in Thousand of Dollars)
Strategic ObjectivesEconomic Restructuring Democratic
TransitionSocial Stabilization Cross-cutting / Special Initiatives Total Privatization -- -- -- -- -- Fiscal Reform -- -- -- -- -- Private Enterprise 5,410 -- -- -- 5,410 Financial Reform 1,300 -- -- -- 1,300 Energy -- -- -- -- -- Environmental Management -- -- -- -- -- Citizens' Participation -- 1,875 -- -- 1,875 Legal Systems -- -- -- -- -- Local Government -- -- -- -- -- Crises -- -- 1,965 -- 1,965 Social Benefits -- -- -- -- -- Environmental Health -- -- -- -- -- Cross-cutting / Special Initiatives -- -- -- 8,200 8,200 TOTAL 6,710 1,875 1,965 8,200 18,750
*FREEDOM Support Act (FSA) funds
USAID Mission Director: Patricia K. Buckles
ACTIVITY DATA SHEET
PROGRAM: TAJIKISTAN
TITLE: Private Enterprise, 110-S001.3
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $5,410,000 FREEDOM Support Act
INITIAL OBLIGATION: FY 1995; ESTIMATED COMPLETION DATE: FY 2002
Purpose: Accelerated Development and Growth of Private Enterprises
USAID Role and Achievements to Date: Before 1996, the policy environment was not conductive to concentrated technical assistance in the area of economic restructuring. In the wake of the civil war, training and exchange were the best mechanisms for Tajik's to observe developments elsewhere and to gain international experience. To encourage reform, USAID engaged with Tajik counterparts on necessary private sector reforms through training courses and modest, targeted technical assistance. USAID has sent hundreds of Tajik's to U.S. and other Central Asian countries for short-term training in a variety of economic reform areas. Specialized in-country training has also been effective. Tajik's trained under these programs how form a cadre of reform-minded officials who are taking the lead in crafting long-term economic stabilization and structural adjustment programs.
An area of USAID training support that has been well received in Tajikistan is commercial law reform. As in the other countries of Central Asia, the Government of Tajikistan has indicated its support for the development of a core set of commercial legislation that will serve as the legal backbone for the nation's emerging private sector. USAID has already demonstrated its strong capability to provide expertise in this area through its comprehensive commercial law assistance activities in Kazakhstan and Kyrgyzstan. Although continued political instability led to the suspension of economic technical assistance at the end of the year further technical assistance planned for 1998 and beyond will constitute a critical element of the peace process.
In FY 1997 the Central Asian-American Enterprise Fund (CAAEF) made eight loans totaling $730,468 to private businesses in Tajikistan. Winrock Farmer-to--Farmer and USAID-funded International Executive Service Corps advisors have assisted Tajik enterprises in preparing business plans and loan/equity proposals for CAAEF, and have acted as consultants on post-investment management.
Description: Subject to continued commitment by the Government of Tajikistan (GOT) to economic reforms and a reasonable degree of political stability in the country, USAID plans to undertake a modest commercial law assistance initiatives in FY 1998 and FY 1999 to help the GOT develop a market-oriented commercial infrastructure; including key reforms in the law. The program will initially focus on drafting the following laws: Bankruptcy; Collateral law; Banking; and Foreign Investment areas designed to promote the transfer of productive assets to the private sector and strengthen the rights of private investors. Practical constraints to business formation and operation (e.g. licensing and registration procedures) will also be addressed. In addition to commercial law reform, the activity will provide in-country training to key officials involved with the implementation of a market-friendly regulatory regime: judges, lawyers, and prosecutors. At the request of the GOT, USAID may also initiate a modest fiscal policy program to help foster a pro-business tax regime.
Work under this strategic objective will promote the rule of law and thereby the solidification of the peace process.
Host Country and Other Donors: USAID will continue to work closely with the various governmental entities involved in private sector development and economic restructuring issues. The World Bank and IMF are at this point directly engaged in this effort. USAID coordinates closely with these two institutions on their activities and in some instances, such as in the recent placement of a privatization advisor in Dushanbe, directly supports their programs. Activities are also coordinated with those ofother donors such as the European Union and UNDP which are interested in economic reform issues.
Beneficiaries: Entrepreneurs and those involved in private sector development stand to benefit from this initiative. More broadly, the citizens of Tajikistan would benefit from economic reform that leads to sustainable economic growth.
Principal Contractors, Grantees, or Agencies: To be determined. Mission plans to buy into existing assistance mechanisms or to competitively procure services depending on which will provide the best benefit to the U.S. Government, cost and other factors considered.
Major Results Indicators: Baseline Target Draft tax code modernized No (1997) Yes (1999) Market-oriented investment legislation in place No (1997) Yes (2000) Share of GDP generated by private enterprise 20% (1996) 50% (2002) Gross domestic investment as % of GDP 17% (1995) 25% (2002)
ACTIVITY DATA SHEET
PROGRAM: TAJIKISTAN
TITLE: Financial Sector Restructuring, 110-S001.4
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $1,300,000 FREEDOM Support Act
INITIAL OBLIGATION: FY 1998; ESTIMATED COMPLETION DATE: FY 2000
Purpose: A more competitive and market-responsive private financial sector
Despite problems related to ongoing political instability in Tajikistan, during the 1996-1997 period the Government of Tajikistan showed increased commitment to economic reforms .
USAID Role and Achievements to Date: Before 1996, the policy environment was not conducive to concentrated technical assistance in the area of economic restructuring. In the wake of the civil war, training and exchanges were the best mechanisms for Tajik's to observe developments elsewhere and to gain international experience. To encourage reform, USAID engaged with Tajik counterparts on necessary private sector reforms through training courses and modest, targeted technical assistance. USAID has sent hundreds of Tajik's to the U.S. and other Central Asian countries for short-term training in a variety of economic reform areas. Specialized in-country training has also been effective. Tajik's trained under these programs now form a cadre of reform-minded officials who are taking the lead in crafting long-term economic stabilization and structural adjustment programs.
USAID's targeted training and technical support has sought to maximize its impact on key economic reforms. For example, in early FY 1997 a USAID privatization advisor played a crucial role in initiating privatization reforms that are now being undertaken as part of a comprehensive World Bank program. In late 1997 a USAID bank supervision consultant began an assignment with the Tajik Central Bank. The activity was designed to help the Central Bank establish the capability to effectively supervise the commercial banking sector in Tajikistan through design and training of a modern bank supervision unit. The project appeared to get off to a very rapid start, with the resident advisor quickly establishing credibility with his counterparts. After only a few weeks, the advisor had already undertaken an on-site commercial bank examination. In addition, the Chairman of the Central Bank requested weekly meetings with the USAID advisor to review progress in implementing the advisor's ambitious work plan. Although continued political instability led to the suspension of economic technical assistance at the end of the year further technical assistance planned for 1998 and beyond will constitute a critical element of the peace process.
Description: In FY 1999, USAID's efforts will be targeted at achieving key results in the legal/regulatory structure of the commercial banking sector, increasing the number and quality of financial services available, and improving Central Bank access to information about the banking system and its capability to enforce prudential norms in the banking sector. These core efforts will likely be complemented by progressive emphasis on use of international accounting standards in the banking sector. USAID will coordinate its Central Bank assistance closely with the IMF and with the advisory assistance from the World Bank. USAID's successful work in banking system development in Kazakhstan and Kyrgyzstan provides a significant advantage in continuation of the program in Tajikistan.
Host Country and Other Donors: USAID will continue to work closely with the various governmental entities involved in private sector development and economic restructuring issues. The World Bank and IMF are at this point directly engaged in this effort. USAID coordinates closely with these two institutions on their activities and in some instances, such as in the recent placement of a privatization advisor in Dushanbe, directly supports their programs. Activities are also coordinated with those of other donors such as EU and UNDP which are interested in economic reform issues.
Beneficiaries: The Central Bank of Tajikistan. The citizens of Tajikistan will benefit from economic reform that leads to sustainable economic growth, a critical element of the peace process.
Principal Contractors, Grantees, or Agencies: Arthur Andersen.
Major Results Indicators: This is a new SO in 1998. Targets will be developed during the next planning cycle; indicators to be tracked are listed below.
Private sector deposits in Tajikistan's banking system as % of GDP.
USAID assessment of regulatory readiness of Central Bank of Tajikistan.
Consideration/adoption of appropriate official laws & regulations.
Percentage of all banks that meet capital adequacy requirements.
ACTIVITY DATA SHEET
PROGRAM: TAJIKISTAN
TITLE: Increased, better informed citizens' participation, 110-S002.1
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $1,875,000 FREEDOM Support Act
INITIAL OBLIGATION: FY 1995; ESTIMATED COMPLETION DATE: FY 2000
Purpose: Increased citizens' participation in political and economic decision-making.
USAID Role and Achievements to Date: USAID has assisted Tajik non-governmental organizations (NGOs) through a combination of U.S. training, in-country training, and modest technical assistance. Results have been encouraging. For example, local NGOs continue to increase in number and have participated in a number of conferences and training sessions aimed at enhancing their role and effectiveness in Tajikistan. A recently-formed judges association adopted a code of ethics in late 1997, following a judicial conference supported by a USAID-backed PVO. Due in part to USAID's efforts through Internews, most of the country's independent TV stations are back on the air. Also, the International Foundation for Electoral Systems (IFES) has initiated contacts with the Tajik government and the Organization for Security and Cooperation in Europe (OSCE) to establish a framework for assistance to the upcoming elections.
Description: Efforts to bring about political consensus in Tajikistan have proven to be long, arduous, and fragile. Nonetheless, provided that the security situation permits international organizations to operate in Tajikistan, opportunities do exist to promote reconciliation through assistance to the election process, enhancement of information flows about the peace process and the upcoming elections, and assistance in increasing the participation of Tajik citizens in the rehabilitation process. The aftermath of civil war and the economic decline have in a number of instances left vacuums that can be filled in part by local community groups working together to help in rehabilitating the country. If the security situation improves and reconciliation proceeds, substantial assistance will be provided in FY 1999 for the country's next elections. In addition, the modest NGO, judicial and media support activities of the past will continue but will be redirected to promote the peace process, support the country's rehabilitation, and the elections.
Host Country and Other Donors: USAID is working closely with OSCE to ensure that the upcoming elections take place and are free and fair. Other donors, including the EU and various UN agencies, are also involved in a variety of activities that promote democracy and the peace efforts. Donors meet regularly to discuss areas of common concern, and this coordination will continue in the future.
Beneficiaries: All citizens of Tajikistan will benefit from activities that promote democracy and the peace effort, encourage free elections and a civil society, and expand the role that private individuals are able to play in the economic and political life of the country and its rehabilitation.
Principal Contractors, Grantees, or Agencies: Several USAID-funded American NGOs such as the American Bar Association/CEELI, Internews and IFES are playing a role in promoting democracy and the peace effort in Tajikistan. The Counterpart Foundation, International Center for Not-for-Profit Law, and Aid to Artisans, which together form the Counterpart Consortium, also participate in NGO development.
Major Results Indicators: Baseline Target No. of NGOs engaged in advocacy 9 (1997) 30 (1999) Average length in minutes of daily independent TV news broadcast 5 (1996) 12 (1999)
ACTIVITY DATA SHEET
PROGRAM: TAJIKISTAN
TITLE: Reduced human suffering and crisis impact, 110-S003.1
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999 $1,965,000 FREEDOM Support Act
INITIAL OBLIGATION: FY 1993; ESTIMATED COMPLETION DATE: FY 2000
Purpose: Reduced human suffering and crisis impact.
USAID Role and Achievements to Date: During the period 1993 to 1996, USAID provided significant humanitarian relief through American Private Voluntary Organizations (PVOs) and international organizations. Emergency funds provided major support for feeding programs, including food-for-work activities and the provision of food for especially vulnerable groups such as women and school children. Ten canteens have been established which provide hot meals to around 4,000 pensioners and street children in Dushanbe and elsewhere.
Development-oriented programs introduced since 1996 have achieved some noteworthy results. A USAID supported small loan program for farmers permits loan repayment in kind directly to local institutions such as hospitals and orphanages, thereby benefitting not only farmers but vulnerable groups. Other programs have improved access to basic health services for 260,000 people, and established 62 village health committees covering approximately 85,000 beneficiaries. A revolving drug fund established with USAID support has enabled 17,000 patients to purchase or receive needed medications. Initial peace process support-funding helped restore potable water supply and aided joint commission oversight of the cease-fire. Subsequent funding helped provide newly-privatized farmers with reimbursable seed and fertilizer supplies and technical advice to expand production of wheat in mountainous areas damaged by fighting during 1995-96. USAID also provided funding for a small-hydro generating plant in the isolated Gorno-Badakhshan region.
In 1997, USAID decided to focus, in addition, on programs which supported the peace accord signed in June of that year. USAID provided critically needed funding to the United Nations Mission of Observers in Tajikistan (UNMOT). Experts on the scene identified this assistance as a key contribution to maintaining personnel and peacekeeping activities at a critical time in the peace process. USAID also provided support for UNDP/UNOPS activities, particularly a UNDP rural reconstruction project for war affected areas. In 1998, USAID initiated assistance to a project of the Agha Khan Foundation (AKF) to support establishment of private farmers in a war-affected area, to promote community-based peace and confidence building measures in the Gharm region based upon the AKF Gorno-Badakhshan model.
Description: Human suffering and the toll from crisis existence continue and could become chronic problems if a stable, peaceful environment cannot be ensured. Thus, the programming priority during this fragile security period is to ensure such an environment so that development oriented activities can be sustained in the long term. Based on a 1996 program evaluation and hopeful prospects for Tajikistan, USAID has begun the transition from purely humanitarian assistance to more development-oriented interventions. This shift in approach is intended to put in place more sustainable interventions to address the chronic human suffering and reduce crisis impact in the still fragile political environment of Tajikistan. It is also intended to help foster an environment conducive to undertaking substantive reform. The environment became less secure in 1997 warranting increased emphasis on supporting the peace process.
While USAID-funded American PVOs remain a significant programming vehicle, some reconciliation activities will require support through other international organizations. Selected direct assistance to international organizations (e.g., UNMOT, UNDP/UNOPS, and the World Bank) is anticipated to secure an environment for USAID interventions and to maximize impact. USAID will continue development-oriented activities in the social sector, especially those which support the peacekeeping and reconciliation process. One example is technical assistance to the Tajikistan Social Investment Fund (TASIF) in implementing its Poverty Alleviation Program and direct grant support for community-based water projects. USAID support is targeted to foster community mobilization around specific water use issues, institute measures to prevent water-borne diseases and move to policy issues relative to water charges and consumer use to ensure long term impact.
Host Country and Other Donors: Donor coordination in Tajikistan is excellent and is regarded as among the most effective in the former Soviet Union. Various donor groups meet weekly to discuss programs and exchange information on important security issues affecting Tajikistan. Occasional sector-specific meetings are also held. Lead organizations include the United Nations (UNDP/UNOPS, UNICEF, WHO, etc.), bilateral donors including various European organizations, and a variety of American and international PVOs. Both the World Bank and the UNDP support initiatives that rely largely on local and foreign non-governmental organizations to deliver badly needed goods and services to many areas of Tajikistan.
Beneficiaries: Direct beneficiaries include all citizens of Tajikistan who benefit from peacekeeping activities and reconciliation interventions. More immediate beneficiaries are citizens in program areas who benefit not only from reconciliation work but also from development inputs in health, water, agriculture, and income generation activities. In the early years of the program, the direct beneficiaries included those who benefitted from food, medical services, housing, and water provided by various USAID-funded groups. In particular, tens of thousands of refugees and internally displaced persons were helped as a result of the USAID program. Vulnerable groups, including women and children, benefitted especially.
Principal Contractors, Grantees, or Agencies: In keeping with the priority to support the Peace Accord and foster reconciliation, support will be provided to organizations such as UNMOT and UNDP/UNOPS among others. The TASIF will be supported through funds to the Counterpart Consortium for technical advisors and through funds to the World Bank for community-based water projects. American PVOs have played a significant role in providing USAID-funded relief assistance and in transitioning to development-oriented activities, especially in troubled regions of Tajikistan. It is anticipated that some will continue to be engaged in development activities within the reconciliation framework. Groups that have received USAID funds include Save the Children/U.S., Relief International, CARE, World Food Programme, Mercy Corps, and AKF.
Major Results Indicators: Year Baseline Target Percent of "Reduced Human 1996 10% Not applicable Suffering and Crises Impact" 1997 50% resources implementing 1998 70% reconciliation programs 1999 70%
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