Abstract
Tajikistan’s economic performance has been satisfactory, but challenges still remain. Executive Directors agreed that the challenge is to support recovery while addressing risks to macroeconomic stability. They emphasized for prudent monetary stance to avoid inflation and also to address vulnerabilities in the financial sector. Directors agreed that structural reforms should be given top priority. They welcomed progress in establishing a framework for agricultural financing. Directors commended plans to improve the business climate through a reform of the tax regime and improved transparency and accountability of state-owned enterprises.
I. Relations with the Fund
(As of February 28, 2011)
I. Membership Status: Joined April 27, 1993; Article VIII
II. General Resources Account:
| SDR million | % Quota | ||
|---|---|---|---|
| Quota | 87.00 | 100.00 | |
| Fund holdings of currency | 87.00 | 100.00 | |
| Reserve position in Fund | 0.00 | 0.00 |
| SDR million | % Quota | ||
|---|---|---|---|
| Quota | 87.00 | 100.00 | |
| Fund holdings of currency | 87.00 | 100.00 | |
| Reserve position in Fund | 0.00 | 0.00 |
III. SDR Department
| SDR million | % Allocation | ||
|---|---|---|---|
| Net cumulative allocation | 82.08 | 100 | |
| Holdings | 69.81 | 85.04 |
| SDR million | % Allocation | ||
|---|---|---|---|
| Net cumulative allocation | 82.08 | 100 | |
| Holdings | 69.81 | 85.04 |
IV. outstanding Purchases and Loans
| SDR million | % Quota | ||
|---|---|---|---|
| ECF Arrangements | 65.27 | 75.02 |
| SDR million | % Quota | ||
|---|---|---|---|
| ECF Arrangements | 65.27 | 75.02 |
V. Latest Financial Arrangements
| Approval | Expiration | Amount Approved | Amount Drawn | |
|---|---|---|---|---|
| Type | Date | Date | (SDR million) | (SDR million) |
| ECF1 | Apr 21, 2009 | Apr 20, 2012 | 104.40 | 65.27 |
| ECF | Dec 11, 2002 | Feb 10, 2006 | 65.00 | 65.00 |
| ECF | Jun 24, 1998 | Dec 24, 2001 | 100.30 | 78.28 |
| Approval | Expiration | Amount Approved | Amount Drawn | |
|---|---|---|---|---|
| Type | Date | Date | (SDR million) | (SDR million) |
| ECF1 | Apr 21, 2009 | Apr 20, 2012 | 104.40 | 65.27 |
| ECF | Dec 11, 2002 | Feb 10, 2006 | 65.00 | 65.00 |
| ECF | Jun 24, 1998 | Dec 24, 2001 | 100.30 | 78.28 |
VI. Projected Payments to Fund2
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2011 | 2012 | 2013 | 2014 | 2015 | |
| Principal | 2.61 | 7.83 | |||
| Charges/Interest | 0.04 | 0.22 | 0.22 | 0.22 | 0.2 |
| Total | 0.04 | 0.22 | 0.22 | 2.83 | 8.04 |
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2011 | 2012 | 2013 | 2014 | 2015 | |
| Principal | 2.61 | 7.83 | |||
| Charges/Interest | 0.04 | 0.22 | 0.22 | 0.22 | 0.2 |
| Total | 0.04 | 0.22 | 0.22 | 2.83 | 8.04 |
VII. Implementation of HIPC Initiative:
Not Applicable
VIII. Implementation of Multilateral Debt Relief Initiative (MDRI):
| I. MDRI-eligible debt (SDR Million)3 | 69.31 | |
| Financed by: MDRI Trust | 69.31 | |
| Remaining HIPC resources | -- | |
| I. MDRI-eligible debt (SDR Million)3 | 69.31 | |
| Financed by: MDRI Trust | 69.31 | |
| Remaining HIPC resources | -- | |
II. Debt Relief by Facility (SDR Million)
| Eligible Debt | |||
|---|---|---|---|
| Delivery Date | GRA | PRGT | Total |
| January 2006 | N/A | 69.31 | 69.31 |
| Eligible Debt | |||
|---|---|---|---|
| Delivery Date | GRA | PRGT | Total |
| January 2006 | N/A | 69.31 | 69.31 |
IX. Safeguards Assessment
An update safeguards assessment of the National Bank of Tajikistan (NBT)—conducted in December 2009—noted that initial steps have been taken to address the risks identified by the special audit on cotton sector financing. However, considerable safeguards risks at the NBT remain. Both the accounting and the organizational structures are still fragmented, with no oversight over external and internal audits. Internal audit is weak and needs to increase coverage of core functions.
To address these issues, the NBT has implemented a number of initial steps: audited financial statements for end-April 2009 and end-December 2009 were published on the NBT website; an external auditor was reappointed for a multi-year term starting from FY2010; NIR reviews at test dates are being conducted every six months; and the internal audit of core functions was recently outsourced.
X. Exchange Rate Arrangements
Since June 2009, the exchange rate regime is classified as stabilized. The official exchange rate is based on all interbank transactions in foreign exchange. It is calculated and announced daily. With effect from December 9, 2004, the Republic of Tajikistan accepted the obligations of Article VIII, Sections 2, 3, and 4 of the Articles of Agreement. The Republic of Tajikistan maintains an exchange system that is free of restrictions on the making of payments and transfers for current international transactions, except for exchange restrictions maintained for security reasons that have been notified to the Fund pursuant to Executive Board decision No. 144–(52/51).
XI. FSAP Participation
Tajikistan participated in the Financial Sector Assessment Program during 2007–08, and the FSSA report has been published at http://www.imf.org/external/country/TJK/index.htm.
XII. Article IV Consultation
The 2009 Article IV consultation was completed on Apr 21, 2009.
XIII. Resident Representative
Mr. Aisen, Resident Representative of the Fund, started his assignment in Dushanbe in July 2010.
XIV. Technical Assistance
The following list summarizes the technical assistance provided by the Fund to Tajikistan since 2004.
| Fiscal Affairs: | |
| July 2004 | Revenue Administration Reform |
| December 2004 | Poverty and Social Impact Analysis |
| June 2005 | Public Financial Management |
| August 2005 | Tax Policy and Administration |
| August 2006 | Fiscal ROSC |
| May 2007 | Public Financial Management (Budget Classification) |
| February/July 2010 | Tax Policy and Administration |
| June 2010 | Public Financial Management Reforms |
| November 2010 | Public Financial Management (Regional Advisor) |
| Monetary and Financial Systems: | |
| May 2006 | Strengthening the Monetary Policy Framework and Liquidity |
| Management | |
| October/December 2009 and | NBT Recapitalization Strategy |
| September 2010 | |
| January 2011 | Improving Accounting Controls at NBT |
| Statistics: | |
| April 2004 | Data ROSC |
| October 2004 | General Data Dissemination System (GDDS) |
| June 2006 | Report on Monetary and Financial Statistics |
| National accounts and price statistics (Regional Advisor) | |
| March 2011 | BOP |
| Legal: | |
| January 2004 | Tax Legislation |
| May 2004 | Tax Legislation |
| 2006 | AML/CFT |
| October 2010 | NBT Law |
| Fiscal Affairs: | |
| July 2004 | Revenue Administration Reform |
| December 2004 | Poverty and Social Impact Analysis |
| June 2005 | Public Financial Management |
| August 2005 | Tax Policy and Administration |
| August 2006 | Fiscal ROSC |
| May 2007 | Public Financial Management (Budget Classification) |
| February/July 2010 | Tax Policy and Administration |
| June 2010 | Public Financial Management Reforms |
| November 2010 | Public Financial Management (Regional Advisor) |
| Monetary and Financial Systems: | |
| May 2006 | Strengthening the Monetary Policy Framework and Liquidity |
| Management | |
| October/December 2009 and | NBT Recapitalization Strategy |
| September 2010 | |
| January 2011 | Improving Accounting Controls at NBT |
| Statistics: | |
| April 2004 | Data ROSC |
| October 2004 | General Data Dissemination System (GDDS) |
| June 2006 | Report on Monetary and Financial Statistics |
| National accounts and price statistics (Regional Advisor) | |
| March 2011 | BOP |
| Legal: | |
| January 2004 | Tax Legislation |
| May 2004 | Tax Legislation |
| 2006 | AML/CFT |
| October 2010 | NBT Law |
II. The JMAP Bank-Fund Matrix
(As of March 31, 2011)
| Title | Products and Brief Description (pillars) | Provisional Timing of Missions | Expected Date of Delivery |
|---|---|---|---|
| A. Mutual information on relevant work programs | |||
| Bank Work Program in next 12 months | PDPG 5
| Identification/Pre-appraisal November 2010 Appraisal April 2011 | Board June 2011 Disbursement: July 2011 |
| Private Sector Development Dialogue | PSD TA support (Doing Business) ongoing since 2008 until June 2011 | ||
| Rural Investment Climate Study (with DFID TF) | Field work starts April 2011 | ||
| Governance | Institutional and Governance Review–development of analytical work Supporting demand-side governance–Governance Partnership Facility funded by DFID–Bank executed TF 2011-13 | December 2011 | |
| Agriculture Expand farmland restructuring to enable more rural people to become independent Build productive assets of rural communities in selected mountain watersheds | Supervision of Land Registration and Cadastral System Project March 2011 September 2011 Supervision of Community Agriculture and Watershed Management Project March 2011 September 2011 | Project closing March 2012 Project closing April 2011, to be extended to end 2012 | |
| Increase domestic food production and reduce the loss of livestock to help at least 55,000 poorest households | Supervision of Emergency Food Security and Seed Imports Project (with Russian Trust Fund) March 2011 September 2011 | Project closing March 2013 | |
| Improve the livelihood of cotton farmers and create the conditions for sustainable growth of cotton production | Supervision of Cotton Sector Recovery Project October 20–November 12, 2009 April 2011 September 2011 | Project closing March 2013 | |
| Water: Second project, Dushanbe water supply | Appraisal: April 2011 | ||
| Infrastructure | |||
| Supporting infrastructure rehabilitation and improvement in selected municipalities | Supervision of the Municipal Infrastructure project–April 2011 | Project closing in August 2011–likely to be extended | |
| Energy—emergency operation to provide electricity during the cold period from alternative (commercial) sources | Supervision of Energy Loss Reduction Project (with additional financing for emergency operation) April 2011 September 2011 | ||
| Conducting assessment studies for the Roghun HPP project | Contract award–February 2011 | ||
| Social safety nets | Social assistance and preparation of options for targeting Appraisal–April 2011 | May 2011 | |
| Health | |||
| Supporting improving equitable allocation of resources and efficiency in health sector provision | Supervision mission in April and September 2011 for Community and Basic Health Project | Closing Dec 31, 2012 | |
| Education | Fast Track Initiative–third | ||
| grant, starting April 2010 Supervision–March 2011 Education Modernization (incl. Additional Financing) Supervision–October, March and September 2011 | |||
| Financial Sector | FIRST TA consultant mission on bank insolvency law and secured transactions reform (law and registry) August 2010 WB missions to initiate FIRST TAs: March 2011 WB missions to monitor FIRST TAs and implementation of government-approved FSD action plan: May 2011 | ||
| Migration | IDF grant to support improvement of M&E works in the migration service under the government of Tajikistan May 2011 | ||
| Mining | IDF grant to support mining sector study and reforms and possibility of Tajikistan joining EITI September 2011 | ||
| Fund work program in next 12 months |
|
|
|
| B. Requests for work program inputs | |||
| Fund request to Bank |
| ||
| Bank request to Fund |
| May 2011 (tentative) | |
| C. Agreement on joint products and missions (as needed) | |||
| Joint products in next 12 months | Low Income Debt Sustainability Analysis | February 2012 | April 2012 |
| Title | Products and Brief Description (pillars) | Provisional Timing of Missions | Expected Date of Delivery |
|---|---|---|---|
| A. Mutual information on relevant work programs | |||
| Bank Work Program in next 12 months | PDPG 5
| Identification/Pre-appraisal November 2010 Appraisal April 2011 | Board June 2011 Disbursement: July 2011 |
| Private Sector Development Dialogue | PSD TA support (Doing Business) ongoing since 2008 until June 2011 | ||
| Rural Investment Climate Study (with DFID TF) | Field work starts April 2011 | ||
| Governance | Institutional and Governance Review–development of analytical work Supporting demand-side governance–Governance Partnership Facility funded by DFID–Bank executed TF 2011-13 | December 2011 | |
| Agriculture Expand farmland restructuring to enable more rural people to become independent Build productive assets of rural communities in selected mountain watersheds | Supervision of Land Registration and Cadastral System Project March 2011 September 2011 Supervision of Community Agriculture and Watershed Management Project March 2011 September 2011 | Project closing March 2012 Project closing April 2011, to be extended to end 2012 | |
| Increase domestic food production and reduce the loss of livestock to help at least 55,000 poorest households | Supervision of Emergency Food Security and Seed Imports Project (with Russian Trust Fund) March 2011 September 2011 | Project closing March 2013 | |
| Improve the livelihood of cotton farmers and create the conditions for sustainable growth of cotton production | Supervision of Cotton Sector Recovery Project October 20–November 12, 2009 April 2011 September 2011 | Project closing March 2013 | |
| Water: Second project, Dushanbe water supply | Appraisal: April 2011 | ||
| Infrastructure | |||
| Supporting infrastructure rehabilitation and improvement in selected municipalities | Supervision of the Municipal Infrastructure project–April 2011 | Project closing in August 2011–likely to be extended | |
| Energy—emergency operation to provide electricity during the cold period from alternative (commercial) sources | Supervision of Energy Loss Reduction Project (with additional financing for emergency operation) April 2011 September 2011 | ||
| Conducting assessment studies for the Roghun HPP project | Contract award–February 2011 | ||
| Social safety nets | Social assistance and preparation of options for targeting Appraisal–April 2011 | May 2011 | |
| Health | |||
| Supporting improving equitable allocation of resources and efficiency in health sector provision | Supervision mission in April and September 2011 for Community and Basic Health Project | Closing Dec 31, 2012 | |
| Education | Fast Track Initiative–third | ||
| grant, starting April 2010 Supervision–March 2011 Education Modernization (incl. Additional Financing) Supervision–October, March and September 2011 | |||
| Financial Sector | FIRST TA consultant mission on bank insolvency law and secured transactions reform (law and registry) August 2010 WB missions to initiate FIRST TAs: March 2011 WB missions to monitor FIRST TAs and implementation of government-approved FSD action plan: May 2011 | ||
| Migration | IDF grant to support improvement of M&E works in the migration service under the government of Tajikistan May 2011 | ||
| Mining | IDF grant to support mining sector study and reforms and possibility of Tajikistan joining EITI September 2011 | ||
| Fund work program in next 12 months |
|
|
|
| B. Requests for work program inputs | |||
| Fund request to Bank |
| ||
| Bank request to Fund |
| May 2011 (tentative) | |
| C. Agreement on joint products and missions (as needed) | |||
| Joint products in next 12 months | Low Income Debt Sustainability Analysis | February 2012 | April 2012 |
III. Statistical Issues
(As of March 31, 2011)
Assessment of Data Adequacy for Surveillance
30. General: Data provision has some shortcomings in the areas of national accounts, price statistics, and monetary statistics, but is broadly adequate for surveillance.
31. National accounts and price statistics: There are significant deficiencies in the statistical techniques for national accounts and price statistics, most notably in procedures to estimate the informal economy, and the techniques for imputation, replacement, quality adjustment, and introduction of new products in the price indices. Technical assistance from the World Bank and the Fund has recently focused on the quarterly calculations of GDP by expenditure and sectors, a framework for reconciling the two approaches, and the improvement of accuracy of the annual estimates. As regards to price statistics, the most important general issue is the further implementation of the system of prices and volumes, instead of presently used comparable volumes.
32. Government finance statistics: Government finance statistics (GFS) are based on cash transactions as recommended in the 1986 Manual on Government Finance Statistics. There are no plans to migrate the basis of compilation to the 2001 Government Finance Statistics Manual. In 2010, the authorities introduced an administrative classification of the budget. However, there are occasional budget classification issues within the economic classification of expenditures and the classification of above- and below-the-line transactions, which are being resolved with the help of a regional advisor.
33. Monetary and financial statistics: The safeguard assessment in 2010 concluded that the accounting function at the NBT is still fragmented and needs to be strengthened. These risks are mitigated by the statutory audits of the financial statements and the ongoing semiannual NIR reviews by external audit firms. The authorities have yet not adopted the latest methodology for the compilation of monetary statistics and reporting of monetary data through the standardized report forms introduced to all IMF member countries in 2004. Thus, the monetary data published in International Financial Statistics are outdated with respect to the methodology and timeliness as well.
34. Balance of payments: There is a need for consistency in applying the residency concept in the balance of payments and the national accounts, and the scope of the foreign trade data needs to be improved to cover the shuttle trade.
Data Standards and Quality
35. Tajikistan began participating in the General Data Dissemination System (GDDS) on November 17, 2004. Metadata is updated regularly. The authorities have indicated their interest in graduating from the GDDS to the Fund’s Special Data Dissemination Standard (SDDS). They have appointed a national SDDS coordinator and requested technical assistance for this purpose.
36. Data ROSC was published on March 30, 2005.
Reporting to STA
Country page in the International Financial Statistics (IFS) has been published since February 2003.
Tajikistan: Table of Common Indicators Required for Surveillance
(As of March 31, 2011)
Includes reserve assets pledged or otherwise encumbered, as well as net derivative positions.
Both market-based and officially determined, including discount rates, money market rates, and rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government comprises central government (budgetary, extra budgetary, and social protection funds) and state and local governments.
Including currency and maturity composition.
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); NA: Not Available.
Reflects the assessment provided in the data ROSC published in April 2005 and based on the findings of the staff mission during April 2004 for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).
Same as footnote 7, except referring to international standards concerning source data, statistical techniques, assessment and validation of source data, assessment and validation of intermediate data and statistical outputs, and revision studies.
Tajikistan: Table of Common Indicators Required for Surveillance
(As of March 31, 2011)
| Memo Items: | |||||||
|---|---|---|---|---|---|---|---|
| Date of latest observation | Date received | Frequency of data6 | Frequency of reporting6 | Frequency of publication | Data Quality –Methodological soundness7 | Data Quality –Accuracy and reliability8 | |
| Exchange Rates | 03/25/11 | 03/29/11 | D | W | W | ||
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | 03/25/11 | 03/29/11 | D | W | W | ||
| Reserve/Base Money | 03/18/11 | 03/29/11 | W | M | W | O, O, LO O | LO, O, O, O, NO |
| Broad Money | 01/31/11 | 03/16/11 | M | M | M | ||
| Central Bank Balance Sheet | 03/18/11 | 03/29/11 | W | M | W | ||
| Consolidated Balance Sheet of the Banking System | 01/31/11 | 03/15/11 | M | M | M | ||
| Interest Rates2 | Feb/11 | 03/29/11 | M | M | V | ||
| Consumer Price Index | Feb/11 | 03/28/11 | M | M | M | LO, LO, LNO, O | LO, LO, LO, O, O |
| Revenue, Expenditure, Balance and Composition of Financing3—General Government4 | Jan/11 | 03/30/11 | M | M | M | LO, LO, O, O | O, O, O, LO, LO |
| Revenue, Expenditure, Balance and Composition of Financing3—Central Government | Jan/11 | 03/30/11 | M | M | M | ||
| Stocks of Central Government and Central Government-Guaranteed Debt | Q4/10 | 01/25/11 | Q | Q | V | ||
| External Current Account Balance | Q3/10 | 01/25/11 | Q | Q | V | LNO, LNO, O, O | LO, O, O, O, O |
| Exports and Imports of Goods | Q4/10 | 01/2511 | Q | Q | V | ||
| GDP/GNP | Feb/11 | 03/28/11 | M/A | M | V | O, LNO, LNO, LNO | LO, LO, LNO, O, O |
| Gross External Debt5 | Q4/10 | 01/25/11 | Q | Q | V | ||
Includes reserve assets pledged or otherwise encumbered, as well as net derivative positions.
Both market-based and officially determined, including discount rates, money market rates, and rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government comprises central government (budgetary, extra budgetary, and social protection funds) and state and local governments.
Including currency and maturity composition.
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); NA: Not Available.
Reflects the assessment provided in the data ROSC published in April 2005 and based on the findings of the staff mission during April 2004 for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).
Same as footnote 7, except referring to international standards concerning source data, statistical techniques, assessment and validation of source data, assessment and validation of intermediate data and statistical outputs, and revision studies.
Tajikistan: Table of Common Indicators Required for Surveillance
(As of March 31, 2011)
| Memo Items: | |||||||
|---|---|---|---|---|---|---|---|
| Date of latest observation | Date received | Frequency of data6 | Frequency of reporting6 | Frequency of publication | Data Quality –Methodological soundness7 | Data Quality –Accuracy and reliability8 | |
| Exchange Rates | 03/25/11 | 03/29/11 | D | W | W | ||
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | 03/25/11 | 03/29/11 | D | W | W | ||
| Reserve/Base Money | 03/18/11 | 03/29/11 | W | M | W | O, O, LO O | LO, O, O, O, NO |
| Broad Money | 01/31/11 | 03/16/11 | M | M | M | ||
| Central Bank Balance Sheet | 03/18/11 | 03/29/11 | W | M | W | ||
| Consolidated Balance Sheet of the Banking System | 01/31/11 | 03/15/11 | M | M | M | ||
| Interest Rates2 | Feb/11 | 03/29/11 | M | M | V | ||
| Consumer Price Index | Feb/11 | 03/28/11 | M | M | M | LO, LO, LNO, O | LO, LO, LO, O, O |
| Revenue, Expenditure, Balance and Composition of Financing3—General Government4 | Jan/11 | 03/30/11 | M | M | M | LO, LO, O, O | O, O, O, LO, LO |
| Revenue, Expenditure, Balance and Composition of Financing3—Central Government | Jan/11 | 03/30/11 | M | M | M | ||
| Stocks of Central Government and Central Government-Guaranteed Debt | Q4/10 | 01/25/11 | Q | Q | V | ||
| External Current Account Balance | Q3/10 | 01/25/11 | Q | Q | V | LNO, LNO, O, O | LO, O, O, O, O |
| Exports and Imports of Goods | Q4/10 | 01/2511 | Q | Q | V | ||
| GDP/GNP | Feb/11 | 03/28/11 | M/A | M | V | O, LNO, LNO, LNO | LO, LO, LNO, O, O |
| Gross External Debt5 | Q4/10 | 01/25/11 | Q | Q | V | ||
Includes reserve assets pledged or otherwise encumbered, as well as net derivative positions.
Both market-based and officially determined, including discount rates, money market rates, and rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government comprises central government (budgetary, extra budgetary, and social protection funds) and state and local governments.
Including currency and maturity composition.
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); NA: Not Available.
Reflects the assessment provided in the data ROSC published in April 2005 and based on the findings of the staff mission during April 2004 for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).
Same as footnote 7, except referring to international standards concerning source data, statistical techniques, assessment and validation of source data, assessment and validation of intermediate data and statistical outputs, and revision studies.
Formerly PRGF.
When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.
The MDRI provides 100 percent debt relief to eligible member countries that qualified for the assistance. Grant assistance from the MDRI Trust and HIPC resources provide debt relief to cover the full stock of debt owed to the Fund as of end-2004 that remains outstanding at the time the member qualifies for such debt relief.