DUSHANBE, June 1, Asia-Plus – The World Bank Board of Executive Directors on May 30 endorsed a $15 million credit for Tajikistan’s cotton sector rehabilitation project, Asia-Plus has learned from the WB Dushanbe Office.
The project, to be funded by the International Development Association, aims at improving the livelihood of cotton farmers and supporting the cotton production in selected, low-income areas of Tajikistan. The project will assist the Tajik government with resolving the debt crisis among cotton producers, improving the policy environment, and increasing cotton output and profitability.
The aim of the project is to support government efforts to rejuvenate the cotton sector and create the conditions for sustainable growth of the Tajik cotton production. In addition to resolving the debt crisis, the project will guide and support policy reforms conducive to increased competition and higher producer returns, and demonstrate the capacity of privately owned family farms to drive future cotton production.
Debt resolution and policy reform will be supported at the national level. The remaining project components will be implemented in selected districts of Khatlon, which accounts for the highest share (60 percent) of cotton production in Tajikistan and has the highest incidence of rural poverty (75 percent of rural people live below the poverty line). The selected districts account for around forty percent of the region’s cotton output.
The specific project components include resolution of farmers’ cotton debt, support to policy analysis and reform, project implementation.
The loan has a maturity of 40 years with a grace period of 10 years. The project will be implemented over five years and has been prepared in parallel with the Asian Development Bank’s Sustainable Cotton Sub-sector Project. The World Bank emphasis on support for cotton producers and increased competition among processors complements the ADB’s focus on marketing and export promotion.
The World Bank’s mission in Tajikistan is to promote economic growth, reduce poverty, and encourage a better quality of life. The World Bank plays a role as a catalyst of change and an institution bringing global experience to developing countries. The financial assistance committed to Tajikistan amounts to nearly US$440 million, both in form of grants and concessional credits.
To date, the Bank has supported projects and carried out non-lending activities aimed at agriculture and rural development, health, education, social security, energy, water resources, infrastructure rehabilitation, and disaster management, among other things. World Bank assistance, in the form of soft loans, has helped the country rebuild the infrastructure destroyed during the civil war and has supported economic reforms.
