DUSHANBE, May 14, 2009, Asia-Plus — A May 13 meeting of heads of the key ministries of economic and social blocs of Tajikistan with representatives of donor organizations resulted in adoption of a joint statement.
Tajikistan’s economy is experiencing difficulties due to the global financial and economic crisis and the government has asked donor community for support for mitigation of effects of the crisis, the statement said.
According to the document, the situation in the macroeconomic sector is continuing to deteriorate with more intensity than expected: economic growth fro the first four months of this year has amounted to only 2.9 percent of gross domestic product (GDP). Economic shock has hit the country much earlier than expected and even prognosis of the International Monetary Fund (IMF) proved to be too optimistic.
Economic shock hit the country through the financial sector (problems with liquidity of commercial banks) and external sector (the financial crisis resulted in the cotton and aluminum prices falling and labor migrants’ remittances decreasing). Over the first quarter of this year, Tajikistan exports have decreased by 41 percent compared to the same period of 2008 and imports into the country have decreased by 11 percent over the report period. Remittances have decreased by more than 30 percent and the national currency has devaluated by 14 percent over the same three-month period.
The statement also notes that receipts in 2009 will decrease by 25 percent and this decrease in receipts requires fiscal regulation. Reconsideration of the budget for 2009 provides for decrease in all expenses with the exception of expenses on the social sector. However, the reviewed budget is aimed at keeping the fiscal deficit at the rte of 0.5 percent of GDP by means of artificial linkage of major part of expenditure items of the budget to implementation of the revenue part of the budget and availability of additional (grant) financing for supporting the budget.
Besides, the statement says the government will continue taking measures to create new jobs in agrarian sector and sector of the service rendering activities.
Donors welcomed the publication of the executive summary of the special audit carried out at the National Bank of Tajikistan (NBT) and prepared plan of actions for implementation of audit recommendations. However, donors wish the NBT to publish the plan of actions in accordance with agreements reached with the International Monetary Fund.
Donors understand that the government plans to complete resolution on solution of the problem of debts of the cotton sector, however, they would like to have an opportunity of detailed discussion of it before appropriate approval by the government. Donors also welcomed adherence of the government to providing leeway to farmers in choosing agricultural crops and further diversification of agriculture.
The statement also says the donors realize difficulties facing the government in the light of the economic crisis and note that the government ought to prioritize the crisis mitigation measures.
Donor organizations noted that they would consider opportunities of providing support to the budget and rendering technical and project assistance within the frameworks of their programs for this year.
However, the government, for its part, should retain reforms pace and demonstrate sustainable progress in land reforms, solution of the cotton debt problems and giving leeway to farmers – it is very important that the cotton debt issue will not arise again.
