DUSHANBE, April 14, 2011, Asia-Plus — The Asian Development Bank (ADB) has approved a $45 million Strengthening Public Resource Management Program grant to help Tajikistan increase public funding for social policies, the ADB Tajikistan Resident Mission reports.
Tajikistan recovered from the global financial crisis, supported by the government of Tajikistan’s anti-crisis program; a rebound in remittances; and higher global prices for aluminum and cotton, which represented 83% of total exports in 2010. However, while economic recovery is under way in Tajikistan with 6.5% growth in 2010, the country’s capacity to finance social policies is limited, and fiscal support is needed to increase critical social expenditure.
“ADB’s funding will allow the government to implement long-needed reforms in tax, social protection, and public financial management, and will provide resources to ensure that critical social expenditure is included in the 2011 and 2012 budgets,” said Joji Tokeshi, ADB”s Country Director for Tajikistan.
The program aims to support improvement of selected aspects of tax policy and administration. The program will also assist the Ministry of Labor and Social Protection to design, implement, and evaluate social safety net pilot schemes of noncash pension payments, and the targeting and consolidation of social benefits.
The program also aims to boost transparency and efficiency in public expenditures through the implementation of a new Law on Internal Audit in the Public Sector, and the enactment and implementation of a new Law on Public Finances to unify the Medium-Term Expenditure Framework with the annual budgeting process.
The Ministry of Finance, the Tax Committee, and the Ministry of Labor and Social Protection will be the main implementing agencies for this program, which is expected to run until April 2013.
The grant will be released in two tranches: the $20 million first tranche will be released upon grant effectiveness; the $25 million second tranche is expected to be released in August 2012, subject to compliance with the agreed conditions.
