Digital Tajikistan can be an important source of innovation, growth, and employment – provided that the country invests more in people’s skills, improves the business environment, and strengthens the digital infrastructure. This is the principal message from a recent World Bank report, entitled Reaping Digital Dividends, that outlines routes and instruments needed to take full advantage of the Internet and new digital technologies. The report examines the impact of information technologies and the Internet on economic growth and the development of countries across Europe and Central Asia, including Tajikistan.
The digital transformation is changing economies in ways that go well beyond technology, with access to high-quality, low-cost Internet connections being only the starting point: the parallel investment in the so-called “analogue foundations” of the digital economy is equally essential.
“Tajikistan, with its young and growing population, is well positioned to take advantage of the opportunities of the digital economy for faster growth and better job creation,” said Hans Timmer, World Bank Chief Economist for Europe and Central Asia when presenting the report in Dushanbe. “With investments in skills and a vibrant business climate, digital technologies can help to diversify the economy and make it more competitive as traditional forms of production and employment are under pressure.”
The report recommends that countries focus on helping people to develop the skills that are necessary to take advantage of digital opportunities. In Tajikistan, the levels of pre-primary enrollment remain the lowest in the region. This is an important constraint as socio-emotional and cognitive skills – which are crucial for learning to use new digital technologies – decline rapidly with age. Increasing pre-primary school enrollment and improving the quality of primary and secondary education in the country will help to increase the availability of skilled workers for the Internet economy.
The telecommunications sectors in the landlocked countries of Central Asia have been improving overall, but access to high-speed Internet is still limited and costly compared with other regions. In Tajikistan, only 17% of people use the Internet on any device, compared to 28% in the Kyrgyz Republic, 44% in Uzbekistan and 55% in Kazakhstan. Fixed-line Internet access in Tajikistan remains limited to major urban areas, where residents pay among the highest prices in the world for Internet service. The cost of a basic subscription package is equivalent to 16% of the average monthly income.
The Digital Dividends report recommends that Tajikistan improve competition in the telecommunications sector, along with broader business environment reforms, in order to help to make the Internet more affordable to citizens and firms.
“A competitive and growing ICT sector, requiring only relatively small upfront investments, will capture the gains of the digital transformation,” said Jan-Peter Olters, Country Manager for Tajikistan. “The World Bank Group is ready to support the Government of Tajikistan in implementing a digital agenda, strengthening regulatory frameworks, building capacities, and improving rural access as complementary policies to improving the overarching business environment.”
The Internet can make an enormous contribution to economic productivity by improving the efficiency of businesses, encouraging the entry and growth of more productive firms and the exit of less productive firms. Greater local competition also provides an incentive for firms to adopt the Internet and use it more intensively.
Because of poor Internet access and high prices, only 57% of firms in Tajikistan currently use e-mail to communicate with their clients and less than 40% of firms have a website. In order to reap the full potential of the Internet for firm productivity and firm entry, a greater emphasis should be placed on improving the business environment to promote competition.
