Day: April 6, 2022

According to the EBRD Dushanbe Resident Office, the official signing ceremony was held in Kulob City on April 5 with participation of Kulob Deputy Mayor Orzu Homidiyon.

A new financial package of US$4 million will be provided by the EBRD and the GCF under the Bank’s Green Economy Financing Facility (GEFF). It will consist of an EBRD loan of US$3 million, which will be disbursed in local currency, and concessional financing of US$ 1 million by the GCF.

HUMO was the first financial institution in Tajikistan to join GEFF back in 2019 and successfully utilized the first loan. The new funds will help increase access to green technologies for local households and small and medium-sized enterprises (SMEs).

The project is supported by technical assistance funded by the GCF and the Government of Korea, and incentive payments from the EU’s Enhanced Competitiveness of Tajik Agribusiness Program (ECTAP), which promotes competitiveness in the agribusiness sector.

HUMO is a subsidiary of Gojo and Company Inc., a Tokyo-based investment holding company promoting greater financial inclusion in developing countries. It is the second largest microfinance institution in Tajikistan serving mainly small and microbusinesses in retail and agribusiness sectors.

The GEFF program is part of the Bank’s Green Economy Transition (GET) approach and the EBRD is planning to scale up its climate and environmental finance and make more than 50 percent of its annual investment green by 2025.

Through GEFF, the EBRD supports businesses and households investing in green technologies. Since the launch of this financing instrument, and with the support of donors, the EBRD has distributed over €5 billion via more than 170 participating financial institutions to support more than 218,000 green investments across 28 countries. The program helps avoid almost 9.5 million tons of CO2 emissions per year.

Green technology refers to a type of technology that is considered environmentally friendly based on its production process or its supply chain. Green technology can also refer to clean energy production, the use of alternative fuels, and technologies that are less harmful to the environment than fossil fuels.

Although the market for green technology is relatively young, it has garnered a significant amount of investor interest due to increasing awareness about the impacts of climate change and the depletion of natural resources.

To date, the European Bank for Reconstruction and Development has invested €854 million through 148 projects in Tajikistan’s economy.

Source: Asia-Plus

A press release issued by the Aga Khan Development Network (AKDN) Resident Office in Tajikistan says this initiative is aimed to promote green environment, the environmental protection and alleviatiion of climate change impact on environment that are common priorities for both AKAH and GBAO Government that consider an environment and climate change perspectives in all the current and future initiatives across the region.

The tree planting initiative was funded through Prince Sadruddin Aga Khan Fund for Environment (PSAKFE).

To combat the climate change impact on environment, rapid deforestation and the subsequent effects of soil and water degradation, GBAO Government pledged to increase tree planting awareness across the population to support the nature and promote the green spaces and environment for the well-being of population.

Greenhouse gas emissions, that has root cause from human induced climate change, affects the water cycle (floods and droughts), negatively impacting human health, threating food security, and leading to more frequent and intense natural disasters. Coping with climate change is a challenge in particular for a landlocked mountainous area like GBAO. Affected by extreme events and dependent on natural resources, the region is highly vulnerable to climate variability and climate change impacts.

This event also builds on the initiatives and plans set under the country’s National Determined Contribution (NDC) and AKAH climate change strategies and actions, and strongly contribute to mitigate risks for vulnerable populations affected, or likely to be affected, by climate change, as well as support climate change resilience and adaptation in the country. AKAH and GBAO Government are undertaking a comprehensive environment and climate stocktaking exercise for their agencies and environmental issues are a cross cutting themes across their joint programming, within which both implement, wherever possible, tree planting initiatives designed to offset greenhouse gas emissions, including on properties within their agency’s purview, or contribute to tree planting initiatives being implemented by other partners in the region.

AKAH merges the capabilities of Focus Humanitarian Assistance, the Aga Khan Planning and Building Services, AKDN’s Disaster Risk Management Initiative, and the PSAKFE.

AKAH works to ensure that poor people live in physical settings that are as safe as possible from the effects of natural disasters; that, residents who do live in high-risk areas are able to cope with disasters in terms of preparedness and response; and that these settings provide access to social and financial services that lead to greater opportunity and a better quality of life.

AKAH helps communities prepare for the worst; provides immediate relief after disaster strikes; and helps build back better and greener while planning for a better future. AKAH currently operates in Afghanistan, Tajikistan, Syria, Pakistan, and India, with plans to expand further in Central Asia as well as East Africa.

The Prince Sadruddin Aga Khan Fund for the Environment (PSAKFE) is the center for environmental activities of the Aga Khan Development Network.

Source: Asia-Plus

An article by him, in particular, notes that because of the highlands in the area, there is little land in the region. The land surface reaches about 18 thousand hectares. The province consists of 7 administrative districts and the city of Khorog.

The region’s economy lags behind other parts of the country.

Among all regions of Tajikistan, GBAO is the most ruralized. Here, 86.7% of the population lives in rural areas and only 13.3% in urban settlements.

Umarov notes that the process of deurbanization of society, which has been going on for the last 10 years, is considered as a negative phenomenon, since deurbanization leads to an increase in the agrarian overpopulation of society. The latter means a decrease in employment and a corresponding increase in unemployment. Over the past 5 years, the number of wage-earners in GBAO has decreased.

According to Umarov, in the country as a whole, there is an increase in employment. Unemployment in GBAO is becoming a very sensitive issue. According to official statistics, the unemployment rate as a percentage of those employed nationwide is 4.1%. This indicator reaches 2.1% in Dushanbe city, 2.1% in Sughd province, 3.1% in Khatlon province and 19.3% in GBAO.

Unemployment in GBAO reaches 19.3%; table / CABAR

The region’s manufacturing industry is facing numerous problems. GBAO reportedly produces only 0.9% of the total volume of gross industrial output nationwide, although the region’s population is 2.5% of the total population of Tajikistan.

Rural areas of GBAO are characterized by predominant development of crop and livestock industries. Dependence of rural population on agricultural industry due to unfavorable transport-geographical conditions remains high.

The statistics of this industry shows a sharp deterioration in the production of agricultural products. In 2010-2019, the production of grains in GBAO decreased by 61.0%, while in districts subordinate to the center (DSC) there was an increase of grains production by 4.2%, in Khatlon province by 11.6%, in Sughd province by 24.2% and in scale of Tajikistan by 19.2%.

The same applies to potatoes, which is recognized as “second bread” in this province. Over the reporting period, the volume of potato production in GBAO decreased by 54.0%. However, during the same ten-year period, the gross production of potato in Sughd province increased by 57.3%, in Khatlon province by 6.2%, in DSC by 38.5% and in the whole country by 30.8%.

Production of gourds in GBAO decreased even more by 7.8 times. At the same time, both on the national scale and in the context of other regions, there were very high growth rates of melon products (from 36.4% to 198.0%).

Sharp decline in the level of vegetable crops production in this region is also a cause for concern. This indicator decreased by 41.9% throughout GBAO. For comparison, on the scale of the country the total volume of vegetable production increased by 99.9%.

These negative trends are explained by the low level of yield of cereals, legumes, potatoes and other agricultural crops in GBAO. In 2019, grain yield in GBAO was 14.3 cwt/ha, while the national yield of these crops was 30.9 cwt/ha.

Potato yield in the same year in GBAO was 131.9 cwt/ha, while in Sughd province the figure was 200.5 cwt, and in DSC – 198.2 cwt/ha. Studies by the Pamir Biological Institute show that some brigades in Rushan district in Soviet times yielded 550-600 cwt of potatoes per hectare.

However, these opportunities are not fully exploited due to problems with specialists, fertilizers and plant protection from insects and diseases. Therefore, the central government of the country should develop a program to dramatically change the situation with yield, both for cereals and legumes, and potatoes, and vegetable crops.

At the same time, it is necessary to take into account the fact that transportation of potatoes, vegetables and gourds, as well as flour from the central regions of the country and from Kyrgyzstan is a very cargo-intensive process, which leads to higher prices in the local markets.

Many believe that the decline in crop production is due to excessive labor migration of the population. However, besides this, there are other reasons (a sharp decrease in the volume of organic fertilizers and a decrease in the proportion of humus in the soil, higher prices for mineral fertilizers, the practical elimination of the system of combating crop pests and diseases).

It should also be noted that from year to year the prices for mineral fertilizers and means of protection against pests and diseases of crops are increasing.

All of this combined has led to a deterioration in soil fertility. The percentage of humus concentration in the soil structure in GBAO is close to the critical level.

Umarov notes that the situation described above for GBAO is potentially dangerous for food security “if we take into account that cultivated areas per capita here are noticeably less compared to all other regions of Tajikistan.”

In GBAO there is 0.05 hectares of land per person. This indicator is 0.10 hectares in Sughd, 0.13 hectares in Khatlon province, and 0.9 hectares nationally. In addition, it should be taken into account that sown areas of GBAO are characterized by high stoniness and low level of natural fertility.

There were times when the Rushan district received 450 or more quintals of potatoes and fodder beets. In many fine contour areas of the Bartang River valley, 8-9 tons of wheat per hectare were obtained. The high yields were due to the high level of farming culture.

Unfortunately, over the past 30 years, many of the valuable skills of the local population to achieve high yields have been lost. The influence of the region’s agricultural science on the development of field farming has also declined sharply.

The expert says the belt of thermal waters along the Ghund River, which is 12 kilometers long, could become a producer of greenhouse crops

“Unfortunately, due to the low revenues of local budgets and their deficit, there is a widespread opinion that local budgets in GBAO cannot become self-sufficient. This position is supported by the managers who are in the republican offices, “ Umarov said, noting that this is the reason why the social sphere in GBAO is developing very slowly and is extremely far from meeting the needs of developing modern “human capital.”

Suffice it to say that between 2016 and 2020, no outpatient and polyclinic facilities were introduced in GBAO, while in the Sughd and Khatlon regions, as well as in Dushanbe, a large number of such facilities were put into operation.

During this time, in GBAO not a single hospital was built and commissioned, while in Khatlon province hospitals with 655 beds were commissioned. It is also completely unjustified that no pre-school institutions have been commissioned in GBAO for the last 5 years. During this time, 1301 pre-school institutions for children were commissioned in Khatlon province and 2049 beds in Dushanbe.

The expert notes that all of the above data indicate that GBAO needs significant assistance from the national authorities and the international community. In our opinion, the following measures seem to be very relevant:

a) A closer study of the experience of socio-economic development of mountain regions of the world and measures to boost the economy of these regions.

b) World experience shows that in the harsh conditions of mountain territories real results on socio-economic development of certain administrative territories can be obtained with a rigid system of public administration.

c) It is necessary to make an operational assessment of those resources of GBAO, the use of which can lead not only to the elimination of subsidization of regional and district budgets, but also to a drastic increase in development resources.

Source: Asia-Plus

The Asian Development Outlook (ADO) 2022, ADB’s annual flagship economic publication, in particular, notes that after a strong economic rebound to 9.2% in 2021 from 4.5% in 2020, Tajikistan’s gross domestic product (GDP) growth is forecast to slow to 2% this year.

Growth is reportedly expected to rise to 3% in 2023 driven by gains in industry and emergency assistance from development partners to support consumption.

“Following strong economic growth in Tajikistan last year, the picture is clouded this year due to geopolitical uncertainty. The impact of this turbulence on the Tajikistan economy is yet to be fully seen and assessed, and ADB may update its projections as the situation evolves,” said Officer-in-Charge of ADB’s Tajikistan Resident Mission Rhodora Concepcion.

Inflation, which slowed to 8% in 2021, is projected to reach 15% in 2022, reflecting higher prices for fuel and imported food, and pressure on the somoni from a plummeting Russian ruble.

The projection reportedly also reflects expected increases in public salaries and pensions, and higher electricity tariffs. In 2023, inflation is projected to drop to 10% with moderating global food and fuel prices.

The report highlights the importance of maintaining debt sustainability for macroeconomic stability.

Various initiatives can strengthen debt sustainability, including maintaining the prohibition on nonconcessional external borrowing; using cost–benefit analysis when selecting public investment projects and limiting the size of the investment budget; and improving the performance of loss-making state-owned enterprises (SOEs).

The report suggests promoting private sector growth through measures to improve the investment climate; reducing reliance on external borrowing by developing the domestic capital markets, including a secondary market in government securities to encourage commercial banks and other parties to buy and hold government debt; and regularly publishing Ministry of Finance reports on public debt, including audited annual statements of the 15 largest SOEs.

The government may also consider limiting fiscal deficits to 2.5% of GDP by cutting low-priority capital expenditure, phasing out tax exemptions, prioritizing spending more effectively, assessing public investment management, evaluating fiscal transparency, and addressing any shortcomings revealed, according to the report.

Since Tajikistan joined ADB in 1998, the bank has become the country’s largest multilateral development partner with $2.3 billion in total assistance, including over $1.7 billion in grants. ADB’s 2021–2025 country partnership strategy for Tajikistan focuses on three strategic priorities: structural reforms to enhance resource allocation and mobilization, improving labor productivity through human capital development, and fostering better livelihoods by investing in the land-linked economy.

Established in 1966, the Asian Development Bank is owned by 68 members—49 from the region.

Source: Asia-Plus