DUSHANBE, July 7, 2010, Asia-Plus  -- The Government of Tajikistan and the World Bank have signed an agreement on the US$ 25.4 million Fourth Programmatic Development Policy Grant for Tajikistan.

The document was inked here today by Mr. Safarali Najmiddinov, Minister of Finance of Tajikistan, and Mr. Motoo Konishi, World Bank regional Director for Central Asia.  The Fourth Programmatic Development Policy Grant is aimed at helping the Government of Tajikistan mitigate the impact of the global economic slowdown and to help it continue to implement its medium-term reform program.

Speaking at the document-signing ceremony, Mr. Najmiddinov said the grant would enable the government to finance health and education sectors and social protection services.

Mr. Konishi, for his part, noted that the grant was part of a large programmatic grant, which was jointly funded by the World Bank (WB), the Asian Development Bank (ADB) and the Eurasian Development Fund.  “Reforms do not provide growth and do not provide more employment,” the WB regional director for Central Asia, “Reforms just create environment, conditions favorable for further economic growth.  The further situation depends on to what extent the government will skillfully manage and take measures and to what extent the population will be able to take advantage of implementation of reforms in order to raise level of employment and provide economic growth.”

We will recall that the World Bank’s Board of Executive Directors approved the US$ 25.4 million Fourth Programmatic Development Policy Grant for Tajikistan on June 23, 2010.

Tajikistan has been severely affected by the global financial crisis mainly through a sharp decline in remittances which reduced the real income of the population.  While the economy is expected to improve in 2010, the public finances remain under pressure due to unanticipated shortfalls in revenue, which is putting pressure on the balance of payments, reserves, the exchange rate, and the current account.  At the same time, the need to assist returning migrants and others who have lost their jobs with social services has increased.   The grant will help the government to provide essential social services and to sustain its ongoing reform and poverty reduction program by helping to partially fill the unanticipated financing gap created by the global economic crisis.

The grant will also help sustain the confidence of investors by supporting policies to promote macroeconomic stability, encourage private investment, and create a professional public service—essential if the economy is to modernize and grow.