IFC, World Bank, the Government of Tajikistan Discuss Future Reform Efforts to Improve the Country’s Business Climate
IFC, the World Bank, and the Tajik State Committee on Investments and State Property Management, have held a joint presentation and discussions with key decision makers of the recently released World Bank Group Doing Business 2008 report. The report, updated annually, ranks 178 economies on the ease of doing business based on 10 indicators of business regulation.
Tajikistan ranks 153 in the overall global standing on the ease of doing business in this year’s report. It had reforms in one of the 10 areas studied by the report—starting a business became easier due to recent business licensing reforms. Tajikistan ranks 161 in starting a business, up 10 places from the previous year.
“Results show that as governments ease regulations for doing business, more entrepreneurs go into business. This has been especially evident in Eastern Europe and Central Asia,” said Simeon Djankov, the report’s lead author.”
There is however, room for improvement. Compared to other economies in the region, Tajikistan continues to rank low on most of the Doing Business indicators. Tajikistan’s ranking slipped in several categories this year, including dealing with construction licenses, getting credit, registering property, paying taxes, protecting investors, and trading across borders.
According to Andrea Dall’Olio, IFC Project Manager for the Tajikistan Business Enabling Environment Project, several factors contributed to this lower ranking. They include poor performance on some indicators such as tax administration, the faster pace of regulatory reform in other countries, and the addition of three new countries to the Doing Business 2008 report list.
“Several key issues continue to hinder progress for small and medium enterprises. For example, Tajikistan has no credit bureaus, which makes lending risky. Also, conditions for cross-border trade and the legislation that protects investors are in serious need of improvement,” said Dall’Olio.
IFC and the World Bank also discussed the Tajikistan Private Sector Development Strategy, which was developed jointly by the Tajikistan government and the World Bank. According to this document, despite Tajikistan’s significant economic growth in recent years and its progress in various areas of economic reform, private sector investments still account for only about 50 percent of GDP compared to 65 percent in Kyrgyz Republic, 65 percent in Kazakhstan, and 70 percent in Armenia.
“The country’s legal and regulatory institutions and public sector administration need to be improved further in order to provide an environment truly conducive to domestic and foreign private investment and efficient public service delivery,” said Edward Brown, World Bank Country Manager in Tajikistan. “It is vital for the Tajikistan government to focus on those policies, laws, regulations, and administrative procedures that pose the greatest barrier to entry or to the cost of doing business for enterprises. We look forward to helping the government minimize these barriers to ensure continued investment and private sector growth in the country,” he said.
To download the full Tajikistan Private Sector Development Strategy report, visit http://www.worldbank.org/tj
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that poor people have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through loan participations and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit www.ifc.org.
About the World Bank/IFC Doing Business Project
The Doing Business project is based on the efforts of more than 5,000 local experts – business consultants, lawyers, accountants, government officials, and leading academics around the world, who provided methodological support and review. The data, methodology, and the names of contributors are publicly available online at www.doingbusiness.org.
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