State-of-the-Union by the President of the Republic of Tajikistan to the Parliament of the Republic of Tajikistan

Distinguished Members of Senate and Lower Chamber of the Parliament,

Esteemed Compatriots,

The 2018 was indeed a historical year for the noble people of Tajikistan and the independent state of the Tajiks by its very important and memorable events.

On World Water Day, 22 March 2018, our fourth global initiative in the field of water resources – the International Decade for Action: Water for Sustainable Development (2018-2028) was officially launched with the participation of the President of Tajikistan in the UN General Assembly.

Due to the climate change the issue of protection of clean drinking water sources and resources has turned into one of the main challenges of the Globe’s population, and Tajikistan is recognized as an initiator and champion in this area at the international level.

The launch of the first unit of Roghun Hydropower Plant, a life-changing facility of the century and a significant factor for bright future of Tajikistan, thanks to which the long-awaited aspirations of the noble and industrious Tajik people have come true, is a milestone event in the history of independent Tajikistan and a firm step of our country toward the achievement of our first national strategic objective, i.e. – energy security.

We have addressed the political, economic and trade issues with the Republic of Uzbekistan that existed during more than two decades which embodies the third historical event in the social, economic and spiritual life of the people.

We achieved this objective thanks to bilateral meetings and negotiations, state visits of the heads of both countries and signing of Strategic Partnership Agreement between the two friendly and brotherly countries. This made it possible to ensure movement of people, thanks to which during the nine months of this year more than two million citizens of our countries visited their relatives, and the economic, trade and humanitarian cooperation between our states enhanced by several times.

The Government of the Republic of Tajikistan has been making efforts to achieve the objectives reflected in our National Development Strategy, and identified as a supreme goal the improvement of the living standards of the population by addressing the issues related to sustainable economic growth, human development, public administration system, our country’s export capacity, improving of investment climate, private sector development and enhancement of the labor market.

This year we made solid steps towards achieving the indicators envisaged in our strategic documents on economic and social development.

As a result of implementation of the tasks outlined in the Address of the last year, in 2018 our GDP growth made 7.3% and the inflation was maintained at the rate of 5.4%.

We ensured progress of the various economic spheres, particularly manufacturing sectors, created more than 150 000 new jobs and for the last three years the number of our citizens engaged in overseas labor migration reduced by 25%.

The monetary income of population increased by 11%, their savings in the banking system of our country increased by 9% in comparison with the last year and the poverty rate declined to 29,5%.

Positive trends in the social fields continued, and particularly the indicator of population’s longevity reached 75 years and mother and child mortality rate decreased by 2.1 and 2.6 times respectively compared to 1998.

The population of our country increased to 9.1m in 2018 against the 5.4m in 1990 and it is expected that in 2023 it will reach 10m.

This requires us to pay an utmost attention to addressing the socio-economic issues, including improvement of living standards of population and enhancement of manufacturing capacity of our country.

We need to effectively use the land and water resources and increased food production in order to improve the public welfare.

In September 2018, the wage of staff in the budget-funded entities, including educational, science, healthcare, culture, and social protection agencies and other institutions as well as retirement allowances and scholarships were increased by up to 15%. The Government of the country will allocate additionally 1.2 billion TJS for this purpose in 2019.

Based on the programs we adopted we need to make further efforts in order to lay the necessary foundation for increasing the wage of staff of the budget-funded entities and pensions in the coming years.

Thus, we need to increase the wage and retirement allowances in the coming year through increasing the revenue part of the budget.

We have to take into account the fact that the public budget revenue will ramp up to 24 billion TJS in 2019 compared to 6.5 billion TJS in 2010, the increase of which will make almost four times and the social expenditures will account for 43.7%.

The budget of 2019 compared to 2018 will foresee increase of funding for the spheres of culture and sport by 17.3%, science and education by 14%, social insurance and social protection of population by 9.5% and healthcare by 7.2%.

According to the plans we approved, compared to 2018 in 2019 the public budget revenue will increase by 13%, GDP growth rate by more than 7%, and inflation rate will not exceed 7% and the population’s income will increase at least by 10%.

In order to ensure the proper implementation of these objectives, the Government of the country needs to continuously analyze the economic and social implications of the process of changing international economic relations, situation in financial markets, trade conflicts and sanctions, and undertake necessary measures with a view to preventing the negative impact of such factors on our national economy.

Moreover, the Government should undertake decisive steps to maintain stable macroeconomic indicators, to ensure solid operation of the banking system, enterprises and to improve investment climate.

The Ministry of Finance has to implement the Public Finance Management Strategy based on the country’s priorities, targets of the public budget revenue and expenditures, transparency of its spending by proposing prospective reform plans in these areas.

I have to note that the banking system plays an important role in ensuring socio-economic development of the country, especially enhancement of the real sectors of the economy, improvement of the national export capacity, creation of new jobs and expansion of public budget revenue sources.

During eleven months of 2018 the banks of the country issued 7,250 billion of loan to entrepreneurs and public at large, which increased by 201 mln. or 3% compared to the similar period of the last year.

In this regard, the National Bank needs to undertake serious measures to increase the credits offered to the private sector, particularly in manufacturing sectors, maintain a stable banking system, improve the quality of services, train highly qualified banking specialists and ensure their professional development.

It is also important to increase cashless payments and to widely introduce them for payment of services and in the trade in 2019 in the country.

In 2018, the share of cash applied outside the banking system accounted for 64 percent of the country’s money turnover.

Taking into account the modern trends, we need to enhance our activities for introduction of digital economy and application of digital technologies in the social and economic sectors.

We have identified the energy security and energy efficiency, ensuring Tajikistan’s connectivity and its transformation into a transit country, food security and access of the country’s population to quality food, as well as productive employment as our strategic objectives, and we have been implementing our agenda on transition from agrarian to industrial economy.

The measures undertaken by the Government made it possible to increase the share of industry in GDP from 15.2 to17.3% during the last 3 years.

Taking into account the importance of industry in addressing socio-economic issues and creating of new jobs, I propose to proclaim accelerated industrialization of our country as our fourth national objective. In this regard, it is important to increase the share of industry in the GDP to 22% by 2030.

To achieve this objective it is crucial to strictly control the implementation of approved sectorial programs and investment projects, and ensure their effective and quality enforcement.

Hence, the heads of province, towns and districts need to enhance their activities in attracting direct investments, construction of new manufacturing enterprises, rehabilitation of idle enterprises and creation of new jobs and report on their progress to the Government of Tajikistan every semester.

The lack of some raw materials in the country for manufacturing new products is yet to be addressed.

In this regard, I would like to propose to exempt the imported raw materials for processing and manufacturing of final products from VAT and customs duty, except the raw materials available in Tajikistan and excisable goods, and relevant authorities need to develop the mechanisms of enforcement of this incentive within a month.

The import substitution measures we have undertaken made it possible to supply the population with the locally produced basic food products, household devices and construction materials and to reduce the import of food products by almost 3 billion TJS or by 31 % during the last three years.

This year the production of 15 out of 20 types of export-oriented products and goods increased.

However, the lack of competitiveness and high production cost of the products of some enterprises, inadequate protection of interests of our exporters in other countries has been impeding the diversity of production and export of our products.

Therefore, the Government of Tajikistan needs to ensure mutually beneficial cooperation with the neighboring counties in order to expand our country’s export and transit capacity for transportation of goods and creation of “green corridors”.

The Ministry of Foreign Affairs, the Ministry for economic development and trade, the Exportation Agency and the heads of province, town and district have to enhance their activities in presenting the products made in Tajikistan, exploring export markets, finding production and trade partners and protecting local entrepreneurs’ interests abroad.

Dear Members of Parliament,

The economic reforms we have implemented during the recent years have been promoting improvement of business environment and investment climate and encouragement of foreign investments, including direct investment.

Currently 70 public investment projects amounting 30 billion TJS in total are ongoing in the country.

During the last 10 years more than 33 billion TJS of foreign direct investments were encouraged into the economy of Tajikistan, the majority of which are channeled to sectors of energy, communication, construction, extraction and processing of minerals and infrastructure.

With a view to achieving our objectives, we will continue cooperating with our development partners, and will channel the encouraged foreign direct investments to import of the latest manufacturing technologies and machinery, creation of new jobs and increase of the production of competitive domestic products.

In this regard, the Government needs to undertake further measures aimed at improving the investment climate, encouraging foreign direct investments and promoting investment projects.

I outlined my ideas on many priority issues, including ease of permit system, inspection of businesses and tax administration at the Entrepreneurship Forum held on October 15 of this year and instructed the authorities in charge to address the existing shortcomings.

Based on the Forum discussions and recommendations we developed and approved a plan of action and the relevant authorities in charge need to follow up and ensure its implementation.

Currently, with a view to improving the investment climate in the country we introduced risk based inspection of businesses.

However the provisions of the legislation in this area are not always respected by some inspection authorities.

This year, with a view to avoiding unreasonable inspections and check-overs and, thereby creating a favorable environment for development of entrepreneurship we announced two-year moratorium for all inspections of manufacturing enterprises, and almost 2000 entrepreneurs have benefited from this incentives.

In order to compliment this process, I believe it is important to stop all types of inspections of manufacturing entrepreneurs in 2019-2020 and to ensure that the provisions of the Law of the Republic of Tajikistan “On the moratorium for inspection of manufacturing enterprises” are respected by all inspection and law enforcement agencies, including the Prosecutor General’s Office, Chamber of Accounts, Agency on State Financial Control and Fight Against Corruption, National Bank, and the tax and customs authorities.

With a view to ensuring compliance with the provisions of moratorium legislation, the Prosecutor General’s Office in cooperation with the State Committee on Investment and State Property Management needs to undertake necessary actions against the public authorities’ officers, who unreasonably interfere with the activity of entrepreneurs and create barriers for development of entrepreneurship.

To improve the level of legal, economic and financial awareness of entrepreneurs, to provide support in drafting business projects and exploring the ways of their financing, particularly, to newly established businesses and involvement of youth to entrepreneurship activities, the Government of Tajikistan needs to undertake necessary measures to create service centers in towns and districts of the country, which could also serve as training centers for entrepreneurs.

Additionally, in order to further support our entrepreneurs, I propose to launch “300 days of reforms for support of entrepreneurship and improvement of investment climate”.

Alongside with this, in order to eliminate administrative obstacles, to ensure effectiveness of operations and to simplify and modernize the public services to entrepreneurs and the population, the Government of the country needs to develop and submit for review the draft Law of the Republic of Tajikistan “On public services”.

Dear Compatriots,

During the last 10 years we have increased the country’s energy generation capacity by 1520 MW and installed and launched more than 1300 km of electricity transmission lines.

From the beginning of the ‘Rogun’ HPP construction we spent 24 billion TJS encourages from all sources of funding, including 3.9 billion TJS in 2018 alone for this facility, and in 2019 we envisage to allocate approximately 4 billion TJS for this purpose and to put into operation the second unit of this hydropower plant.

In September 2018, we commissioned “Tojikiston” HPP with the capacity of

© 2018 Ambassy Republic of Tajikistan to Turkmenistan