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Tajikistan: Donors Meeting Following Up On Dushanbe's Promises To Fight Poverty, Corruption

Top Tajik officials are gathering in London today and tomorrow for talks with donors on the country's progress in reducing poverty. Participants will also look at the disbursement of funds pledged last year.

Prague, 9 February 2004 (RFE/RL) -- A two-day followup meeting of Tajikistan's donors starts today in London. Donors include governments from around the world, as well as international organizations such as the International Monetary Fund and the World Bank.

President Imomali Rakhmonov's adviser on economic issues, Fayzullo Kholboboev, is leading the Tajik delegation, which also includes Finance Minister Safarali Najmuddinov and Murodali Alimardonov, chairman of the Tajik National Bank.

"[But] corruption is an ongoing problem. I think there'll be reluctance to disburse all of that money until they're sure that it's going to be more prudently used."
Anna Walker, an analyst at the London-based Economist Intelligence Unit, explained the significance of the meeting for the impoverished Central Asian nation. "It's important for Tajikistan in that financing by donors is one of its major sources of investment," she said. "It needs the money for improving infrastructure and for social payments. It's also important in that it indicates ongoing Western interest in the country, which is necessary for boosting investment."

Tajikistan is the poorest former Soviet republic, with 80 percent of its 6 million people living below the poverty line. A five-year civil war in the 1990s stunted economic development, hindered reforms, and discouraged investors. Direct foreign investment totaled only $36 million in 2002.

Participants at the London meeting are reviewing progress on implementing the government's action plan to reduce poverty. That plan focuses on improving health and education services, rehabilitating the country's crumbling infrastructure, and supporting private-sector development.

Kholboboev told RFE/RL that a review of the disbursement of funds pledged in the Tajik capital, Dushanbe, in May 2003 will be high on the agenda. "At some point, [we will pressure] donors to fulfill the promises they made in May at the Dushanbe meeting," he said.

Donors have been generous in their pledges, which totaled $900 million for the next three years within the framework of the Tajik government's poverty-reduction strategy.

But Walker notes that, in reality, these figures are unlikely to be disbursed in full. In 2001, donors pledged $390 million over the following two years for Tajikistan, but that engagement was not met. "Tajikistan hasn't yet received anything like as much as it was pledged at the last conference, when [$390] million was pledged. [Tajikistan] only received about $40 or $50 million of that. I think it's unlikely they will receive the full $900 million," she said. "But certainly, they should improve on the last conference."

Walker notes that Tajikistan's economic infrastructure does not have the capacity to absorb such large amounts of money, making it hard for donors to identify areas where their money can safely be spent. Disbursement also depends on governance reforms and a reduction in corruption. "The banking system has been improving. So that should help," Walker said. "[But] corruption is an ongoing problem. I think there'll be reluctance to disburse all of that money until they're sure that it's going to be more prudently used."

At the same time, Rustam Bobojonov says the Tajik government is becoming more cautious itself concerning the credits it receives from international lenders. Bobojonov is an independent expert on economics in Dushanbe. "Before, the Tajik government used to take credits and grants without looking at the interest it had to pay and when it had to reimburse," Bobojonov told RFE/RL. "But now, Tajikistan has a very good specialist [in Fayzullo Kholboboev]. And [now] they ask donors about advantageous conditions before taking credits."

Bobojonov says one priority is to restructure or write off Tajikistan's $1 billion in external debt, which represents 65 percent of its gross domestic product.

Rashid Ghani is an independent analyst in Dushanbe. He says donor meetings enable Tajikistan to attract international attention to its economic and social challenges. "Such gatherings are a good [opportunity] to show the world community the problems Tajikistan faces," Ghani said. "Not all the money will come, but the interest of the world community to Tajikistan is also good because it's some kind of support for Tajikistan, not only financially but [also] morally [and] politically."

(Mirzo Salimov and Sojida Djakhfarova of RFE/RL's Tajik Service contributed to this report.)