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Tajikistan: Privatization To Revive War-Damaged Economy

Prague, 23 October 1997 (RFE/RL) -- Following the signing of a final peace agreement with the armed Islamic opposition, the government of Tajikistan is pressing ahead with privatization as an important way of reviving the shattered economy.

The second phase of the privatization program, in which medium size enterprises are being sold, has just begun. The first stage, dealing mainly with small enterprises, has been continuing since 1991, following the adoption of a privatization law by the Tajik parliament. Under this initial phase, many of the country's small enterprises, such as shops and restaurants, have been sold off. The third and final stage, or the "big privatization" as it is being called, is set to take place next year.

So far, however, only 27 percent of the total number of enterprises in Tajikistan have been sold. Progress has been slowed by the bloody civil war. In order to speed up the process, the government last year began offering privatization vouchers in exchange for people's savings frozen in the state savings bank accounts.

The deadline for taking up the offer expired at the start of this month. The deputy head of the privatization section of the Government Property Committee, Sherali Musoev, told an RFE/RL correspondent that only 60 percent of vouchers were distributed. This level of participation illustrated the widespread indifference to privatization.

The basic reason for that is simple: the average Tajik's savings are equal to about 1,000 Tajik rubles which, following bouts of inflation, corresponds now to the price of some 2 kilogram of meat.

Opinion polls show that 74 percent of citizens can not take part in the privatization process, mostly for financial reasons. But a fair number of Tajiks lost the right to participate because they were outside the country during the period of the distribution of vouchers. There are for instance the thousands of refugees who left the country during the civil war and who are now returning home. Their disentitlement was a matter of discussion between the government and opposition, but, according to Sherali Musoev, in the end result they lost the right to hold vouchers.

One of the consequences of this is that enterprises are being sold off to newly-emerged Tajik elites -- the government dignitaries and their relatives, and the leaders of armed groups, who gained enormous wealth in the past few years.

In addition, the privatization process is taking place sometimes in illegal conditions. Many profitable properties, for example, are being sold quietly without advertising or without open auctioning. In some cases, people know who will buy a profitable enterprises even before the auction takes place. Others who would be interested in buying shares are being intimidated.

In spite of these shortcomings and difficulties, the process of privatization is going ahead, and since January last year more than a thousand enterprises have gone into private hands. In total the sale of these companies has brought in more than 3.2 billion Tajik rubles (about $2.7 million). So far in the second phase, a silk factory and a combine for the production of construction materials in Dushanbe, a poultry farm in Khojand, and a leather and shoe factory in Kulob are the more important enterprises which have been transferred to private hands.

In the near future, the government will receive a list of another 200 enterprises for privatization.
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    Farangis Najibullah

    Farangis Najibullah is a senior correspondent for RFE/RL who has reported on a wide range of topics from Central Asia, including the impact of Russia’s invasion of Ukraine on the region. She has extensively covered efforts by Central Asian states to repatriate and reintegrate their citizens who joined Islamic State in Syria and Iraq.