Economics & Development

The development objective of the Second Competitive And Inclusive Tajikistan Development Policy Operation for Tajikistan is to further open the economy to competition and create favorable market conditions for private sector development, and to strengthen the efficiency, transparency, and accountability of the public sector for better service delivery. The operation supports economy-wide and sectoral measures to level the playing field by improving telecom and digital market governance through transparent spectrum allocation and licensing, public consultation and dispute resolution rules, and more predictable regulation to lower broadband costs; advancing civil aviation liberalization and affordability with updated cost-reflective methodologies for jet fuel and airport charges, and stronger safety oversight aligned with International Civil Aviation Organization (ICAO) standards; strengthening the investment framework via investor facilitation and grievance mechanisms and clearer work-permit rules for skilled foreign labor; streamlining state support by reducing tax and customs incentives and establishing the basis for a public state-aid registry; and modernizing competition policy through a new law and enhanced investigative powers to deter cartels and abuse of dominance. Public sector efficiency and inclusion are reinforced by improved state-owned enterprise (SOE) governance—introducing independent boards, gender-diversity and environmental risk governance aligned with Organisation for Economic Co-operation and Development (OECD) guidelines, mandatory publication of International Financial Reporting Standards (IFRS)-based audited financials, and medium-term strategies—alongside measures in the power sector to move toward full cost recovery and operational resilience, including energy efficiency standards for aluminum production and phased tariff adjustments for the Tajik Aluminum Company (TALCO) to reduce quasi-fiscal deficits and enable private renewable energy investment. The program also enhances social outcomes by operationalizing transparent Rogun Hydropower Plant revenue management and benefit sharing, improving the targeted social assistance (TSA) through a revised proxy-means test and a higher budget share, refining rule-based school financing to improve equity, and publishing budget allocations and expenditures received by frontline health and education units to bolster accountability. Expected results include more affordable mobile data, increased weekly international flights and higher ICAO safety scores, a rise in newly registered foreign companies, higher domestic tax revenues with clearer state-aid decisions, effective antitrust enforcement actions, more women on SOE boards and wider SOE financial disclosure, lower technical and commercial electricity losses with at least 300 megawatts of new private renewable capacity, full cost-of-supply coverage for large industrial tariffs, greater TSA funding, more schools meeting quality standards, and improved Public Expenditure and Financial Accountability (PEFA) ratings for resources reaching service delivery units.