Economic Transformation and Institutional Development in Tajikistan

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Institute of Economic Research, Hitotsubashi University. (E-mail: ... medical facilities, and 200 educational facilities were completely or partially destroyed. .... 8 The Tajik government reached agreements with the IMF in May, 1996, on “Standby ...
PIE Project Discussion Paper Series No. 120 October, 2002

Economic Transformation and Institutional Development in Tajikistan *

Ichiro IWASAKI Institute of Economic Research, Hitotsubashi University (E-mail: [email protected])

Abstract: In Tajikistan, economic reform was substantially dela yed in the initial period of transition.

The negative effects of the long lasted civil war can be grasped here.

But in the

late 1990’s, the Government abruptly accelerated its steps towards a market economy.

For

instance, domestic pricing was almost liberaliz ed between 1995 and late 1996, and the state order syste m was completely abolished as early as before 1996.

Moreover, the Government succeeded

in establishing a relatively liberal trade and exchange syste m b y late 1998.

However, in

striking contrast with the remarkable success in economic liberalization, privatization of state-owned industrial enterprises showed little progress.

In additio n, the Rakhmonov

administration strove to prolong the life of inefficient enterprises b y maintaining a soft budget and institutional constraint—inherited from th e communist regime. marketization in Tajikistan, as a whole, is greatly out of balance.

For these reasons, Hence, the Government ought

to put in operation more drastic measures in such a way as to benefit from being a late starter in its economic transition.

*

JEL Classification Numbers: E21, P 31, P37.

T his research wo rk was supported b y the gr ants na med “Scienti fic Resea r ches of Priorit y Ar eas (B) 603: P roj ect on Intergenerational Equit y” and t h e gr ants na med “Research Proj ect on Econo mic Develop ment and Stabilit y in Ce ntral Asia a nd Caucasus” (P roj ect No. 14203004) fr o m t he Minis tr y o f Ed ucatio n, C ult ur e, Spo r ts, Science and Techn o lo g y o f J ap an. Fo r p r eparatio n o f this article, the Institute fo r Rus sian & East Euro p ean Eco no mic Stud ies (ROTOB O) also p ro vid ed fi nancial and technical s upport in 2001. Editorial assista nce by Ms. Yu ko Fuj i wara is gr atefull y ackno wledge d. T his p a p er is the e xte nd e d ver sio n o f my p a p e r ( 20 02 ) .

Economic Transformation in Tajikistan

1

INTRODUCTION Toda y, Tajikistan is facing two economic challenges.

The first challenge is economic revival

after a civil war whose combatants were the Communist P arty and the United Tajik Opposition (UTO) of the Democrats and the Muslims. 1 Dushanbe, capital of Tajikistan.

The political war broke out in Ma y 1995, in

Intensive g unfight soon developed into an all-out civil war.

Until a peace agreemen t was concluded in June, 1997, the Republic suffered a great man y hu man and material losses.

According to one report, about 50,000 people lost their lives and ove r the

same number of people became disabled.

Besides, nearly 0.6 million people were forced to

evacuate and about 60,000 people experienced hard refugee lives in northern Afghanistan.

In

addition, about 0.5 million citizens including man y technocrats and skilled workers fled their country.

The damage inflicted upon the economy and social infrastructure was also enormo us:

600 km of road, 165 bridges, over 200km of floods protective wall, 39,000 hectares of agricultural irrigation syste ms, 1,100km of power lines, 5,000 telephone lines, 36,000 houses, 80 medical facilities, and 200 educational facilities were completely or partially destro ye d. Additionally, factories and farmland at the battlefields were largely damaged. 2 The long lasting dispute severely damaged production activity in Tajikistan.

According

to official statistics, for five years in the beginning of the transition period, the gross domestic product recorded negative growth b y two digits (see Table 1).

As a result, the real output level,

which takes 1991—the end of Soviet era—as the standard at 100, fell drastically to 37.4 and industrial production fell even further, to 34.2 in 1996.

The extent of decrease in GDP and

industrial production in Tajikistan was the worst among all Central Asian countries (see Figure 2).

After 1997, the Tajik economy finally got back on track.

Yet, the after-effects of the civil

war combined with structural depression, which originated from the collapse of a centrally planned communist economy, and frequent natural disasters burdened the material sectors. 3

In

fact, the proportion of the industry, agriculture and construction in terms of GDP fell sharply after 1993 (see Table 2).

1

2 3

As for emplo yme nt, the industry and construction sector showed a

T he UTO was o r igi na ll y fo r me d in 1 99 3 in Af g ha ni stan. T his a nti -co mmu n ist fo r c e wa s mai n l y co mp o sed o f three p o liti cal gr o up s: T he Isla mi c Renais sance P art y (IR P) was the lead in g fo rce o f so -called “I sla mic-De mo cratic B lo cs”. T he IP R ad vo cated the revival o f the Isla mic sp irits in all sp heres o f the life in Taj ikista n. Seco nd gr o up was the De mo cratic P arty. T his Part y sto od fo r a creation of secularist de mo crac y, and mo stl y sup ported by i ntellectual s and yo un g ge nerations in ur b an areas. T he p o litical mo ve ment Lali B adakh sha n was t he las t o ne. It was orga nized fo r the r ights o f t he P amir i min or it y and their ho me r egio n, the Gor no -B ad akh sh an Auto no mo us Ob last. Fo r mo r e details o n the UT O a nd the c ivil war, se e Kuz mi n ( 20 01 ) a nd E I U ( 19 9 6, pp . 9 0 -9 3) . Wo r ld B a nk ( 19 9 4, p. 2 2) , I M F ( 19 9 6, p. 1) , AD B ( 19 98 , p . 3) . Fo r e xa mp le , the c o unt r y s uffer e d sub sta ntial fl oo d d a mage in 1 9 92 , 1 9 9 3, a nd 1 9 98 . As a r e sul t, r esid ents’ li ves ha ve b een ser io usl y affected ( Wo r ld B ank, 19 9 4, p. 22 ; ADB, 19 98 , p. 13 ) .

Economic Transformation in Tajikistan

sharp decline in the employment rate between 1993 and 2000.

2

The former experienced 42.7%

(from 213,000 emplo yees to 122,000), while the latter experienced 73.0% (from 126,000 emplo yees to 34,000) of such decline.

In contrast, the agricultural sector expanded its work

force during the same period b y 15.3% (from 945,000 to 1,090,000). 4

However, as time -series

dyna mics of labor productivity indicates, this phenomenon ma y be reflected b y a rapid increase in disguised emplo yment in agriculture (see Figure 3). 5

It is inferred that disguise d

unemplo yment rose due to the outflow of unemployed citizens from urban areas moving into rural areas and the long-lasting emplo yment slu mp , which continued to rise during the civil war. Consequently, even since 1997, the slump in the material sectors of Tajikistan has remaine d in critical condition, keeping the Government racking its brains for a viable solution. The second challenge is drastic restructuring of the national economy.

Since Tajikistan

became an independent state in September of 1991, 6 the Government has been more than willing to shift to a market economy. 7

However, it goes without sa ying that the civil war hampered the

Rakhmonov ad ministration in the promotion of economic reform, and, as we have seen afterwards, particularly in the early 1990’s, as state control over enterprise activities remained extensive. The turning point came in mid -1996 before the conclusion of the peace agreement.

In that ye ar,

the Government, supported b y the IMF and World Bank facilities, launched a full-scale economic stabilization program.

At the same time, the y took additional measures for the further

promotion of economic liberalization and enterprise privatization, which had in fact alre ad y restarted in 1995. 8

Subsequently, transition to a market economy in this country continued

developing, especially during recent years.

It is even evaluated that the gaps with other FSU

countries have been narrowing gradually.

Nevertheless, Tajikistan’s backwardness in its

economic transition still remains unsolved and the restructuring of its economic system is to date a heap of political problems. The aim of this paper is to trace the transition process toward a market economy in 4 5

6

7

8

Calcula te d b y t he a utho r b a sed o n I M F (2 0 00 , p . 6 5 ) a nd I M F (2 00 1 , p . 1 9) . “Dis gui sed une mp lo ym e nt” r e fer s to tho se wo r k e r s who , d e sp ite b e ing u ne mp lo ye d d ue to a la c k o f job op po rtunit ies, are in fact no t counted as suc h officiall y because t he y e arn their living b y far mi ng. T he Sta te me nt o f Sup r e me So vie t o n the I nd e p e nd e nc e o f the Rep ub lic o f Taj ikista n d a ted Sep te mb er 9 , 1 99 1 is eq uivale nt to this. Hereinafter, la ws a nd d ecrees cited in thi s p ap er are r e fer re d fr o m Na ro dn a ia Ga zeta a nd fr o m t he law d a tab a se o n CI S c o unt r ie s mad e a va ilab le in f u ll o n the Internet b y the U niversit y o f B r e men (htt p :// www. lexi nfo s ys.d e/le xin fo s ys/). Outlines o f refo r m p lan s d eclar ed b y the Go vern ment i n the b egi nni ng o f 1 9 90 ’s, see P l ys hev skii (1 99 3 , p p. 29 -3 0 ) . T he Taj ik go ver n me nt reached agree me nts wit h the IMF in Ma y, 19 96 , on “Sta ndby Arrange ment ” (To tal 22 millio n USD) and wit h the World B ank in Sep te mb er, 19 96 , o n “Agr icult ural Reco ver y and So cial Pro tectio n Cred it” (To tal 5 0 millio n USD), acco rd in g to ADB (1 99 8 , p . 1 0).

Economic Transformation in Tajikistan

3

Tajikistan, whose hardships are twofold, as already stated, and attempts to grasp what achieve ments have been made in building economic institutions for the development of the private sector.

For this purpose, the rest of the paper is organized as follows: The first section

describes the introduction of a law syste m on private business activities. deliberates the achievement of economic liberalization. frameworks and progress of enterprise privatiz ation.

The second

The third examines the institutio nal

The final section summarizes the author’s

conclusion.

LEGISLATION OF PRIVATE BUSINESS ACTIVITY Despite accelerating internal instability, the Republic’s Government and Parliament took very intensive measures toward legislating private enterprise activities for several years throughout the end of the Soviet e ra and right after independence.

The result was put into effect b y the

introduction of the Ownership Law, enacted in December 1990, as well as the Law on Entrepreneurship (December 1991), and the La w on Enterprises (June 1993), among others. These laws, as a whole, ensure liberal business activities based on private ownership and are still the basis of toda y’s Tajik law system on enterprise activities.

For instance, the Law on

Entrepreneurship, which was adopted b y the Parlia ment whose principle was to “vest entrepreneurs with possibilities to utilise the fruits of their own labor in an entirely different manner”, 9 emphasising liberty of enterprise activities.

All this is based on equality a mo ng

different forms of ownership as ordained by the Ownership Law. ownership, (b) collective ownership, ownership”).

10

These include: (a) state

(c) citizen ownership (later revised as “private

Furthermore, the Law on Entrepreneurship endows a wide range of rights

including some to favor, (a) establishing enterprises, (b) the acquisition of assets, (c) hiring and firing of emplo yees, (d) decisions on a wage syste m, (e) planning of economic activities, (f) establishing price and fees, (g) disposal of profit, (h) entry to foreign economic activities, and (i) effecting foreign currenc y exchange, among others (Article 7).

These rights were given to

domestic and foreign entrepreneurs after having approved the exclusive control right for the owner’s assets of the enterprise concerned (Article 14).

Moreover, in an effort to prevent state

intervention in entrepreneurial activities, this law prescribes in detail the responsibility of administrative authorities not to obstruct dome stic business activities (Article 21 to 27). Ensuring enterprise corporate bodies similar rights to those listed above, the Law on

9

Quoted fr o m the officia l explanation of the bill ’s ai m gi ven b y Tashta no v, Vice Chair ma n of the Supre me Soviet ’s Co mm ittee of Econo my a nd Fi nance (Na ro dn a ia Ga zet a, De c e mb e r 2 5 , 19 9 1) . 10 “Collective O wnership ” includ es o wnership b y labo r co llectives (e mp lo yee gr o up s), co op erative asso ciations, j o int-stock co mp anies, leasi ng ente rp rises and enterprise amalga mations (World B ank, 19 94 , p . 29 ) .

Economic Transformation in Tajikistan

4

Enterprises also provides the liberty to join and withdraw from an enterprise amalgama tion (obedinenie predpriyatii) (Article 4), which was banned during the Soviet era, and prohibits the intervention of national and local authorities in enterprise management and financial affairs (Clause 2, Article 12).

In addition, this law did not succeed in providing labor collectives’

direct participation in enterprise management, something “the Federal Law of USSR on Enterprises” (June 1990) did allow (Article 14 to 16).

Such prohibition further reinforces the

discretion of managers and asset owners b y giving labor collectives only the right to reach a “collective contract” (kollektivnyi dogovor) with the management side (Clause 2, Article 15). These provisions in th e Laws on Entrepreneurship and on Enterprises are aimed at promoting (a) thoroughgoing ownership principals concerning enterprise activity, (b) drastic expansion of discretion rights of asset owners and managers, and (c) national neutrality in business activities.

On the whole, these were to drastically change the enterprise management

principals of the Sovie t era.

Furthermore, these series of laws; the Law on Banks and Bank

Activities (February 19 91), the Law on Joint-S tock Companies (December 1991), the P residential Decree on Foreign Economic Activity of Domestic Entities in the Territory of Tajikistan (June 1992), the Law on Fo reign Trade Activities (December 1993), supplement the insufficient stipulations of the Law on Entrepreneurship and the Law on Enterprises, and heighten its lega l efficienc y.

In this sense, the law syste m the Tajik Government and P arliament prepared

between 1990 and 1993 is equal to that of o ther Central Asian countries. 1 1

It is a fact tha t

despite the adoption of repeated amendments and revisions, economic laws in Tajikistan have been regarded questionable due to (a) the incompleteness of unified procedures regarding law and regulations, (b) the lack of a central depository, and (c) inconsistenc y among laws and unclearness of the text of law. 1 2

There is no doubt that this is p artially attributable to

legislative stagnation during the civil war.

Yet, Tajikistan at least does not seem substantially

behind when comparing it to other neighboring countries.

However that ma y be, law system

reform without liberalization of the internal ma rket comes just to naught.

Therefore, we need to

examine measures for economic liberalization that play an important role in the actualization of a new legal system in Tajikistan—the main subject of next section. ACHIEVEMENT OF ECONOMIC LIBERALIZAITON Since immediately after independence, the Tajik government has taken a number of measures

11

Fo r mo r e r egar d ing t he legislatio n s ituatio n i n o ther Centr al Asia n co unt r ies, see I wa saki ( 2 00 1 , Part II). 12 IMF (2000, p. 44 ). Fu rther more, the IMF also po ints out t hat ma ny corrections, in a gree ment wit h inter na tio nal sta nd a rd s, wer e a d ded to e c o no mic la w b e t we e n 1 9 9 8 a nd 19 99 ( ib id .) .

Economic Transformation in Tajikistan

toward a drastic liberalization of its economy.

5

However, the attempts in the early transition

period were very limite d and it was not until the late 1990’s that this polic y field experienced remarkable development. This is typically exemp lified b y price liberalization.

Right after Russia and Kyrg yzstan

carried out sweeping price liberalization, the Tajik government, on January 1, 1992, repealed the official price upon 80% of goods and services all together.

8 industrial products and 15

consumer goods were excluded, but b y maintaining the official price against basic foods, main export goods, energ y products, transportation, communication and public services, the Government continued to influence domestic pricing.

Later there was an influx of former

Russian roubles form neighbouring FSU countries that had adopted their own currencies. brought steep inflation to Tajikistan and strained domestic markets. further strengthened price control again. 1 3

This

In turn, the Governmen t

In doing so, the Ministry of Finance and other

industrial ministries strikingly restricted price determination of influential enterprises by usin g a wide range of administrative guidance rights as allowed b y antimonopoly-related regulations and ordinances effective at the time. 1 4

As a result, the process of price liberalization in Tajikistan

came to a standstill and might have even retreated between late 1993 and the end of 1994. However, the Government changed its plan drastically in 1995.

That is to sa y, after

abolishing direct price control on all products except for six basic food ite ms 1 5 (January 1995) and phasing in food product price liberalizations (June 1995 and March 1996), domestic pricing came close to being completely liberalized. 1 6

Moreover, later laws against natural monopolies

and other monopolistic enterprises were prepared step b y step and the opaqueness of antimonopoly polic y was solved to a certain extent. 1 7 13

Wo r ld B a nk ( 19 9 4, pp . 10 -11 ), I M F (1 99 6 , p p. 4 1 -42 ) . T he a ve r a ge in fl a tio n r a te b e t we e n Januar y a nd Octo ber o f 19 93 was a b o ut 3 0 %, b u t tha t o f No ve mb e r a nd De c e mb er, whe n i nflo w o f the fo r mer Ru ssia n roub le beca me serious, reached 63% and 176% resp ectivel y. 14 See the Re so lutio n o f C ab inet o f Ministers o n th e Natio nal Re gistratio n o f Mo nop o listic Ama lga matio n s a nd E nte rp r ises d a ted M a y 2 4, 19 93 , the La w o n Re gula ti o n o f M o nop o l y Acti vit y and Develo p me nt o f Co mp etit io n d ated Dece mb er 2 7, 19 93 and Wo r ld B ank ( 1 99 4 , p . 117 ) . 15 B r e ad p ro d uc ts, whe a t flo ur, mil k, dail y p ro d uc ts, vegetab le o il, a nd me a t a r e inc lud e d her e ( I M F, 19 96 , p . 42 ) . 16 I M F ( 19 96 , p . 42 ) , I M F ( 1 99 8 , p . 5 4) , Gürge n, E . e t a l. ( 19 9 9, p. 57 ) . 17 Namel y, b y t he La w on Natural Mo nopolies enacted in Dece mb er, 1997, and the Governme nt Reso lutio n o n State Rep ub lican Organ fo r Reg ul atio n o f the Acti vit y o f Sub jects o f Natural M o nop o lies d a ted M a y 4 , 1 99 8 , the M ini str y o f E co no my a nd Fo r e ign E c o no mic Relatio n s c a me to unitaril y sup ervi se natur al mo no po l y enterp rises. Further mo r e, the La w o n Co mp etitio n and Restriction of Monopoly Acti vities on t he Product Market enacted in Nove mb er, 20 00 , fo r the firs t ti me clearl y d efine s “d o mina nt sit uatio n”. Acc ord ing to article 3 o f thi s la w, an eco no mic entit y ho lding over a 65 % mar ket share of a particular merchand ise beco mes “domi na nt”. Also , even i f market s hare is belo w 65%, the anti mo nopoly aut horit y could still regard an entit y a s “d o mi nant”.

Economic Transformation in Tajikistan

The State Order S yste m followed almost the same path.

6

Between 1991 and 1994, the

Government maintained the state order syste m, though subjecting it to main agricultural and industrial products.

In fact, about 70% of the industrial output was based on the state order

contract, which was agreed upon b y the Government and domestic enterprises.

Especially, the

state order rate for cotton and aluminiu m (the primary processed goods and the most important sources of hard currency) was rigidly fixed at 100%.

However, in 1995, the range of goods on

the state order was considerably minimized and even that of aluminiu m was cut in the second half of 1995.

The state order of cotton also ended by 70% of forced purchases of products harvested

in 1995.

In other words, the state order syste m of Tajikistan was completely abolished as early

as before 1996. 1 8 Deregulation in foreign trade and currenc y exchange proved the most complicated among all measures designed for economic liberalization.

Even though the aforesaid presidential

decree( June 1992) and the Law on Foreign Trade Activities (December 1993) advocate a extremely liberal trade syste m, until the end of 1994 the Government stretched its interpretation of the reserved provisio ns inserted to these laws and organized the centralized trade regime, which is equivalent to the one of the Soviet era .

That is to sa y, b y th e last half of 1993 all

trading businesses were obligated to have licenses or quota, and their issuance was exclusively controlled b y six trade organizations designated b y the Government. 1 9 In addition, earnings on exports of state monopolized goods including cotton and aluminium, which formed more than 80% of the total exports, were imposed 32 to 100% of the surrender requirement whereas other exported ite ms were imposed 30% across the board.

Moreover, import business was mostly

monopolized b y the aforementioned trade organizations.

Also in January, 1994, the subjected

items b y the centralized trade regime expanded from 37 to 54 ite ms.

The surrender requirement

toward export earnings of state monopolized export goods was raised to 70% across the board. 2 0 Two reasons wh y the Government persisted on such a restricted trade regime are plausible.

First, at tha t time, Tajikistan had an obligation to pursue the governmental agreement

on mutual material procurement, which had concluded with Russia.

Therefore, state order and

Ho wever, this la w p r o vid es that in an y case, a s hare inferior 35% is no t “d o mi nant”. Wo r ld B a nk ( 19 9 4, p. 7 2) , I M F ( 19 9 6, pp . 3 9 -4 3) , ADB ( 1 99 8, p . 26 ) . 19 T hese organizations are co mposed of the Mi nist ry of Tr ade and Material Reso ur ces, t wo jo int-s to ck enterp rises in the lig ht i nd ustr y, the Unio n Allia nce o f Agriculture P ro d ucers, the Co ns umer ’s Cooperative , and the Tursunzade Alumini u m S melter. T hese six organizatio ns were p er mitted to enter the ex po rt b usi nes s und er the pr o visio n o f exercised j urisd ictio n o f exp o r ting lic e nse a nd /o r q uo ta . ( Wor ld B a nk, 1 9 94 , p p . 7 0 -71 ) 20 Wo r ld B a nk ( 19 9 4, pp . 70 -7 4 ), I M F (1 99 6 , p . 3 8) . 18

Economic Transformation in Tajikistan

monopoly over the main exports were necessary.

7

As a previous essay alread y points out, 2 1 this

agreement showed strong humanitarian support on the side of the Russian government and offered very beneficial trade conditions to Tajikistan. 2 2

Also, to substitute industrial relations

from the Soviet era, which had been broken off, large-scale barter trade with Russia became very important to the Tajik economy.

Secondly, as the export industry and foreign capital were the

main sources of politica l and economic power, the Government was afraid that those supremacies would switch sides and support the opposition. Along with the development of price liberalization and the shrinking of the state order syste m, the centralized trade regime approached a turning point.

Deregulation in the trade and

currency exchange progressed drastically after going through, first, the abolition of the license/quota syste m in July, 1995, which was subjected to most exports except for cotton and aluminium, 2 3 then, starting the foreign exchange auction (February, 1996), 2 4 and, lastly, abolishing the export earning surrender requirement and export duties (March, 1997). 2 5 Howeve r, this sector did to imme diately experience a considerable shake.

Due to renewed disputes in

several parts of the country and against a background of ineffective peace talks, the Government restrengthened its control against trade activities b y reactivating the monopolization of cotton exports, export duties, and export licences as well as introducing protectionistic import dutie s. 2 6 These measures were introduced in early 1997 and were then repealed one after another once the peace agreement was concluded.

As a result of these twists and turns, comparatively liberal

trade and a foreign exchange syste m were established finally in the beginning of 1998. 2 7 These economic liberalization processes of Tajikistan discussed above were dela yed by one year and half to two years in comparison to Kazakhstan and Kyrg yzstan, where radical

21

See I wa sa ki ( 1 99 9 , p p. 18 -2 2 ). B ased o n the agr ee ment , in 19 92 the Taj ik go ver n me nt p r ocur ed 50 ,0 0 0 t o ns o f co tto n and 4 2 ,0 00 tons of primar y processe d alumini u m goods to Russia. In excha nge, it received 260,000 to ns of fue l, 2 6 0, 00 0 c ub ic mete r s o f ti mb e r, a nd 2 5 ,0 0 0 to ns o f c e r e a ls (Wo r ld B a nk, 1 99 4 , p . 7 0) . Taking the re markable st eep rise of fuel prices at that ti me into co nsid eratio n, such trad e pr ob ab ly br o ug ht a gr e a t a mo un t o f tr a nsa c tio n r e nt to the Taj ik sid e . 23 P resid ential Decree o n Further Lib eralizatio n o f Foreign Tr ad e d ated J un e 2 7 , 19 9 5. At the sa m e ti me, the Go vern ment ab o lished all favo rab le me asur es to ward exp o r ters. 24 Official regu latio ns o n fo reign e xcha nge a uctio ns were all ab o lished in Ap ril, 1 99 8 (E B RD, 1 99 9 , p. 27 0 ). 25 IMF (1996, pp. 39-40 ), IMF (1998, p. 55 ). Mo re accurately, t he surrender require me nt of expor t earni ng was co n verted into the repatriatio n req u ireme nt o f exp o r t earni n gs. 26 I M F ( 19 98 , p . 9, pp . 5 5 -5 6 ), E I U ( 4 th Qua r ter o f 1 99 7 , p .3 0 ) - her e a fter a bb r e viated a s E I U (1 99 7 Q4, p . 3 0) . 27 Further mo r e, rather p ro tective i mp o r t d uties we re co nverted into 5 % uni fied tariffs in J an uary, 19 98 ( EI U, 19 98 Q1 , p . 2 9) . 22

Economic Transformation in Tajikistan

structural reform was promoted since the beginning of the transition period. long-lasted civil war can be grasped here.

8

The effects of the

Notwithstanding, EBRD evaluates that b y mid -1988

Tajikistan had caught up with these two countries to some extent as far as liberalization of the domestic market and trade activities are concerned. 2 8

In this sense, reform efforts put forth by

the Tajik government in the last several years are worth y of a positive evaluation.

Moreover,

the evolution of the institutional environ ment surrounding domestic e nterprises is sufficiently coordinated with the marketization process.

However, d ynamic enterprise activities cannot

emerge only b y improving jurisprudence and liberalizing the economy.

Decentralization of the

highly concentrated industrial organization 2 9 and a daring reform in ownership and a reorganization of the enterprise sector are indispensable.

Therefore, the next section focuses on

the privatization of state-owned enterprises (SOEs) — the most powerful driving force of economic transformatio n.

PRIVATIZATION OF STATE-OWNED ENTERPRISES Institutional Framework of Privatization Policies As in other Central Asian counties, privatization policies in Tajikistan constitute a complicated syste m consisting of innumerable laws and ordinances.

Also, due to the frequenc y of minor

adjustments in the country’s privatization syste m, it is difficult to introduce each one of these within the limited space of this paper.

Thus, this subsection attempts to provide an outline of

only the most important points of the institutional framework influencing the privatization of SOEs. Specifically, the focus here is the Law on Denationalization and Privatization of State Property (February 1991) and a considerably revised version of this law, the Law of on Privatization of State P roperty (Ma y, 1997). The Law on Denationalization and P rivatizatio n of State Property provided privatization measures just during the civil war period. be summarized in the following four points:

This law set forth a privatization framework that can (a) Privatization of the republican assets is to be

controlled b y the State Property Committee (SPC), and the so-called “public assets” (assets of local administration) is to be controlled b y the local assembly (the National Deputy’s Soviet) a nd the SPC’s local branch respectively.

(b) As basic manners of privatization, five forms exist: (i)

leasing, including future purchase, (ii) reorganization into a joint-stock compan y, (iii) bu y-out of

28

Namel y, mar ks give n in mid -1 9 98 b y E B RD ( 4 b e ing t he hi ghest) o n lib e r a liz a tio n o f p r ic e s, a nd the trade and excha nge s yste m were 3 & 4 respectivel y fo r both Kazakhst an and K yrg yzsta n, but 3 & 3 fo r Taj ikista n. ( E RB D, 1 99 8 , p p. 26 -2 7 ) . 29 Fo r mo r e d etails co ncer nin g the i nd ustr ial orga n izatio n in Taj ikista n and o ther Centr al Asian countries at the starting po int of transit ion, see Iwasa ki (200 0) .

Economic Transformation in Tajikistan

whole compan y, (iv) selling b y tender or auction, and (v) free distribution.

9

(c) The initiative in

privatization and priority in property acquisition belong to the labor collectives.

(d) However,

the Government will take the initiative in carrying the privatization of low-profit or deficit or bankrupted enterprises. 3 0 Between 1992 and 1994, in accordance with the aforementioned privatization framework, the central and local governments selected thousands of SOEs every year and attempted to sell them. 3 1 According to Table 3, however, despite these policy ta rgets, the numbers of privatized enterprises in these three years reached only 1,246 (average of 415 per year).

Moreover, 45% of

these enterprises were small businesses having only a little more than one emplo yee each. 3 2 course, insider control progressed greatly in privatized enterprises.

33

Of

At that time, political

leaders were not sufficiently aggressive toward achieving the privatiza tion of enterprises.

For

instance, the y regarded the wishes of the local assemblies and labor collectives too seriously, and reserved the property sale of certain industrial sectors and important enterprises.

In spite of

this, the above result even fell short of their expectations. Therefore in August 1995, P resident Rakhmonov and the Cabinet of Ministers were determined to take action. 3 4

The y decided that (a) fundamentally, all industrial sectors are

subject to privatization, (b) strengthening the control of SPC over the initiative of enterprise privatization, and (c) under these circumstances, allowing foreign investors to join all stages of enterprise privatization.

After having clearly stated these resolutions, the y proposed

introducing a voucher-type mass privatization plan.

Moreover, in November of the same yea r,

the Law on Denationalization and P rivatization of State P roperty itself was revised and SPC was given the right to independently select the enterprises to be privatized. 3 5

These series of

measures strongly suggested a shift under the strong leadership of the central government from privatization “from the bottom” towards omnid irectional privatization.

In fact, the

Privatization P rogram of 1996-1997 included cotton ginners, which so far had been kept as

30

See Ar ticle 7 , 9 , 11, 12 o f the La w o n Denatio n alizatio n and P r ivatizatio n o f State Pro perty. e.g. 1 , 27 6 e nterp r ises wer e to b e p r iva tise d b e t we e n 1 99 1 a nd 1 99 2. ( Wo r ld B a nk, 1 99 4 , p . 3 3 ). 32 I M F ( 19 96 , p . 43 ) . 33 e.g. About 60% of privatized s mall -scale enter prises were acquired by labo r co llectives and mo re tha n hal f o f all mi d and large -scale enterp rises were also so ld to th e m. Also , in the case o f industrial enterprises reorganized as j o int-stock comp anie s, 40 % of the s tocks on average were tr a nsfe r r e d to labo r co lle c tive s ( Wor ld B a nk, 1 9 94 , p p . 3 3 -38 ) . 34 P residential Decree on Measur es fo r Further De epeni ng a nd Enlargi ng P r ivatization of State As sets d ated Aug ust 2 , 1 99 5 . Also , the Go vern me nt Reso lu tio n o n Organi zatio nal Measur es fo r Fur ther De e p e nin g a nd E nlargin g Pr iva tiz a tio n o f Sta te Asset s d a ted Au g u st 23 , 1 9 95 . 35 See the La w o n Intro d uctio n o f Co rrectio ns and Amend ment s to the La w o n Denatio nalizatio n a n d Pr iva tiz a tio n o f Sta te P r op e r ty d a ted No ve mb e r 4, 19 95 , a nd I M F ( 19 9 6, p . 4 4 ). 31

Economic Transformation in Tajikistan

10

“untouchable” state enterprises, 3 6 in addition to political goals such as the early completion of small-scale privatizatio n and the incorporation of all mediu m and larg e scale SOEs as open-type joint-stock companies (aktsionernoe obshchestvo otkrytogo tipa).

Also, in April, 1997, a

“privatization check” started to be distributed to the Tajik people. 3 7 The Law on P rivatization of State P roperty, en acted in May 1997, along with man y other laws and ordinances promulgated since then, brought about further revisions to the institutio nal framework of enterprise privatization. aforementioned revised policies. revised policies. 3 8

This action was done in accordance with the

The following three points are the most remarkable of the

First, the fundamentals of the basic manner of enterprise privatization were

limited to sales by tender or auction and compe titive sales of state-owned stocks on the condition that the individual inve stment project (management reconstruction plan) be executed after having been approved b y the Government.

The latter was mainly applied to govern ment designated

medium and large-scale enterprises.

This included, in addition to all the cotton ginners and

most of the representative large scale SOEs in the industrial sector including “Tursunzade Aluminiu m Smelter (or Tajikistan Aluminiu m Factory)”, “Vakhsh Nitro gen-Mineral Fertilizer Factory”, “Leninabad Rare Metal Complex”, “Tajik Textile P roduction Amalgamation”, and “Kyrgan-Tiube Transformer Factory”. 3 9 state-owned stocks was exclusive to SP C.

Secondly, the authority in control of sales of Moreover, SPC was obliged to keep selling the stocks

of the target enterprises for privatization until the share of state ownership became 25% or less per enterprise.

Thirdly, the establish ment of private investment enterprises, “In vestment

Funds” was legalized. check”.

36

This was done to promote effective management of “the privatization

The main functions of the In vestment Funds are considered to be very similar to the

Go ver n ment Reso lutio n o n the P ro gr a m o f P r iva tiz a tio n o f Sta te Pr o pe r ty i n 1 99 6 -1 99 7 d a ted M a y 20 , 1 99 6 . 37 Na rod na ia Ga zeta , Feb r uary 2 8 , 1 99 7 . Also , a p r ivatizatio n check was sup p lied u ntil Ap ril 19 9 8 and mainl y used as a me ans of purchasi ng state rental ho us ing and enterprise stocks at op en a uc tio ns sp o nso r e d b y S P C a nd lo c a l ad mi nistr a t io ns (Na ro dn a ia Ga zeta , M a y 1 5 , 1 9 98 a nd Ap r il 18 , 1 99 8 .) 38 T he fo llo wi ng a ut ho r ’s su mmatio n is b ased no t so lel y o n t he La w o f the Rep ub lic o f Taj ikistan o n Privatizatio n o f State P r op erty, b ut also o n the G o vern me nt Reso lu tio n o n Sellin g State O wned Shares o f Op en-Typ e Jo int Sto ck Co mp anies d ate d Feb r uar y 20 , 19 98 ; the Go vern men t Reso lutio n on Co nfor matio n the Lis t of State Co mp anie s, which are Subj ect to P r ivatization on Individual Pr oj ect d a ted Octob e r 2 7 , 1 99 8 ; the Go ver n me nt Reso lutio n o n Co nfo r ma tio n o f the R ule o n Privatization of State B u sines s b y Individual P r oj ects dated Dece mb er 30, 19 98 ; and the Na ro d n a ia Ga zeta, Ap r il 1 8 , 1 99 8 . 39 e.g. B a sed o n a n i nd ivid ua l p ro je c t, p ub lic sales o f sta te -o wned sto c k s o f c o tto n gi n ne r s sta r ted in M a r c h 19 9 9. B y the se c o nd q ua r ter the pr e d o mina nt sto c k ( 7 5 % o f th e sto c k) o f 2 3 o ut o f a to tal o f 2 8 gi nner s wer e so ld to str a tegic inve sto r s ( EI U, 1 9 99 Q2 , p p. 25 - 26 ; E I U, 20 00 Q2 , p . 3 7 ).

Economic Transformation in Tajikistan

11

“Investment P rivatization Funds” established in Kazakhstan and “Special Investment Funds” of Kyrg yzstan. 4 0 Progress and Problems of Enterprise Privatization As mentioned before, the actual results of the initial stages of privatization during 1992 and 1994 fell far short of government’s expectations.

Even more, privatized enterprises were

concentrated on the trade and catering industry and service sector (86.4%), while the industry enterprises, which needed the most radical structural reform, re mained at a mere 3.5%.

Also,

the number of privatize d enterprises in 1995 only increased by 10.8% (37 enterprises) in comparison to the previous year.

But, according to Table 3, a series of syste mic reforms put

into force in the summer of the same year, combined with the advancement of economic liberalization sped up the privatization process, which had been on the stagnant side. is clearly shown on actual privatization results after 1996. 80.3% in 1996 in comparison to 1995.

The effect

P rivatize d enterprises increased by

In 1997, the number of privatized enterprises grew to

742 and, both in 1998 and 1999, reached four digit figures (1,435 and 1,460 enterprises respectively).

In this wa y, at the end of 2000, the total number of privatized enterprises was

recorded at 6,570—5.3 times more than that at the end of 1994. Likewise, the privatization process surely accelerated since 1996.

However, the major

sectors still continued to be the trade and service industries and not the more essential manufacturing industry.

In fact, privatized industrial enterprises between 1996 and 2000

numbered only 201, and the weight on the total privatized enterprises each year was an avera ge of less than 5%.

Needless to sa y, this is greatly estranged from the trend of the entire economy.

Table 4 provides more detail on the mid-term achieve ment of enterprise privatization. According to the table, small-scale privatizatio n and the incorporation of all mediu m and larg e scale SOEs as joint-sto ck companies had almo st reached completion by September 1999. Conversely, the privatiz ation rate of middle and large-scale enterprises was at the rather low level of 16.7%.

Therefore, it is strongly suggested that most industrial enterprises could not

push reform beyond reorganization and become state-owned joint-stock enterprises. 4 1

This ma y

be a main factor accountable for the lack of an y appropriate changes in the structure of industrial production and emplo yment of whole economy.

Two facts are noteworthy:

First, the weight of

the state sector remaine d heavy in gross industrial output, at 75.5% in 1999; 4 2 and secondly, 40

Fo r further details, see I wasa ki (2001, Chapters 6 and 7) . Wo r ld B a n k (2 0 01 , p . v ) a lso r e po r te d tha t b y M a rch o f 2 00 0 , o nl y 1 40 o f 75 0 o f large a nd med i u m enterprises had b een p r ivatized , and it wa s p artly d ue to to o high i nitial aski ng p r ice set b y the Go ver n me nt. 42 SART ( 20 0 0, p. 52 ) . 41

Economic Transformation in Tajikistan

12

despite the privatizatio n rate of nearly 80% for all sectors, the total share of government emplo yees only decreased b y 12.4% within the eight years between 1993 and 2000. 4 3 As alread y mentioned, it is no exaggeration to say that privatization polic y during the nine years of transition could scarcely contribute to structural reform in Tajikistan, particularly, the restructuring of influential industrial enterprises. 4 4

Furthermore, as far as the author has

investigated, the Rakhmonov administration has neither set forth other effective policies for industrial reorganizatio n nor for the contribution to state-owned enterprise reform.

Rather, it

attempted to prolong the life of state enterprises b y maintaining a soft budget and institutional constraint, which is equivalent to the Soviet era. This includes (a) the continuation of direct credit b y the Central Bank, 4 5 (b) the extension of the bankruptc y law for enterprises under management failure, 4 6 and (c) overlooking corporation tax arrears. 4 7 Moreover, there are ma ny problems that preve nt enterprise privatization.

Various

issues common among the FSU countries include: an unstable situation of politics and society, insufficient capital accumulation, management dullness of SOEs, underdevelopment of the banking syste m and capital market, and difficulty in attracting foreign capital investment. There might be differences in gravity, but these unsolved problems exist in Tajikistan as well as in other FSU countries.

Besides, international financial organizations and individual students

point out that there is (a) a sharp conflict of interests between SPC and local authorities, (b) complicated procedures of asset transformation and slowness of admin istrative affairs, (c) irrationally high initial prices of state assets to be sold b y tender or auction, (d) frequent irregularities, including the illegal concealment of public information and embezzlement of capital b y governmenta l officials, (e) threats and violence b y criminal groups against public auction participants, and (f) non -pa yment of large amounts of capital sales. There is no doubt that all of these are also serious problems hampering privatization polic y in Tajikistan. 4 8

43

Calcula te d b y t he a utho r b a sed o n I M F (2 0 00 , p . 6 3 ) a nd I M F (2 00 1 , p . 1 7) . See Wo r ld B a nk ( 2 00 1 , pp . iv- vii) . I n a d d itio n , E B RD (2 0 01 , p . 1 9 8) p o ints o ut tha t “p o st-p r ivatizatio n restr uctur i ng is ha mp ered b y the lack o f in vest men t fund s, incl ud in g fo reig n inve sto r s, who re mai n d eterr ed b y the sec urit y s ituatio n”. 45 e.g. In Taj ikista n, desp ite havi ng banned direct credit fr o m the central bank fo r the natio nal b ud ge t a nd no n-b a n ki ng se c to r s in Octo b e r 19 99 , the central bank largel y financed the cotton sector a nd SOE s in the b e gi nni ng o f 2 0 00 ( EB RD, 20 0 0 , p . 2 15 ) . 46 E ve n tho u gh the b a n kr u p tc y la w wa s e stab lished in Octob e r 19 9 2, a nd r e vised gr e a tl y in M a y 1 9 9 8 , no ban kr up tc y ind ic t men t was i nstit ute d unti l J a nuar y 2 00 0 ( I M F, 20 00 , p . 4 4) . 47 e.g. T he tax r e ven ue f or the fir st q ua r ter o f 1 9 99 was le ss tha n t he targ e t fig ur e b y 3 5 %. At le a s t 60 0 enter p r ises neglecte d o n p a yi ng their taxes ( E I U, 19 99 Q2 , p . 25 ) . E ven so , the Go ver n me nt is yet to p ut an y d r astic me asur es into effect to tack le this p ro b le m. 48 Fo r fur ther d e tails o n t he se iss ue s, se e I M F ( 19 96 , p p . 4 3 -44 ) , Us mano v ( 1 99 7) , EI U ( 19 97 Q4 , p . 28 ) , E I U ( 1 99 8 Q3 , p. 27 ), E I U ( 19 9 9 Q4 , p . 3 4 ) , E I U ( 20 00 Q2 , p . 3 7 ), I M F (2 00 0 , p p . 44 -4 6 ) , 44

Economic Transformation in Tajikistan

13

CONCLUDING REMARKS Unless the Tajik government sets forth appropriate policies against the social and economic problems described above, and demonstrates a resolute attitude toward SOEs, radical reform in the industrial sector will not proceed—still less, creating d ynamic competition, which would be the impelling force of production syste m modernization and high growth among enterprises. As alread y stated in the introduction, material production remains floundering at the bottom in spite of economic recovery since 1997.

Some statistical data strongly suggest that

manufacturing is in much worse critical condition than an y other sector.

Namely, as a result of

recording a long period of negative growth in most sectors, the actual output of the total industrial production decreased almost b y half from 1992 to 2000.

To be more specific,

production in these four sectors: the steel industry, chemical and petrochemical industry, wo od, wood-working and paper industry, and construction material industry, were reduced to a fatal level (see Table 5).

Meanwhile, the output structure of the industry inclined more deeply

toward the electric energy industry and non-ferrous metallu rg y (i.e. the aluminiu m industry), which remained state monopolies.

Also, the share of electric and non-ferrous industries

increased b y 38.8% out of the total industrial production from 1993 to 2000 (see Table 6). Consequently, as shown on the Table 7, Tajikistan’s trading activities could not escape the simple, traditional trading structure and had kept on falling in the red. Nonetheless, problems are not merely limited to this.

That is to sa y, retaining the

biggest monopolistic enterprise “Tursunzade Aluminium S melter (TADAZ)” 4 9 is tantamount to keeping the whole aluminium industry and forces a direct or indirect sacrifice on the various sectors of the national economy.

For example, TADAZ consumes about 40% of all domestic

electricity for electrical smelting of aluminium, enjo ying a quite lower govern ment-set price for electricity than other domestic enterprises. 5 0

Despite this fact, TADAZ has not paid for a great

deal of electricity to electric power compan y “Balki Tojik” by reason of an aggravation in financial affairs. 5 1

In order to reconstruct TADAZ, the Government carried out various

U ma r o v a nd Han ma d so e v ( 20 01 , p . 14 9) . TAD AZ is o ne o f the la rgest s melters o f its kin d in the wo rld . It is b ased in the cit y o f Tur su nzad e. At its p ea k in 1 9 89 , annual o utp ut r eached 41 6 ,0 00 to ns. I n 1 99 8 it had ab o ut 12 , 00 0 e mp lo ye e s ( ADB , 1 99 8 , p p. 24 -2 6 ) . Aft er the c o llap se o f t he So vie t Unio n, o utp ut fr o m the s me lter ha s sha r p l y d ec r e a se d . I n 1 99 7 , o u tp ut fell d o wn i nto 18 9 , 00 0 to ns. I t wa s the lo west level in 1 9 90 ’s, b ut sinc e then, the alu mi niu m p r od uctio n ha s b een stead il y reco vered and was r ep or te d to have i nc r e a se d to 2 96 , 00 0 to ns i n 2 0 00 (E I U, J ul y 2 0 01 , p. 3 8) . 50 e.g. In 1996 industrial electricity cost 1.5 cents per 1 KW per ho ur, but the sp ecial rate that a pp lied to TAD AZ wa s o nl y 0 . 8 5 c e nts ( I M F, 1 99 8, p. 17 ) . 51 I n 1 99 6 , TAD AZ o nl y p a id 8 .6 % o f its e le c tr ic ity e xp e nse s ( I M F, 1 9 98 , p. 17 ) . M or e o ve r, 49

Economic Transformation in Tajikistan

measures through the World Bank and other financial institutions. in the black as of 1999. 5 2

14

Yet, this enterprise was not

In the meantime, the Balki Tojik has been importing electricity for

higher prices from neighbouring countries to secure domestic supply of electricity and make up for inefficienc y. 1997. 5 3

Moreover, the import of electricity has all the time exceeded the export since

Taking economic calculations under consideration, the chances of the aluminium

industry of being a big burden on the national economy are high.

In this manner, it is said, the

industrial sector is currently broadening the warp in production structure and economic inefficienc y. This paper ’s analysis has made it clear that Tajikistan has been achieving remarkable progress toward its transition to a market economy in fields of law reform and economic liberalization.

It is true that such progress is the fruit of the Government’s reform efforts,

which began in 1995 and became earnest in mid-1996.

However, obvious as it ma y be, the

marketization process in Tajikistan as a whole is greatly unbalanced.

So, I cannot but think that

the emergence of an inefficient reproduction c ycle is depriving the whole economy of its vitality. This all originated while the economic environ ment was becoming liberalized, leaving behind its paternalistic background.

In short, it is the result of shelving, on one hand, the privatization of

mid and large-scale SOEs, and on the other, industrial and competitio n-promoting policies.

If

this is indeed the case, such kind of institution al structure needs to be broken down quickly. Fortunately, it seems that toda y political leaders of Tajikistan have not lost eagerness for drastic structural reform. 5 4

Hopefully Tajikistan will take a drastic leap toward economic revival b y

utilizing its condition as a transitional country with a late start.

according to IMF (2000, p. 48 ), the account s receivable of the B alki Toj ik in 19 99 had accumulate d 26 mo nt hs wo rt h of unpaid electricit y costs—larg el y attributable to TAD AZ. 52 I M F ( 20 00 , p . 49 ) 53 T he factors behind Taj ikista n ’s si multa neous i m po rt and export of electricit y includ e the lack of a nationwide electricit y su pp l y as well as geologic al and technical circums tances. 54 In fact, at the Taj ikista n Tr ade Inve st me nt Co nf erence held in Tokyo on Ma y 17 , 20 01 , and sponso red by t he J apane se Ministr y of Foreign Affairs, President Ra kh mo no v and accomp a n yi ng Econo my and Trade Minister Saliev, on their firs t visit to Japan, gave a s p eech that e mp hasized their d eter mi natio n to mo ve to ward s a market ec o no my.

Economic Transformation in Tajikistan

15

REFERENCES ADB (Asia n Dev elo p me nt Ba n k), Econ o mic Rep o rt an d In terim Op era tio na l Stra teg y fo r Ta jikist an , Manila: ADB , 19 98 . CISSTAT (Int erstate St at istical Co mmittee of the Co mmonw ealth of Independent St ates) , So d ru zh e stv o Neza v isi my k h Go su da rstv : Sta tistich e skii E zh eg o dn ik 1 9 98 (Co mmo n we a lth o f In d ep e nd e n t Sta te s: Sta tistica l Yea rbo o k 1 9 98 ), M o sco w: CI SSTAT, 19 9 9 . CISSTAT, S od ru zh e stv o Neza v isimy k h Go su d a rstv : Sta tistich e skii E zh e g od n ik 19 99 ( Co mmo n we a lth o f I nd e p en d en t Sta te s: Sta tistica l Yea rb o o k 1 99 9 ), Mo sco w: CI S STAT, 2 0 00 . CISSTAT, 10 Let S od ru zh e stv a Neza v isimy k h Go sud a rstv (1 99 1 -2 00 0 ): Sta tistich e skii S bo rn ik (10 Yea rs o f th e Co mmo n we a lth o f In d ep e nd e n t Sta te s (1 9 91 - 20 00 ): Sta tistica l A b stra c t), M o sco w: CI SSTAT, 2 0 01 . CISSTAT,

So d ru zh e stv o Neza v isimy k h

Go su d a rstv

v 2 0 01 g o d y:

Sta tistich e skii S p ra vo c hn ik

(Co mmo n we a lth o f In d ep e nd e n t Sta te s in 2 00 2: Sta tistica l Ab stra c t ), M o sco w: CI SSTAT, 2 00 2 . EB RD ( Euro pea n B a nk fo r Reco nst ruct io n a nd Dev elo p ment ) , Tra n si tion R e po rt 1 99 8: F ina n c ia l S ecto r in Tra n sitio n , Lo nd o n: E B RD, 1 99 8 . EB RD, Tra n sitio n Repo r t 1 9 99 : Ten Yea rs o f Tra n sition , Lo nd o n: E B RD, 19 99 . EB RD, Tra n sitio n Repo r t 2 0 00 : Emp lo ymen t, Ski lls an d Tra n sitio n, Lo nd o n: EB RD, 2 00 0 . EB RD, Tra n sitio n Repo r t 2 0 01 : En erg y in Tra n si tion, Lo nd o n: E B RD, 20 01 . EB RD, Tra n sitio n Repo r t Upd a te Ma y 20 02 , Lo n do n: E B RD, 20 02 . EIU (Eco no mi st Intellig ence Unit), EIU Country Profile 1995-96: Kazakhstan, Kyrgyz Republic,

Tajikistan, Turkmenistan, Uzbekistan , Lo nd o n: E I U, 19 96 . EIU, E I U Co u n try R e po rt, Lo nd o n: E I U, 4 th Qu a r ter o f 1 9 97 ; 1 st Qua r t er o f 1 9 9 8 ; 3 r d Qua r ter o f 19 98 ; 2 nd Qua r ter o f 1 9 99 ; 4 th Qua r ter o f 1 9 99 ; 2 nd Qua r ter o f 20 0 0 ; J u l y 20 01 . ( I ssue s to uchi n g up o n Taj ikista n) Gürgen, E. et al., E c on o mic R e fo rms in Ka za kh sta n, Kyrg y z R ep ub lic, Ta jikistan , Tu rkmen ista n , a n d Uzbekistan, Washi n gton, D.C.: IMF Occasional P aper No.183, 1999 IM F ( Int ernat io na l M o net a ry F und) , Republic of Ta jikistan: Recent Economic Develop ments ( Re po r t No . 96 /5 5) , Wash ingto n, D.C.: I M F Sta ff Co untr y Rep o r t No . 9 6 /5 5, 19 96 . IM F, Republic of Ta jikistan: Recent Economic Develop ments, Washin gt o n, D.C.: IMF Staff Co u ntr y Rep or t No . 98 /1 6 , 19 9 8. IM F, Republic of Ta jikistan: Recent Economic Develop ments, Washin gt o n, D.C.: IMF Staff Co u ntr y Rep or t No . 00 /2 7 , 20 0 0. IM F, Rep ub lic o f Ta jikis tan : Sta tistica l Ap p en d ix, Washin gto n, D.C.: I M F Sta ff Co u ntr y Rep or t No. 01 /69 , 20 01 .

Economic Transformation in Tajikistan

16

Iw a sa ki, I. , Th e In itia l Pha se o f Tra n sitio n o f Ru sso -Cen tra l Asia n Econ o mic Rela tio n s: An In stitu tio na l Ap p ro a ch, To k yo : Uni ve r sit y o f To k yo ( I sla mic Ar e a Stud ies Wo r kin g P a per Ser ie s No. 11 ) , 19 9 9. Iw a sa ki, I. , “I nd ustrial Structur e and Regional Develop ment i n Central As ia: A Microd ata Anal ysis o n Sp atial Allo catio n o n Ind u stry,” Cen tra l A sia n S u rv e y, 19 , 1 :1 57 -1 8 3, 2 0 00 . Iw a sa ki, I. , Ch uo ua jia Hik a ku Keiza ita ise i I k ou ron (A Co mp a ra tiv e Stu d y o n Tra n sitio n E c on o mies in Cen tra l Asia ), To k yo : Hito tsub ashi U niversit y (Do ctoral Dissertatio n) , 2 0 01 . Iw a sa ki, I. , “Legi slati ve and Instit utio nal Fra me wo r k fo r Eco no mic Refo rm i n Taj ikista n: A Research Note,” E u ra sia n Geo g ra p h y a nd E co no mics ( fo r thc o min g) , 20 0 2. Kuz mi n, A., “T he Ca use s and Lesso n s o f t he C iv il War,” in A. Vassiliev, ed., Cen tra l Asia : Po litic a l an d E c on o mic Ch a llen g e s in th e Po st- S oviet E ra , Lo nd o n: Saq i B o o ks, 20 01 , 1 75 -2 1 9 . P ly shev s kii, B . , “ Re fo r mir o vanie E ko no mi k Go sud a r stv S NG: K yrg yzst a n i Tad z hiki sta n ( E c o n o mic Refo r ms o f CI S States: K yrg yzsta n and Taj ikist an),” R o ssiisk ii E k o n o micheskii Zh u rn a l, 11 :2 4 -3 0, 19 93 . SART (Sta te St at istical Agency under the Go v e r n me nt o f t he Republi c o f Ta j i kist a n) , Ta jikis tan in F ig u re s 2 0 00 : Sta tisti c a l P o c ke t B oo k , Dusha n b e : S ART, 2 00 0. U ma ro v, H . a nd J . Ha n ma d sho e v , “Trans fo r ma tio n Pro cesses i n the Tajikista n Eco no my,” Cen tra l A sia a nd th e Ca u c a su s, 8, 2 :1 4 6 -15 0 , 2 00 1 . Us ma no v, Kh. , “Pr o myshle nno ct’ Tad zhikista n a: E st’ li S vet v Ko n t se To nnel ya ( I nd ustr y o f Taj ikista n: Is there a light in t he end of tunnel?),” Ha ro dn a ya Ga zeta, J a nuar y 1 0 , 1 9 97 . Wo rld Ba n k, Ta jikista n : A Wo rld Ba n k Cou n try Stud y, Washi ngto n, D.C.: Wo r ld B a nk, 1 99 4 . Wo rld B a nk, Ta jikistan To wa rd s Accelerated Economic Growth: A Country Economic Memora ndum, Washin gto n, D.C.: Rep o r t No . 2 20 1 3 -T J, 20 01 . (all in Ru ssia n. Cf. fo o tno te 6 .) Pa st a nov lenie Ka binet a M inistro v Respubli ki Ta dzhi kist a n

«O Go sudarstvenno m Ree stre

O b’’ edinenii i Predpriiatii M o no po listo v » ( Re so lutio n o f Cab inet o f M iniste r s o n the Natio n a l Regis tratio n o f Mo no po listic Amal ga matio ns a nd Enterp rises), Ma y 24 , 1 99 3 . Pa st a nov lenie P ra bit el’stv a Respubli ki Ta dz hi kist a n Da l’ neishe mu

Ug luble niiu

i

Ra sshireniiu

« O O rga ni zat sio nny kh M era kh po

Priv a t iza t ii

Go suda rs tv enno i

So bstv enno sti»

(Government Reso lutio n on Organizatio nal Measur es fo r Further Deepeni ng and Enlargi ng Privatizatio n o f State As sets), Au gu st 2 3, 19 95 . Pa st a nov lenie

Pra bit el’stv a

Respubli ki

Ta dzhi ki st a n

«O

Prog ra mme

Priv a t izat ii

Go suda rst v enno i So bst v enno st i na 19 96 - 19 97 go dy » ( Go ve r n me nt Res o lutio n o n the P r o gr a m o f Pr iva tiz a tio n o f Sta te P r op e r ty i n 1 99 6 -1 99 7 ), M a y 20 , 19 96 . Pa st a nov lenie

P ra bit el’stv a

Respubli ki

Ta dzhi kist a n

«O

Pro da z he

P r ina dle z ha shchi kh

Economic Transformation in Tajikistan

17

Go suda r st v u A kt s i i A kt si o ne r ny kh O bshc he st v Ot kry to g o Tipa » (Go vern me nt Reso lutio n o n Sellin g State O wned Sha r es o f Op en -Typ e Jo int Sto ck Co mp anies), Feb r uary 2 0 , 1 99 8 . Pa st a nov lenie P ra bit el’st va Respubli ki Ta dzh i ki st a n O rg a ne

Reg ulirov a niia

Deia tel’ no sti

Suv ’’ekto v

«O Go su darstvenno m Resp ubli ka n s ko m Estestv enny kh

M ono po lii»

( Go ve r n me n t

Reso lutio n o n Sta te Re p ub lic a n Organ fo r Re gula tio n o f t he Acti vit y o f Sub j e c ts o f Natur al Mo nop o lies) , May 4 , 19 98 . Pa st a nov lenie

P ra bit el’stv a

Respubl i ki

Ta dzhi ki st a n

«O

Ut verzhdenii

Perechnia

Go suda rstv enny kh Predpriia tii, Po dlezha shch ikh Priva t iza t ii po Ind iv idua l’ny m Pro ekt a m» ( Go ve r n me nt Reso lut io n o n Co n fo r matio n t he List o f Sta te Co mp a ni es, which a r e Sub j e c t to Pr iva tiz a tio n o n I nd ivid ua l Pr oj e c t), Octob e r 2 7 , 1 9 98 . Pa st a nov lenie Priv a t iza t sii

P r a bit e l’stv a

Respubli ki

Go suda rs tv enny kh

Ta dzhi kist a n

Predpriia tii

po

«O

Utverzhdenii

Polo zheniia

Indiv id ua l’ny m Pro ekt a m»

o

( Go ve r n me nt

Reso lutio n o n Co nfo r ma tio n o f t he R ule o n P r iva tizatio n o f State B usi nes s b y Ind ivid ual P roj ects), D e c e mb e r 3 0, 19 9 8. Ukaz

Prezidenta

Khozia istvennykh

Respubli ki

Ta dzhi kist an

St ru kt ur,

Raspolozhennykh

«O na

Vheshnee ko n o miches ko i Territorii

Respubli ki

Deiatel’n o st i Ta dzhi kist an »

(P residential Decree o n Fo reign Eco no mic Ac tivit y o f Do me stic Ent ities in the T err ito ry o f T aj ikista n) , J une 1 7 , 1 9 92 . Ukaz Prezidenta Resp ubli ki Ta dzhi kist an «O Dal’neishei Leberalizat sii Vneshnei To rgovli» (P r e sidential De c r e e o n Fur ther Lib e r a liz a tio n o f For e ign Tr a d e) , J une 2 7 , 1 99 5 . Ukaz

Prezidenta

Respubli ki

Ta dzhi ki st an

«O

M erakh

po

Dal’neishe mu

Uglublen ii u

i

Ra sshireniiu Priv a t iza t ii Go suda rstv enno i So b stv enno sti» (P residential Decree on Measur es fo r Further Deep enin g and Enlargin g Privatizatio n o f State Asset s) , Au gu st 2 , 1 9 95 Za ia v le nie Ve r kho v nog o Sov e ta Resp ubli ki Ta dzhiki st a n « O Go sud a r stv e nno i Ne z a v isi mo st i Respubli ki Ta dzhi kist a n» ( State ment o f S up r e me So vie t o n the I nd e p e nd e nc e o f the Rep ub lic o f Taj ikista n) , Sep te mb e r 9 , 1 99 1 Za ko n « O So bst v enno st i» ( La w o n O wner s hip ) , De c e mb e r 5 , 1 99 0 . Za ko n

«O

Pa zg o sud a rstv lenii

i

Priva t iza t ii

Go suda rstv enno i

So bstv enno sti»

( La w

on

Denatio nalizatio n and P r ivatizatio n o f State P r op erty), Feb r uar y 2 1, 19 91 . Za ko n « O Va n ke i Va nko v s ko i Deia tel’no sti» (La w o n B an ks a nd B an k Acti vities), Feb r uar y 21 , 19 91 . Za ko n «Ob A ktsionern ykh Obs hchestvakh» (La w on J o int-Stoc k Co mp anies) , Dece mb er 23, 19 91 . Za ko n « O Predprini ma t el’s ko i Deia tel’ no sti» (La w on Entrepreneur s hi p), December 23 , 19 91 . Za ko n « O Predpriia t iia kh» (La w on E nterprises ), J une 25, 19 93 . Za ko n « O b Og ra nichenii M o no po listiches ko i Deia tel’ no sti i Pa zv itii K o n kurentsii» ( La w o n

Economic Transformation in Tajikistan

18

Regulation of Monopoly Acti vit y a nd Develop me nt of Co mp etition) , December 27, 1993. Za ko n « O Vneshnee ko n o miches ko i Deia t el’ no s t i» (La w o n Fo reig n T r ad e Activitie s), Dece mb er 27 , 19 93 . Za ko n « O Vnesenii Iz me nenii v Za ko n o Pa zgo suda rstv lenii i Priva t iza t ii Go suda rstv enno i So bst v enno st i»

(La w

on

Introd uctio n

of

C orrectio ns

and

Amend ment s

to

the

La w

on

Denatio nalizatio n and P r ivatizatio n o f State P r op erty), No ve mb er 4 , 1 99 5 Za ko n « O Priv a t iza t ii Go suda rst v enno i So bst v enno st i» ( La w o f o n P r iva tiz a tio n o f Sta te P ro p e r ty) , Ma y 16 , 19 97 . Za ko n « O Estestv enny kh M o no po liia kh» (La w on Natural Monopolies) , December 12 , 19 97 .