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Annual address to Majlisi Oli of the Republic of Tajikistan

Dushanbe, April 25th, 2008

Distinguished members of Majlisi Milli and

the deputies of Majlisi Namoyandagon!

Dear compatriots!!!

The message about the main directions of internal and foreign policy of the Republic of Tajikistan which is offered to your attention today is a logic continuation of last years’ statements of the President of the country, addressed to the legislative authority.

We still are passing a way of realization of those strategic missions and purposes which we have defined for ourselves during last years.

Most of these goals and tasks have been foreseen for a long time period and every year we overview the process of the implementation in accordance with a current economic and social situation of the country and also some part of them are developed with consideration of the development of modern world and we set and determined new objectives and duties.

In this process, acceleration of economic reforms which are directed toward development of all social and manufacturing sectors of the country is considered as our important task.

In order to achieve Millennium Development Goals, the Government of the Republic of Tajikistan has adopted National Development Strategy for the period till 2015 and Poverty Reduction Strategy for 2007-2009. The purpose of adopting and realization of National Development Strategy is to increase Gross Domestic Products 2.5 times and decrease the level of poverty of population twice.

Socio-economic policy of the country is primarily directed, first of all at maintenance sustainable economic development, increasing the level and living standard of the people, improving social protection of indigent citizens and creation of necessary conditions for breeding healthy and educated generation.

Regarding our complied works, it’s necessary to mention that last years consistent development and sustainable growth of national economy is observing: in the result of the realization of adopted programs of socio-economic development of our country, during last seven years a volume of Gross Domestic Products has been increased to 81%, and comparatively exceeded 2006 index to 7.8 %.

Implementation of initiatives envisaged in the fields of financial and tax policies promoted increase of profitable part of the state budget and its general volume consisted 19 % of Gross Domestic Product last year.

Decreasing tendency of external debt has proceeded in 2007, for example: if in 2000 its general volume was 108 % of Gross Domestic Product, but in the begging of this year this amount has been equaled to 30 percent of GDP.

However, there are some factors and obstacles still existing in this direction, including external factors that is dynamically varying condition of modern world, increasing price of Oil and Gas, foodstuffs, ecological and technogenic calamities negatively affect economic and social situation of our country, which obliges us to take supplementary necessary actions on prompt implementation of national strategic interest - to guarantee energy independence of the country, to get country out of communication isolation and ensure food security.

In addition to that, energy crisis which occurred due to severe frost winter, Tajikistan had never been faced such situation before, including draughty March and spreading of grain insects which indicates the hot and droughty year, has negatively influenced to the level of living standard of the people.

The rise of the prices has once again showed that our food markets still primarily depend on import of main products and stability of prices depends on oil and imported grain crops cost.

According to statistics, only in 2007 our country has imported goods and production of 8.3 billion somoni which it is 26% more than in 2006.

Namely, in the beginning of this year, in a view of this situation and with the purpose of protection of food security of the country, I have addressed to the people of my country concerning reasonable and effective utilization of all reserves and opportunities.

As well as the ministries and agencies, organizations and institutions, banks and regional executive authorities in the cities and districts are responsible to timely provide agricultural farms and people with small loans, high quality seeds, fertilizers, equipments and other necessary means to.

Indeed, one of the important ways of protection of consumers market of the country from negative influence of external factors and prevention of price growth for foodstuffs are effective and rational use of arable lands, raising the level of crop yield and increase of its own agricultural production manufacturing.

Therefore, it is necessary for the heads of the Ministries of Agriculture, Melioration and Water Recourses, Agricultural Academy, regional authorities of cities and districts to timely implement tasks given in the statement of the President of the Republic of Tajikistan on effective use of the lands and the Middle-term Economic Development Program of the Republic of Tajikistan for the period of 2015 as a main direction of activities and take necessary initiatives for the sake of ensuring food security of the country.

Severe frost winter this year caused the economic damage of more than 2 billion 900 million somoni which it certainly creates difficulties in achieving expected macro economic indicators.

In this regard, the Government of Tajikistan and heads of executive authorities of the regions, cities and districts are also responsible, to keep up the level of the previous years capability indicators and further wellbeing of socio-economic situation of the country, increasing the possibility of adaptation of national economy to the world prices and decreasing the level of its dependence from outside negative impacts and take necessary steps for their implementation.

So, under the current situation the Ministry of Economic Development and Trade is responsible to evaluate and create new macro-economic strategy of the country together with other ministries and agencies.

In order to keep sustainability of the situation in internal food market and preventing undesirable phenomena during the purchase of goods and services, the Ministry of Economic Development and Trade together with other ministries and agencies are responsible to prepare appropriate legal documents for settlement of retail trade, food and domestic services for the population and submit to the Government for further consideration.

Coordination of functioning of the state authorities and private sectors, attraction of investments, as well as foreign direct investments to economic sector will lead to the continuation the sustainable socio-economic development of the country, which in turn will gradually decrease the level of population poverty.

Development of above mentioned sectors, in particular, improvement of employment status of population within the country, strengthening of export diversity, improvement of quality and promotion access of the population to public services will increase population living standards.

For the fruitful promotion of tax and budget policy and further expansion of state budget income, Ministry of Finance, Ministry of Economic Development and Trade, Tax Committee, Custom Service and other related agencies should reconsider tax efficiency again as soon as possible, have to take concrete and effective measures to receipt taxes and other social funds surpluses to state budget, intensify the fight against hidden economy, prevent and diminish the level of corruption as well as improve the situation of taxing in economy.

Furthermore, analyzing income indicators of the state budget, tax surpluses and social expenses should be considered.

Realization of abovementioned initiatives in 2008, state budget income should be increased to 21% and to 24% of the gross domestic product till 2011. Particularly budget deficit should be kept stable and shouldn’t exceed half percentage of the gross domestic products.

In the situation of increasing price for oil, food and deficit balance of foreign trade, activity of bank and financial sectors should be strengthened in order to take further steps to retain control over inflation rate.

In this connection, the Government and National Bank of Tajikistan are responsible for the implementation of arrangements on restraining the level of inflation and national currency rate.

Issues related to exchange rates of the currencies, determination of interest rates, credit policy and as well as condition of state market supply with food, depend on globalization of world economy.

Last monthsunprecedented and artificial growth of the prices for oil and gas in the global market, as well as strengthening of threatening tendency of unexpected food price growth, in particular grain and wheat has negatively affected the economy of many countries as well as national economy of Tajikistan.

It becomes clearer that unstable process of globalization brings decline to the economy of some countries.

Especially the countries that are in a transition process and not ready for existing competition in the global market will suffer more than others.

We could hope that respected International Organizations, international financial institutions and industrialized developed countries of the world will certainly respond to these transnational threats and will take necessary steps for the sake of fair economic relations in the global world.

In our opinion, this system will undoubtedly promote ensure of security and prosperity of not only individual countries, but of all the states in the world.

Necessity of the establishment of this system comes from the well known statistic reports of financial institutions - World Bank and International Monetary Fund, that now more than33 countries have faced severe economiccrisis and they caused economic loss of 1 trillion US $ in total.

Effective monetary - credit policy and sustainable development of banking system depends on the process of institutional reform, especially on transforming the structure of National Bank.

Thereupon, all above mentioned reforms must be conducted in accordance with advanced experience by the end of this year.

Moreover, further increasing of banks capital, opening branches of foreign banks in Tajikistan, strengthening the role of national banks in extension of credits, resolving the issues of cotton producing farmsand setting a new mechanism for financing cotton producing sector, securing transparency in banking transactions must be a principal course of monetary and credit policy of our country.

Comprehensive assistance on completion of important economic, transport, communication and energy projects, protection of economic interests, penetration to new markets and new jobs creation are the topical issues of foreign economic policy of Tajikistan.

With the aim of resolving abovementioned important issues and acceleration of economic reforms we will further continue our mutually benefit cooperation with the respected international financial institutions, including International Monetary Fund, World Bank, Asian Development Bank, European Bank for Reconstruction and Development and Islamic Development Bank.

An experience of developed countries proves that free economic zones play significant role in attraction of investments. This year, government will create 2 free economic zones in the country, which they will have to give a new impulse to growth of industrial manufacturing and trade development. Spadework of these projects is in process now.

Recently a volume of investment inflow to the national economy has been increased and amounted 3 billion somoni in 2007, which 1,5 billion of them are direct investment. However, still it is not enough.

Thus, for the mobilization of big investments, Ministry of Economic Development and Trade, State Committee on Investments and State Property Management as well as other appropriate agencies are liable for developing new investment projects and submit to local and foreign investors.

Alongside with that, the Government of Tajikistan has to undertakepractical measures on creation more opportunities for mobilization of local investments.

Today, we should provide necessary and favorable conditions to fasten the process of modernization of industrial enterprises and development of equity market, mobilize definite part of stocks of industrial companies for attraction of investments and improvement of competitive production.

In this connection, within the framework of equity market’s development strategy, Ministry of Finance, Ministry of Economic Development and Trade, State Committee on Investments and State Property Management and National Bank obliged to work out legal documents for establishing new financial means of stock markets, to create advantageous climate for investment, trade development and fortification of investors’ rights protection.

Dear audience!

The energy crisis of last year forces us to take efficient steps on strengthening energetic capability of the country, modernization and rehabilitation of power stations potential, to establish a pretreatment of coal and redundancy elimination of electricity and gas loss.

This year there are more than 850 million somoni from all the sources of investments will be directed for construction of power stations.

At the present time construction of 95 small power stations completed and put into operation, as well as there are 21 more power stations are being built and according to the investment projects construction of 20 small power stations is planned.

By the end of this year, there are three last aggregates of “Sangtuda - 1” hydro-power station will be put in commission and constructing works of “Sangtuda - 2” will be enhanced.

Now, on the basis of investment projects that are in amount of 1, 5 billion somoni, construction of Electricity Transmission Lines 500 kWt «South-North», 220 kWt «Lolazor-Khatlon», reconstruction of municipal energy sector and decrease of electricity loss is planned.

Within the frames of government and direct investment project programmes a mobilization of 4,5 billion somoni is envisaged during next three years for rehabilitation, modernization and construction of hydro power stations and high-voltage electricity transmission lines.

Since 1991, within 17 years, for the first time we have an opportunity to speed up construction of Rogun hydro power station through assignment 136 million somoni of public budget and local enterprises funds.

State budget financing of this project will be twice increased next year and will consist 272 million somoni. With the objective of soon completion of construction of “Rogun” hydro power station, the World Bank supported an appeal of the Government of Tajikistan in organization of international consortium and works in this direction have already started.

I would like to remind you that the construction of “Rogun” hydro electro-station had been started during soviet times and about 40% of constructing works in this object as well as purchase of equipment in amount of more than 1 billion USD have been completed till today.

For completion of this great object construction there Open Joint-Stock Company “Rogun” has been created. Charter and its managerial structure have been approved and began to function.

In this regard, the Government is empowered using and attracting all resources and opportunities to take concrete initiatives for putting in operation first stage of “Rogun” hydro power station.

Taking this opportunity, I want to kindly appeal all the people of the country, especially the engineering staff, highly qualified constructors and specialists of energy and constructing sectors to actively participate in using all resources for the purpose of promptly completing of construction and putting “Rogun” hydro electro-station in operation as well as contribute to securing energy independence of Tajikistan.

On the issue of restoration of existing hydro-power stations capacity, I want to notice, that because of long exploitation of “Nurek” hydro-power station from 1972 and “Kairakkum” hydro-power station from 1956 machines and equipments of these objects became obsolete.

In addition to that, bottom of water reservoir is raising and reservoir capacity has been decreasing because of the sediments.

Therefore, Ministry of energy and industry, State Committee on Investment and State Property Management, as well as Open Stock Holding Company “Barki Tojik” should necessarily undertake the concrete measures for renewing and reconstruction of these hydro-power stations with attraction of foreign preferential investments, preferably, by mobilization of grants. With the purpose to improve the level of ensuring electricity and heat to population, now “Tajik Aluminium Company”, “Barki Tojik” and municipal authority of Dushanbe are responsible to bring output capacity of thermal power plants in Dushanbe to the capacity of 180 megaWatt and 120 megaWatt in Yavan region by October.

At the same time, involving foreign investment, the Ministry of energy and industry together with “Barki Pomir” Company will be obliged to work out a project feasibility study of “Sanobod” hydro power station with the capacity 80 of MW within the Rushon region and submit to the Government. Besides, for the purpose of improvement of conditions of electricity supply of the mountain regions and reasonable utilization of water resources the Ministry of Energy and Industry will be given an order to elaborate Long-term Program of construction small hydro-power stations cascade for 2007-2020 and should submit it to the Government of Tajikistan in new edition.

In a view of establishing fruitful activity of all the spheres of national economy and satisfaction of consumers’ requirements on energy and heat, the Ministry of energy and industry, the State Committee on Investment and State Property Management in a joint cooperation with other Ministries and agencies of the country are responsible to submit to the Government concrete conclusions upon wide using of power supply sources, including sun, wind and small rivers, exploration of coal, oil and gas resources.

Moreover, circumstantial analyze of uranium resources existing in the country and preparation of concrete proposals on their realization have a significant importance.

In addition to that, the Government, as well as the Ministries of finance, energy and industry, “Barki Tojik” and “Tajik Aluminum Company” will be given an order from 2009 to envisage the assignment of necessary financial means for preparation of project feasibility study and working out “Shurob” hydro-power station with a capacity of more than 1000 Megawatt.

Ministry of Economic Development and Trade, Ministry of Finance, Ministry of Justice, State Committee on Investment and State Property Management have to identify the process of financial participation of the citizens and local companies, as well as the organizations in spite of type of their properties in a construction of large and small hydro power stations, take into account their encouragement, stipulate the ways of its further implementation and submit concrete proposals to the Government.

At the present time, we need to pay a continuous attention to the issue of preventing improper spending and loss of electricity, heating, natural gas and water.

We adopted a law with a view of regulation of traditions and ceremonials. Therefore it is necessary to seriously control realization of this act in future as well.

We should set up works in such direction in order be able to reduce the spending and improper expenses in all spheres of life, including in utilization of heating, electricity, water and gas and this behavior should be a part and parcel of family breeding of the people.

In regard with this issue Ministries of Energy and Industry, Melioration and Water resources, “Barki Tojik” Company, State Unitary Enterprise “Tojikgas”, local executive authorities of cities, districts, regions and all the members of society, should take efficient measures on reasonable utilization of above mentioned resources and import of economically efficient electricity equipments.

In connection with the use of hydro energy resources of the country I would like to underline that the construction of water reservoir basins in upper stream of the country is not in the interests of these countries only. Water reservoirs do not reduce water resources, but on the contrary they keep its level.

Today everybody knows that 93% area of Tajikistan consists from mountains and our country uses 7% – 8% of its water resources at all.

From this point of view, we are constructing water reservoirs in Vakhsh, Panj and Zarafshon rivers not only for the irrigation benefits, but, first of all for producing electricity. At the present time it is in the favor of down-stream countries.

At the Soviet time, during the planning of cotton lands irrigation project which was an only strategic agricultural crop in the region, construction of water reservoirs in the upstream countries had been planned for water supply of down-stream countries.

In order to clarify some details, I will remind you some numbers: after completion of “Kayrakum” and “Norak” water reservoirs, about 1 million hectares of the lands in downstream countries were irrigated and ameliorative situation of more than 2 million hectares of lands was improved.

I underline it again, that Tajikistan will never support the initiative of implementation of water and energy projects to the prejudice of its neighbor countries.

Furthermore, in the way of realization of our state energetic policy, we – people of Tajikistan have to constantly take into account one important principle, that construction of hydropower stations and guaranteeing energy security of the country became a vital issue of the day of Tajik state.

We therefore are obliged to achieve this strategic goal by using all our opportunities and recourses in the near future.

Dear friends!

Development of agricultural crops production is the most important factor of ensuring food security of the country. Therefore, the issues of reasonable use of lands and increase of their productivity in this direction are our main duties.

Adoption and proper implementation of state programmes on ensuring food security and development of fruits and vegetable export for the period till 2015 will allow improve condition of land use and take drastic measures in the cases of its misuse.

In the condition of growth of world prices for foodstuffs especially the prices for grain crops, rational and efficient utilization of every pieces of land is a moral and vital duty of the farmers.

In other words, we will be able to guarantee a food security of the country when we’ll mostly increase a volume of local agricultural crops production and be less depending on imported foodstuff.

At the present time, with a purpose to facilitate an agricultural sector, normalize conditions of irrigated lands and restore the irrigation facilities there are 15 joint investment projects with a total volume of 940 million somoni has been implementing in Tajikistan.

In addition to that, there are 50 million somoni were assigned from the state budget for purchasing agricultural crops seeds, elimination of agricultural pests, gardening and viticulture development, cattle-breeding, bee keeping and other measures.

Moreover, with the aim to facilitate cotton growing farms there 140 million somoni of lax credit was allocated from the state budget this year through commercial banks of the country.

Now, a micro-credit mechanism with a volume of nearly 350 million somoni has been widely implementing in order to promote agricultural field which exceeds an indicator of last year three and half times.

The realization of mentioned initiatives allows increase a volume of agricultural productions to 16% and labour productivity to 8% per year. Ministry of agriculture, other appropriate authorities and agencies, as well as executive bodies of regions, cities and districts should play an important role in implementation of agrarian policy of the country on ensuring food security and development of agrarian product processing industry.

Alongside with this, Ministry of Energy and Industry, Ministry of agriculture and Academy of agricultural sciences,executive authorities of regions, cities and districts should take urgent and necessary measures for qualitative fulfillment of adopted programs on gardening and viticulture, cattle-breeding, poultry, fruits and vegetable processing as well as other agricultural programs.

Today total acres of arable lands in Tajikistan consist 710 thousand hectares which 500 thousand of them are irrigating areas.

Cotton is sown in 250 thousand hectares of land and the rest of the lands will be assigned for planting agricultural crops, including grain, vegetable oil, potato, vegetable and forage.

Arable land that suitable for two-times sowing in a summer season consists 100 thousand hectares which it can be increased to 250 thousand hectares at the end of summer till autumn.

Additional harvest that would possible to grow in this area will consist of 350 thousand tones of grain crops, vegetables, vegetable oil, as well as 1 million and 200 thousand tones of forages.

It should not be forgotten that our people were landowner for a long time and our homeland is one of the ancient centres of farming culture.In view of favorable climate and God-gifted water and land resources which are very suitable for growing all kinds of crops, fruits and vegetables,we should not feel shortage of foodstuffs anymore.

In nowadays condition, development of industry and most of all, light industry, particularly silkworm breeding is significantly beneficial, because of its high demand in both local and external markets.

With the aim of intensification of further light industry development, especially silkworm breeding, the Ministry of Economic Development and Trade, Ministry of finance, Ministry of Energy and Industry are given an order to take necessary measures to equip industrial enterprises with new technology, in particular technology for processing silkworm and cocoon, setting up efficient mechanism of import-export operations in this field and cocoon industry development.

Improving the exporting potential of our country and further development of primary reprocessing of industrial and agricultural raw materials such as aluminum, fruits and vegetables, and leather are the issues of special importance.

Thereupon, the Ministry of Economic Development and Trade, Ministry of Energy and Industry, Ministry of Agriculture, State Committee on Investment and State Property Management, Tajik Aluminum Company “Talco”, “Tojikmatlubot” union and other bodies of the executive local authorities need to adopt necessary measures.It is important to take necessary measures to organize wide scale reprocessing of the above mentioned goods and its export. Another important direction in industry is mining of deposits, reprocessing of precious stones and of steel, as well utilization of the reach deposits of “Koni Mansur”.

With this aim, responsible ministries and departments need to regard related issues on declaring international tenders on development of reach deposits of silver by establishing joint ventures.

Thereupon, today there 114 licenses were issued in Tajikistan to exploit land interiors, in order to complete exploiting works and mining of minerals. However, majority of the companies and enterprises could not organize their work in the right manner according to the requirements of the licenses.

Therefore, the Government has been instructed to elaborate and introduce a special system, with the aim of eliminating existing difficulties in the process of issuing licenses, providing transparency, choose proper company through bids to be granted the permission to exploit deposits and mining of minerals.

Furthermore, it is necessary to adopt measures on introduction changes into tax and civil legislation, forming a unified system of providing information on location of deposits and minerals, simplifying registration procedures, legal recommendations on using deposits and preparation of national personnel in this sphere.

Dear audience!

Our third strategic aim is to lead out the country from communication deadlock and providing further development in transport and communication sphere.

We are building the tunnels, roads and bridges with international importance that give us an opportunity to have permanent access to other countries and regions.

It should be noted, that within the framework of realization of the creativeness projects in our country, the proportion of the investments for the main construction is increasing year by year.

Источник: ИА "ХОВАР"
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