Tajikistan recently celebrated its 20th anniversary of independence with great fanfare, plenty of new buildings inaugurated, and a new record: the tallest flag pole on earth!
As a result, when strolling the streets of Dushanbe, Tajikistan’s capital city, it is easy to forget that 47 percent of Tajiks live on less than $2 a day (World Bank). However, as soon as you get out of the capital, and into the provinces, the lack of infrastructure becomes obvious.
The Sughd region in the North of the country is a case in point. The region, home to over two million people (more than a quarter of the total population), is connected to Dushanbe by a road which is often closed in winter due to weather conditions. Villages and cities experience harsh power rationing every winter, as the mostly hydroelectric-powered country is unable to cope with the demands for energy due to water freezing (see: Energy and Communal Services in Kyrgyzstan and Tajikistan for recent data). Irrigation channels require constant repair and are unable to fully satisfy the demand from agriculture – the most important economic sector of the country after aluminum production. Currently product yields and quality are low, making it difficult to get good prices in wholesale markets and to establish contracts with processors – which would make a world of difference to farmers.
Despite all these challenges, I defy anyone having tried the Grade A dried apricots from Tajikistan to not be willing to move mountains to get some sort of supply chain going between the Sughd region and the country they call home!
One important step has been to allow the private sector to take part in the preparation of local economic development plans at the district and jamoat level (that’s the lowest level of governance in Tajikistan). This might seem obvious, but is far from common practice. We’re also helping to create a trust fund that supports implementation of the priorities identified by local communities. No doubt a lot of irrigation projects will be funded.
What else can be done to develop the business environment and private sector development in rural areas of Sughd? We decided to focus on issues such as a regional platform for public private dialogue. But this is not enough. We know from experience that in addition to creating such a forum – we need to equip private sector representatives (business associations and farmers’ organizations) to become effective and sustainable participants through dedicated support and training. And we need to provide farmers and small businesses with dedicated agriculture and business advisory services in order to increase the quantity and quality of production. We’re currently developing this as a paid service.
So what starts as a rather straightforward objective (to promote growth) quickly becomes a multi-faceted, complex programme which involves a broad set of specialized skills. It is managing this complexity that is part of my job!
And this is not all. Even assuming all of these issues are addressed, there is still a major hurdle to overcome: access to finance for producers and processors. There again, our programme is supporting microfinance institutions and their lending organizations, which fill part of the significant gap created by commercial banks that target the (less risky) upper end of the market. However, access to markets cannot be addressed by microfinance alone. We are currently exploring options to support value chain finance through special credit lines or a business challenge fund. If you have any suggestions or examples of something similar, I’d love to hear from you. And stay tuned for updates!
Pascale Bonzom manages the Rural Growth Programme in Tajikistan.