In an interview with Asia-Plus, Nematullo Khikmatullozoda, Tajikistan Minister of Economic Development and Trade/ ADB Alternate Governor and CAREC National Focal Point talked about how cooperation between our country and the Asian Development Bank (ADB) began, what was done for 20 years of the joint work, and what is planned for the future.

- This year marks 20 years of Tajikistan cooperation with ADB. How would you describe the relationship with this international financial institute?

- The history of relationship between Tajikistan and ADB began in 1998, when our country joined this international organization. Our accession to ADB was preceded by diligent preparatory work, which took place in difficult circumstances for the country. Even before the signing of the peace agreement, the government decided to join ADB realizing the need for financial resources for post-conflict reconstruction. It took two years to comply with all set procedures. Negotiations on obtaining the first loan from ADB were held outside the republic, as the bank's employees at that time did not dare to come to Dushanbe. 

Since that time, the relationship between Tajikistan and ADB reached a strategic level; and today the Asian Development Bank is the largest multilateral development partner of Tajikistan.

For example, as of May 2018, we are jointly implementing 11 projects totaling $643 million. Last October, ADB President Takehiko Nakao visited Tajikistan; and President of the Republic of Tajikistan Emomali Rahmon met with him. As part of his first three-day visit to our country, Mr. Nakao took part in the ground-breaking ceremony for the Dushanbe-Kurgan-Tyube road rehabilitation project, visited the Gorno-Badakhshan Autonomous Oblast and the Sarez Lake, and got acquainted with the Nurek hydropower plant.

- How much did ADB support contribute to the social and economic development of our country?

- Since the beginning of cooperation with ADB, Tajikistan has made significant progress in social and economic development: stable growth rates, poverty decreased from 81% in 1999 to 29% in 2017, major projects to improve physical and social infrastructure have been implemented. The economic indicators of Tajikistan remain stable, despite the complex external environment, characterized by volatility of prices for key commodities. To some certain extent, this was facilitated by our joint programs and projects with ADB in various fields. To date, the Bank has approved a total of about $1.6 billion in grants, concessional loans and technical assistance for Tajikistan.

ADB projects have direct impact on Tajikistan economy

- Can you list ADB project that are most significant for the development of our country?

- With ADB support, we have restored over 650 kilometers of roads in our country. In the energy sector, as a result of projects supported by ADB, three hydropower plants were repaired and modernized, and more than 600 kilometers of transmission and distribution lines were built.

Projects supported by ADB provided access to clean water for more than 30,000 households in Tajikistan, improved 140,000 hectares of land through the rehabilitation of irrigation and drainage systems. A special ADB project on building resilience to climate change has helped over 100,000 Tajik people cope with the adverse effects of climate change. In 2016, ADB approved a project to develop agricultural production and improve food security by improving the efficiency of water management in the Pyanj River Basin.

In the education sector, ADB helped to build or modernize 1,770 rural classrooms and schools, and train more than 68,700 teachers to improve education for 173,000 students.

A project is currently being implemented to develop technical and vocational education and training in the country. As a result of this project, returning migrants, rural residents and women who need skills to get jobs will obtain technical education, which is lacking in the market now.

In health, ADB helped strengthen drug quality control mechanisms in Tajikistan, develop a family medicine program, restore and equip about 240 rural medical institutions, and train approximately 960 family doctors and nurses.

ADB assisted in the development of a sustainable microfinance sector in Tajikistan. Policy-based budget support helped to increase public financing of important social expenditures and promoted reforms to improve the investment climate, tax administration, public finance management and social protection.

ADB assists Tajikistan in developing productive employment through public-private partnerships and vocational training, infrastructure development (especially transport and energy), promoting economic diversification, increasing resilience to climate change and ensuring food security.

Through the introduction of a single computerized information system, the creation of a national "single window" mechanism and the modernization of key customs border posts, ADB has helped Tajikistan to promote regional cooperation and trade through more efficient and transparent customs services. The Bank also supports the country's participation in the Central Asia Regional Economic Cooperation (CAREC) Program.

These projects had direct impact on the economy of Tajikistan and the improvement of living standards of the population, and helped to realize the country's existing potential to a certain degree.

There are prospects for high economic growth

- In which directions, in your opinion, did ADB support bring the most significant benefit?

- We cooperate with ADB in many areas, but I would like to highlight the role of the bank in improving road and energy infrastructure, as well as in supporting regional cooperation. About 35% of the total assistance to the country is in the transport sector, 32% - energy. Energy and transport are key priorities both in the Tajikistan National Development Strategy until 2030 and the CAREC 2030, which was approved by 11 member countries last October in Dushanbe during the CAREC Ministerial Conference.

CAREC 2030 clearly demonstrates that there are good prospects for achieving higher economic growth, poverty reduction and trade diversification in the CAREC region.

The CAREC program has six transport corridors linking markets in the region and beyond, four of which pass through Tajikistan. These corridors contributed to the growth of the country's foreign trade turnover in the last decade.

The CAREC program also supports the country's efforts to expand the energy sector of Tajikistan, which is of great importance for the development of industry and the creation of foreign exchange reserves. The purpose of the development of the energy sector is to ensure constant access of the population and economic entities to the country's energy resources, as well as the construction of new generating capacities and transmission networks, which will allow the seasonal surplus of electricity to be imported to neighboring countries.

As examples of projects supported by ADB in the field of transport, I can mention the projects for the rehabilitation of the Dushanbe-Kyrgyz border road and the Ayni-Panjakent-Uzbekistan border road. These projects contributed to the creation of a sustainable regional and national road network, helped to improve the connectivity of road networks in the region and to expand regional economic cooperation, impacted on reducing transport costs and improving access to markets that historically were not available. During his visit, ADB President Mr. Nakao, together with Emomali Rahmon, launched the start of construction works on the Dushanbe-Kurgan-Tyube road rehabilitation project, to which ADB allocated $65 million for the first phase.

This strategically important road connects the north and south of the country, it is characterized by intensive traffic and is part of three CAREC corridors.

Mr. Nakao, together with Minister of Foreign Affairs Sirojiddin Mukhriddin, visited GBAO and Sarez Lake to assess Tajikistan's vulnerability to climate change. Since most of the country's territory is covered with mountains, Tajikistan suffers from severe floods and mudflows every year, aggravated by climate change. ADB helps the country improve water management to increase food production and adapt to climate change. In addition, ADB helps to restore and build climate-resilient irrigation canals, river dams and water supply systems in rural areas, while improving food production.

In the energy sector, I would like to note a very important project for the reconstruction of the 500 kV switchyard in Nurek. The Nurek HPP is the main source of electricity in Tajikistan, producing more than 70% of the country's electricity, which is used by about 6 million people, industries and agriculture that contribute to the economic development of the country. This project was successfully completed last year.

ADB is planning to provide over $280 million to Tajikistan

- How effective do you think the implementation of the current ADB partnership strategy with Tajikistan, within which the country is being supported in achieving sustainable and inclusive economic growth?

- The current five-year partnership strategy between ADB and Tajikistan for 2016-2020 was adopted in August 2016. As part of this strategy, ADB supports the country's efforts to improve energy supply and transport infrastructure, reforms on private sector development and improving business and investment climate, and strengthen regional cooperation under the CAREC Program.

ADB's partnership strategy with the country for 2016-2020 attaches special importance to expanding the economic base of Tajikistan by developing its domestic and international competitive advantages, improving the investment climate in the country to create jobs with high incomes. This will also require upgrading the skills of the workforce and improving food security.

As for the immediate plans, ADB plans to provide Tajikistan with more than $280 million during 2018 - 2020 to assist in developing energy infrastructure, improving water and disaster risk management, urban development, health and education, and restoring key transport corridors.

We believe that the implementation of the current ADB partnership strategy with Tajikistan is carried out effectively. This is confirmed by the results of regular joint project reviews. Tajikistan is one of the leaders in the quality of project implementation among ADB member countries. The country has high success rates for completed projects and timely implementation of ongoing projects.

- ADB plans to provide only grant assistance to Tajikistan this year, at least. The decision was made in connection with the risk of stability of the external debt of the republic. Does Tajikistan need such support today?

- ADB is a development bank, its main mission is to promote economic growth in its member countries. Therefore, all financial support is provided on extremely concessional terms. For example, loans are granted with a maturity of more than 30 years, and there is a grace period, usually 10 years, during which the interest is not paid, and the interest itself is less than 2%. As for grants, this is gratuitous aid and is not required to return. Decisions on loans and grants are based on the classification of the external debt of Tajikistan.

During 2008-2014, Tajikistan received only grants from ADB, but since 2015, assistance was provided on a grant-loan basis (50/50). This year, ADB decided to provide financial support to our country again on a grant basis. This decision was made considering the need to maintain the acceptability of the level of external debt, as well as after negotiations with the government of Tajikistan.

- ADB main tools to assist developing countries are political dialogue, loans, equity investments, guarantees, grants and technical assistance projects. Which of the listed support do you consider more acceptable and appropriate for Tajikistan?

- Each of these tools has its own specifics and scope. They are not mutually exclusive and usually complement each other, so they are all acceptable and used in Tajikistan.

«ADB has been and remains a reliable partner for the development of Tajikistan»

- What new areas of cooperation would you like to develop under the next partnership strategy between Tajikistan and ADB, which will be designed for 2020-2024?

- Despite significant progress in the development of the economy and improvement of the well-being of the population, problems in infrastructure development (energy and transport), as well as creation of favorable environment for private sector investments remain urgent in our country.

To implement large-scale reforms in various sectors of the national economy, the government of Tajikistan works closely with ADB and other development partners. Priorities under the next partnership strategy between Tajikistan and ADB will be the priorities identified in the National Development Strategy till 2030, namely, ensuring energy and food security, breaking the communication deadlock, turning Tajikistan into a transit country, and expanding productive employment.

Specific directions and projects within these priorities will be determined during negotiations. For our part, we want to propose: in the energy sector, projects to continue rehabilitation and development of the energy systems, to increase energy efficiency and energy savings; in the field of productive employment - strengthening the education system. Technical and vocational education with an emphasis on improving labor skills, as well as initiatives in agriculture and rural employment; in the field of transport - development of road and transport infrastructure, gradual transformation of transport corridors into economic ones. Other important areas of cooperation can also be the development of tourism and assistance in achieving the sustainable development goals.

In addition, we hope that the bank will continue to support Tajikistan's efforts to expand regional economic cooperation and trade. We are sure that mutually beneficial regional cooperation and regional initiatives in key sectors can link the countries of the region.

ADB has been and remains a reliable partner for the development of Tajikistan, as evidenced by our 20-year constructive cooperation. I am confident that we will continue to work effectively for the benefit of Tajikistan's development.