Tajikistan : Capital Expenditures and Public Investment Management

Abstract

This policy note is part of the World
 Bank's Programmatic Public Expenditure Review (PER)
 work program for FY2012-2014. The PER consists of a series
 of fiscal policy notes, which aim at providing the
 Government of Tajikistan with recommendations to strengthen
 budgetary processes and analysis. This policy note, the
 sixth in the series continues the fiscal policy dialogue
 conducted in the previous notes. It is structured as
 follows. Chapter 2 sets a macro-fiscal context for the
 analysis with a particular focus on fiscal policy
 challenges. Chapter 3 analyzes the composition and trends in
 capital expenditures to identify issues and offer solutions
 for improving efficiency of capital spending. Chapter 4
 reviews a public investment management process in Tajikistan
 to identify weaknesses in the capital budgeting cycle
 (planning, budgeting, implementation, and audit), and to
 recommend measures and remedies to address shortcomings in
 these processes. Chapter 5 provides the main conclusions: 1)
 although Tajikistan has enjoyed high economic growth and
 substantial external assistance, increasing uncertainties
 about the global environment and the Russian growth outlook
 put Tajikistan's growth prospects at high risk, and the
 fiscal space will be very tight; 2) Tajikistan needs to
 address both equity and sector allocation efficiency issues
 to better mobilize resources in support of national
 priorities; 3) analysis of the public investment management
 system suggests that lack of a unified methodological
 framework, fragmentation, and poor institutional links
 discourage efficient use of limited domestic resources and
 attraction of external financing; and 4) the proposed
 reforms need to be sequenced to take into account
 implementation capacity and expected benefits. This note
 provides detailed recommendations to the Government
 regarding public investment management.