Tajikistan privatization task order : final report

While the program can be made to work, it must first resolve a number of problems. The privatization process is too complex, too slow, and lacks transparency, and the principal action agency, the State Property Committee (SPC), is more an impediment than a catalyst. Several national-level privatizations are backlogged in the SPC. It is impossible to ascertain the number and nature of delays and who is responsible for them, since there is no management information system. The high degree of discretion in the approval process, particularly in the valuation methodologies, allows infinite delays or postponements. The program is blocked at the regional level by lack of knowledge, resources, and in some case, motivation. There are very real problems caused by mandatory valuation guidelines and at other points where the SPC gets involved in the process. Regional privatization -- at least in some regions -- can be energized. A basic (but correctable) deficiency in information and tools, both at the SPC and elsewhere, is resulting in lack of enthusiasm and low morale. Nor is this weakness offset by the commitment, depth, or quality of the leadership provided. There are also some core problems regarding issues such as the bankruptcy law, valuation methodology, and accounting and tax law, as well as the absence of an informed and motivated constituency (including the leadership) for changing these laws. Overall, society has not been prepared for transition to a market economy. It was the intention of the donor/lender community that UNDP and USAID bridging projects would convey a sense of urgency, action, and serious commitment to the privatization process, and help motivate the process so that the larger World Bank project would achieve rapid absorption. These efforts seem to be having an effect, as both the UNDP and USAID are focusing on a broader range of resources on the issue. However, Tajikistan has not benefited significantly from the range of institution building and "transition to a market economy" training that has been going on since 1990. It has a very significant and basic need in this regard. While this need is slowly being met, the process should be accelerated. The body of knowledge, trainers, curricula, and other information are available in Russia and well-known to the donor/lender community. Several recommendations are made.