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MDG Needs Assessment

Process in Tajikistan

Temur Basilia

MDG Team Leader

UNDP TajikistanJuly 2005

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Presentation AgendaTajikistan’s MDG Needs Assessment Process;

Main Structural Reforms needed for achievement of the MDG;

Scenarios of the MDG Needs Assessment in Tajikistan;

Financial Estimations;

Next Steps.

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MDG Needs Assessment Process-The Government of Tajikistan

The President’s leadership;

The Government Working Groups under the leadership of relevant deputy prime ministers;

Coordination of the process by the State adviser to the President.

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Governmental Working GroupsPresident

President Administration

Education Working

Group

Gender Working Group

Health Working Group

Water Sanitation and

TreatmentWorking Group

Food SecurityWorking Group

Focal Point at the Ministry of

Education

Focal Point at the Ministry of

Health

Focal Point at the Ministry of

Agriculture

Focal Pointat the Ministry ofMelioration and Water Manag.

Focal Point at Committee onWomen Affairs

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MDG Needs Assessment Process-The UN Tajikistan

The UN MDG Team: International and national consultants; Policy: Policy Adviser, Macroeconomist and Financial

Modeling specialist, PRSP consultant; Sectoral consultants: Health, Education, Agriculture and

Food Security, Water and Sanitation; Environment, and Gender;

Regular meetings and workshops with donors and civil society;Support of the Millennium Project.

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Main Structural Reforms Needed for the Achievement of

the MDGsGood governance and public administration reforms;

Tax and customs administration reforms;

Privatization and the development of small and medium enterprises;

Utility sector reform.

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Main Structural Reforms Needed for the Achievement of the MDGs (cont.)

Good governance and public administration reforms

Eliminate duplication of functions at all levels;Improve the function of the executive office of the President, with better capacity and more focus on development of overall strategies and monitoring oversight;Improve capacity of the public service delivery at all levels, but especially at local levels, and encourage flexible local service delivery mechanisms that address local needs and priorities;Create open competitive system for all positions of public service

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Main Structural Reforms Needed for the Achievement of the MDGs (cont.)

Tax and customs administration reformsSimplify the Tax Code, and establish a unified income tax rate of 12%;Increase the threshold for VAT for private enterprises with an annual turnover equivalent to US$ 50,000 and higher;Consider abolishing the sales tax and replacing it completely with VAT;Reduce the new Single Agricultural Tax rate to avoid extra burden on poor farmers, especially cotton farmers; Improve tax collection from wealthy individuals (the tax administration to identify the 100 wealthiest individuals for tax collection).

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Main Structural Reforms Needed for the Achievement of the MDGs (cont.)

Privatization and the development of small and medium enterprises

Simplify the burdensome administrative procedures for the private sector-develop a standard package for registration and streamline licensing, permits and approvals processes;Reduce the frequency of tax inspections to once every two years, and impose the issuance of mandatory notifications to enterprises before inspections;Coordinate other inspections (fire, sanitation, law enforcement agencies etc.) by limiting the frequency to one per year;Establish an Investment Council under the President’s leadership to eliminate barriers for investors and attract new potential investors.

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Main Structural Reforms Needed for the Achievement of the MDGs (cont.)

Utility sector reformRestructure energy monopoly company and other large state utilities; transfer generation, transmission and distribution responsibilities from state enterprises to private providers;Create an independent regulatory body for the energy and water sectors to establish tariffs and regulate utility providers;Implement nationwide metering services for electricity and water usage to increase the net collections;Regulate tariff rates for public utilities based on cost recovery principle and the public’s ability to pay; provide subsidies for the poor;Encourage mechanisms to reduce losses and illegal usage of utilities;Encourage community involvement in public utilities management (i.e. water users’ associations).

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Scenarios of the MDG Needs Assessment

Economic growth scenarios: baseline and high-growth;Baseline Scenario: GDP Growth- 5% annually; increasing tax revenue-19% by 2015; budgetary expenditures on MDG related activities-31%

High (growth) Scenario: GDP Growth- 7% annually; increasing tax revenue-24% by 2015; budgetary expenditures on MDG related activities-50%

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Scenarios of the MDG Needs Assessment (baseline scenario)

Total Needs

State Budget Input

Private Sector Input

Foreign Aid Financing Gap

MDG Sector USD mln

As % of total needs

as % of GDP

as % of total needs

as % of GDP

as % of total needs

as % of GDP

USD mln

% of total needs

as % of GDP

Food Security

6,250 2% 0% 70% 14% 4% 1% 1,505 24% 6%

Education 1,766 59% 3% 8% 0% 15% 1% 313 18% 1%

Health 3,587 7% 1% 25% 3% 12% 0% 1,979 55% 5%

Water 998 3% 0% 29% 1% 8% 0% 595 60% 2%

Gender 116 0% 0% 0% 0% 32% 0% 78 68% 0%

Environment 260 9% 0% 0% 0% 17% 0% 192 74% 0%

Total 12,977 12% 4% 44% 16% 9% 3% 4,663 36% 14%

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Scenarios of the MDG Needs Assessment (high growth scenario)

Total Needs

State Budget Input

Private Sector Input

Foreign Aid Financing Gap

MDG Sector

USD mln

as % of total needs

as % of GDP

as % of total needs

as % of GDP

As % of total needs

as % of GDP

USD mln

% of total needs

As % of GDP

Food Security

6,250 10% 2% 70% 11% 4% 1% 1,023 16% 3%

Education 1,766 81% 4% 9% 0% 15% 1% -95 -5% 0%

Health 3,587 34% 3% 29% 3% 12% 0% 878 24% 2%

Water 998 44% 1% 29% 1% 8% 0% 185 19% 0%

Gender 116 63% 0% 0% 0% 32% 0% 6 5% 0%

Environment 260 32% 0% 0% 0% 17% 0% 133 51% 0%

Total 12,977 30% 1% 45% 15% 9% 3% 2,129 16% 5%

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Scenarios of the MDG Needs Assessment (per capita)

2006 2010 2015 BASELINE SCENARIO MDG investment needs 205 243 248 Source of financing: Private Contribution 71 94 113 Government Expenditures 20 27 36 ODA for direct MDG support 14 14 14 MDG financing gap 100 108 85 HIGH GROWTH SCENARIO MDG investment needs 205 243 248 Source of financing: Private Contribution 72 95 115 Government Expenditures 23 60 86 ODA for direct MDG support 14 14 14 MDG financing gap 96 74 33

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Next StepsThe Government ownership of the development of the MDG-based PRS and the National Development Strategy; The UN: technical assistance, coordination of the monitoring and evaluation of the PRS process; advocacy for increased ODA;Participatory process: inclusion of civil society, donors, and local communities;Other donors’ participation: Donor’s Advisory Board (UN, IMF and WB) with involvement of other international organizations.

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Government Working Groups And Their Cooperation with the UN NDS and PRS Development Project

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Structure of the UN Project to Support the Development of NDS and PRS