[{"bbox": [109, 153, 325, 182], "category": "Section-header", "text": "2. RATIONALE"}, {"bbox": [109, 212, 234, 237], "category": "Section-header", "text": "2.1 Context"}, {"bbox": [120, 253, 1110, 352], "category": "Text", "text": "Tajikistan is a low-income⁵, mountainous land-locked Central Asia country with a territory of 141.4 thousand square kilometres⁶. It is constrained by increasing security concerns due to its common 1,300 km border with Afghanistan, where the political is situation rapidly deteriorating, and various conflicts in Fergana Valley appearing as a result of borders established during the Soviet era."}, {"bbox": [120, 363, 1110, 462], "category": "Text", "text": "Tajikistan remains the poorest country in Central Asia⁷ with 40% of the population living below the poverty line and one of the world's most remittance-dependent⁸ (around 28.6% of GDP in 2019). While the country reduced its monetary poverty rate from 80% in the late nineties to around 27% today, it has been experiencing an economic crisis since 2014, resulting in falling living standards⁹."}, {"bbox": [120, 472, 1110, 835], "category": "Text", "text": "The agriculture sector is the biggest employer in the country. The population of 9.475 million¹⁰ is unevenly distributed with 73% living in the rural areas. An absolute majority of 88% of Tajikistan's farmers are small-scale family farms¹¹. While it remains the greatest provider of employment, the agriculture sector only accounts for 20% of the country's gross domestic product (GDP) and about 30% of exports. High GDP growth since the 90s has largely been driven by mineral exports and has not translated into corresponding job creation to accommodate the rapid entry of young workers into the workforce, particularly into the private sector that remains very limited, with a correspondingly high proportion of migrant workers (mainly to Russia) and high household dependency on remittances (which supply about 35% of GDP). Slowdowns in the Russian and Chinese economies (exacerbated by COVID-19), low commodity prices, currency fluctuations and a fragile banking system impede sustainable growth. The NDS-2030, aims at improving the quality of life according to the goals of the country and its targeted SDGs. The NDS also aims to improve the population's living standards based on sustainable economic development, meaning energy security and efficient use of power, food security and access to good quality nutrition, productive employment and exit from connectivity limitations. The NDS underpins the direction towards \"the elimination of unnecessary barriers for private sector development and investments, strengthening legislation in the area of complete protection of property rights, improving the quality of vocational education system\"."}, {"bbox": [120, 847, 1110, 1017], "category": "Text", "text": "Because less than 7% of the land area is arable and cotton is the predominant crop, Tajikistan imports approximately 70% of its food, while irrigation serves 85% of cultivated land and supports over 90% of the total crop production. At the same time, water is the main primary energy source in Tajikistan, with hydropower generation constituting 93% of the total power generation capacity of the country. A critical goal to be addressed through the water-energy nexus is to improve efficiency in the agriculture sector in an inclusive and sustainable manner, that benefits small farmers, while also ensuring the maximisation of potential renewable energy, including for export¹², as a sector with better economic prospects."}, {"bbox": [120, 1028, 1110, 1223], "category": "Text", "text": "The power sector of Tajikistan being the backbone of the country's economy, is facing a number of challenges. The most acute problems are obsolete generation, transmission and distribution capacities, which cannot be revamped or replaced due to a lack of financing caused by low electricity tariffs and poor revenue collection. According to the latest MEWR's assessment, both technical and commercial losses exceed 43% of the total energy production in some provinces, while revenue collection rate is less than 50%. These result in difficult financial situation of BT. Furthermore, BT accounts for over 80% of the total State-Owned Enterprises' debt to the Ministry of Finance. Despite existing high levels of external debt (around 44.9% of GDP in 2020), the Government plans to finance infrastructure investments (including the very ambitious Roghun Hydropower Plant) which increases the risk of debt distress."}, {"bbox": [109, 1277, 1121, 1316], "category": "Footnote", "text": "⁵ Change of classification from ‘Lower-Middle’ to ‘Low’ in July 2018. Sources: https://blogs.worldbank.org/opendata/new-country-classifications-income-level-2018-2019 &"}, {"bbox": [109, 1317, 963, 1337], "category": "Footnote", "text": "⁶ Tajikistan in figures, 2018, Statistical Office of Tajikistan http://stat.ww.tj/publications/June2019/tajikistan-in-figures-2018.pdf"}, {"bbox": [109, 1337, 540, 1356], "category": "Footnote", "text": "⁷ Lowest per capita GDP among the 15 former Soviet Republics."}, {"bbox": [109, 1356, 827, 1375], "category": "Footnote", "text": "⁸ Official figures account for around 30%, but indications that it could be as much as 50% of GDP. Sources:"}, {"bbox": [109, 1375, 1121, 1433], "category": "Footnote", "text": "⁹ Following the commodity price shock in 2014, and subsequent stagnation of the Russian economy, Tajikistan went through a cumulative 45% decline of both remittances and imports, which has been partially reverted, as of 2017, by rising energy prices (according to World Bank *Country Partnership Framework for the Republic of Tajikistan for the Period FY19-FY23*, April 2019)"}, {"bbox": [109, 1433, 383, 1452], "category": "Footnote", "text": "¹⁰ https://www.imf.org/en/Countries/TJK"}, {"bbox": [109, 1452, 837, 1471], "category": "Footnote", "text": "¹¹ Tajikistan Small Family Farms Country Factsheet, FAO, 2018, http://www.fao.org/3/i8348en/I8348EN.pdf"}, {"bbox": [109, 1471, 1121, 1587], "category": "Footnote", "text": "¹² The ongoing Central Asia – South Asia (CASA-1000) electricity transmission project aims to establish an electricity trade involving the transfer of surplus hydropower available in Central Asia (approximately 1.3GW from Kyrgyzstan and Tajikistan) to electricity-deficient countries in South Asia (Pakistan 1 GW and Afghanistan 300 MW). The CASA-1000 project is financed by seven institutions (USD 1.17 billion) with a majority of financing provided by the World Bank Group (USD 526.5 million), Islamic Development Bank (IsDB, USD 155 million), European Bank for Reconstruction and Development (EBRD, USD 110 million), European Investment Bank (EIB, USD 180 million), Foreign, Commonwealth & Development Office (FCDO) of the UK Government, Afghanistan Reconstruction Trust Fund (ARTF, USD 40 million), and the US Government."}, {"bbox": [1012, 1659, 1121, 1681], "category": "Page-footer", "text": "Page 5 of 26"}]