Consultative Council as an instrument facilitating political dialogue between the state and private sector Consultative Council as an instrument facilitating political dialogue between the state and private sector

Private sector development review 1. Private sector in Tajikistan is weakly organized and structured; 2. Main factors impeding private sector development:  Complicated administrative procedures  Complicated tax administration system and tax burden  Lack of objective information on market opportunities and trends  Insufficient initial capital and weak technological capacity of enterprises  Insufficiency of investment process in the country and lack of ventured investment  Insufficient private sector access to financing/credits  Non-competitiveness of local commodity producers and manufacturers  Weakness of business support institutions  Weak partnership between the state authorities and private sector 3. Private sector is on the initial stage of its consolidation and its potential is not yet disclosed completely.

Institutionalization trends in private sector development Government and Donors: 1. Combine efforts in private sector development: PRS Strategy BEE WG 2. Involve private sector representatives into decision-making process: Entrepreneurs participate in working groups during the process of laws elaboration Government officials conduct meetings with business structures Aimed to improve investment climate and business environment the Consultative Council under the President of RT has been established Business structures try to strengthen their positions: 1. In order to survive in existing situation businessmen unite in corporations; 2. Businessmen create the structures oriented to business support such as business associations, business support centers, etc.

Status of the Council and Opportunities The Consultative Council has been established by the Presidential Decree as consultative-advisory body aimed to elaborate recommendations for the Government and other state bodies on improvement of investment climate and business environment issues The Council has promoted informal dialogue between the government and private sector on a continuing basis (quarterly meetings). The creation of the Consultative Council initiated the promotion of the business community activity The Council promotes the reforms required for private sector development

Difficulties and Risks Disinterested state bodies Misunderstanding and unwillingness of state bodies to improve the existing situation Business structures low confidence in the government Business structures non-confidence in improvement of the situation Insufficient support of the Council activity by the international partners (donors) due to low coordination between them and their own agendas Duplication of the Council activity Uncertainty of the Council status or mandate in the state mechanism

Structure of the Council Multilaterals - One representative

Outcomes of year one Action Plan towards improvement of country’s rating in Doing Business is adopted – Decree of the President is adopted; Reforms in an area of permissions for entrepreneurs are initiated – Decree of the President is adopted; Reforms in construction area aimed to simplify administrative procedures are initiated – Decree of the President is adopted; Large-scale program “200 days of reforms” for simplification of administrative and regulatory procedures is developed – to be adopted in up-coming Council meeting

200 Days of Reforms – Features Criteria of the Program reform measures:  Simplicity of adoption  Prompt implementation  Effectiveness in terms of financial cost  Targeted interventions – aimed to reduce administrative burden to business  Validity and predictability

200 Days of Reforms – expected results Expected results: Reduced cost and time for business for opening business Increased effectiveness and responsibility of the state bodies Improved interaction of business with the state bodies Improved access of business to information Increased number of registered businesses Decreased unofficial pays to authorities Reduced scale of hidden transactions Reduced level of corruption Improved international rating of Tajikistan in business environment

Information about the Secretariat

The main activities of the Secretariat  Stimulation of business community consolidation  Coordination of donors’ institutional projects in the sphere of private sector improvement and promotion of recommendations and suggestions put forward by these projects via the Council  PR-companies and informing on the Council activity  Coordination with state bodies on business improvement issues

Activity on improving Tajikistan’s indicators in international rating of Doing business  The issue of improving Tajikistan indicators in international ratings of Doing Business was included into the first Consultative Council meeting agenda  Action Plan on improving Tajikistan international ratings according to “Doing Business” report was approved on the second Consultative Council meeting  Secretariat being supported by USAID project has arranged the trip to Republic of Kyrgyzstan for government delegation aimed to learn the Kyrgyzstan experience and meet “Doing business” team.  Secretariat has conducted the meeting for Goscominvest representatives with “Doing business” team in the Secretariat office.

Coordination with other Secretariats supported by the EBRD in other countries 1. The Memorandum on joint activity of the Investment Councils Secretariats of Armenia, Georgia, Kyrgyzstan, Mongolia and Tajikistan has been concluded (December 2007) 2. Secretariat consultants in April 2008 visited Republic of Kyrgyzstan in order to learn the Kyrgyz Secretariat experience 1. Secretariat conducts consultations with Kyrgyzstan Secretariat on various issues on constant basis

Sustainability There is a probability that: 1. Other donors will take part or continue financing of the Secretariat activity:  Based on other Secretariats working experience  Presently, IFC expressed readiness in designing and maintenance of the Secretariat web-site 2. Business structures will also take part in financing the Secretariat activity in 3 or 4 years:  Presently, private sector has contributed to the Secretariat activity in the form of office furniture provision

Thank you!