bne:Invest in Tajikistan - March 2014

Content: 1 Top Stories 3 Interview 6 Feature 8 Sector10 News in brief

March, 2014 www.bne.eu

bne:Invest in Tajikistan

Top story

Microfinance comes of age in Tajikistan

A vibrant and highly professional microfinance sector has evolved in Tajikistan, serving the needs of the country’s small-scale farmers and urban micro-entrepreneurs.

The increase in microlending since the adoption of Tajikistan’s first law on microfinance back in 2004 has been dramatic. In the last decade the number of micro-finance institutions (MFIs) in the country has increased almost tenfold, to reach 125 as of the end of 2013, with a gross lending portfolio of around $1.2bn, according to the Association of Microfinance Organizations of Tajikistan (AMFOT).

As well as having the lowest income per capita level in the CIS region, Tajikistan has a high level of demand for microloans from the large rural population - over 70% of the country’s 8m population live in rural areas. Commercial banks are mainly

active in the major cities, while MFIs tend to have networks spanning parts of the country that are harder to access.

Shuhrat Abdulloev, deputy director of AMFOT, stresses the importance of microlending in Tajikistan, citing both the high level of demand for microloans and the overall demand for financial services in rural areas.

Fadoua Boudiba, investment manager for Central Asia and MENA at Incofin, a fund manager specialising in support for microfinance in developing countries, agrees on the vital role microfinance plays in countries like Tajikistan. “Microfinance isn’t the sole solution to poverty in Tajikistan, but it is an important tool. As micro-enterprises grow, they create more job opportunities for people,” she says. Incofin’s

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The Islamic Corporation for the Development of the Private Sector is a multilateral partner of the Invest in Tajikistan newsletter


Impulse Microfinance Investment Fund granted a $2m senior loan facility to Tajikistan’s AccessBank to support lending to micro- and small enterprises in the Tajik regions in February.

With their on the ground presence, MFIs tend to be highly responsive to the specific needs of their customers. “The microfinance institutions working in remote areas are doing a good job. Some institutions have developed mobile branches that visit remote areas regularly, and they have adapted their products after analysing the specific needs of the farmers. There is constant evolution in the products provided,” Boudiba says.

Poverty is already declining in Tajikistan, with the proportion of people living below the poverty line dropping from 50% in 2008, to 38.3% in 2012, according to the Ministry of Economic Development and Trade. Tajikistan’s income per capita also passed the $1,000-mark in 2013. However, due to the lack of economic opportunities at home, up to a million Tajiks, mainly men, travel to Russia and other countries to work.

As in other developing countries, many of the MFIs’ clients are women. “I think every microfinance industry starts with the women, in Tajikistan as in other countries,” says Boudiba.

Incofin is one of many international financial institutions, NGOs and donors engaged in supporting microfinance in Tajikistan to help the country’s development. The country’s first MFIs were launched in 1998, the year after the civil war ended, though the sector’s growth only started to accelerate after the first law on microfinance was adopted in 2004. Organisations including the Aga Khan Foundation, Mercy Corps, CARE International and the UNDP all support microfinance in Tajikistan.

As a result, virtually the whole country is now served by MFIs, although the market has yet to reach the level of maturity seen in Latin American countries such as Peru, and there is still room for further growth. “[There] still exist [a] few regions where

there is no competition among MFIs, only one or two MFIs provide services to the population... If the competition keeps growing, the interest rates of financial sources will drop,” says Abdulloev.

AMFOT was the driving force behind the adoption of a new law on microfinance in 2012, which introduces stricter rules for MFIs and is intended to further develop the sector.

Highlighting the importance of the micro-lending sector, many Tajik banks have chosen to downsize to focus on micro-loans as well as traditional corporate lending. Meanwhile, with an ever-increasing number active in Tajikistan, MFIs are being forced to differentiate themselves from their competitors, with several now looking to convert into banks.

Boudiba notes that part of the success of the microfinance sector is due to the lack of trust in the banking sector. While microfinance institutions increasingly handle deposits and remittances and carry out other banking functions, “the most important factor is the proximity to their clients and the relationships they build with them. When I talk with microfinance customers in Tajikistan, most say it is the relationship that they value the most,” she says. “The proof for this is that many of the banks have now started to downscale, creating competition between conventional banks and MFIs.”

AMFOT’s Abdulloev confirms that, “a few large MFIs which have loan portfolios over $20m do plan to transform to commercial banks... in the next two to three years.”

The latest development in this area was the decision by IMON International, the largest MFI in Tajikistan as of late 2013, to transform into a bank. IMON, which has almost 60,000 customers and a network of 102 outlets across the country received an equity investment from the European Bank for Reconstruction and Development and the Netherlands Development Finance Company to help with the transformation in November 2013.

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bne: When was the ICD set up?

KAA: The ICD is a multilateral organisation within the Islamic Development Bank Group. It was set up by the IDB and its member countries in November 1999. Shareholders include the IDB, 52 member countries and five public financial institutions.

The ICD encourages the establishment, expansion and modernisation of private enterprises through financing private sector enterprises and projects. The ICD also advises governments and private sector groups on enterprise policies, development of capital markets, best management practices and enhancing the role of market economy. Its operations complement the activities of the IDB.

bne: What resources does the ICD have?

KAA: The ICD has an authorised capital of $2bn with a paid-up capital of $771m. The ICD’s capital is allocated as follows: 50% for the IDB, 30% for member countries and 20% for public financial institutions of member countries.

bne: Are there restrictions on where the ICD can invest?

KAA: ICD financing is available to each and every citizen from its member countries without any distinctions, provided the project is bankable and is majority private-sector owned. We are glad to serve all our member countries on an equal footing.

The ICD operates under Islamic financial principles, which tend to be a more socially responsible and ethical financial system. Islamic finance is simply a complementary way of providing investments and financing to the business community, as can be seen in Saudi Arabia or Malaysia where Islamic and conventional financial systems work in parallel

Interview

ICD expands presence in Central Asia

The Islamic Corporation for the Development of the Private Sector (ICD) is expanding its presence in former Soviet countries such as Azerbaijan and Uzbekistan, at the same time as many of these countries are developing domestic Islamic finance sectors. Khaled Al-Aboodi, chief executive officer of the ICD, outlines his organisation’s mission and activities, and how it compares to other development institutions such as the IFC.

bne: What is the ICD’s mandate?

Khaled Al-Aboodi: The mandate of the Islamic Corporation for the Development of the Private Sector (ICD) is to promote the economic development of its member countries in accordance with Sharia principles, through private sector development. Our vision is to become a premier Islamic multilateral financial institution for the development of the private sector. The ICD’s mission is to complement the role played by the Islamic Development Bank (IDB) through the development and promotion of the private sector as a vehicle for economic growth and prosperity.

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without any conflict. The growing awareness and success of Islamic finance is demonstrated by London’s aim to become the Islamic finance capital of Europe and by the keen interest expressed by other major OECD countries.

bne: What exactly is the relation between the Islamic Development Bank and the ICD?

KAA: The ICD is a fully autonomous entity and operates as the private sector arm of the IDB Group. The relationship between the ICD and the IDB is similar to that between the IFC and the World Bank. The ICD and the IFC have a fairly similar mandate, which is to further economic development of their member countries through financial support to the private sector. Both institutions are for-profit organisations working on a pure commercial basis, though with a strong development mandate. The major difference is that ICD operates under the principles of Islamic finance. One could be tempted to say that the ICD is the Islamic IFC.

bne: What is the ICD’s interest in the countries of the former Soviet Union and Southeast Europe?

KAA: We are in the process of scaling up our activities in order to boost development in our member countries. We have launched several programmes such as the SME programme, the Special Economic Zone programme, and the Islamic Finance Institutions programme, which will have a multiplier effect on development. However, the ICD’s activity is limited to its member countries. Within this region, most are in Central Asia – Kazakhstan, Azerbaijan, Uzbekistan, Kyrgyzstan and Tajikistan. We also manage a few projects on behalf of the IDB in some non-member countries in the region.

bne: Are there any any regions or countries in which you are especially active?

KAA: We are increasing our investments and financing in the CIS region. Currently the total

portfolio stands at $227m, with a further $127.9m in the pipeline for signing in 2014. The ICD has been particularly active in Uzbekistan where it has extended three lines of financing totaling $133m to local banks for onward lending to SMEs [small and medium-sized enterprises]. Nine banks qualified for the funding and as of today $78m has been successfully used to finance a total of 145 SMEs in various sectors including agriculture, industry, healthcare and oil and gas.

The ICD is also active in Azerbaijan where it has established a leasing company and an investment company, in addition to extending lines of financing worth $77m to several local banks for SME funding. In line with our new investment strategy, we recently set up a leasing company in Kazakhstan, together with international and local investors; the company has a fully paid up capital of $28m. The ICD has also recently established a leasing company in Tajikistan together with some prominent local partners.

bne: Can you give me a couple of examples of your investments? KAA: Food security is an issue of critical importance and is a key challenge in many member countries that are not producing sufficient food for their populations. Most of our members are net importers of food. The ICD has teamed up with Robeco to launch a $600m Food and Agriculture Business Fund that will invest not only into food production but across the whole value chain. Investments by the fund into new farming methods, production technology, logistics and food handling facilities will also ensure more efficient food production, better crop yields and crucially reduce wastage during transit.

Secondly, a loss of investor confidence in global markets has significantly dried up the flow of funds to the SME sector following the global financial crisis. I believe the health of the SME sector is crucial to every country in the

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world. This is the sector where most employment is created and new ideas are generated. To put it simply, SMEs are the engine of the economy. In several member countries, we are setting up funds under our SME Programme to support and improve SMEs’ access to financing. One such fund, with a target size of 1 billion riyal ($267m) has already been launched in Saudi Arabia and several more are in the pipeline for 2014. I believe this type of fund will go a long way to support growth of the SME sector, generating many new jobs and helping to alleviate poverty in ICD member countries.

bne: Does the ICD have a special role to play in countries like Tajikistan, which are often overlooked by western investors and development banks?

KAA: Actually, China is Tajikistan’s main trading partner and investor, accounting for more than 40% of all investments in the Tajik economy, followed by Russia. The ICD’s total portfolio for the country currently stands at $13.5m; a $10m commercial real estate project is in the pipeline for signature in 2014. The ICD’s portfolio comprises mainly of lines of financing facilities to local banks for onward lending to SMEs.

bne: What are the prospects for growth and investment in the countries in which you operate? KAA: The ICD is currently implementing a new “Channel Strategy”, which will have greater and more sustainable developmental impact, as well as generating substantial revenues for the corporation. The new strategy has four main pillars, one of which calls for the establishment of commercial banks, investment companies, leasing companies and Islamic insurance companies. As we roll out the implementation plan gradually over the next few years, the ICD will have a substantial portfolio of investments spanning across its 52 member countries. Africa holds tremendous growth potential. It’s always an exciting experiment to break into new markets;

each part of the world is different and has its own challenges.

bne: Islamic countries, in particular Arab countries, have been slow to invest in Central and Eastern Europe, but recently the pace has increased. What has changed? KAA: I think the game-changing event that forced many Arab Sovereign Wealth Funds (SWFs) to take a closer look at their investment policies was the sub-prime crisis in the US and the ensuing global financial crisis. That caused a lot of damage to SWFs, whose mandate is actually wealth protection. What we are seeing now, with the worst of the financial crisis over, is a rebalancing of investment portfolios to diversify away from markets which were traditionally seen as less risky. With oil prices at $100 plus per barrel, substantial budget surpluses are being generated. We will see more diversification in SWFs’ investment strategies in the future, as well as more investments in local and regional markets as the pressure from demographics, especially unemployment, bears down further on local governments.

bne: How do you see the relations between the Islamic world and former Soviet countries such as Russia and Azerbaijan developing?

KAA: Azerbaijan has strong historical ties with the Islamic world through its proximity to Turkey and Iran. Azerbaijan also has close ties with Russia given that it was part of the Soviet Union, as were five other Organisation of Islamic Conference (OIC) member states. The Russian Federation has a substantial Muslim population and Russia gained observer status in the OIC in 2005, which was also of strategic importance to forge mutually beneficial ties between Russia and the Islamic world. As this part of the world opens up further, I see relations between the Islamic world and both Russia and Azerbaijan getting stronger in the future… It’s not a zero sum game!

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Tajikistan to amend anti-corruption law

The Tajik parliament is currently considering proposed amendments to the country's law against corruption. If adopted in its current form, the law will give NGOs and international organisations active in Tajikistan a greater role in fighting against corruption.

The draft law is currently being debated by the Tajikistani parliament, after being adopted by the government in January 2014. The board of the Majlisi Namoyandagon, lower house of parliament, discussed the proposed legislation at a meeting on February 24.

The new law will amend existing anti-corruption legislation. Tajikistan adopted its first anti-corruption law in December 2004, replacing this with a later law in July 2005, which as remained in force until now, although amendments were introduced in 2007, 2008 and 2011.

Under the proposed amendments, not only government bodies - ministries, government agencies, state committee and local governments - but also political parties, NGOs and international

organisations working in Tajikistan will be recognised as anti-corruption actors. The law will also set out the activities of Tajikistan’s National Anti-Corruption Council.

“Any activities against corruption by public officers already mean improvement of the situation in society,” says Kanat Seidaliev, head of the Kyrgyzstan and Tajikistan offices at law firm Grata.

According to Seidaliev, under the new legislation the obligation for preventing crime will be spread more widely, with the responsibility held “not only by the state officials but also by other institutes of civil society as political parties, non-profit organisations and international organisation. Hence, they are obliged to take measures to prevent, identify and eliminate corruptions and collaborate with mass media and other citizens to fight corruption.”

However, Seidaliev points out that additional issues and areas for improvement are likely to become apparent only after the law comes into force. “[E]ach institute of civil society will be involved in the anti-corruption process and will propose their specific measures to fight corruption. For this reason, it is possible that there will be some more amendments in the law,” he tells bne.

In Transparency International's 2013 corruption perceptions index, Tajikistan was ranked in 154th place out of the 177 countries on the index. This represented a slight improvement since 2012 when Tajikistan was in 157th place, though it remains close to the bottom of the index.

A 2013 report from the corruption watchdog says that while Dushanbe has taken some steps to fight corruption, "the country lacks some important anti-corruption mechanism

Feature

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and the necessary political will to effectively counter corruption."

"Most evidence indicates that corruption in Tajikistan is widespread and at all levels of society. Rule of law is weak and most institutions lack transparency and integrity structures," the report says.

While implementation of anti-corruption legislation has been criticised, Seidaliev

points out that at present there are numerous ongoing criminal cases launched against officials suspected of bribe-taking, which are being monitored by the media. In particular, independent Tajik newspaper Asia-Plus frequently reports on bribery and corruption cases.

Tajikistan’s state anti-corruption agency, the Agency for State Financial Control and Combating Corruption, has also stepped up its activities recently.

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Mobile segment drives telecom sector growth

Telecommunications has emerged as one of the fastest growing and most competitive sectors of the Tajikistani economy, with mobile telecom the main driver for this growth.

After a decade of strong and steady expansion, mobile remains the most active segment of the telecom market. While the mobile penetration made a massive leap in 2007, growing by almost 200% within the year, since then the sector has remained buoyant and has continued to expand even during tough economic times when GDP growth has fallen.

The Tajik mobile sector is now following a similar path to other Central Asian countries such as Kyrgyzstan and Kazakhstan where penetration is now over 110%. “Tajikistan’s mobile sector has been growing strongly for over a decade and is the standout feature of the country’s telecom industry. Mobile penetration passed the 90% milestone in 2012 and the mobile subscriber base was continuing on a positive growth path in 2013,” says a report from consultancy Budde Communications.

As of 2012 there were nine mobile operators active in Tajikistan, including GSM operators, which together provided coverage for 99% of the country’s population. The country’s main operators include Babilon Mobile, TeliaSonera’s Tcell and Vimpelcom’s Tacom.

There is a high level of competition among the major players as they seek to expand their coverage of Tajikistan’s mountainous terrain. Babilon, whose website says it currently has 3m subscribers, has invested into a network to cover 300 towns and settlements across Tajikistan. Meanwhile, TeliaSonera quickly ramped up its subscriber base from under 700,000 in 2007 to 2.5m five years later. This followed investments of more than $200m in developing Tcell’s network, and launching 3G services. Since then, the company has invested in expanding its network to cover remote areas of the country including the Anzob and Shahristan mountain passes, Lake Iskanderkul and numerous small mountain settlements.

Four companies have been awarded licences to provide 3G services in Tajikistan, and while according to Budde take-up was initially low, the market has expanded rapidly from 2012.

Internet usage has also increased steadily in Tajikistan, though from a low base. The State Communications Service announced in July 2013 that 3.8m people – almost half the population - were internet users, with numbers increasing following a fall in tariffs.

Meanwhile, the fixed line sector has lagged behind. Tajikistan inherited an outdated and undeveloped telecom network after the breakup of the Soviet Union in 1991, a situation that only worsened with the outbreak of the five-year civil war in 1992. This benefitted the country’s mobile operators since with only a small proportion of the population covered by the fixed-line network, mobile became the primary mode of communications. Like a number of other developing countries, Tajikistan leapfrogged over a generation of technology.

While new companies have been allowed to enter the fixed sector, state-owned Tajiktelecom remains

Sector

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the main provider. Plans to privatise the company have been in the pipeline for almost two decades. Back in the mid-1990s, the Tajik government launched a national programme for development of the communications sector, which included plans to privatise telecom operators as well as broadcasters. Tajiktelecom was due to be sold off in 2004, giving eight years for competitors to develop after private companies were allowed to enter the telecoms sector - in particular the mobile and

internet segments - from 1996. However, the sale of the company has been repeatedly delayed.

According to Budde, as of 2012 Tajikistan had one of the world’s lowest fixed-line penetration rates - only around 6%, with little improvement in the 22 years since independence. There have, however, been more recent investments into Tajikistan’s fixed-line network, with old analogue networks replaced with digital technology across all of the country.

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Tajikistan has seen growth in agricultural productivity accelerate in recent years as the government turns its attention to the country’s largest source of employment and international organisations help to introduce modern farming and irrigation methods.

Agriculture accounts for the lion’s share of employment in Tajikistan - around 75% of the country’s working population is employed in this sector - and it accounts for 23% of GDP. This is despite the fact that only around 7% of Tajikistan’s mostly mountainous terrain is arable land. The country also suffers from water shortages in many areas, and irrigation systems are only recently being improved.

The Tajik government has started to pay more attention to agriculture, launching a far-reaching reform programme aimed at increasing productivity, ensuring food security and improving nutrition.

Donors have also launched their own projects. The World Bank, for example, launched a $45.9m project alongside the Tajik government to improve agricultural production and create temporary employment in the Khatlon region in 2013.

Growth in agricultural productivity accelerates

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China to fund construction of new Tajik railwayTajikistan is expected to receive a soft loan from China to fund construction of the Vahdat-Yovon line in the near future. The new railway will create a direct link between the capital Dushanbe and the country's third largest city Qurgonteppa, replacing an existing rail link that runs through Uzbekistan.

Discussions on the loan from the Export-Import Bank of China took place earlier this year, the then head of Tajik Railways, Amonullo Hukumatullo, told a press conference on January 29.

"Exim Bank will provide a $51m loan to Tajikistan for construction of the Vahdat-Yovon railway... Negotiations are still going on and the issue will be solved within the next few days," Hukumatullo said, according to Asia Plus.

The 46.3 kilometre line will run from Vahdat to Yovon, providing a link between the Dushanbe-Vahdat and Yovon-Qurgonteppa lines. The existing line travels west from Dushanbe, crossing into Uzbekistan, and re-enters Tajikistan in the far south near the Afghan border. While Dushanbe and Qurgonteppa, one of the main urban centres in south Tajikistan, are just 92km apart, trains must travel a 429km route between the two cities. Building the new line will cut 152km off the journey distance.

The railway network Tajikistan inherited from the Soviet Union left the country heavily dependent on neighbouring Uzbekistan. Not only does the main line from Moscow enter Tajikistan from Uzbekistan, the line connecting the north and south of the country travels through Uzbek territory.

CASA-1000 agreement signed in WashingtonAn agreement on the CASA-1000 project to transport electricity from Central Asia to Afghanistan and Pakistan was signed in Washington on February 19, setting out terms and conditions for electricity purchasing.

Energy ministers from the four participating countries - Kyrgyzstan, Tajikistan, Afghanistan and Pakistan - met in Washington to discuss terms of the project, according to reports in the Pakistani press.

Under the CASA-1000 project, a high-capacity transmission line will be built from Kyrgyzstan, south through Tajikistan and Afghanistan to Pakistan. This will allow the two Central Asian countries, which have substantial hydropower potential, to export surplus electricity during the summer months.

Afghanistan and Pakistan are both experiencing electricity shortages, which are worsening as the two countries' populations grow and economies expand. Pakistan's demand for electricity peaks in summer, which makes it an ideal customer for Kyrgyz and Tajik electricity.

There are two major power lines that need to be built under the CASA-1000 project, in addition to three convertor stations. A 500 kV AC line will run from Datka in Kyrgyzstan to Khujend in north Tajikistan 477 kilometres away. A second high voltage DC line will run from Sangtuda in Tajikistan to Peshawar via the Afghan capital Kabul, a total distance of 750 km. 1,300 megawatt AC-DC convertor station will be built at Sangtuda and Peshawar, in addition to a 300 megawatt converter station at Kabul.

News in brief

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The project is expected to have a total cost of around $1bn. The World Bank may help to finance the project, with several international governments including Russia and the US also expressing an interest.

Tajikistan beats Russia on economic freedom index Tajikistan was in 139th position on the Heritage Foundation’s 2014 Index of Economic Freedom, one place ahead of the Eurasia region’s largest economy Russia.

However, Tajikistan was still relatively low on the conservative think tank's annual index, which ranks 178 countries according to indicators including regulatory efficiency, rule of law and economic openness.

In the 2013 index, Tajikistan improved its position in the investment freedom category, the report said. However, this was offset by declines in the labour freedom, trade freedom, freedom from corruption, and business freedom categories.

Overall, Tajikistan has advanced by almost 11 points since it was first rated on the foundation’s 1998 index, with the greatest advance in the monetary freedom category where Tajikistan rose by more than 65 points.

Bank lending increases sharply in 2013 Tajikistan saw the total volume of bank loans increase by 38.9% in 2013, to reach TJS7.5bn ($1.56bn) by the end of the year, according to the National Bank of Tajikistan.

A total of TJS8.9bn worth of loans were issued during 2013, up 26.4% compared to during 2012, central bank officials told a press conference in Dushanbe on January 29. Of the total outstanding

loans, 40.5% are in somoni, and 59.5% in foreign currencies.

Deposits grew by a more modest 11.9% during the year, to reach a total of TJS5.5bn, with 32% in somoni and 68% in foreign currency.

Micro-lending also increased during the year, with the total volume of lending reaching TJS4.7bn, representing a 50% increase during the year. Micro-loans worth TJS898.9m were issued during the year, up 41.6% during the year, with a strong increase in remote mountain areas.

ICD launches human capital development programme for Islamic finance sector

The Islamic Corporation for the Development of the Private Sector (ICD), a member of Islamic Development Bank Group (IDBG), has launched its Islamic Finance Talent Development Programme.

The aim of the programme is to build up a pool of highly talented Islamic finance executives to lead the industry in the future, the ICD said in a statement. The ICD hopes the programme will become the "gold standard" for developing human capital in the Islamic finance sector.

The programme targets mid-career professionals with a high level of leadership ability, and includes a rotational programme with three eight-month assignments in an IDBG sub-business.

“A shortage of qualified human capital is one of the most serious challenges facing the Islamic finance industry today,” according to the ICD.

"The focus of IDBG was to generate competent executives to the office and to help shape various

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opportunities for the institution" said the ICD’s CEO and general manager, Khaled Al-Aboodi.

Remittance payments from Russia increase Remittance payments to Tajikistan from migrant workers in Russia increased by 17% year on year in the third quarter of 2013, according to the latest data from the Russian central bank.

A total of $1.15bn was sent to Tajikistan from Russia in July to September 2013 - up 27% compared to the second quarter of the year, when $901m was remitted. This also represented the highest quarterly sum since the beginning of 2010.

Remittances from migrant workers account for almost half of Tajikistan’s GDP, making the country the most remittance dependent worldwide. Russia is the top destination for Tajik migrant workers, followed by Kazakhstan.

Tajikistan is the largest recipient of remittance payments from Russia in the CIS region after Uzbekistan, which received $2.309bn worth of remittances during the third quarter of 2013.

ADB, Japan to improve Tajikistan’s business climate The Asian Development Bank (ADB) has launched a new programme to improve the business climate in Tajikistan, with financial support from the Japanese government.

The Japan Fund for Poverty Reduction (JFPR) is providing a $1m grant to support the Investment Climate Reforms project, a three year project due to be completed in 2016, according to an ADB press release.

The aim of the project is to improve Tajikistan’s investment climate, support knowledge transfer

to businesses and attract potential investors. This will include advising the Tajik government on reforms to reduce risks for investors and help businesses to expand.

Tajikistan’s investment promotion agency will receive support to develop investment promotion materials, upgrade its website and train its staff. A pilot business incubator for women entrepreneurs will also be set up.

“We expect this project to broaden the base of private entrepreneurs and investors who wish to set up and expand their businesses in Tajikistan, and produce more and higher-value products and services,” said Ruben Barreto, financial sector specialist at the ADB’s Central and West Asia department.

NBT starts trading on Moscow Exchange forex marketThe National Bank of Tajikistan has started trading on the Moscow Exchange forex market, closing its first deal - a dollar-ruble deal - on January 20.

The NBT is the first central bank from the Eurasian Economic Community (EurAsEC) region, aside from the Russian central bank, to gain access to the market, the MOEX said in a statement.

A Tajik commercial bank, Eskhata Bank, also entered the market in December 2013. According to Interfax, MOEX may launch trading in the Tajik somoni/Russian ruble forex pair by the end of this year.

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bne:Invest in Tajikistan - March 2014