TEXTILE & CLOTHING (T&C) INDUSTRY DEVELOPMENT … · TEXTILE AND CLOTHING ( T&C) INDUSTRY DEVELOPMENT STRATEGY OF TAJIKISTAN 2016-2025 V EXECUTIVE SUMMARY 1 GLOBAL PERSPECTIVE 5

TEXTILE & CLOTHING (T&C)INDUSTRY DEVELOPMENT STRATEGY OF TAJIKISTAN2016-2025

This sector development strategy was developed on the basis of the pro-cess, methodology and technical assistance of the International Trade Centre ( ITC ) within the framework of its Trade Development Strategy programme.

ITC is the joint agency of the World Trade Organization and the United Nations. As part of the ITC mandate of fostering sustainable development through in-creased trade opportunities, the Trade Development Strategy programme of-fers a suite of trade-related strategy solutions to maximize the development payoffs from trade. ITC-facilitated trade development strategies and roadmaps are oriented to the trade objectives of a country or region and can be tailored to high-level economic goals, specific development targets or particular sectors, allowing policymakers to choose their preferred level of engagement.

The views expressed herein do not reflect the official opinion of ITC. Mention of firms, products and product brands does not imply the endorsement of ITC. This document has not been formally edited by ITC.

The International Trade Centre ( ITC )

Street address: ITC, 54-56, rue de Montbrillant, 1202 Geneva, Switzerland

Postal address: ITC Palais des Nations 1211 Geneva, Switzerland

Telephone: + 41- 22 730 0111

Postal address: ITC, Palais des Nations, 1211 Geneva, Switzerland

Email: [email protected]

Internet: http: // www.intracen.org

Layout: Jesús Alés – www.sputnix.es

TEXTILE AND CLOTHING ( T&C ) INDUSTRY DEVELOPMENT STRATEGY OF TAJIKISTAN

2016-2025

II TEXTILE AND CLOTHING ( T & C ) INDUSTRY DEVELOPMENT STRATEGY OF TAJIKISTAN 2016-2025

NOTE TO THE READER

This document contains the strategy for the development of the Textile and Clothing ( T&C ) industry in Tajikistan ( 2016-2025 ). This sector encompasses the following segments1 :

The strategy is organized according to the following analyses:

i. A description of the competitive landscape in the global T&C industry and an overview of global trends. This section sheds light on Tajikistan’s place within the global T&C value chain and details the conditions for success in the modern marketplace.

ii. An overview of the T&C sector in Tajikistan, including details on the historical context, production structure and export performance of sector enterprises. It presents a detailed map of the sector’s value chain and analyzes the distribution channels for Tajikistan’s most important T&C product groups.

iii. A comprehensive analysis of the issues affecting export competitiveness, categorized ac-cording to the four gears framework. The Trade Support Network ( TSN ) is analyzed and constraints to the provision of effective support services are identified. The problem tree diagram illustrates the key challenges facing the sector in graphical, hierarchical form.

iv. An analysis of the development support framework, detailing governmental policies and donor activity affecting the sector. The purpose of this section is to ensure the best align-ment and integration of this strategy to existing initiatives.

v. A formulation of the strategic orientations and future perspectives for the sector. Directions are provided to help the sector expand exports into target markets. New opportunities for re-taining and adding value are identified for short, medium, and long-term time frames. A “fu-ture value chain” diagram summarizes the adjustments required in the value chain over the next ten years that will allow the sector to address its constraints and leverage its potential.

vi. The roadmap section details strategic objectives through which the larger vision for the sector will be achieved. These objectives are structured around a specific set of activities that are intended to address the wide range of issues confronting the T&C sector. Each of the strategic objectives relies upon a set of operational objectives. The operational objectives are intermediate achievements that must be reached in order for the strategic objectives to be met.

vii. The strategic plan of action ( PoA ) presents a detailed matrix containing the comprehensive set of activities, grouped by strategic, and then operational objective. Each activity of the PoA includes information on: its beneficiaries; its target measures and means of verifica-tion; the institutions that will lead its implementation; the supporting actors that possess expertise in the field; existing related programmes; and an estimated cost.

viii. The implementation management section lays out the proposed mechanisms through which the strategy will be brought to fruition in a sustainable, effective manner.

1. A comprehensive scheme of the full sector value chain is represented in figure 11.

IIITEXTILE AND CLOTHING ( T & C ) INDUSTRY DEVELOPMENT STRATEGY OF TAJIKISTAN 2016-2025

ACKNOWLEDGEMENTS

The Government of Tajikistan developed the Textile and Clothing ( T&C ) Strategy ( 2016-2025 ) as a part of its continuous efforts to place trade and socio-economic development at the heart of its national policy agenda. The Strategy was elaborated under the leadership of the Ministry of Industry and New Technologies with technical assistance from the International Trade Centre ( ITC ). This initiative was supported and sponsored by the Government of Switzerland under the Trade Cooperation Program ( TCP ) in Tajikistan.

Tajikistan’s T&C Strategy initiative was spearheaded under the tutelage of Mr. Shavkat Bobozoda, Minister of Industry and New Technologies. The Strategy was developed under the oversight of Anton Said, Chief of the Export Strategy section at ITC. Eric Buchot, Senior Officer of the Export Strategy section at ITC, provided overall coordination and technical lead. Armen Zargaryan, Trade Promotion Adviser in ITC’s Office for Eastern Europe and Central Asia, and Saidmumin Komolov, ITC national programme manager in Dushanbe, provided country intelligence and assistance that was essential to the rollout of the initiative. The technical support and coordination efforts provided by Alexandra Golovko, Manzura Makhkamova, and Robert Kafafian were invaluable throughout the strategy design process.

All decisions and deliberations were led by the National Strategy working group, composed of public and private sector representatives of the entire value chain. This Strategy is the result of collaboration between many individuals, institutions, academia and enterprises. We would like to express our deep gratitude to all contributors for their dedication and support in developing this strategic document.

In particular, we wish to thank the following key contributors:

Ministry of Industry and New Technologies :

� Shavkat Bobozoda, Minister

� Khol Haidar, First Deputy Minister

� Bako Hotamov, Head of Light Industry and Sericulture Department

� Sulton Umarov, Head of International relations Department

Ministry of Economic Development and Trade :

� Gulru Kayumova, Deputy Minister of Economic Development and Trade

National Strategy Working Group :

� Akhmedov I., deputy head of the Main Dept on development of real sectors of economy of the Ministry of Economic Development and Trade

� Nazarov Kh., deputy head of the Dept on budgetary policy in economic sectors of the Ministry of Finance

IV TEXTILE AND CLOTHING ( T & C ) INDUSTRY DEVELOPMENT STRATEGY OF TAJIKISTAN 2016-2025

� Rahimzoda N., head of the Dept on energy, water melioration, science and technical policy of the Ministry of Energy and Water Resources

� Holikzoda S., deputy head of the Dept on legislation and strategies at the Ministry of Justice

� Yahyokhujaev A., head of Dept crop science of the Ministry of Agriculture

� Tagoev O., head of Dept on Monitoring of state programs and strategies of the State Committee on Investments and State Property Management

� Nazriev H., head of Dept of tax legislation reform of the Tax Committee under the Government

� Mirakov B., head of Dept of tariff and customs simplification and control at the Customs Committee under the Government

� Odinaev T., deputy head of the Dept on technical standardization of the Agency on Standardization, Metrology, Certification and Trade Control under the Government

� Khonaliev N., Doctor of Economic Sciences, head of Dept on economy and industry at the Institute of Economy and Demography under the Academy of Science

� Makhkamov B., senior research assistant at the Institute of Economy and Demography under the Academy of Science

� Karimov N., director of LLC “Textile City”

� Muhammadiev A., deputy director of OJSC “Nafisa”

� Sanginova D., rector of the Politechnical college of the Technical University of Tajikistan

� Hakimov A., owner of LLC “Spitamen Textile”

� Abdulov J., director of LLC “Olim Textile”

International Trade Centre:

� Anton J. Said Chief, Export Strategy

� Armen Zargaryan Trade Promotion Adviser, OEECA

� Eric Buchot Senior Officer, Export Strategy

� Saidmumin Kamolov National Programme Manager

� Munish Tyagi Textile sector expert

� Rajesh Bheda Clothing sector expert

� Alexandra Golovko Associate Adviser, Export Strategy

� Robert Kafafian Technical Advisor

� Manzura Makhkamova National consultant in strategy design

� Nargiza Abdumajidova National Programme Assistant

� Jesús Alés Graphic Design and Layout

Swiss State Secretariat for Economic Affairs ( SECO )

� Nathalie Barbancho, Deputy Country Director, Swiss Cooperation Office Tajikistan

� Malika Ibrohimova, National Programme Officer for Economic Affairs, Swiss Cooperation Office Tajikistan

ACKNOWLEDGEMENTS

VTEXTILE AND CLOTHING ( T & C ) INDUSTRY DEVELOPMENT STRATEGY OF TAJIKISTAN 2016-2025

EXECUTIVE SUMMARY 1

GLOBAL PERSPECTIVE 5

TRADE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

THE GLOBAL VALUE CHAIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

SUCCESS FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

INVESTMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

KEY TAKEAWAYS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

OVERVIEW OF THE TEXTILE AND CLOTHING INDUSTRY IN TAJIKISTAN 19

HISTORICAL PERSPECTIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

VALUE CHAIN MAPPING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Yarn spinning and combing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Weaving and knitting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Dyeing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Sewing and design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Primary support services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

EXPORT PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Yarns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Fabrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Garments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Active sportswear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Home textiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

INDUSTRY DIAGNOSTIC 31

COMPETITIVENESS CONSTRAINTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Supply side constraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Business environment constraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Market entry constraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Social and economic concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

CONTENTS

VI TEXTILE AND CLOTHING ( T & C ) INDUSTRY DEVELOPMENT STRATEGY OF TAJIKISTAN 2016-2025

THE TRADE SUPPORT NETWORK DIAGNOSTIC . . . . . . . . . . . . . . . . . . . . . . . 45

Policy support network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Trade services network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Business services network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

PROBLEM TREE AND KEY PRIORITY ISSUES . . . . . . . . . . . . . . . . . . . . . . . . . 46

DEVELOPMENT SUPPORT FRAMEWORK 50

NATIONAL POLICIES AND DEVELOPMENT PLANS . . . . . . . . . . . . . . . . . . . . . 50

DONORS’ ACTIVITY IN THE TEXTILE AND CLOTHING INDUSTRY. . . . . . . . 51

FUTURE PERPECTIVES 55

STRATEGIC VISION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

TARGETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

FUTURE VALUE CHAIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Structural adjustments to the value chain : value options . . . . . . . . . . . . . . . . . . . . . . 57

Indicative target markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Investment opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

THE ROADMAP 60

THE STRATEGIC OBJECTIVES AND OPERATIONAL RECOMMENDATIONS . . 60

1. Improve the business environment to support the development of the T & C industry in Tajikistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

2. Increase the capacity and productivity of Tajik T & C enterprises . . . . . . . . . . . . 61

3. Increase the value added in the T & C sector and align production with market requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

4. Improve access to markets for T & C enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

IMPLEMENTATION PLAN 63

IMPLEMENTATION MANAGEMENT FRAMEWORK 79

ESTABLISH AND OPERATIONALIZE A PUBLIC AND PRIVATE COORDINATING BODY AND ITS SUBSIDIARY ORGAN . . . . . . . . . . . . . . . . . 79

BIBLIOGRAPHY 82

VIITEXTILE AND CLOTHING ( T & C ) INDUSTRY DEVELOPMENT STRATEGY OF TAJIKISTAN 2016-2025

LIST OF FIGURES

Figure 1 : Apparel market size ( 2012, USD billions ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Figure 2 : Apparel market size projects ( USD billion ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Figure 3 : Textile and clothing value chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Figure 4 : Cost breakdown of men’s woven cotton shirt sold in the US market . . . . . . 12

Figure 5 : Main global sourcing objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Figure 6 : FDI inflows by type of economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Figure 7 : FDI inflows by region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Figure 8 : FDI projects by sector, 2012-2013, USD billions . . . . . . . . . . . . . . . . . . . . . . . . . 17

Figure 9 : Projected investments in the global T & C sector ( 2012-2015, billion USD ) . 17

Figure 10 : Production in volumes of selected T & C products and raw cotton . . . . . . . 20

Figure 11 : Diagram of the textile and clothing value chain in Tajikistan . . . . . . . . . . . . 25

Figure 12 : T & C exports by product group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Figure 13 : Exports of cotton yarn ( HS 5205 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Figure 14 : Exports of cotton fabric ( HS 5208 & 5209 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Figure 15 : Exports of ready-made clothes ( HS 6201, 6203-6206 ) . . . . . . . . . . . . . . . . . . . 28

Figure 16 : Evolution of market and product concentration . . . . . . . . . . . . . . . . . . . . . . . . 28

Figure 17 : Exports of technical wear ( HS 6211 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Figure 18 : Exports of carpets and home textiles ( HS categories 57 and 63 ) . . . . . . . . 29

Figure 19 : Evolution of Tajik market concentrations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Figure 20 : Evolution of home textiles products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Figure 21 : Problem tree diagram . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

VIII TEXTILE AND CLOTHING ( T & C ) INDUSTRY DEVELOPMENT STRATEGY OF TAJIKISTAN 2016-2025

TABLES

Table 1 : Share of manufacturing employment in T & C . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Table 2 : Top exporters of clothing, 2003 - 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Table 3 : Top importers of clothing, 2003 – 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Table 4 : Top exporters of textiles, 2003 - 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Table 5 : Top importers of textiles, 2003 - 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Table 6 : Trading across borders in Tajikistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Table 7: TSN of the Tajik T&C sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Table 8 : National policies and development plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Table 9 : List of donors’ intervention in Tajikistan, affecting T & C . . . . . . . . . . . . . . . . . . 51

IXTEXTILE AND CLOTHING ( T & C ) INDUSTRY DEVELOPMENT STRATEGY OF TAJIKISTAN 2016-2025

BOXES

Box 1 : Methodological note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Box 2 : Multi-Fibre Arrangement ( MFA ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Box 3 : Changing dynamics in China will lead to a $100 billion trade gap . . . . . . . . . . 11

Box 4 : Buyer classifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Box 5 : Bangladesh, a case study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Box 6 : Declining output of cotton fabrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Box 7 : Vertical integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Box 8 : Kyrgyzstan vs. Tajikistan ; similar countries, divergent paths . . . . . . . . . . . . . . . . 22

Box 9 : Niche production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Box 10 : Impacts of financial illiteracy on Tajikistan’s textile sector . . . . . . . . . . . . . . . . . 33

Box 11 : Technology needs by company type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Box 12 : ITC pilot companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Box 13 : GSP+ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Box 14 : The Jackson–Vanik amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

1EXECUTIVE SUMMARY

EXECUTIVE SUMMARY

The expansion of cotton monoculture in Tajikistan throughout the 20th century formed the basis from which a thriving processing industry would launch. In short time, Tajikistan grew from being a simple producer of raw ma-terials to being a supplier of world-class textiles and ap-parel to countries throughout the Soviet Union : in 1990, Tajikistan produced over 150 million square meters of fab-ric per year, as well as knitwear, carpets, shoes, and other garments. Output, however, fell dramatically during the turbulence of the post-independence period. Although much of the industry was destroyed, many participants retained important knowledge about the sector.

Investment started to return in the late 1990s, and cot-ton production began to increase once again. While pro-duction remains below the levels achieved at the peak of the Soviet Union, Tajikistan’s strategic location, low in-put and labour costs, and high quality cotton provide it with competitive advantages that, should they be har-nessed, could help the sector serve as a powerful driver of socioeconomic development. Stakeholders have al-ready leveraged some of these advantages, and the sec-tor has returned as an important driver of employment and income generation on the national stage. Indeed, it is now comprised of over 70 enterprises that range from large, vertically integrated companies all the way to small, niche producers.

Nevertheless, the value chain continues to be hindered by a number of constraints. By limiting value addition, pro-ductivity, and profitability, the following challenges must be addressed in order for the T & C sector to reach its full potential as a driver of sustainable economic develop-ment in Tajikistan :

Supply-side : Weak management capacities constrain business development ; Limited access to finance restricts ability to invest in value addition ; Inefficient working condi-tions reduce productivity ; Limited availability of qualified specialists and engineers reduces productivity ( textiles ) ; Inadequate machinery limits productivity and hinders val-ue addition ( textiles ) ; Inefficient sourcing practices restrict profitability ( textiles ) ; Limited human resource capacities

hinder design and production ( clothing ) ; Inefficient sourc-ing practices reduce efficiency and hinder diversifica-tion ( clothing ) ; Outdated technologies limit productivity ( clothing )

Business environment : Weak Technical Vocational Education and Training ( TVET ) capacities limit com-petitiveness ; Geographical factors limit labour supply ; Limited access to finance hinders growth and value ad-dition ; Inadequate regulation damages the business environment ; Porous borders facilitate black market im-ports ; Duty system damages the business environment and hurts competitiveness ; Irregular energy supply inter-feres with productivity and diminishes the ability to meet buyer requirements ; Tax regime restricts incentives for growth and diminishes profitability ; Bureaucratic burdens increase costs and unpredictability

Market-entry : Market concentration hinders growth op-portunities ; Weak trade intelligence capacities diminish ability of exporters to meet market requirements ; Lack of national branding policy hinders market development ; Limited institutional support restricts market access ; Inadequate leveraging of preferential trade agreements weakens terms of trade

Social considerations : poor working conditions pose health and safety risks ; outdated dyeing methods pol-lute waterways ; lack of women’s ownership and leader-ship hinders gender equality.

The goal of Tajikistan’s T & C Export Strategy is to address these constraints in a comprehensive manner and de-fine concrete opportunities that can be realized through the specific steps detailed in the Plan of Action. By unit-ing producers and support institutions throughout the value chain, the strategy will allow stakeholders to maxi-mize value addition over the coming years. The strategy is articulated around a unifying vision and four strategic objectives :

2 TEXTILE AND CLOTHING (T&C) INDUSTRY DEVELOPMENT STRATEGY OF TAJIKISTAN 2016-2025

The T & C export strategy was the result of extensive con-sultations with public and private sector stakeholders, leading to unprecedented levels of cooperation among sector operators. Key private sector stakeholders and leading institutions facilitated an exhaustive analysis of the sector. Market-led strategic orientations, prioritized by stakeholders and embedded into a detailed five-year implementation plan, provide a clear roadmap that can be leveraged to address constraints to trade, maximize value addition, and support regional integration. In addi-tion, the inclusive approach to strategy design ensured that all stakeholders were committed to the process and left with a clear understanding of each actor’s role.

The strategy will seek to deliver the following production, export, and development targets by 2020 :

� Volumes of cotton fibre processed locally to increase to 35 %, from the current 10 % ;

� 50 firms have acquired new equipment and related technical capacities ;

� 100 new production lines developed by Tajik firms in yarn, textile and apparel production ;

� Production of textile and garment to increase 160 % to US $ 61.12 million ;

� More than 4000 new jobs in the textile and clothing sector ; and

� 60 % of companies complying with international stand-ards related to working conditions, quality manage-ment and sustainability.

This strategy is ambitious in its goals, however it is also meant to be realistic in terms of implementation. Indeed, not all identified constraints can be resolved within this strategy’s timeframe. Such limiting factors must not be ignored but rather accepted as given in the short term. In fact, as the strategy is implemented, some of the current restrictions will dissipate ; for example, as capacity utiliza-tion rises, profitability will increase and the availability of working capital will improve. It is also assumed that future

policies will build upon successes and complement the strategy formulated here for further development of the sector.

In order for the strategic vision to become a reality, stake-holders must coordinate across a variety of fronts so as to ensure continued buy-in and guarantee successful im-plementation. As such, this strategy recommends that Tajikistan establish an independent committee for public-private dialogue that serves to coordinate implementation among the various sector participants. This committee should be comprised of representatives of key institutions, ministries, TSN members, and the private sector.

Photo: fotos, 02.jpg

3EXECUTIVE SUMMARY

Box 1 : Methodological note

The approach used by ITC in the strategy design process relies on a number of analytical elements, such as value chain analysis, Trade Support Network ( TSN ) analysis, problem tree and strategic options selection, all of which form major building blocks of this sector export strategy document :

Value chain analysis

A comprehensive analysis of the sector’s value chain is an integral part of the sector strategy development process. This analysis results in the identification of important actors and link-ages in the value chain. The mapped value chain also serves as the basis for analysing the current state of the value chain and deliberating on options for a future value chain.

The first part of the analysis charts the main stages involved in the sector export value chain, navigating from inputs sourcing to distribution in market segments. This is followed by the identification of key stakeholders who include not just the primary actors ( e.g. processors, distributors etc. ) but also supporting actors with direct linkages to the primary actors. These support services include input providers ( cotton fibre, equipment suppliers, etc. ), transportation service providers, packaging houses and financial service providers, among others.

The next step in the value chain analysis identifies linkages between the actors ( both primary and support services ). Both critical and non-critical linkages are identified and mapped. This exercise facilitates the identification of important support needs and input / output needs of the actors in the value chain. In other words, it identifies a range of needs for actors in the value chain, which can be assessed and further analysed for gaps and constraints through the problem tree analysis as well as the TSN analysis.

Trade Support Network analysis

The TSN constitutes the support services available to the primary value chain actors. It is comprised of a policy support network, a trade services network and a business services network. An analysis of the quality of service delivery and constraints affecting the constituent trade support institutions ( TSIs ) is an important input to the strategy development process.

Competitiveness constraints analysis / problem tree analysis

Traditionally, the scope of export strategies has been defined in terms of market entry, such as market access, trade promotion and export development. This ignores several important factors in a country’s competitiveness. For an export strategy to be ef-fective it must address a wider set of constraints, including any factor that limits the ability of firms to supply export goods and services ; the quality of the business environment ; and the development impact of the country’s trade, which is important to its sus-tainability. This integrated approach is illustrated by the four gears framework schematic on the right.

Border IssuesBorder-In Issues

Border-Out IssuesDevelopment Issues

CapacityDevelopment

Cost ofDoing Business

Developinig skills

and Entrepreneurship

Capac

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Infrastructure and

Regulatory Reform

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Market Accessand Policy Reform

National Promotion

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Serv

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Poverty Alleviationand Gender Issues

Regional Development

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Envir

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To increase the specificity of constraint analysis for the T & C sector in Tajikistan, a detailed constraint overview is provided for each subsector of the industry, namely : spinning and textiles on the one hand and clothing on the other.

The problem tree approach is based on the principles of root cause analysis and the Pareto principle. This exercise results in an inverted tree-like structure with high level constraints at the top level and related root causes placed at subsequent levels. Critical root causes are identified following the Pareto principle. The basic rationale behind the problem tree exercise is to gain a deeper understanding of what is causing the high level constraints, and where the focus of solution-seeking activities should be directed. This exercise involves a two-step process :

� First, constraints identified as part of the value chain analysis during the first consultation with key public and private stakeholders results in the identification of constraints affecting the value chain. These constraints are generally abstract, and a more thorough breakdown is required to identify the root causes of the constraints. Multiple levels of root causes are identified for each high level constraint in order to gain specific insights into the causality : i.e. the relationship between the root causes and the constraints currently affecting the export competitiveness in the sector. Complex root causes are further divided into atomic root causes until a satisfactory level of detail is accomplished.

� Second, the problem tree uses the Pareto principle to identify critical root causes. This is especially important in the context of resource limitations that usually exist during the strategy implementation phase, thus necessitating focus on those 20 % of the root causes which potentially result in 80 % of the constraints affecting the sector. Critical paths through the problem tree are charted to select those root causes that play a majority role in constraining the sector. Identifying – and thus prioritizing – the root causes in this manner is expected to focus efforts while developing solutions – i.e. the PoA – in following stages.

The steps outlined above are expected to result in a comprehensive problem tree, detailing the constraints affecting the sector export value chain, along with characterizations related to the granularity and intensity of the root causes. This problem tree in turn guides the solution-seeking phase of the strategy design process.

Development of future perspectives

The future perspective for the Textile and Clothing strategy of Tajikistan consists of three components :

� A market perspective involving identification of key markets in the short and medium-to-long term for Tajik exporters.

� Identification of value options that hold the greatest potential, and the design of a future value chain based on these opportunities.

� The possible role of domestic and foreign investment to lift the sector’s export potential.

5GLOBAL PERSPECTIVE

GLOBAL PERSPECTIVE

The textile and clothing sector is valued at an estimated 1.1 trillion USD and it accounts for roughly 1.8 % of global GDP. As a result of higher per-capita spending on ap-parel, the US, EU, China, and Japan currently account for three fourths of the market despite representing only a third of the global population.1

Figure 1 : Apparel market size ( 2012, USD billions )

Source : Wazir Management Consultants. The road to 2025 : 5 market, trade, and investment trends that will define the course of textile and apparel industry, 2013, pg. 3.

The sector has long served as a stable source of income for a wide range of stakeholders. This is especially true for emerging economies, where T & C exports often account for a significant portion of international trade. In 2013, clothing accounted for more than 40 % of total exports for Haiti ( 87 % ), Bangladesh ( 84 % ), Cambodia ( 54 % ), Lesotho ( 46 % ), and Sri Lanka ( 43 % ).

Indeed, developing countries tend to be more competitive in the clothing segment due to their lower labour costs. As the clothing industry is quite labour intensive, it has become a very important source of income, and there-fore poverty reduction, for emerging economies. Specific figures are difficult to attain due to the prevalence of small and medium sized, and often unofficial, enterprises, but it has been estimated that the T & C sector has accounted for roughly 10 % of manufacturing jobs worldwide over the last decade. This figure is significantly higher however for

1. Wazir Management Partners. The road to 2025 : 5 market, trade, and investment trends that will define the course of textile and apparel industry. 2013.

select developing markets.2 In Bangladesh, over 4 million people are employed by the sector, while in Pakistan it accounts for 30 % of total employment. The garment in-dustry meanwhile is the largest employer of Cambodia’s formal economy.

The following table illustrates how the T & C sector tends to be a relatively more important source of employment for less developed countries.

Table 1 : Share of manufacturing employment in T & C

Country Group Share ( % )

Less developed 59.1

Low income 34.4

Lower middle income 35.7

Upper middle income 28.4

Source : Jodie Keane and Dirk Willem te Velde ( Overseas Development Institute ). The role of textile and clothing in-dustries in growth and development strategies. May 7,2008 ; data calculated from UNIDO Industrial Statistics, World Development Indicators, and ILO Labour stats – averages are based on a selection of countries in each group, Table A11

TRADEGlobal textile and clothing exports were valued at 751 billion USD in 2013, accounting for roughly 4 % of inter-national trade. 57 % of these exports, or 425 billion USD , were comprised of apparel.

The nature of each country’s exports varies widely, and can be categorized as being one of three types :

1. Manufacturers of unbranded lower-end garments at high volumes, such as China, India, Bangladesh and Viet Nam.

2. Home countries of major brands and higher-end niche manufacturing. These include Germany, Italy and the United States.

3. A trading country with little manufacturing or value ad-dition to garments. These include Hong Kong ( China ) ( although it retains some higher-end manufacturing ), Belgium and the Netherlands.

2. European Parliament. Workers’ conditions in the textile and clothing sector : just an Asian affair? Issues at stake after the Rana Plaza tragedy ( Briefing ). August, 2014.


CLOTHING

Table 2 : Top exporters of clothing, 2003 - 2013

No Exporters Exported value in 2003 Exported value in 2013 CAGR Share

World 222,586,047 425,465,165 6.7 % 100.0 %

1 China 45,757,114 165,044,601 13.7 % 38.8 %

2 Bangladesh 5,040,792 26,258,818 17.9 % 6.2 %

3 Italy 15,449,056 21,625,743 3.4 % 5.1 %

4 Viet Nam 3,386,376 18,496,564 18.5 % 4.3 %

5 Germany 9,127,940 18,320,287 7.2 % 4.3 %

6 India 5,916,206 15,702,657 10.3 % 3.7 %

7 Turkey 9,546,445 14,961,774 4.6 % 3.5 %

8 Spain 3,384,396 11,065,848 12.6 % 2.6 %

9 France 6,580,732 10,079,791 4.4 % 2.4 %

10 Belgium 5,167,839 8,678,581 5.3 % 2.0 %

11 Netherlands 3,189,380 8,206,881 9.9 % 1.9 %

12 United Kingdom 4,166,096 7,482,159 6.0 % 1.8 %

13 Indonesia 3,982,464 7,383,998 6.4 % 1.7 %

14 Cambodia 1,593,121 4,998,862 12.1 % 1.2 %

15 United States of America 5,114,112 4,996,041 -0.2 % 1.2 %

16 Mexico 7,191,236 4,373,125 -4.9 % 1.0 %

17 Sri Lanka 2,400,340 4,270,811 5.9 % 1.0 %

18 Pakistan 2,351,089 3,960,247 5.4 % 0.9 %

19 Denmark 2,210,878 3,889,639 5.8 % 0.9 %

20 Poland 2,008,092 3,684,004 6.3 % 0.9 %

Source : International Trade Centre ( 2015 ). Trade Map Database. Available from www.trademap.org.

Exports of clothing have experienced a compound an-nual growth rate ( CAGR ) of 6.7 % between 2003 and 2013, and China is by far the world’s largest supplier, as it is responsible for 38.8 % of clothing exports. Nevertheless, this was not always the case, and an analysis of trade patterns over the last decade can shed light upon the changing apparel landscape. First and foremost, the sup-plier base has become more concentrated. Whereas in 2003, the top 10 exporters accounted for 59.1 % of the sector’s total, that share has grown to 72.9 % in 2013. In addition, the last ten years have seen China solidify its position as a market leader, its share of exports having nearly doubled from 20 % in 2003. Other notable changes include the rise of Bangladesh, Viet Nam, India, Spain, the Netherlands, and Cambodia as important suppliers of apparel to global markets. Indeed, clothing production

has shifted steadily toward Asia, which now accounts for 58 % of world exports, as opposed to 32 % in 2003. Other countries however were less successful, and nations in-cluding Hong Kong, Mexico, and the United States lost considerable market share.

The largest markets for clothing imports are the United States ( 21.2 % ), Germany ( 9 % ), Japan ( 8 % ), and the United Kingdom ( 6.3 % ). A number of markets, includ-ing Russia, the United Arab Emirates, Viet Nam, Korea, Australia, and China have been growing at a very fast pace. It is interesting to note that the markets for apparel have actually become less concentrated in the last ten years. The top ten markets account for 65.5 % of total tex-tile imports today, down from 77.3 % in 2003.

7GLOBAL PERSPECTIVE

Table 3 : Top importers of clothing, 2003 – 2013

No Importers Imported value in 2003 Imported value in 2013 CAGR Share

World 232,432,183 395,693,250 5.5 % 100.0 %

1 United States of America 65,728,684 83,809,307 2.5 % 21.2 %

2 Germany 20,956,763 35,501,809 5.4 % 9.0 %

3 Japan 18,381,669 31,783,366 5.6 % 8.0 %

4 United Kingdom 19,348,136 25,023,403 2.6 % 6.3 %

5 France 14,002,618 21,755,863 4.5 % 5.5 %

6 Italy 8,789,431 14,823,763 5.4 % 3.7 %

7 Spain 6,146,645 14,304,756 8.8 % 3.6 %

8 Hong Kong, China 14,964,306 12,688,578 -1.6 % 3.2 %

9 Netherlands 5,416,694 10,180,059 6.5 % 2.6 %

10 Belgium 5,956,826 9,130,533 4.4 % 2.3 %

11 Canada 4,019,914 9,054,990 8.5 % 2.3 %

12 Russian Federation 484,124 8,191,264 32.7 % 2.1 %

13 United Arab Emirates 0 8,058,455 na 2.0 %

14 Korea, Republic of 2,411,390 7,135,284 11.5 % 1.8 %

15 Viet Nam 299,985 5,973,536 34.9 % 1.5 %

16 Australia 1,995,359 5,765,041 11.2 % 1.5 %

17 Austria 3,323,212 5,513,508 5.2 % 1.4 %

18 Switzerland 3,714,443 5,458,005 3.9 % 1.4 %

19 China 1,340,566 4,816,507 13.6 % 1.2 %

20 Denmark 2,552,177 4,205,202 5.1 % 1.1 %


TEXTILES

Textiles account for the remaining 325 billion USD of T & C exports, having experienced a CAGR of 5.2 % between 2003 and 2013. As with apparel, the largest exporter is China, which enjoys a 29.7 % market share. The textile supplier base has also grown more concentrated : the top 10 exporters now account for 70.6 % of total exports, com-pared with 63 % in 2003. A number of countries, including China, India, Turkey, and Viet Nam have registered con-siderable growth over the past ten years. Other countries, such as Hong Kong ( CAGR of -16 % ), Italy ( -0.1 % ), France ( -2.6 % ), and the UK ( -0.2 % ), have seen their shares drop significantly.

Photo: Pictures, DSC_0424.JPG


Table 4 : Top exporters of textiles, 2003 - 2013

No Exporters Exported value in 2003 Exported value in 2013 CAGR Share

World 196,507,245 325,993,593 5.2 % 100.0 %

1 China 27,454,487 108,898,007 14.8 % 33.4 %

2 India 6,521,615 19,854,948 11.8 % 6.1 %

3 Germany 13,973,846 16,493,995 1.7 % 5.1 %


5 Italy 14,008,743 13,926,994 -0.1 % 4.3 %


7 Turkey 5,430,513 12,560,332 8.7 % 3.9 %

8 Taipei, Chinese 10,052,788 10,920,608 0.8 % 3.3 %

9 Pakistan 5,862,994 9,398,146 4.8 % 2.9 %

10 Japan 7,139,211 8,209,987 1.4 % 2.5 %

11 Belgium 7,237,926 7,612,201 0.5 % 2.3 %

12 France 7,507,221 5,761,799 -2.6 % 1.8 %

13 Netherlands 3,638,188 5,675,755 4.5 % 1.7 %

14 United Kingdom 5,416,982 5,323,816 -0.2 % 1.6 %

15 Indonesia 3,039,049 5,251,019 5.6 % 1.6 %

16 Thailand 2,476,496 4,667,067 6.5 % 1.4 %

17 Viet Nam 487,137 4,440,274 24.7 % 1.4 %

18 Spain 3,867,639 4,383,901 1.3 % 1.3 %

19 Austria 2,395,454 2,942,327 2.1 % 0.9 %

20 Australia 1,991,791 2,815,820 3.5 % 0.9 %


The structure of textile imports has remained fairly static over the last ten years, and the United States and China have continued to be the top two importers. Even so, a number of new markets have begun to grow in impor-tance. These include Viet Nam, whose imports had a CAGR of 18.1 %, Bangladesh ( 15.9 % ), Indonesia ( 22.9 % ), Russia ( 15.9 % ), and the United Arab Emirates. As with clothing, markets have become slightly less concentrat-ed : the top ten importers now account for 46.7 % of the market, down from 53.5 % in 2003.

Photo: fotos, Afghan refugee women in Dushanbe 2.JPG

9GLOBAL PERSPECTIVE

Table 5 : Top importers of textiles, 2003 - 2013

No Country Imported value in 2003 Imported value in 2013 CAGR Share

World 183,618,047 298,512,144 5.0 % 100.0 %


2 China 16,764,457 26,947,348 4.9 % 9.0 %

3 Germany 10,778,566 15,237,467 3.5 % 5.1 %

4 Viet Nam 2,614,894 13,855,881 18.1 % 4.6 %

5 Hong Kong, China 13,219,950 12,794,047 -0.3 % 4.3 %

6 Italy 8,396,731 10,172,196 1.9 % 3.4 %

7 Japan 5,393,912 9,058,737 5.3 % 3.0 %

8 Turkey 4,026,611 7,964,370 7.1 % 2.7 %

9 United Kingdom 7,714,808 7,961,016 0.3 % 2.7 %

10 France 7,366,377 7,602,099 0.3 % 2.5 %

11 Bangladesh 1,609,101 7,061,293 15.9 % 2.4 %

12 Indonesia 848,724 6,647,594 22.9 % 2.2 %

13 Mexico 5,647,316 6,426,687 1.3 % 2.2 %

14 United Arab Emirates 0 6,148,618 na 2.1 %


16 Russian Federation 1,110,827 4,871,997 15.9 % 1.6 %

17 Canada 4,015,013 4,778,301 1.8 % 1.6 %

18 Belgium 3,922,868 4,634,440 1.7 % 1.6 %

19 India 1,535,037 4,592,979 11.6 % 1.5 %

20 Spain 4,375,677 4,537,027 0.4 % 1.5 %


Box 2 : Multi-Fibre Arrangement ( MFA )

One of the key catalysts that have helped shape the T & C industry over the last decade has been the dismantling of the Multi-Fibre Arrangement ( MFA ) and WTO Agreement on Textiles and Clothing ( ATC ), which governed trade in the sector until 2005. Established in 1974, the MFA allowed developed countries to protect the domestic T & C industry by imposing import quotas on developing nations. It had been used largely to prevent imports from large-volume, low-cost producers including China, India, Pakistan, and Bangladesh. While it had done little to stop the decline of Western production, it had distorted the trade regime by spurring production in low-cost countries in Africa and Asia that were not subject to the quotas.

The MFA was phased out in 2005, from which point trade in textiles and garments was governed by normal WTO rules. The impact was evident immediately. Chinese clothing exports to the US and EU jumped by 56 % and 44 % respectively in the first three quarters of 2005. The countries that had come to rely upon T & C production due to their exemption from the quotas were especially hard hit, as production was dismantled and shifted to China, India, and other locations. Indeed, the end of the MFA spurred a concentration of production and hastened the shift towards Asia.

Sources : Enlightenment Economics ; Kerry McNamara ( Infodev ). The Global Textile and Garments Industry : The Role of Information and Communication Technologies ( ICTs ) in Exploiting the Value Chain. June, 2008 ; WTO. Textiles Monitoring Body ( TMB ) : The Agreement on Textiles and Clothing. Accessed 3 / 3 / 2015. https : / / www.wto.org / english / tratop_e / texti_e / texintro_e.htm.


FUTURE MARKET EVOLUTION3

Experts indicate that these market trends are likely to con-tinue, helping to shape the sector throughout the next decade. The apparel market is expected to grow to 2.1 trillion USD in 2025, up from 1.1 trillion USD today. This will be driven largely by the growing consumption of T & C products in developing countries. Per capita spending on clothing will likely grow at the fastest pace in India ( 11 % ), China ( 10 % ), Russia ( 8 % ) and Brazil ( 4 % ). It should be noted that despite slower growth in developed countries, per capita spending on clothing will still be higher in the West. Nevertheless, the quicker per capita expansion, together with strong population growth, will help the de-veloping world overtake the West as the main market for T & C products.4

The two fastest growing markets will be China and India. This growth will be supported by the following trends in the two countries : economic expansion and growth of disposable income ; population growth ; growing prefer-ence among Chinese consumers to buy for fashion as opposed to utility ; increased exposure to organized re-tail and branded clothing in India ; expansion of domestic brands ; and growth of online retail. By 2025, China will account for 27 % of the total market for apparel products, and together, the combined market size of China and India will surpass that of the EU and US.

3. Wazir Management Consultants. The road to 2025 : 5 market, trade, and investment trends that will define the course of textile and apparel industry, 2013.4. Wazir Management Consultants. Investment Opportunity for Textile Machinery Manufacturing in India : Tapping a US $ 75 bn textile machinery market by 2020.

Figure 2 : Apparel market size projects ( USD billion )

Source : Wazir Management Consultants. The road to 2025 : 5 market, trade, and investment trends that will define the course of textile and apparel industry, 2013, pg. 5.

Photo: Picts for cover page, Suman (2).JPG

11GLOBAL PERSPECTIVE

Box 3 : Changing dynamics in China will lead to a $100 billion trade gap

China has dominated the T & C sector due to a focus on mass exports that have been sup-ported by low labour and manufacturing costs, a large population, and the wide availability of infrastructure. Large injections of domestic and foreign investment have helped the sector to become a driver of economic progress in the country. Nevertheless, while China currently accounts for nearly 40 % of the sector’s total exports, its economy is at a crossroads in which private consumption will begin to overtake investment as the main driver of economic growth. This shift will likely result in structural changes to export-oriented sectors such as T & C.

Indeed, domestic demand for apparel in China is expected to grow significantly, and per capita spending on clothing will reach $377 in 2025, up from $109 in 2012. The total market meanwhile will grow by 10 % per year, expanding from $150 billion in 2012 to $540 billion in 2025. This expan-sion will shift a greater portion of production to domestic consumption as the internal market becomes relatively more attractive to domestic firms when compared with export markets. In addition, imports are expected to increase.

Further compounding this shift are a number of supply-side changes, including an increased focus on service sectors and higher-value-added industries. In addition, costs in China are no longer as attractive as they used to be. Wages have been increasing by double digit rates, and a number of South-east Asian countries with which China has trade agreements boast lower labour costs. As such, T & C output growth is expected to drop from 7 % to a more moderated 5-6 % per year.

The combination of these demand and supply side shifts will result in a global trade gap : worldwide clothing exports are expected to grow to $1,700 billion by 2025 ( CAGR of 6.5 % ), whereas China’s T & C exports will only grow by a CAGR of 6 %. The net result of this lag will be a $108 billion market gap that represents an opportunity for other countries wishing to increase their share of the global market.

Source : Wazir Management Consultants. The road to 2025 : 5 market, trade, and investment trends that will define the course of textile and apparel industry, 2013.

The next decade will also see a steady rise in intra-Asian trade for T & C products, highlighting the growing impor-tance of the region, not only as a base of production, but also as a source of demand. This trade will grow from $180 billion in 2011 to $350 billion in 2025.

THE GLOBAL VALUE CHAIN

The T & C value chain includes activities such as raw ma-terial production, yarn spinning, fabric production, dye-ing, finishing, sewing, trimming, labelling, packaging, and delivery.5

5. Enlightenment Economics ; Kerry McNamara ( Infodev ). The Global Textile and Garments Industry : The Role of Information and Communication Technologies ( ICTs ) in Exploiting the Value Chain. June, 2008.

In general, Western countries have retained much of the higher value added portions of the value chain, includ-ing research, design, marketing, financial services, and capital-intensive textile production. The lower-value seg-ments, such as the low margin and labour intensive activi-ties, continue to be concentrated in developing markets. The following figure shows the costs associated with vari-ous portions of the value chain. While the data is slightly dated, it can nonetheless serve to illustrate the distribu-tion of value throughout the manufacturing and distribu-tion process. It should be noted that profit margins for the manufacturing of garments are slim, even with the low la-bour costs of developing markets. Indeed, the manufac-turing cost in the example below is only 22 % of the retail price. One way for retailers to reduce costs, and for the producers to add more value, is to shift more of the de-sign and development work to the manufacturing country.


Figure 3 : Textile and clothing value chain

Source : Stacey Frederick, Jennifer Bair, Gary Gereffi ( Duke University : Center on Globalization, Governance & Competitiveness at the Social Science Research Institute ). Nicaragua and the Apparel Value Chain in the Americas ; Implications for Regional Trade and Employment. March 18, 2014.

Figure 4 : Cost breakdown of men’s woven cotton shirt sold in the US market

Source : David Birnbaum. 2005. Source-it, Global material sourcing for the clothing industry. Hypothetical case study based on standard US costing. Retail mark-up includes R & C, design, marketing, head office costs, other costs ; Enlightenment Economics ; Kerry McNamara ( Infodev ). The Global Textile and Garments Industry : The Role of Information and Communication Technologies ( ICTs ) in Exploiting the Value Chain. June, 2008.


Box 4 : Buyer classifications

Clothing buyers can be categorized according to three classifications, though the distinctions between them are often vague. The first type of buyer is the retailer. These companies generally subcontract production and sell clothes under their own brands and in their own retail outlets. An example of a retailer is Gap. The second type of buyer is the marketer, such as Nike. These companies generally do not operate their own sales outlets. Specializing in design and market-ing, they outsource production. Lastly there are the branded manufacturers and marketers. While they usually do not have their own retail outlets, these buyers do produce most of their goods in their own factories. An example of this type of buyer is the Sara Lee Corp.

Source : Enlightenment Economics ; Kerry McNamara ( Infodev ). The Global Textile and Garments Industry : The Role of Information and Communication Technologies ( ICTs ) in Exploiting the Value Chain. June, 2008.

Large, international retailers ( TNCs ) have grown to domi-nate the T & C value chain.6 They have gained significant influence over the choice of production locations and they enjoy considerable bargaining power. These companies, which are generally based in the US, EU, and Japan, pur-chase large quantities of goods. Following the elimination of the MFA, they have been consolidating production in fewer and fewer countries. Where they exist, foreign af-filiates of TNCs often account for the majority of T & C ex-ports from developing countries.

GEOGRAPHICAL SHIFTS 7

Textiles : As textile production requires more technology and skill, it is generally less flexible. Indeed, it requires significant financial resources, as well as time, and most developing countries are engaged in textile production to only a limited extent. All of the segment’s functions, including spinning, weaving, knitting, dyeing, printing, and various finishing may be performed in the same fac-tory. The capital intensity required often necessitates large minimum orders and hinders flexibility. A few developing countries have expanded their textile production to signifi-cant levels, including China, India, Pakistan, and Turkey.

Clothing : Due to its labour intensity, the clothing sector has frequently migrated to lower-cost locations through-out the last century. Recent years have seen a marked shift in production towards Asia, and China in particular. Despite this shift, a variety of countries still maintain com-petitive advantages based on factors such as proximity to markets ( for example Turkey to the EU ), or access to specific markets under preferential trade agreements.

6. IBID7. IBID

SUCCESS FACTORSGlobal sourcing has been increasing by double-digit rates.8 The main impetus for such sourcing practices is cost savings, and reduction in costs leads to a shift of the supplier base every five years. While acceptable price levels are a condition that potential suppliers must meet, buyers also seek producers as a means of improving quality, process efficiency, and compliance. The following figure illustrates the main objectives of global sourcing, as identified by survey respondents.

The world’s leading buyers consider a number of cri-teria to be key success factors. These include qual-ity production and assurance ( product testing ) ; timely delivery ; competitive pricing ; product development ca-pacities ; social compliance ( health and safety, workers’ rights, environment ), adequate distribution capacities, and Vendor Managed Inventory capacities. Unless a supplier is able to meet these criteria, it will find it diffi-cult to cater to the needs of large international buyers. From a macro-perspective, buyers often take care to miti-gate the following risks : inflation, poor energy and water provision, wage increases, unstable currency exchange rates, weak rule of law, barriers to trade, political instabil-ity, weak intellectual property protection, difficult physical access to markets, and unattractive credit environments. This highlights the role of the government in ensuring a stable and attractive overall business environment.

More specific to the textiles and clothing sector, coun-tries and suppliers wishing to enter the global value chain must be able to adapt to the following trends and market requirements :9

8. Price Waterhouse Coopers, Global Sourcing : Shifting Strategies, 2008.9. Enlightenment Economics ; Kerry McNamara ( Infodev ). The Global Textile and Garments Industry : The Role of Information and Communi-cation Technologies ( ICTs ) in Exploiting the Value Chain. June, 2008.


Figure 5 : Main global sourcing objectives

0% 10% 20% 30% 40% 50% 60% 70% 80%

Reduced Product/raw material cost

Flexibility in production/supply

Competetive Response

Expand Existing offer

improved quality

replace dwindling local supply

Improved responsiveness

Social/political/ethical reasons

Better standards

Other

No comment

Source : Price Waterhouse Coopers, Global Sourcing : Shifting Strategies, 2008. page 9.

LEAN RETAILING

Retailers increasingly want to focus on sales, while trans-ferring all other supply chain activities to their suppliers. Retailers are also beginning to engage more directly with producers, removing the middlemen of the past. As such, they are requiring suppliers to act as “full package” ser-vice providers. Suppliers are expected to provide more services than before, from the sourcing of materials, to logistics and delivery. While the ability to provide such full package services requires integration and significant management skills, it does present an opportunity for low-cost manufacturers to capture greater value.

SPEED TO MARKET

Fast-fashion brands such as Zara have revolutionized supply chain management. Point-of-sale technologies now allow retailers to analyze trends. This analysis is then used to quickly produce and stock goods accord-ing to the latest market dynamics. This has resulted in fast turnover where products have short life spans, and suppliers need the capacity to respond to variable orders. Upstream and downstream service providers ( and mate-rial suppliers ) must also support clothing manufactures in their efforts to turnaround and deliver finished products in such a short time frame.

ICT

The growing role of ICT is a direct response to some of the trends that have been discussed previously. Disaggregated production requires efficient and time-ly information sharing, while fast fashion necessitates the same. ICT also allows suppliers to vertically inte-grate and provide full package services to lean retailers.

Technologies such as Computer Aided Design are re-quired for modern production. ICT can aid the com-munication between supplier and buyer, allowing for the automated checking of orders, stocks, and prices. Enterprise Resource Planning ( ERP ) meanwhile integrates orders, sourcing, manufacturing, account handling, and logistics, thereby helping companies optimize operations. In addition, modern ICT tools can allow manufacturers to track units throughout the production line in real time, fa-cilitating more effective monitoring.

CONSUMER PRESSURES

Consumers have become increasingly concerned about the treatment of workers in the T & C sector. This has put pressure on the industry to begin adhering to Corporate Social Responsibility ( CSR ) programs and Codes of Conduct. These schemes, which also cover suppliers and subcontractors, require that firms be audited in order to ensure compliance with various health, safety, and en-vironmental issues. While this does result in higher costs, some US and EU buyers have begun excluding suppliers that do not meet such criterion.

VOLUMES

Another important trend is the increased volumes re-quired by retailers. The retailers themselves are growing in size, and they require significant quantities of product. While these volumes used to be sourced from a variety of locations during the MFA era, retailers are looking to streamline their production by reducing the number of countries / suppliers that they source from. Suppliers must therefore be able to meet buyer volume requirements, ei-ther alone or in partnership through consolidation, if they are to enter some of the most attractive supply chains.


Box 5 : Bangladesh, a case study

The case of Bangladesh is a particularly interesting, as it sheds light on the ways in which national stakeholders worked together in order to increase competitiveness and cater to buyer demands. Between 2007 and 2013, textile and clothing enterprises from Bangladesh increased their exports by 166 %. The seeds of success were sewn by an array of internal conditions, including the availability of a vast pool of low cost labour ; the existence of sea ports ; and proximity to textile suppliers in India, China, and Korea. Yet while the incredible growth achieved by Bangladesh would not have been possible without these factors, success was driven by the proactive and equal participation of all stakeholders, including the Government and industry / business as-sociations. Indeed, the Government has promoted policies to attract foreign investment and promote the garment industry, while at the same time helping to foster stable industrial relations and ensure that raw materials could be imported without undue hassle. A strong industry as-sociation meanwhile has succeeded in organizing stakeholders and providing relevant services that allowed enterprises to seize upon Bangladesh’s comparative advantages.

Nevertheless, in April of 2013, an 8 story building collapsed in Dhaka, Bangladesh, resulting in the death of 1,129 people, and the injury of an additional 2,500. As the building was being used for the manufacture of ready-made garments, the tragedy brought new focus onto the dangerous working conditions in the T & C sector. In the years following the collapse, the sector has been subject to increasing consumer pressures for social responsibility, and both the government and international retailers have pledged to improve working conditions. Other multinational buyers have stopped dealing with factories in Bangladesh due to the lack of Corporate Social Responsibility ( CSR ) standards. Some countries meanwhile are playing off of Bangladesh’s damaged reputation in their efforts to attract socially aware buyers. Tajikistan would be wise to learn from this example and ensure that its T & C sector meets the CSR demands of the international community. Without such efforts, sustainable export growth may prove to be elusive.

Source : Rajesh Bheda Consulting. “First Stakeholder’s Consultation : Textile and Clothing Sector Assessment.” January, 2015. Dushanbe ; Celeste Montevera Vena ( European Institute for Asian Studies ). CSR in the Bangladesh Textile Industry : Responsible Supply Chain Management ( EIAS Briefing Paper 2013, 06 ). November, 2013.

INVESTMENTFOREIGN DIRECT INVESTMENT ( FDI )10

FDI has long served as a cornerstone of the T & C sector, as firms continuously seek to shift production in an effort to leverage local comparative advantages and achieve cost competitiveness. Investment in the sector has been facilitated largely by foreign affiliates of TNCs and joint ventures with domestic enterprises.

Global FDI inflows were valued at 1.45 trillion USD in 2013, having grown by 9 % year-on-year. FDI to developing and transition economies reached historic peaks, expanding to 778 billion USD and 108 billion USD respectively.

10. UNCTAD. World Investment Report 2014 : Investing in the SDGs : and action plan. New York and Geneva, 2014.

As a region, developing Asia continued to attract the most foreign capital. All of its sub regions experienced FDI ex-pansion in 2013 with the exception of Western Asia, which suffered from a perceived deterioration in geopolitical stability. The most important destinations for FDI are the United States, China, the Russian Federation, Hong Kong, Brazil, and Singapore. While FDI to transition countries did grow by 28 % in 2013, it was largely attributed to energy sector deals in the Russian market.


Figure 6 : FDI inflows by type of economy

Source : UNCTAD FDI-TNC-GVC Information System, FDI / TNC database ( www.unctad.org / fdistatistics )

Figure 7 : FDI inflows by region

Source : UNCTAD FDI-TNC-GVC Information System, FDI / TNC database ( www.unctad.org / fdistatistics )

FDI outflows from developed countries were flat in 2013, and TNCs continue to wait for a more attractive invest-ment climate, instead maintaining large cash reserves. Flows from the United States, the largest source of FDI, dropped by 8 %, while those from Europe increased 10 %. Flows from developing countries meanwhile grew by 3 % year-on-year, led by an 8 % increase from developing Asia. Indeed, investments from Chinese TNCs grew by an impressive 15 %. FDI from transition economies also in-creased considerably as a result of activity from Russian, Kazakh, and Azeri TNCs.

Total FDI in the manufacturing sector was valued at 384 billion USD , having remained relatively flat with regards to 2012. The majority of this activity is the result of greenfield projects. The T & C industry was one of the key contribu-tors to the growth in Greenfield FDI that was experienced in 2013. Indeed, the T & C sector announced investment projects that were valued at over 24 billion USD . This rep-resents an historic high, and an increase of more 100 % over the levels registered in 2012.


Figure 8 : FDI projects by sector, 2012-2013, USD billions

Source : UNCTAD FDI-TNC-GVC Information System, cross-border M & A database for M & As and information from the Financial Times Ltd, fDi Markets ( www.fDimarkets.com ) for Greenfield projects.

Figure 9 : Projected investments in the global T & C sector ( 2012-2015, billion USD )

Wazir Management Consultants. The road to 2025 : 5 market, trade, and investment trends that will define the course of textile and apparel industry, 2013, pg. 22.

T & C CAPITAL REQUIREMENTS 11

The T & C sector is relatively capital intensive : the invest-ment to turnover ratio is 1 :1 for spinning, 1 :1.5 for fabric production, and 1 :4 for clothing production. As such, an investment of $85 million ( land, building, equipment, and other fixed assets ) is required to produce a $100 million Value of Production ( VoP ) at the garment stage of the value chain. Enterprises must make investments in order to both increase capacity and replace existing machinery.

11. Wazir Management Consultants. The road to 2025 : 5 market, trade, and investment trends that will define the course of textile and apparel industry, 2013.

Experts calculate that the growth in global apparel de-mand will require an additional $165 of VoP by 2025.12 Given the investment turnover ratios, this will require $142 billion of investments throughout the value chain. The re-placement / upgrading cost of current equipment mean-while is expected to be roughly $210 billion during the same period. The total required investment in the sector is therefore expected to be $350 billion.

12. Apparel demand is expected to grow by $1 trillion ( from $1.1 trillion to $2.1 trillion ). Given that this increase will be due to both price and volume growth, and assuming an average of 3 % price inflation, demand will grow by $410 billion ( retail ) or $165 ( VoP ). [Wazir Management Consultants. The road to 2025 : 5 market, trade, and investment trends that will define the course of textile and apparel industry, 2013, pg. 22.]


KEY TAKEAWAYSCURRENT CONTEXT

� Global apparel market is worth $1.1 trillion � The US, EU, China, and Japan account for 75 % of the

market � Global trade in the T & C sector is valued at $751 billion

( 57 % clothing, 43 % textiles ), having grown 6.7 % per year from 2003 to 2013 ( CAGR )

� China is the largest exporter of clothing ( 38.8 % of the total ), and the largest markets for clothing imports are the US ( 21.2 % ) and Germany ( 9 % )

� Exports of textiles are dominated by China ( 29.7 % ) ; the US ( 9.4 % ) and China ( 9 % ) are the two largest import-ers of textiles

� The sector is dominated by large international retailers ( TNCs ), generally based in the US, EU, and Japan, that purchase large quantities of goods

� Western countries have retained the higher-value-added activities of the value chain

� Reduction of production costs is the most important, but not only, driver of the expansion of global sourcing

� FDI in the T & C sector was $24 billion in 2013, a 100 % increase from 2012

INDUSTRY TRENDS

� The global apparel market will grow by $1 trillion, to $2.1 trillion, through 2025

� The three fastest growing markets for apparel are Russia, China, and India ; together, the size of the Chinese and Indian markets will surpass that of the EU and US

� Intra-Asian trade will double to $350 billion over the next ten years

� The Chinese focus on the internal market will result in a $100 billion T & C trade gap

� The sector will require $350 billion of investment over the next decade

SUCCESS FACTORS AND IMPLICATIONS FOR TAJIK FIRMS

� Consumers are putting increased pressure on the T & C sector to increase social responsibility

� The demand for full package services from lean re-tailers requires that suppliers expand their service offerings ; this presents an opportunity for low-cost manufacturers to capture greater value.

� Firms must increase volume capacity, either inter-nally or through consolidation / partnership agree-ments, to meet large, and often unpredictable, buyer requirements

� Firms must increase their ability to quickly supply the market in response to fast fashion demands. Given Tajikistan’s strategic location between three of the fast-est growing markets ( Russia, China, and India ), this represents a potential area in which Tajikistan could seek to compete should the necessary logistical ser-vices be developed.

� Increased management and ICT capacities will be required to satisfy buyer demands

Photo: ITC

19OVERVIEW OF THE TEXTILE AND CLOTHING INDUSTRY IN TAJIKISTAN

OVERVIEW OF THE TEXTILE AND CLOTHING INDUSTRY IN TAJIKISTAN

This section discusses the historical, economic and so-cial relevance of the T & C industry for Tajikistan’s trade development. It includes a detailed mapping of the T & C value chain, a description of the distribution channels at each stage, and an overview of the supporting institu-tions. It will serve as the basis for the strategic diagnostic that will follow.

HISTORICAL PERSPECTIVEBorn from the remnants of the ancient Bactrian Empire and Sogdian States, Tajikistan has long played a vital role in the international textile and garment trade. The re-gion’s importance as a trade route expanded significantly in the 2nd century BC following a concerted outreach by Chinese emissaries seeking to find new markets for Han Silk.13 Thus began a commercial relationship that would characterize trade between East and West throughout the next millennium. During this period, the merchants of modern day Tajikistan served as some of the most impor-tant middlemen in the Silk Road. The Sogdians, whose range extended to the Sughd Region of Tajikistan, and whose influence peaked in the mid to latter half of the first millennium AD, were even known by contemporaries as the “great traders of inner Asia,”14 having become nearly synonymous with the inland Silk Road.

Despite eventual geopolitical shifts and the decline of the Silk Road, silk weaving remained a key part of the local economy over the course of the centuries.15 Yet it was not until Russia’s expansion into the region in the 1860s that the seeds of Tajikistan’s modern textile and clothing ( T & C ) industry were sewn. The imperial Russian government expanded cotton cultivation, particularly in the Fergana

13. Étienne de la Vaissière ( École pratique des hautes études Sciences historiques et philologiques, Paris ), “Sogdians in China : A Short History and Some New Discoveries,” The Silk Road Foundation Newsletter. Vol I, No 2, pp. 23-27. December, 2003.14. IBID15. Habib Borjian, “Economy xii. In Tajikistan,” Encyclopedia Iranica. Vol. VIII, Fasc. 2, pp. 169-173, updated 2011 ; available online at http : / / www.iranicaonline.org / articles / economy-xii-in-tajikistan, ( accessed 3 February, 2015 ).

valley, in its desire to offset the rising costs spurred by the American Civil War. American cotton was introduced to the region in 1884, and Tajikistan’s economy would con-tinue to be guided by Russian, and then Soviet policy until independence in 1991.16

While Tajikistan’s integration into the Soviet economy stim-ulated growth in both agriculture and industry, its econo-my was designed to cater to central Soviet demands, as opposed to local needs.17 In this context, agriculture was collectivized, and grain production gave way to a focus on cotton monoculture. New lands were brought under cultivation and large irrigation networks were developed. At the same time, improvements in cultivation practices, together with the increased use of fertilizers and pesti-cides, resulted in greater cotton yields. As such, cotton production grew from just .17 million tons in 1940 to 1 mil-lion tons in 1980, and Tajikistan became the third largest producer of cotton in the Soviet Union, responsible for 11 % of total supply.

Tajikistan’s growing cotton industry provided the basis from which a T & C sector would launch. Cotton process-ing became an important industry, and while the major-ity of its output was sent to Russia for further refinement, complementary activities thrived.18 By 1990, Tajikistan was producing knitwear, silk fabrics, cotton fabrics, carpets, shoes, and other garments, proving that its economic role had grown beyond that of a simple source of materials.19 It had become an important supplier of textiles for the entire Soviet Union, producing over 30 varieties of high-quality fabric with an output of 150 million square meters of fabric per year, including 122 million square meters of cotton fabric.

16. Souleymane Coulibaly, World Bank. Shifting Comparative Advantages in Tajikistan : Implications for Growth Strategy, Policy Research Working Paper 6125, July, 2012.17. Habib Borjian, “Economy xii. In Tajikistan,” Encyclopedia Iranica. Vol. VIII, Fasc. 2, pp. 169-173, updated 2011 ; available online at http : / / www.iranicaonline.org / articles / economy-xii-in-tajikistan, ( accessed 3 February, 2015 ).18. IBID19. International Trade Centre. Access to Finance in Tajikistan’s Textile and Clothing Sector. Geneva, 2015..


Nevertheless, the T & C sector was severely disrupted fol-lowing the dissolution of the Soviet Union and the ensuing civil war. As illustrated in figure 3, the production of cotton fabrics was decimated between 1990 and 1997. Other segments of the sector, including knitwear, silk fabrics, and carpets had all but disappeared.

Investment began to filter back into the textile sector following the end of the Tajik Civil War in 1997. Capital

expenditure picked up, bolstered by foreign direct in-vestment ( FDI ), assets were modernized, and the pro-duction of cotton fabrics began to grow again.20 Output reached a peak of 36.5 million square meters in 2009, having more than tripled from its lows in 1997. Even so, output fell back to 19.7 million square meters in 2014, and the peak production of 2009 pales in comparison to the levels achieved during the Soviet Union.

20. IBID

Figure 10 : Production in volumes of selected T & C products and raw cotton

Source : ( TajStat ) ; International Trade Centre. Access to Finance in Tajikistan’s Textile and Clothing Sector. Geneva, 2015. Pg. 5.

Box 6 : Declining output of cotton fabrics

Nassojii Dushanbe was one of the largest textile companies in Soviet Tajikistan, having employed more than 10,000 people in the 1980s. In 2006, a joint venture, “TajPolTex”, was established in partnership with Polish investors. The joint venture produced different types of grey and bleached cotton fabrics, exporting them to Poland and other European countries. While this contributed to the increase in cotton fabric exports from 2006 to 2010, the Polish investors withdrew from Tajikistan in 2011, and TajPolTex ceased its operations. As such, the production of cotton fabrics had declined yet again. While Nassojii Dushanbe continues to produce and export both grey and died cotton fabrics, the volumes have decreased significantly. The company’s major markets are Russia, the Czech Republic, Lithuania, and Turkey. Today, the company is the only significant exporter of cotton fabrics in Tajikistan.

Source : Agency on Statistics under the President of Tajikistan


While much of the former industry was destroyed, many participants retained important knowledge about the sector. In addition, cotton production began to increase yet again. Although only 10 % of domestically produced cotton is processed, it is of high quality and reasona-bly priced. Given these advantages, combined with Tajikistan’s strategic location and low input and labour costs, Tajikistan’s T & C sector has the potential to serve as a driver of income and employment generation.

This fact has not been lost on the Government of Tajikistan, which identified the sector as a priority for de-velopment and began providing various types of sup-port since independence. The Government formalized its support to the sector though two important programs : the Cotton Fiber Processing Program ( 2007 – 2015 ) and the Light Industry Development Program ( 2006 – 2015 ). The former aimed to increase cotton fibre processing in order to provide inputs for light industry. The goal of the latter was to increase processing and boost T & C exports through improvements across the value chain, support network, and regulatory environment. As part of its sup-port to the sector, the Government granted a 12 year tax exemption to enterprises that vertically integrate by 2015,

transforming domestic cotton into finished textile and gar-ment products.

Historically, Tajikistan’s state policies have shown mixed results. From the 1990s through 2008, directed lending practices resulted in the widespread misallocation of capi-tal to the cotton sector, detrimentally affecting the cotton, processing, and financial industries. More recent policies however, have thus far been met with initial success : in-vestment in textile production has increased, and 7 mod-ern spinning factories have been established over the last few years, bringing the total count of operational compa-nies above 30. In line with Government aspirations, many of these enterprises intend to move up the value chain and process fabrics and garments.

In the garment subsector, enterprises have begun to re-build what was once a prominent part of Tajikistan’s eco-nomic landscape. These companies now produce a wide range of goods, participate in international trade fairs, and export apparel to select CIS and European markets. From casual and business wear, to technical wear and acces-sories, garment production has returned as an important source of income and employment, with roughly 40 op-erational garment enterprises.

Box 7 : Vertical integration

One of the Government’s top priorities with regards to the sector is to stimulate the develop-ment of the full T & C value chain by promoting the processing and use of domestic cotton in textiles and garments. The sector’s largest source of Foreign Direct Investment ( FDI ) provides evidence that such vertical integration can provide a framework for a competitive T & C sector in Tajikistan. Established in 1992, Giavoni is a joint venture majority owned by Carrera Group, one of the world’s leading producers of casual garments. Carrera sells its garments throughout Europe, and Giavoni is the principal seat of its production. Employing roughly 3,000 people, Giavoni’s success is often credited to its vertical integration : it even cultivates a large part of the cotton that it eventually processes into textiles and clothing. The company announced that this integration is what allows it to produce jeans at a competitive cost of 3.5 USD per pair.

Source : Adriano Moraglio. “A Ritmo di Export.” Il Sole 24 Ore. March 14, 2014 ; International Trade Centre. Access to Finance in Tajikistan’s Textile and Clothing Sector. Geneva, 2015. Pg. 6.


Box 8 : Kyrgyzstan vs. Tajikistan ; similar countries, divergent paths

Tajikistan shares many similarities with its neighbour, the Kyrgyz Republic. Both countries are landlocked, and they are of a similar size. They also lack the large natural resource base that the economies of many other countries in the region have long benefitted from. In addition, they were both former Soviet states that retain strong economic ties to the CIS region. Like Tajikistan, Kyrgyzstan is a producer of cotton, and its T & C sector was identified as a priority sector for economic development.

Yet it is here that the similarities end, and the divergent paths of the two countries’ sectors become apparent. While Kyrgyzstan’s cotton output is only a quarter of the Tajik output, its cotton processing industry employs over 100,000 people. Tajikistan’s meanwhile employs only about 13,000. In addition, Kyrgyzstan’s T & C sector counts roughly 500 exporting SMEs as opposed to nearly 30 present in Tajikistan. Whereas the Kyrgyz T & C sector accounts for 15 % of GDP, up from 5 % a decade ago, and contributes 10 % to total exports, the Tajik sector contributes a mere 3.2 % to total exports.

Despite the stark differences between the two sectors today, both countries were on similar footing at the turn of the century. Indeed, Kyrgyzstan was endowed with the same large, Soviet factories as Tajikistan, and its numerous small workshops operated largely outside of the official economy. Nevertheless, the sector managed to persevere in the face of cheap imports from China, growing to become a formidable source of competitiveness on interna-tional markets. This success has been attributed mainly to five factors :

� Open economy and simplified customs clearance system based on weight allows for the cheap import of fabric inputs.

� Simplified tax regime, largely due to the successful patent system for SMEs, allowed enterprises to operate officially and gain access to credit and other services.

� Strong entrepreneurial skills.

� State support for the sector’s development.

� Opening of the Russian market.

Source : Jenish N. 2014, Export-driven SME Development in Kyrgyzstan : The Garment Manufacturing Sector, Nurbek Jenish, University of Central Asia, Working Paper No 26, 2014

VALUE CHAIN MAPPINGThe T & C sector is currently comprised of 21 spinning mills, 6 vertically integrated textile companies, 4 knitting units and about 40 garment enterprises. The enterprises are heterogeneous and include : medium to large ver-tically integrated companies, mid-sized manufacturing companies ( generally from the soviet era ), and modern SMEs that cater to niche markets.

The value chain begins with the sourcing of neces-sary inputs from both domestic and foreign providers. Enterprises rely on domestic supplies of silk and wool ; organic cotton fibre ; cotton fibre ( from North Sughd and Khatlon ) ; water, electricity, and fuel ; and labour. The re-mainder of inputs however are imported from abroad, including dyes ( mainly from Switzerland and China ) ; ma-chinery ( Europe ) ; accessories ( Italy, China, and Turkey ) ; and chemicals ( Italy, Switzerland, China, and Kyrgyzstan ). As a result of high per unit costs and long delivery times, many companies order large volumes of inputs that are then used over several months of production and sales.

YARN SPINNING AND COMBING

Tajikistan produces roughly 400 thousand tonnes of pre-mium cotton per year ( 28 to 31 mm fibre length ), mainly in the southern Khatlon region and northern Sughd region. This cotton has good fineness and low trash levels, and it can be used to produce yarn counts ranging from 24 Ne to 40 Ne. As such, it is highly sought by cotton import-ers from countries including Turkey, Russia, and China.21 While the majority of the cotton is exported unprocessed, about 10 % of domestic production is processed locally, serving as the main raw material for the domestic spin-ning industry.

Three types of Tajik enterprises are engaged in spinning and combing. The first is spinning companies that pro-duce carded yarns. These companies tend to work out of

21. Munish Tyagi ( International Trade Centre ). Mission Report ( Tajikistan : Strengthening export competitiveness of SMEs in the Textile and clothing sector and enhancing trade support institutional capacity ; Improvement and enhancement of operations of Textile factories in Tajikistan ). 2014.


Soviet era factories, and value addition is low. Companies in this category include Farres, and Resandai Kurgan-Tyube. The second type is those spinning companies that produce combed yarns. These companies utilize more modern technologies, resulting in greater profitability and value addition. Companies in this category include Fayzi Istiqlol-2011, Olim Textile, Hima Textile, Spitamen Textiles, and Resandai Khatlon. Lastly there are the integrated mills that operate throughout the entire T & C value chain. These include Nassojii Tojik, Nassoji Khujand, JV “Giavoni”, and Resandai Kurgan-Tyube. It should be noted that only about a dozen spinning mills are capable of producing significant quantities of yarn ( 85 to 90 tonnes per day ).22

Spinning activity is supported by yarn dyeing companies, of which only a few exist. Indeed, the majority of yarn output is raw / grey, limiting value addition. Most yarns are then export-ed to Turkey, Italy, China, Russia, and Belarus. A small por-tion ( up to 10 % ) continues along the domestic value chain.

WEAVING AND KNITTING

While domestically produced cotton yarns are the main material used for weaving and knitting in Tajikistan, some inputs, including synthetic yarns, are imported from China, Turkey, and India. Weaving and knitting companies are fair-ly varied, and include those that produce : hosiery ( Nafisa ), knitted fabrics ( Nohid ), woven home textiles ( Textile City, Leader, Kairakkum Carpets, Nigor ), and woven fabrics for work clothes and uniforms ( Nassojii Tojik, Rahimov ). In

22. IBID.

addition, three companies ( Firuz, Rahimov, and Leader ) produce sportswear kimonos. To this end, they are ver-tically integrated in the weaving and knitting, dyeing, sewing and design phases of the value chain. Lastly, the integrated mills also engage in weaving and knitting.

As with yarns, the majority of fabrics ( rough and fin-ished ) are exported, mainly to Italy, the Czech Republic, Lithuania, and Russia. The remainder proceeds to the next stage of the value chain.

DYEING

Only a select few companies engage in the dyeing of knit and woven fabrics. These include Rahimov, the integrated mills, and the producers of sportswear kimonos.

SEWING AND DESIGN

The last stage of the value chain before distribution is sew-ing and design. Companies engaged in these activities rely upon Tajik cotton fabrics, although fabrics are also import-ed from China, Pakistan, Turkey, Russia, and Italy. Clothing enterprises produce silk garments ( Atlasi Khujand ), arti-sanal sewn goods ( Suman, Haft Paykar, Umed, Dilorom, Guldast, Chakan ), uniforms ( Guliston, Leader, Zinat, Yoqut-2000 ), work clothes ( Mehrovar, Dilorom ), and mens’ / womens’ / childrens’ wear ( Guliston, Giavoni, Textile City, SATN, Leader, Zinat, Yoqut-2000, Ortex, Rahimov ). Sewing and design is also performed by the integrat-ed mills and the producers of sportswear kimonos.

Box 9 : Niche production

While not numerous, some SMEs have been quite successful in establishing profitable, export-oriented businesses in niche product categories. The most striking example is kimono produc-tion, although jeans and men’s sportswear producers have also found success. Indeed, these two niches are the only clothing categories for which Tajikistan benefits from an international reputation. Tajik kimonos are sought after by Russian martial artists and their suppliers, while its jeans are well-regarded by retailers and producers in the CIS.

Kimono production is centred in Khujand, where there are five or six manufactures. The largest, Firuz, owes its success to a contract with the Russian Judo Federation, for which it is an official supplier. Firuz’s largest shareholder is the president of Tajikistan’s Judo Federation, and as such, his personal ties were critical to the success of the business. Another important player is Leader, the only kimono producer that also has a dyeing capacity. It should be noted that these SMEs are generally parts of larger, diversified businesses, and while T & C production is not their main source of revenue, its potential has been recognized. Their participation in larger business models does however allow them access to relatively stable funding from these business groups.

Source : International Trade Centre. Access to Finance in Tajikistan’s Textile and Clothing Sector. Geneva, 2015.


Only 12.5 % of these goods are distributed domestically, where they must compete with cheap imports from China, Uzbekistan, Turkey, and Pakistan. The remainder is ex-ported ( to be detailed in the following section ).

PRIMARY SUPPORT SERVICES

The value chain is supported by a multitude of actors in both the private and public sector, without whose services the sector would be unable to properly function. First and foremost, Government support was formalized through its tax break program ( decree 392 – August 2007 ) granting a 15 % VAT exemption to spinning and sewing enterprises.

Various support is then provided by the Light Industry Association, the Chamber of Commerce and Industry, and the Ministry of Industry and New Technologies. Tajikstandart and the State Inspectorate for Phytosanitary and Plant Quarantine provide quality control services, while laboratories facilitate quality testing. Consulting companies, technical and maintenance service provid-ers, and other tertiary institutions provide a wide range of operational consulting services. Financial services mean-while are provided by banks and International Financial Institutions. Transportation services are provided by the Tajik Association of Road Transport Operators ( ABBAT ), and the Customs Services under the Government of the Republic of Tajikistan facilitates cross-border operations.



Figure 11 : Diagram of the textile and clothing value chain in Tajikistan


EXPORT PERFORMANCEWhile a small portion of output is sold domestically either for further processing or final consumption, the majority of products in the sector are sold abroad. Tajik enterprises exported 38.2 million USD of textile and clothing prod-ucts in 2013 including yarns, fabrics, ready-made clothes, technical wear, and home textiles and carpets. The follow-ing graph illustrates the evolution of foreign demand for Tajik products since the turn of the century. Of particular note is that exports expanded for all product groups with the exception of fabrics, whose foreign sales have fallen dramatically since 2001.

YARNS

Up to ten percent of Tajik yarns are sold domestically to both fabric producers and final consumers. The re-mainder, valued at 14.6 million USD in 2013, is exported. Cotton yarn is the most important export in the product group, and while enterprises do sell wool and mixed yarns abroad, the values are negligible. Turkey represents the largest market, receiving 64.3 % of Tajikistan’s cotton yarn exports, followed by China ( 14.3 % ), Russia ( 10.4 % ), and Belarus ( 3.7 % ). In addition, 2 % to 3 % is destined for buyers in the EU. Whereas markets were extremely con-centrated at the turn of the century, the sector has suc-cessfully begun to diversify away from CIS countries. As illustrated in figure 6, the surge in yarn exports over recent years has been driven mainly by increased sales to Turkey and China, the first and fifth most important importers of this product respectively.

Figure 12 : T & C exports by product group

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Figure 13 : Exports of cotton yarn ( HS 5205 )

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Figure 14 : Exports of cotton fabric ( HS 5208 & 5209 )

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Tajik exports of cotton yarns ( HS5205 ) to China and Turkey grew by 248 % p.a. and 87 % p.a. respectively be-tween 2009 and 2013, far surpassing these countries’ cotton yarn import growths of 30 % and 4 % during the same period. This provides evidence that Tajik yarn pro-ducers are proving to be worthy competitors for existing suppliers.

FABRICS

Tajik enterprises exported 4.1 million USD of refined and crude fabrics in 2013, including 3.56 million USD of cot-ton fabrics, 401 thousand USD of knitted or crocheted fabrics, 125 thousand USD of synthetic fabrics ( from im-ported synthetic yarn ), and minor amounts of wool fabrics. The most important markets for cotton fabrics are Italy ( 35 % of exports ), the Czech Republic ( 25.01 % ), Lithuania ( 18.43 % ), Belgium ( 8.74 % ), and Russia ( 6.91 % ). Between 4 % and 5 % of output is sold to domestic sewing enter-prises. Knitted or crocheted fabrics are sold mainly to Russia ( 79 % ) and Belarus ( 20 % ).

The decline in fabric exports over the past ten years has been due to falling sales in all of Tajikistan’s major markets, driven largely by the dissolution of TajPolTex. In 2013, Tajik enterprises exported no fabrics to Asia or the Americas, and sales to the EU, CIS, and North Africa / Middle East have all fallen dramatically since the turn of the century. Indeed, Korea and the United States were the most important markets for Tajik fabrics in 2001, having received over 51 % of total exports. Today, neither of these countries is a destination for Tajik fabrics.

GARMENTS

Roughly 10.5 % of Tajik apparel is sold in the domestic market, including 10 % of business and casual wear, and up to 15 % of technical wear. 90 % of this is sold to local retail and outlet stores, while the remaining 10 % is bought for state procurement purposes. According to stakehold-ers, 100 % of garment exports are sold to bulk buyers.

Tajik enterprises exported 17.74 million USD of business and casual wear in 2013. Both products and markets are extremely concentrated ; exports of mens / boys trousers and shorts ( HS620342 ) account for 16 million USD , or 90.6 %, of total garment exports. 95.6 % of these exports are destined for Italy ( Giavoni / Carrera ), while the remain-der are sold largely in Russia ( 3.3 % ). The remaining 9.4 % of garment exports are comprised mostly of womens / girls trousers, dresses, skirts, and shorts ( 1.4 % ) ; mens / boys cotton shirts ( 0.9 % ) ; mens / boys anoraks and overcoats ( 0.8 % ) ; and womens / girls blouses and shirts of cot-ton ( 0.7 % ). Womens / girls trousers, dresses, skirts, and shorts are exported to Russia ( 86.2 % ) and Algeria ( 4.3 % ). The largest markets for mens / boys cotton shirts are Italy ( 74 % ) and Russia ( 18.7 % ), and the most important mar-kets for men’s overcoats / anoraks are Russia ( 41 % ), Italy ( 39 % ), and Slovenia ( 20 % ). 100 % of women’s blouses and shirts meanwhile are exported to Russia.

It should also be noted that the product and market con-centrations have only become more extreme in recent years. Today, 87.8 % of garments are exported to Italy, as opposed to 74 % in 2001. Similarly, there has been little in the way of product evolution, and the products offered today are the same as those at the turn of the century. The sector has become even more reliant upon the domi-nant product group, mens / boys trousers and shorts : this product category accounts for 90.7 % of garment exports today, as opposed to 69.4 % in 2001.


Figure 15 : Exports of ready-made clothes ( HS 6201, 6203-6206 )

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Figure 16 : Evolution of market and product concentration

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Figure 17 : Exports of technical wear ( HS 6211 )

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ACTIVE SPORTSWEAR

The introduction and growth of technical wear has been a notable exception to Tajikistan’s stagnant garment port-folio. A number if niche manufacturers have succeeded in producing high quality, competition grade kimonos. Tajik kimonos have gained quite a reputation abroad, and they are the official garments of the Russian Judo Federation. Exports have grown from negligible amounts in 2001, reaching 1.5 million USD in 2013. The two main markets for these goods include Russia ( 97.3 % ) and Kazakhstan ( 2.3 % ). While not reflected in official statistics, stakehold-ers note that between 2 % and 3 % may be sold to coun-tries in the EU.

HOME TEXTILES

Although the production of carpets and home textiles is minimal compared to that of other product categories, 616 thousand USD of goods were exported in 2013 ( 207 thousand USD home textiles, and 409 thousand USD carpets ). The vast majority of home textiles ( 91.8 % ) were sold to buyers in Russia. Carpets meanwhile were ex-ported mainly to Kazakhstan ( 70.4 % ) and Russia ( 27.8 % ).

It should be noted that the markets have shifted signifi-cantly : Tajikistan used to export nearly 90 % of home tex-tiles to Italy ( 2001 ), whereas today Italy no longer receives any of Tajikistan’s home textiles. While much of this trade has been lost for good, some of it was replaced by in-creased exports to Russia. A similar evolution can be not-ed in the carpets segment, where Kazakhstan eventually surpassed Russia as the main destination for Tajik car-pets. Despite shifts in trade patterns, the markets remain heavily concentrated.

Product assortment has also shifted over the years. Curtains and drapes have overtaken bed, table, toilet, and kitchen linens as the dominant product group. In addition, concentrations have generally improved, and Tajikistan exports a greater variety of home textile products today when compared to 2001.

Figure 18 : Exports of carpets and home textiles ( HS categories 57 and 63 )

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Photo: ITC


Figure 19 : Evolution of Tajik market concentrations

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Figure 20 : Evolution of home textiles products

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31INDUSTRY DIAGNOSTIC

INDUSTRY DIAGNOSTIC

COMPETITIVENESS CONSTRAINTSTraditionally, the scope of export strategies has been de-fined in terms of market entry, such as market access, trade promotion and export development. This ignores several important factors in a country’s competitiveness. For an export strategy to be effective it must address a wider set of constraints, including any factor that limits the ability of firms to supply export goods and services, the quality of the business environment, and the develop-ment impact of the country’s trade, which is important to its sustainability. This integrated approach is illustrated by the four gears framework schematic on the right.

To increase the specificity of constraint analysis for the T & C sector, a detailed constraint overview is provided for each subsector of the industry, namely : textiles and clothing. In cases where the same constraints are shared, they will be detailed under the subheading “across the value chain.”

Supply side issues impact production capacity and include challenges in areas such as availability of ap-propriate skills and competencies ; diversification capac-ity ; technology, and low value addition in the sector’s products.

Business environment constraints are those that influ-ence transaction costs, such as regulatory environment, administrative procedures and documentation, infrastruc-ture bottlenecks ; certification costs, internet access and cost of support services.

Market entry constraints are essentially “external” to the country ( but may also be manifested internally ), such as market access, market development, market diversifica-tion and export promotion.

Social and economic concerns include poverty reduc-tion, gender equity, youth development, environmental sustainability and regional integration.

Border IssuesBorder-In Issues

Border-Out IssuesDevelopment Issues

CapacityDevelopment

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SUPPLY SIDE CONSTRAINTS

Across the value chain

� Weak management capacities constrain business development

� Limited access to finance restricts ability to invest in value addition

� Inefficient working conditions reduce productivity

Textiles

� Limited availability of qualified specialists and engineers reduces productivity

� Inadequate machinery limits productivity and hinders value addition

� Inefficient sourcing practices restrict profitability

Clothing

� Limited human resource capacities hinder design and production

� Inefficient sourcing practices reduce efficiency and hinder diversification

� Outdated technologies limit productivity


ACROSS THE VALUE CHAIN

Weak management capacities constrain business development

The weak managerial capacities that permeate the tex-tile and clothing industry have a wide-ranging impact on the sector’s development. Management skills are lack-ing in areas such as sourcing, planning, order manage-ment, human resource management, and manufacturing management. While limited abilities to manage sourc-ing and production result in diminished profitability, in-adequate order management practices make it difficult for enterprises to sustain export relationships over time in order to achieve stable growth. Issues such as weak human resource management, and low financial literacy ( both detailed in other sections of this strategy ), impact the ability to attract, train, and retain skilled workers and to access the necessary investment and working capital respectively.

A further constraint is limited capacities to market and sell. Management is unable to analyze trade intelligence in order to identify opportunities. In addition, they lack the capacities to formulate marketing strategies and ap-proach potential buyers.

Middle and high-level managers do not have the appro-priate managerial training. The quality of management training at Tajik Universities is lacking, and those man-agers that are relatively-well prepared still lack an under-standing of international practices. Indeed, it is difficult for managers to gain international experience, as exchange programs are non-existent and the import of international management personnel is not practiced. It should be not-ed that enterprises do a poor job of assessing their own training requirements and communicating those needs to universities. As a result, the universities do not have enough information with which to adjust their curricula.

A further challenge is one of conflicting interests : man-agement and owners often do not have similar goals. Owners may favor short-term, quick profits. As a result, they can be reluctant to follow the recommendations of management, which may be more long-term and invest-ment oriented in nature.

Limited access to finance restricts ability to invest in value addition23

Companies need financing in order to both sustain their operations and grow. Tajikistan’s T & C enterprises are no exception, and while some have taken large loans from

23. International Trade Centre. Access to Finance in Tajikistan’s Textile and Clothing Sector. Geneva, 2015..

commercial banks, they traditionally rely upon internal sources of financing ( including owner resources, private loans, and money from friends, family, and acquaintanc-es ) to fund their businesses. These companies require financing in order to purchase or rent production outlets, purchase equipment, pay salaries, source materials, mar-ket and sell, perform general administrative functions, and pay taxes.

Limited liquidity is currently hindering the ability of T & C enterprises to invest in the technological upgrades that they need in order to increase production and add more value. As a result, the levels of productivity at many com-panies that continue to rely upon outdated equipment are low. Indeed, one of the most important roadblocks to growth and value addition is the inability to find funding for investment. When credit is available, interest rates are often unaffordable ( annual rates of 25 % to 36 % are com-mon ), the long-term credit needed for capital investment is difficult to find, and the breadth of financial tools and services is limited. These problems result from a multitude of underlying causes, and many of them, including weak management and know-how at some banks, an inad-equate regulatory and supervisory environment, lack of bank resources, and state intervention, are external to the companies. These issues will be dealt with accordingly when discussing the business environment.

Nevertheless, a number of issues are directly related to enterprise-level challenges. First and foremost, a num-ber of large spinning factories have significant amounts of bad debt on their balance sheets. As a result, large lenders are now wary of providing further credit to these companies.

Banks are also concerned about the managerial capaci-ties at T & C companies. This results in higher perceived risks, which in turn reduces the favorability of lending con-ditions. Closely linked to managerial capacities, is the lack of financial literacy. Indeed, T & C companies are unable to define their financial needs and develop an appropriate financing strategy. Similarly, limited knowledge regarding basic financial and cash flow analysis inhibits their ability to adequate gauge financing offers.

Information asymmetries are also roadblocks to financ-ing, and smaller companies lack the capacities to provide adequate documentation and transparency. Without the ability to more accurately assess business-specific risks, lenders are less likely to provide credit on favorable terms. While lenders often use collateral as a means of dealing with this lack of transparency, Tajik T & C companies find it difficult to supply the required guarantee. Indeed, it has been estimated that lack of adequate collateral is respon-sible for roughly 75 % of rejected credit applications in Tajikistan’s T & C sector.


Box 10 : Impacts of financial illiteracy on Tajikistan’s textile sector

“The consequences of this limited knowledge are exemplified by the recent experience of new spinning factories. While they received credit in accordance with valuations of the equip-ment that they required, they did not properly calculate their profitability rates. As such, they misunderstood their ability to pay back the loans. Had they used a simple discounted cash flow model, they would have realized that the conditions of the loans would not allow them to fulfil their repayment schedules. Furthermore, the entrepreneurs did not take into account their need for working capital, which should have necessitated short-term credit lines in addition to the investment loans that they contracted. As a result, many of them do not have the cash to purchase raw materials, and their new equipment remains idle.”

Source : International Trade Centre. Access to Finance in Tajikistan’s Textile and Clothing Sector. Geneva, 2015. Pg. 32.

While international financial institutions could represent potential sources of funding, SMEs in the T & C struggle to meet their stringent requirements, rules, and proce-dures. Minimum loan amounts tend to be high, and IFIs require strict documentation that that generally exceeds the financial and operational capacities of enterprises in the sector ; particularly those who may not be fully oper-ating in the formal economy. All of the factors hindering financial access in general also play a role in deterring greater cooperation with IFIs, including limited financial literacy, lack of transparency, weak management, and the history of bad debts.

Poor working conditions reduce productivity

The working conditions at many textile companies are not designed for optimal productivity. One of the most impor-tant deficiencies is the lack of proper worker scheduling. Working hours are not optimized, and there is no pos-sibility to offer extended hours for extra payment when necessary. Worker safety is not prioritized, and the use of personal protective equipment is not a common practice. In addition, the industry does little to incentivize their work-ers. Salaries are low when compared to other industries in Tajikistan, and employees have little motivation to in-crease their productivity. In other countries such as India and Pakistan, cotton spinning enterprises provide work-ers with cash incentives in order to promote productivity, regular attendance, product quality, and reduced waste. The integration of such practices in Tajik T & C companies would aid in attracting more skilled workers and improv-ing profitability.

TEXTILES

Limited availability of qualified specialists and engineers reduces productivity

Textile production, and particularly the spinning activi-ties that are most prevalent in Tajikistan, are capital in-tensive. Nevertheless, textile producers in Tajikistan lack qualified engineers and specialists ( including foremen, fitters, and jobbers among others ) that would be able to ensure the proper functioning of the appropriate machin-ery. The result is that machinery does not operate at full potential, even though some enterprises have invested in new equipment. As such, profitability and productivity are often well-below their true potential. While ideally mills should operate at around 90-95 % of capacity, the short-age of qualified workers makes such levels of productivity difficult to attain, and the lack of technical skills results in longer machinery downtimes. In addition, senior manage-ment lacks an understanding of the key ratio that needs to be maintained in order to run a profitable spinning mill.

The inability to capture the full capacity of the equipment is particularly concerning, given that this machinery is quite expensive. Enterprises must ensure maximum out-put in order to guarantee that the financing schemes they used to purchase the equipment remain profitable.

The reasons for the shortage of specialists are numerous. First and foremost, the enterprises themselves provide al-most no trainings for workers and technicians that would help them upgrade their skills. In addition, academic in-stitutions and other TVET organizations are disconnected from the needs of industry, and their curricula are out-dated. As a result, students and trainees do not graduate with the sector-specific knowledge demanded by tex-tile companies. As specialists are not adequately trained


in-house, and companies cannot rely upon TVET institu-tions to supply them with appropriate workers, the sector lacks access to the qualified staff that is so important to their profitability. In addition, staff proficiency in foreign languages, particularly English, is low. Workers are there-fore unable to utilize technical literature that would other-wise improve capacities. Limited language skills hinder networking opportunities, impede upon the ability to hire international consultants, and hurt knowledge transfer.

The other main constraint has to do with industry-wide human resource policy. The salary range of skilled spe-cialists is very low. In fact, it is one of the lowest among all sectors in Tajikistan, reducing the incentive for workers to enter the industry. It is also important to note that com-panies do not plan for the hiring of the appropriate hu-man resources when making the decision to invest in new equipment. As there is no anticipation of future needs, companies will purchase the equipment without consid-ering that skilled staff are required to make them function. It is particularly important that textile companies attract young workers to the physically demanding industry via more appropriate training programs, higher wages, and attractive incentives.

Inadequate machinery limits productivity and hinders value addition

While the sector is heterogeneous, and different techno-logical capacities are found throughout the various en-terprises, there is a general lack of adequate machinery. Indeed, a large portion of spinning and weaving compa-nies still rely upon machinery from the Soviet era, and it is estimated that the level of technology in the sector is roughly 2 to 3 generations behind modern standards. The current level of infrastructure does not allow enterprises to produce goods on a continuous and economically viable basis, in a timely fashion, and at an acceptable quality level. In addition, product diversification is hindered, as the equipment it is unable to cater to the design and flex-ibility requirements of modern fashion trends. As a result, productivity is diminished, and companies find it difficult to move up the value ladder and offer more profitable products to their clients.

The reasons behind the lack of upgrading are numer-ous. With regards to company strategy, business plans generally do not consider the periodic upgrading of ma-chinery. When purchases are made, the choice of equip-ment is not done according to the Unit per Kilogram of Yarn ( UKG ). This would require that each Mill section have an equal capacity, so as to diminish bottle necks in the production line. The UKG method would also require that each production line be economically viable on its own when accounting for line-specific expenses including in-put costs and depreciation.

In addition, budgetary considerations are inadequate ; neither amortization costs nor electricity costs are includ-ed in budgets. In this sense, the importance of historical context cannot be overlooked. In the USSR, electricity was provided by the state, and enterprises have yet to fully consider the implications of a market economy in their budgeting processes. Currently, the cost of electric-ity is second only to the cost of raw materials, and it must be accurately budgeted. In other countries such as India, mills consider the costs of both raw material and power to be a single combined input expense that must be kept below 75 % of the mill value of the textile product.24

Companies also lack awareness of the latest in available machinery, whether it be from Western Europe, or Asian or regional sources ( such as India, China, Taiwan, Korea and Turkey ). Even where companies are aware and interested in making a purchase, financial limitations often hinder such investments. Lastly, and strongly linked to the busi-ness environment and lack of general institutional sup-port, the government does not provide assistance with energy costs. In India, for example, the State government provides rebates and incentives for the introduction of energy saving technology for all sectors of the economy. The lack of such a scheme in Tajikistan may help to deter investment in high energy consumption equipment.

24. A mill is an internationally recognized unit of measure ; 1 mill = 25,000 spindles

Photo: ITC


Box 11 : Technology needs by company type

Spinning : these companies need to modernize their blowroom, carding, combing, and Humidification plants.

Weaving sector : the technology of this segment is the most outdated, and weavers will require new looms in order to produce the quality of fabric that would make them competi-tive. Less-expensive looms ( based on airjet and rapier technology ) can be purchased from Korea and China.

Knitting : investment in knitting equipment is required.

Dyeing and finishing : while important for value addition, fabric dyeing plants ( yarn dyeing and both woven and knit fabric dyeing ) are outdated and lack the ability to complete full processing.

Source : Munish Tyagi, Rajesh Bheda ( ITC ). Improvement and enhancement of operations of Textile factories in Tajikistan. 2014.

Inefficient sourcing practices restrict profitability

The management of inputs is inefficient, and the inad-equate sourcing practices result in heightened cost and limited product diversification.

Only basic variations of yarns are produced domestically, and the dyed yarns that are available tend to be of limited quantity and questionable quality. Manmade yarns and fibers, mixed fibers, synthetic filaments, and twisted yarns are not produced domestically at all. As a result, enter-prises either purchase inputs abroad, or else rely upon local cotton and basic cotton yarns. Enterprises choosing the latter tend to inhibit their ability to diversify and move up the value latter, as domestically produced materials lack sufficient value addition.

When sourcing abroad, enterprises do not select suppli-ers based on market criteria. Instead, inputs are often pur-chased according to the historical nature of a partnership, rather than the competitiveness of the partner’s products. Moreover, materials are not selected in accordance with market requirements and trends, resulting in a reliance upon basic materials that limit value addition. Companies also have little awareness about alternative sourcing mar-kets for yarns. As such, Tajik textile producers neglect potential sourcing partners that may offer more competi-tive prices.

Sourcing is also characterized by the involvement of mid-dlemen. SMEs cannot make the minimum purchase or-ders directly from the input manufacturers, and the lack of coordination within the sector means that they are un-able to place bulk orders together and attain discounts. As a result, they must utilize intermediaries, who charge high rates and commissions. This is further complicated

by the high cost of credit, as well as high import tariffs. These factors increase the cost of doing business and diminish the price competitiveness of the final products. Enterprises also suffer from the irregular supply of inputs, which reduces the ability of companies to ensure regular production levels and meet customer commitments in terms of delivery schedules and volume.

CLOTHING

Limited human resource capacities hinder design and production

Tajikistan’s clothing companies lack access to qualified personnel throughout different stages of production. This serves to limit productivity and profitability, thereby reduc-ing competitiveness on international markets. The need for specialized personnel is two-fold ; modern clothing companies require both skilled technicians as well as capable designers. Without the former, productivity and quality may suffer, resulting in lower production levels and higher rates of defect, both of which lead to higher costs and hinder growth. Some companies have begun to intro-duce modern training techniques, such as the 3G Tailor Training System. Where used, it has allowed enterprises to quickly train qualified sewing operators. Even so, many companies are either not aware of such options or are unwilling to accept modern approaches and invest in the skill-upgrading.

Designers meanwhile are needed in order to allow en-terprises to produce goods in accordance with market trends. The capacity to offer attractive and fashionable goods is required for those companies looking to move


up the value ladder and diversify by entering more attrac-tive markets. As such, the lack of qualified personnel is a key roadblock in sector development.

It is difficult for the sector to attract capable personnel due to low salary levels. Indeed, the general perception among workers is that clothing does not offer a promising career path. In addition, companies do not dedicate re-sources to upgrade their staff ; they are hesitant to spend money on educating their staff, and they do not consider the long-term benefits of training in their strategies.

The lack of on-the-job training is compounded by the weak TVET infrastructure. The universities do not co-ordinate with the private sector, and their curricula are therefore not consistent with the sector’s requirements. Scientific research is misaligned with company interests, and there are few arrangements by which students could gain practical experience through internships or other mechanisms. As a result, graduates do not meet the re-quirements of modern industry. In addition, there are no TVET centers dedicated to retraining. A further compli-cation is the lack of training institutions in the provinces.

Inefficient sourcing practices reduce efficiency and hinder diversification

There is a limited production of the necessary inputs in Tajikistan, including fabric, accessories, dyestuffs, pack-ing materials, buttons, laces, and sewing threads. As such, Tajik companies must import the majority of inputs from abroad. Indeed, locally produced fabrics do not align to the requirements of the clothing sector. The sector has therefore found it difficult to add value to national produc-tion in an integrated matter. Given the abundance of local

cotton and the presence of a domestic textile industry, val-ue addition may be most effectively pursued if the textile and clothing enterprises align their interests and develop a more symbiotic relationship. The Tajik Government’s ef-forts to promote investment for vertical integration should help stimulate progress in this direction.

In addition to increasing costs, the inefficient sourcing practices have two other insidious impacts on competive-ness. In the first place, irregular supplies make it difficult for producers to meet buyer requirements with regards to quantity and timeliness. In addition, the dearth of variety in materials has diminished the ability of the sector to di-versify their product range and more up the value ladder.

Moreover, companies do not make sound sourcing de-cisions when looking for imported fabrics. As they are unaware of the true breadth of materials and partners available on international markets, they may continue to rely on the same supplier, even if more attractive alterna-tives exist. They also do not consider sourcing to be an integral part of the product design process. As a result, materials are not selected in accordance with market de-mand and trends.

A key problem with regards to the improvement of sourc-ing practices is the lack of direct links and contacts with fabric manufacturers in source countries such as India, Viet Nam, and China. This, together with the inability to meet minimum order requirements ( a situation which could be resolved through the placing of bulk orders with other sector participants ), means that enterprises must depend on middlemen. The high rates and commissions charged by such intermediaries, along with import duties and the high cost of credit, increase the cost burden and make it difficult for enterprises to be price competitive.

Box 12 : ITC pilot companies

13 Tajik stakeholders, including 9 representatives from T & C companies, participated in a sourcing mission to China in March, 2014 as a part of ITC’s ongoing technical assistance to the sector. The programme included a visit to the Intertextile Shanghai Apparel Fabrics exhibition, a leading international trade fair for the textile industry ; a visit to wholesale markets in Shanghai and Keqiao ; a buyer-seller meeting in Keqiao China Textile City ( CTC ) ; and a visit to a garment factory in Keqiao. During the course of the visit, the representatives had an opportunity to make business contacts and source materials more competitively. As a result of the mission, 12 contracts worth USD 139,000 were signed for the purchase of fabrics, accessories, and dyeing equipment.


Outdated technologies limit productivity

Although the clothing industry is less capital intensive than the textile sector, the lack of modern equipment and technologies continues to hinder enhanced sector pro-ductivity. As with the textile sub-sector, many clothing en-terprises still rely on outdated equipment such as cutting machines and sewing machines, often from the Soviet era. Machinery upgrades, together with the introduction of modern design technologies, would allow the sector to increase quality, improve productivity, and develop new diversified product portfolios that respond to international market trends.

Old, Soviet-era factories are in dire need of machinery up-grades, for which they may need larger investment loans. Many smaller and niche SMEs meanwhile, such as produc-ers of Judo and Sambo ( sportswear ) uniforms, have thus far managed to pursue sound export strategies. In order to further penetrate foreign markets, they will need to ensure adequate quality control, which is of paramount impor-tance to exporters. In order to do this, many enterprises will require upgraded equipment. Individual workers in work-shops meanwhile could significantly increase their pro-ductivity if they had access to modern sewing machines.25

The reasons behind the lack of upgrading are numerous, but one of the most important roadblocks is limited ac-cess to finance, which is detailed more completely under its own constraint. While individual tailors that operate in workshops seem reasonably willing to upgrade their equipment if they can access the available resources, shareholders in formalized companies often take a short-term strategic view. With a focus on immediate profits, these shareholders may not weigh the long-term benefits of capital investment. Furthermore, limited knowledge of the equipment available on the market hinders the per-formance of accurate cost-benefit analyses.

Limited exposure to international best practices hinders competitive business development

The international clothing market is highly competitive, and many developing countries are aiming to increase their share and boost their exports. It is of paramount im-portance that clothing manufacturers in Tajikistan take the opportunity to visit garment factories in competitive Asian countries in order to learn the best practices and under-stand how successful garment factories are managed for competitiveness and profitability. Such exposure will pro-vide owners and senior management first hand exposure to the application of modern management and techno-logical practices. They will also gain an understanding of the management systems that are expected by leading


international customers. This exposure could in turn moti-vate them to adopt best practices and management sys-tems in their plants in a step by step manner.

It must be noted that leading international buyers do not start commercial negotiations with factories in any coun-try unless the factory satisfies a technical and Social Compliance Audit. The exposure to international facto-ries will help industry participants evaluate their current operations in the context of the expected standards.

BUSINESS ENVIRONMENT CONSTRAINTS


� Weak Technical Vocational Education and Training ( TVET ) capacities limit competitiveness

� Geographical factors limit labour supply

� Limited access to finance hinders growth and value addition

� Inadequate regulation damages the business environment

� Porous borders facilitate black market imports

� Duty system damages the business environment and hurts competitiveness

� Irregular energy supply interferes with productiv-ity and diminishes the ability to meet buyer requirements

� Tax regime restricts incentives for growth and diminishes profitability

� Bureaucratic burdens increase costs and unpredictability


Weak Technical Vocational Education and Training ( TVET ) capacities limit competitiveness

As detailed under the supply-side constraints, the limited availability of skilled specialists diminishes productivity and inhibits the design and production of goods accord-ing to market demand. One of the key hindrances to a more adequate labor supply is the lack of adequate TVET capacities. In the clothing subsector, TVET capacities are especially lacking in the areas of computer aided design, pattern making, and production organization. In the textile subsector, TVET structures lack pattern-making capaci-ties. The net result for both subsectors is that there is little product differentiation : existing designs are re-used and replicated by multiple companies in the sector, leading to a limited number of models.


The T & C courses that do exist are often considered to be too broad and unfocused. This is in stark contrast to the needs of the industry, whose human resource require-ments are characterized by a high degree of speciali-zation. Indeed, a 7 day course can be all that it takes to ensure quick improvements in a worker’s performance. Nevertheless, such short and targeted courses are com-pletely absent in Tajikistan.

While the Ministry of Labor is ostensibly responsible for TVET in Tajikistan, it has been unable to truly fulfill its func-tion. One of the key constraints is the lack of geographic reach outside of the capital. It should also be noted that the few TVET centers that do exist lack the latest tech-nologies and modern curricula. In addition, sector as-sociations are weak and lack the capacities to provide TVET services. As such, the enterprises are required to build capacities themselves. Even so, as noted previously companies often lack the incentive and means with which to engage in such capacity-building.

The academic framework is also poorly aligned to the sec-tor’s needs. Both the skills of faculty as well as the curricu-la require upgrading. Academic standards are poor, and there is little interaction between it and the T & C industry, thereby diminishing knowledge sharing and communal upgrading. With regards to technical areas, improvements are required in training for open end and air jet spinning, compact spinning, core spinning, weaving by rapier and airjet looms, and fiber / yarn / fabric dyeing and finished processes. Such improvements will allow for the produc-tion of high quality fabric that can be used by the garment sector at a competitive price.

Advanced trainings and professional development pro-grams for faculty are also in short supply. Short-term, pro-fessional and evening courses should be developed for enterprise owners and entrepreneurs.

Geographical factors limit labor supply

Tajikistan’s T & C labor force is characterized by a low skill level and an overall shortage of personnel. Indeed, there are few who are interested in working in the sector, with the exception of women who reside near production fa-cilities. One reason for the gap between labor demand and supply is the migration of able-bodied men to Russia. Many qualified operators have moved to Russia, attracted by better working conditions and wages. Another factor however, is the location of the enterprises themselves : most of the sector’s companies are located within 100 km of Dushanbe or Khujand, while the bulk of the labor force is located in rural areas. This has led to a natural gap be-tween labor supply and demand in the vicinity of T & C pro-duction centers. As a result, companies depend largely on the local women that make up their workforce, and it

is difficult for production units to fill staff rosters that can fully cover operations in both day and night shifts.

Limited access to finance hinders growth and value addition26

As noted previously, T & C companies have relied largely upon internal sources of funding. Nevertheless, they will require investment and working capital financing if they are to increase production quality and quantity. Export-financing tools such as letters of credit, factoring, and reverse factoring are also required. Lending however is currently limited due to high interest rates and other re-strictive terms and conditions. While many of the root causes for poor financial access are internal to the bor-rowers themselves ( as discussed under the supply side constraints ), institutional challenges also play a role in making it difficult for T & C companies to access credit.

First and foremost, information asymmetries and limited risk management know-how at banks impede the ability of lenders to accurately assess risk. As a result, lending decisions are often based on personal connections as opposed to sound financial analysis. Alternatively, strin-gent lending conditions such as high interest rates or large collateral requirements ( that T & C companies find it difficult to meet ) are imposed in order to account for heightened perceived risks. Banks lack know-how with regards to investment banking and corporate finance, lim-iting the amount of financial tools available to borrowers. Tajik banks also lack access to a stable source of financial resources : household deposits are low, and international financial institutions lack the trust in the Tajik financial sys-tem that would be required for them to act as lenders.

Other problems include inadequate banking supervision and directed lending practices. As the government pres-sures lenders to provide preferential credit, supervisors are incentivized to relax regulatory controls. In turn, the directed lending leads to a misallocation of capital and a buildup of risk that eventually results in non-performing loans. Indeed, many large banks still maintain bad debts on their balance sheets as a result of directed lending. This limits their ability to expand credit.

Constructive government support is also lacking, and there are no credit guarantee funds for the T & C sector. In addition, development banks have difficulty identifying qualified lenders in the sector, largely due to limited trans-parency, weak management, and poor governance within T & C companies themselves. While some international fi-nancial institutions do provide loans at attractive interest rates ( 4 %-6 % ) to Tajik businesses, SMEs from the T & C sector are generally not able to benefit from the schemes.



The process is complex and time consuming. Even where T & C companies have the ability to meet the requirements ( which is often difficult due to the issues discussed under the enterprise level constraints ), it may take over one year to receive a loan. In addition, the minimum loan amount is generally 1 million USD , which is far above the 100,000 to 300,000 USD required by most T & C enterprises.

Lastly, T & C companies are confronted with adverse credit selection. Tajikistan’s remittance-driven economy is one of the main factors that have resulted in high interest rates. Lenders have become accustomed to providing credit to importers, traders, and street vendors. These borrowers can bear the high interest rates due to comfortable profit margins. In addition, they only require short term credit since their goods are sold quickly. As consumer goods are considered to be quite liquid, these entrepreneurs also have little trouble providing banks with adequate col-lateral. The net result is that Tajik banks have strong de-mand for short-term, well-collateralized, high interest rate loans. They therefore have little incentive to offer credit to T & C producers with longer-term financing needs, lower profitability, and heightened corporate risks. By accept-ing rudimentary and expensive instruments, the importers and traders are effectively diminishing the incentives of banks to develop more modern credit portfolios.

Inadequate regulation damages the business environment

Tajikistan has no specific law dedicated to the T & C sector, and the government has failed to take adequate action to remediate the many challenges facing the industry. As an

example, there are no regulations to prevent the import of cheap, second-hand clothing. As such, a significant part of the local market share is lost, as local producers are un-able to reduce prices enough to compete. Another area in which the government could support the sector is through interest rate subsidies ; the cost of credit could be reduced through an interest rebate provided to new Greenfield pro-jects that help add value to the supply chain, are export oriented, or introduce newer technologies.

It should be noted that a T & C sector strategy was pre-pared in the past, but it was not implemented as it was never approved by the Government of Tajikistan. A por-tion of the strategy was however implemented by the International Trade Centre through its technical assis-tance program.

In general, stakeholders note that there are no national regulations that specifically address T & C investment, nor are there any laws that seek to promote the sector. At the local level, community councils do not consider propos-als from the private sector with regards to taxes, duties, costs of services, etc.

Porous borders facilitate black market imports

One of the key challenges facing the T & C sector is the porous customs system that does little to protect against illegal imports. While illicit activities may play a role, in-efficient customs procedures and regulations are also to blame. For example, imports of T & C products tend to be controlled by weight as opposed to price, mod-el, or quantity. As such, shipments are rarely searched

Photo: ITC


in detail, increasing the potential for smuggling activity. In addition, certifications of origin and quality are often not present, reducing transparency on the marketplace. When goods are imported illegally, they arrive on the mar-ket untaxed. As a result, prices are so low that Tajik pro-ducers cannot compete. Black market imports of Uzbek T & C goods have presented a particular problem for local competitiveness.

The level of duty used in T & C sector damages the business environment and hurts competitiveness

Tajikistan is one of the friendliest countries in the WTO, as measured by duty and tax levels for importers.27 Indeed, budget tables show that the effective tax rates on imports in 2012 were only 2 % of the value of the goods ( customs duties were equal to 1 % of GDP, while imports accounted for 49.9 % )28. This holds true as well for T & C products, whose effective tariff rate is estimated to be between 1 % and 2 %. As this is well-below the 20 % rates allowed by the WTO, T & C enterprises are not garnering the full ben-efits of WTO membership. Indeed, most T & C goods are imported from low-cost producers in China and other countries in nearby Asia and Central Asia. The combina-tion of cheap production costs, together with negligible duties, allows importers to severely undercut the prices of domestic producers.

In addition, most products are taxed by weight and vol-ume as opposed to value ( i.e. model of the product, the size and the price ). This tends to allow for the import of lower quality goods, as the quality of such products is de-termined by factors other than weight, such as the qual-ity of materials, craftsmanship, etc. Moreover, taxation by weight creates a situation in which valuable imports are not appropriately assessed, thereby allowing higher-value products to be price competitive with lower quality goods produced in the domestic market.

Irregular energy supply interferes with productivity and diminishes the ability to meet buyer requirements

Energy supply is affected by the lack of clean lines and generating capacity. According to the World Bank’s Doing Business Report ( 2015 ), Tajikistan ranks 178 out of 189 countries for getting electricity. The lack of sta-ble and adequate energy provision is particularly harm-ful to textile companies, as production processes tend to

27. International Trade Centre. Access to Finance in Tajikistan’s Textile and Clothing Sector. Geneva, 2015..28. IMF 2012, IMF Country Report No. 12 / 110 Republic of Tajikistan : Sixth Review Under the Three-Year Arrangement Under the Extended Credit Facility — Staff Report, May 2012

be technologically and power intensive. Irregular power supply and rolling blackouts disrupt production, thereby resulting in decreased output and inconsistent quality. The results are far-reaching : in addition to the diminished profitability that naturally results from decreased produc-tion, operating at under-capacity can threaten the finan-cial viability of equipment financing. Moreover, companies may fail to fulfill orders, thereby breaching contracts and harming their relationships with clients.

While less electricity-intensive than the textile subsector, clothing production still relies upon the use of electric and electronic sewing machines. As such, the lack of a perma-nent and high-quality power supply is just as disruptive to clothing manufacturers. This has resulted in a focus on producing simple, less-risky garments with limited val-ue addition. Furthermore, it has restricted the volume of output that producers can reliably manufacture and sell, severely diminishing potential growth. When equipment does fail as a result of energy disruption, as happens fre-quently, producers may be unable to fill orders, leading to financial losses and damaged reputations. In addition, infrequent energy supply can also affect the quality of goods. The resulting defects can in turn lead to greater financial and reputational damage. Lastly, frequent out-ages directly impact the productivity, and consequently the wages, of individual workers. As such, it is a contrib-uting factor to the outflow of labor, which is depriving the sector of qualified technicians.

It should also be noted that Tajik firms do not properly account for the losses in production that arise from ir-regular electricity supply. While these losses should be considered in the costing of the final product, Tajik firms do not take them into account. The lack of adequate con-sideration means that Tajik firms do not have a proper understanding of their true production costs. This hin-ders financial planning efforts and can ultimately impact business viability.

Tax regime restricts incentives for growth and diminishes profitability

The tax regime in Tajikistan is burdensome, and it does not provide sufficient incentive for growth. A new tax code was introduced in 2013 that imposes 10 different types of tax including an 18 % VAT, a 15 % corporate tax, a 25 % social fund contribution, and a 13 % income tax. These taxes are not only onerous, but they are also complex and costly to navigate. In addition, enterprises can be subject to arbitrary enforcement including unlawful coercion to prepay. Such lack of predictability and transparency is a great hindrance to sectors with historically low margins, such as T & C.

In India, for example, garment exports only pay an income tax, which is supplemented by the payment of 12 % of


employees’ salaries in social contribution / welfare taxes. Any other taxes, such as VAT, if paid, are refunded by the government. This encourages enterprises to invest in growth, thereby contributing to employment generation and poverty reduction.

It should be noted that there is a simplified tax regime for smaller enterprises, which pay only 5 % on their income as long as their turnover is less than 500,000 TJS per year. The effects of this tax regime are twofold : on one hand, medium sized companies claim that it puts them at a significant tax disadvantage. On the other hand, the smaller companies that benefit from the regime note that the 500,000 TJS per year limit is well below the levels of turnover that would be necessary for a company to gain economies of scale and become competitive. Some com-panies also refrain from making further investments so as to stay below the tax threshold.

Another instance in which an attempt to promote the sec-tor has had mixed results is the tax exemption system for vertically integrated enterprises : the government has established a 15 % tax rebate for companies that plan to vertically integrate within a fixed time period in order to promote the vertical integration of mills throughout the entire value chain. Nevertheless, companies that fail to achieve full integration within the given timeframe will be required to reimburse the totality of the tax exemption accumulated throughout the program. As the program comes to an end next year, this will put some companies in a fragile position. While having invested towards inte-gration, the lack of a market oriented approach has not allowed them to make adequate profits from the new in-vestments. This has led some enterprises to suspend the newly integrated processes, already resulting in losses. Should these companies be required to reimburse their

tax exemption, some may be forced to file for bankruptcy. It should be noted that the government may consider an extension to the program.

Bureaucratic burdens increase costs and unpredictability

Tajik enterprises must deal with a variety of other bureau-cratic hurdles that inhibit business development. A chief concern is the presence of extortion and corruption. Such practices add costs and uncertainty, hindering opera-tional efficiency. In addition, enterprises note that there are too many inspection bodies ( 21 in total ) that control various aspects of economic activity in Tajikistan. Indeed, due to the large number of such agencies, SMEs spend enormous amounts of time dealing with inspections processes and reporting. Some of these agencies are supposed to perform inspections once per year, others once every three years, and others once every five years. Nevertheless, many agencies violate the pre-defined in-spection plans, thereby bothering enterprises more often than legally allowed. Entrepreneurs do not have enough legal knowledge or resources to resist such practices. Inefficiencies are also encountered wherever enterprises must be granted permits from state agencies. It takes 228 days, for example, to obtain a construction permit ( World Bank Doing Business 2015 ).

Tajikistan ranks 188 in the trade across borders category of the World Bank Doing Business Report ( 2015 ).29 The document requirements are stringent, processes are timely, and costs are extravagant. The following table il-lustrates the state of trade processes in Tajikistan.

29. Tajikistan ranked 166 overall in the World Bank Doing Business Report

Table 6 : Trading across borders in Tajikistan

Indicator Tajikistan Europe & Central Asia OECD

Documents to export ( number ) 11 7 4

Time to export ( days ) 71 23.6 10.5

Cost to export ( US $ per container ) 9,050.00 2,154.50 1,080.30

Cost to export ( deflated US $ per container ) 9,050.00 2,154.50 1,080.30

Documents to import ( number ) 12 8 4

Time to import ( days ) 70 25.9 9.6

Cost to import ( US $ per container ) 10,650.00 2,435.90 1,100.40

Cost to import ( deflated US $ per container ) 10,650.00 2,435.90 1,100.40

Source : World Bank. Ease of doing business in Tajikistan. 2015.


MARKET ENTRY CONSTRAINTS


� Market concentration hinders growth opportunities

� Weak trade intelligence capacities diminish ability of exporters to meet market requirements

� Lack of national branding policy hinders market development

� Limited institutional support restricts market access

� Inadequate leveraging of preferential trade agree-ments weakens terms of trade


Market concentration hinders growth opportunities

Tajik textile and clothing companies have come to rely upon a small number of markets. Clothing companies export mainly to Italy, Russia and Kazakhstan, while larg-er textile companies are dependent upon Russia, Italy, Turkey, and China. Such significant market concentrations make the sector vulnerable to regional price and demand fluctuations that could ultimately harm the financial viabil-ity of enterprises that are caught in a prolonged downturn.

In addition to the obvious dangers, this overdependence presents an insidious constraint to future growth. Many companies have become conditioned to catering to a lim-ited number of stable buyers. This has reduced incentives to further expand, leading to a passive ’make to orders expected’ syndrome in which production is aligned to the demands of a select few buyers. For example, South America, the Gulf region, and Western Africa represent at-tractive markets for Tajik textile companies. Nevertheless, they remain completely untapped, as the sector continues to rely upon its traditional trading partners.

Expansion is hindered by a variety of factors, including the absence of hard selling and aggressive marketing. In ad-dition, there is a lack of market intelligence, which would help companies identify markets and trends and design products accordingly. This is further compounded by lim-ited managerial skills ; management is unable to under-stand market trends, identify appropriate opportunities, and realign production capacities to market demands. Lastly, Tajikistan’s landlocked status leads to very high transport expenses. This makes it difficult for companies to be cost-competitive unless they increase the value ad-dition of their products.

Weak trade intelligence capacities diminish ability of exporters to meet market requirements

Tajik companies are unable to access reliable and timely sources of trade intelligence, including information about market characteristics, buyer requirements, favored dis-tribution channels, acceptable payment mechanisms, trends in consumption, voluntary standards, and technical specifications. This has resulted in a failure of both textile and clothing companies to meet quality requirements and expand into new markets. The impact on clothing com-panies however is more acute. The lack of adequate in-telligence has lead to non-compliance with international standards, effectively blocking sales to certain markets. In addition, poor design, weak packaging, and limited uptake of innovative materials hinder growth potential. The inability to interpret dynamic consumer preferences meanwhile has hindered the capacity of clothing compa-nies to cater to international fashion trends.

Many clothing companies do not use the services of pro-fessional consultants in order to access market intelli-gence. While there is a shortage of such professionals, they do exist. Companies however, often find it difficult to justify the expense, partially due to limited awareness about the importance of such intelligence, and partially due to internal financial limitations. There is however, a shortage of design specialists, which would otherwise be able to help companies interpret and cater to changing fashion trends. In both the clothing and textile subsectors, entrepreneurs generally lack awareness of where to ac-cess the necessary trade intelligence.

Another key challenge when it comes to trade intelligence is the lack of adequate institutional support. There is no Trade Promotion Organization ( TPO ), and the associa-tions that do exist, such as the Chamber of Commerce and Industry, are lacking in financial and human resource capacities. As such, they have not developed service port-folios that cater to the demands of T & C companies. One solution would be the creation of an Export Promotion Council ( EPC ) that would provide T & C companies with sector-specific trade intelligence. While this approach has proven successful in other countries, Tajikistan has yet to form a centralized export promotion body catering to the T & C sector.

Tajikistan also lacks the presence of sourcing compa-nies or buying agents. In countries such as China, India, Bangladesh, Viet Nam, and Sri Lanka, buying agents have played a very important role in the growth of T & C exports. These companies, also known as sourcing com-panies, bring significant market intelligence in terms of customer expectations, quality standards, expected fac-tory systems, social standards, raw material sources and shipping / customs logistics. Such organizations have helped hundreds of small and medium exporters to find the right customers in international markets and receive


stable orders. There is currently a complete absence of such sourcing companies in Tajikistan, and attracting or establishing one could go a long way towards improving trade intelligence in the country.

Lack of national branding policy hinders market development

Industry representatives take little interest in having a sin-gle brand for Tajik products. While recent strides have been made to promote clothing products under the brand “Made in Tajikistan,” efforts are nascent. In addition, simi-lar initiatives have yet to be undertaken for the textile sub-sector. Efforts have also been hindered by the lack of a centralized promotion council for Tajik T & C products. An important step will be raising awareness of the po-tential benefits for sector-wide branding in order to build enterprise and institutional support for such a program. Stakeholders note that there is potential to leverage the good quality of cotton textiles for branding purposes, as was done for Giza cottons in Egypt, Supima cottons in the USA, and Shankar cottons from Gujarat, India.

Limited institutional support restricts market access

Another constraint to market access is the poor coordina-tion between companies, trade support institutions, and commercial representatives stationed abroad. Most com-panies do not have sales agents stationed in key markets, nor do they maintain an adequate web presence. This, in conjunction with limited institutional support for brand-ing and promotion has resulted in the poor visibility of Tajik products.

Globally weak institutional capacities hinder more efficient coordination. There is no association that proactively ca-ters to a broad segment of the sector’s stakeholders, and the capacities of the institutions that do exist, such as the Chamber of Commerce and Industry, require strengthen-ing. As such, there are limited platforms for networking and discussing common challenges. Greater cooperation could lead to stronger bargaining power and order con-solidation. In the absence of a proactive association, the level of exporter participation in international trade fairs is relatively low. This has diminished their exposure to target markets, limited their networking opportunities, and hin-dered their ability to promote products directly without the involvement of state authorities and middlemen.

Moreover, foreign representatives would ideally assist in promoting Tajik goods and gathering trade intelligence in target markets. The absence of such representatives hin-ders the ability of the sector to adequately promote prod-ucts and identify and capitalize upon sales opportunities. The few specialists that are stationed abroad have poor

qualifications, limited networking skills, and an insufficient understanding of the industry in the target country. In addi-tion, their slow reactivity means that they are unable to help Tajik producers capitalize upon opportunities in a timely and reliable fashion. The sector is also in need of busi-ness facilitators, or buying agents, that would fill gaps with regards to market intelligence and product research and serve as a bridge between buyers and T & C companies. The experience of other countries has shown the advan-tages of having a more effective representation abroad ; in India for example, large corporations selected repre-sentatives to be sent abroad by the government through a Marketing Development Assistance ( MDA ) initiative. As a result of this program, turnover increased by 10 %.

Inadequate leveraging of preferential trade agreements weakens terms of trade

Tajikistan is not yet benefiting from a number of important preferential trade agreements. As such, exports to key markets continue to be subject to MFN tariffs.

While the European Union is a market with significant po-tential for Tajik textiles, Tajikistan is not yet benefitting from GSP+. Instead, Tajik exports to the EU are subject only to the Generalized Scheme of Preferences ( GSP ), which grants preferential tariffs to developing countries. GSP+ treatment would grant additional concessions, including deeper and broader tariff cuts, which would help Tajik textiles increase their price competitiveness.

While the country is currently processing the GSP+ agreement, insufficient attention is hindering its advance-ment. Tajikistan meets all of the EU’s vulnerability criteria, but approval of GSP+ cannot proceed until it adopts the “Convention on the Prevention and Punishment of the Crime of Genocide ( Paris, 1948 )” and the “Convention of Biological Diversity ( 1992 )”. Additional lobbying will be needed in order to raise awareness of the issue and in-centivize appropriate action.

With regards to the American market, stakeholders are making efforts to repeal the Jackson agreement, which has hindered trade with the US. As with GSP+, lobbying is needed in order to raise awareness and push for an adequate resolution.


Box 13 : GSP+

“The GSP+ is a component of the EU Generalised Scheme of Preferences ( ’GSP’ ) for develop-ing countries. It offers additional trade incentives to developing countries already benefitting from GSP to implement core international conventions on human and labour rights, sustainable development and good governance.

GSP+ is a scheme that rewards developing countries that shows a credible commitment to implementing those conventions by granting duty reductions on exports to the EU on some 6,000 tariff lines ( 66 % of the EU common customs tariff ). In 2012, this represented approximately €4.9 billion of imported goods.”

Source : European Commission. 10 countries to benefit from EU preferential scheme GSP+ as of 1 January 2014. Brussels, 30 December, 2013.

Box 14 : The Jackson–Vanik amendment

“The Jackson–Vanik amendment is a 1974 provision in United States federal law, intended to affect U.S. trade relations with countries with non-market economies ( originally, countries of the Communist bloc )…The amendment denies most favoured nation status to certain countries with non-market economies that restrict emigration, which is considered a human right. Permanent normal trade relations can be extended to a country subject to the law only if the President determines that it complies with the freedom of emigration requirements of the amendment.”

Source : Avaz Yuldoshev, Asia Plus. “Tajikistan to conduct negotiations with USA on waiving the Jackson–Vanik amendment.” Dushanbe, January 9, 2013.

SOCIAL AND ECONOMIC CONCERNS


� Poor working conditions pose health and safety risks

Textiles

� Outdated dyeing methods pollute waterways

Clothing Lack of women’s ownership and leadership hinders gender equality


Poor working conditions pose health and safety risks

Inappropriate working conditions are commonplace. Workplaces do not deploy modern technology, which can lead to safety issues, and lighting is often insufficient. In addition, inadequate heating in the winter and cooling and ventilation in the summer contribute to poor working conditions. These issues are compounded by periodic disruptions in the power supply, particularly during the winter months. In general, working conditions are not well-regulated, leading to a higher socio-economic burden.


TEXTILES

Outdated dyeing methods pollute waterways

Tajikistan is endowed with significant water resources : each year, 50.9 billion m3 of water is formed due to a combination of precipitation and glacial melt. As these waters flow to the Amu Darya and Syr Darya rivers through Afghanistan, Kazakhstan, Kyrgyzstan, Turkmenistan, and Uzbekistan, water pollution is more than just a domestic problem.30

The textile industry consumes a considerable amount of water resources in the dyeing and finishing processes. In addition, outdated dyeing methods release chemical waste, including Persistent Organic Pollutants ( POPs ), into the water.

New methods do exist, however, that would allow textile companies to utilize less water and minimize pollution. Such methods include optimization of the dyeing process itself ( i.e. utilizing air dyeing techniques ), and improved waste water treatment. Nevertheless, stakeholders do not consider the issue to be a major concern, and they lack awareness of the benefits that might result from transi-tioning to a more sustainable process. Not only would improvements lead to environmental preservation, but they could also be leveraged as marketing tools in or-der to add value to final products. As an example, the EU market restricts the use of azo-dyes for any imported T & C product. To be able to penetrate this market, Tajik firms must gradually replace these dyes with alternatives.

CLOTHING

Lack of women’s ownership and leadership hinders gender equality

Although the clothing industry relies heavily upon a fe-male workforce, women have very limited managerial and entrepreneurial roles. Indeed, female-owned clothing en-terprises are rare, and women are generally not involved in the decision making process unless they are owners. While cultural factors do play a role, as does the traditional link between ownership and management, the lack of ac-cess to relevant education has hindered an expansion of female leadership in the sector.

Women in Tajikistan are also heavily involved in the manu-facturing of handicraft goods, including rugs, carpets and traditional cloth in rural areas. In these cases, women do manage small scale production on their own. Even so, these women-artisans generally do not establish more for-mal structures. In addition, they maintain their household

30. UNECE, “Environmental Performance Reviews – Tajikistan”, 2004.

obligations and can therefore not dedicate as much time to work. These women sell most of their produc-tion through informal networks or in local markets, rarely engaging in export. Stronger growth is being hindered first and foremost by limited business and financial skills.

THE TRADE SUPPORT NETWORK DIAGNOSTICThe future success of Tajikistan’s T & C sector will depend not only upon the internal capacities of the companies operating in the industry. In order for the sector to achieve long-term, sustainable growth, participating enterprises must be able to rely upon a capable network of govern-ment and private sector support institutions. Tajikistan’s T & C trade support network ( TSN ) is comprised of the following organizations :

POLICY SUPPORT NETWORK

These institutions represent ministries and competent authorities responsible for influencing or implementing policies at the national level. Despite the Government’s interest in stimulating the T & C sector, policy-level support is weak. Inadequate human and financial capacities are complicated by fragmented attempts at State support, whose lack of overall strategy and limited continuity has done little to provide meaningful assistance.

Of particular note is the lack of TVET support for the sec-tor. While the Ministry of Labour has been tasked with implementing TVET programs, the reach of such assis-tance is small. It should be noted however that an on-going GIZ project, “Supporting Reform of the Technical and Vocational Education and Training ( TVET ) System” ( 2008 – 2016 ), is working to improve access to qual-ity education and training. In addition, four universities ( Khujand State University, the Technological University of Tajikistan [TUT], Tajik State University of Commerce and the University of Central Asia ) offer relevant coursework. Unfortunately, linkages between the universities and in-dustry are weak, and the curricula follow outdated stand-ards which need to be upgraded to contemporary norms that meet the needs of modern enterprises. In addition, while a range of facilities such as technoparks are made available to students, opportunities to gain practical ex-perience through in-company placements are lacking.

A number of reforms are required, including a public-pri-vate partnership for the development of University techni-cal courses. Such a partnership will require legislation that establishes the mechanisms for cooperation. In addition, universities are not equipped with adequate machinery for the training of technical personnel : universities must invest in sample training machines ( these can be purchased inex-pensively from second hand sources in India, for example ).


Table 7: TSN of the Tajik T&C sector

Policy support network Trade services network Business services network

» Ministry of Economic development and Trade » Ministry of Industry and New Technologies » Ministry of Finance » Ministry of Labour, Migration and Employment » Ministry of Agriculture » Ministry of Energy and Water resources » Ministry of Transport » National Bank » Tax committee under Government of the Tajikistan » Committee on Environmental protection under Government of Tajikistan » State Service on phytosanitary and plant quarantine inspection ( Min Agriculture ) » State Service on Sanitary and Epidemiology ( Min of Health ) » Agency on State Financial Control and Fight against Corruption » The Antimonopoly Agency ( AMA )

» Tajikstandart - Agency on Standardization, Metrology, Certification and Trade Inspection under the Government of the RT » Customs Service under the Government of the Republic of Tajikistan » Chamber of Commerce and Industry ( CCI ) » Independent laboratories

» Leasing companies » Association of Light industry Enterprises » Tajik Association of Road Transport Operators ( ABBAT ) » Consulting companies on quality issues » Commercial banks » High education institutions and vocational schools » Management consulting companies » Farmers’ associations » Association of Exporters » Management consulting companies » Microfinance institutions » Bankers’ association » Audit companies

From a macro-perspective, Tajik policies have thus far realized mixed results in their efforts to foster a support-ive business environment. In general, the tax regime is considered to be unfavourable : the tax system is com-plex, and medium-sized companies are at a significant tax-disadvantage compared to smaller enterprises. While tax incentives to reward vertical integration were welcome, their effects have not been purely positive. Indeed, while a 15 % tax rebate was offered to companies planning to vertically integrate within a fixed time period, the rebate must be reimbursed by companies who fail to achieve full integration within the deadline. This may put some com-panies in a precarious financial position when the rebate period comes to an end next year.

Monetary and fiscal policies meanwhile have done little to combat high interest rates and have helped reduce the availability of credit to the sector.

TRADE SERVICES NETWORK

These institutions or agencies should ideally provide a wide range of trade-related services to both government and enterprises. In this role, they would support and pro-mote the sector through the delivery of trade and export solutions. As with policy support institutions, the trade services network is currently under-capacitated. The Chamber of Industry and Commerce lacks a sufficient international network, and its ability to provide relevant services is weak at best. While the chamber currently counts 20 representations abroad, said representations are not positioned in a strategic manner, nor are they able to effectively help industry capitalize upon market oppor-tunities. Laboratories and certification bodies meanwhile are nearly absent from the country, and Tajikistan is not a member of ISO.

Tajikistan lacks an export promotion council that would help enterprises access key markets. India, for example, has a semi-governmental export promotion council con-trolled by the private sector and facilitated by the gov-ernment. It has representatives in a number of growing markets including Europe, Japan, South America, and Africa. There is one such council for cotton textiles and one for man-made fibre-based products. The involve-ment of the councils has been of paramount importance in India’s expansion as a hub for the global T & C sector.

Of particular concern to the sector is inadequate sup-port from the Customs Service under the Government of Tajikistan. Clothing from Kyrgyzstan, China, and Uzbekistan are often imported illegally. As the appropriate taxes are not paid on these products, they can severely undermine the competitiveness of domestic producers. Previously the products were assessed at customs in terms of the model of the product, the size and the price. Due to the increased volumes of imports, and in order to facilitate the work of customs’ agents, the clearance is now based on the volume and weight of the products. This makes it easier for importers to smuggle goods. In order for the T & C sector to thrive on its merits without having to suffer from unfair competition, it is imperative that the Customs Service step up its enforcement at the borders. Unfortunately, the Government does not provide the Customs Service with adequate financial means to ef-fectively support customs enforcement.

BUSINESS SERVICES NETWORK

Most notably, the services offered by business support organizations are globally weak. These associations and commercial service providers should support the growth and development of sector businesses through their of-ferings. Instead, low buy-in from stakeholders, together


with limited professional expertise and service portfolios, hinders their effectiveness.

The Association of Light Industry Enterprises is a sector association formed five years ago. Nevertheless, a lack of sustainable financing has left it relatively inactive. In ad-dition, and as a result of contentious leadership appoint-ments, many stakeholders feel that the association does not represent their interests. This has helped to foment a lack of trust in the institution, and some SMEs see little incentive to advocate for its optimal functioning.

Another key roadblock to the development of the T & C sector is the lack of financial access. While partially caused by complications in the macro-environment, as well as problems within the borrowing enterprises, the operations of financial support institutions play a major role. The portfolio of financial tools offered by commercial banks is limited, and leasing is not widespread. Limited capacities, especially with regards to credit and risk as-sessment, also hinder the diffusion of more affordable and accessible financial solutions.

PROBLEM TREE AND KEY PRIORITY ISSUESThe problem tree approach is based on the doctrine of root cause analysis and the Pareto principle. This exer-cise results in an inverted tree-like structure with high level constraints at the top and related root causes placed at subsequent levels. Critical root causes are identified fol-lowing the Pareto principle. The basic rationale behind the problem tree exercise is to gain a deeper understanding of what is causing the high level constraints, and where the focus of solution-seeking activities should be directed. This exercise involves a two-step process :

� First, constraints are identified as part of the value chain analysis during the first consultation with key public and private stakeholders. These constraints are generally abstract, and a more thorough breakdown is required to identify their root causes. Multiple levels of root causes are identified for each high level constraint in order to gain specific insights into the causality : i.e. the relation-ship between the root causes and the constraints cur-rently affecting the export competitiveness in the sector. Complex root causes are further divided into atomic root causes until a satisfactory level of detail is achieved.

� Later on, during the second consultation, the Pareto principle is used to identify critical root causes. This is especially important given the resource limitations that usually exist during the strategy implementation phase, thus necessitating a focus on the 20 % of root causes that result in 80 % of the constraints. Critical paths through the problem tree are charted to select those root causes that play a majority role in constraining the sec-tor. Identifying – and thus prioritizing – the root causes in this manner helps to focus efforts and develop the most effective solutions – i.e. the PoA – in the following stages.

Based on the constraints identified during the first con-sultation, a detailed Problem Tree diagram was designed ( Figure 21 ). The Problem tree identifies the following four high-level constraints :

� Low business efficiency in the T & C sector � Unconducive business environment � Insufficient orders � Insufficient market-entry capacity

These broad constraints served to facilitate the elabora-tion of the structure of the Plan of Action. The root causes that were identified and the priorities set enabled to prior-itize activities of the Strategy.

Photo: Picts for cover page, IMG_0839.JPG


Figure 21 : Problem tree diagram


Figure 21 : Problem tree diagram


DEVELOPMENT SUPPORT FRAMEWORK

The following section outlines the development support framework as it relates to Tajikistan’s T & C sector. To this end, it details a list of governmental policies affecting the sector ( national development plans and programmes ) and provides an overview of existing donor activity that might impact the industry. By identifying existing support, this section will allow stakeholders to efficiently integrate and align the strategy to ongoing initiatives.

NATIONAL POLICIES AND DEVELOPMENT PLANS

Table 8 contains a list of development initiatives and pro-grammes that relate to the T & C sector.

Table 8 : National policies and development plans

National development plan

Reference Provisions related to the cotton to clothing sector

Program on development of light industry in the Republic of Tajikistan in 2006-2015

Decree of the Government of the Republic of Tajikistan Nº 422 dated 31.10.2005

Main goals of the Program are establishing conditions and framework of developing the light industry in the Republic of Tajikistan based on processing of local raw material resources ; increasing the export potential of textile products and others ; creating jobs for the population.

Program of complete processing of cotton fibre up to 2015 of the Republic of Tajikistan


To ensure complete processing of ginned cotton to ready-made items at the enterprises of the Republic of Tajikistan. The amount of the processed raw materials by 2015 has to reach 209 thousand tons per year. To achieve this, the following is anticipated : » construction of 15 new enterprises and reconstruction of existing enterprises » setting of preferences » development of exports

Program on manufacturing of goods for children in the Republic of Tajikistan


Manufacturing clothes for children, such as : coats, jeans, school uniform, underwear, hats, socks, pyjamas, etc.Main goals of the program are to ensure a suitable economic environment and to motivate local producers in manufacturing goods for children ; to enrich the domestic market with highly competitive and export-focused goods ; to increase the number and types of goods for children using the domestic raw materials ( cotton, wool, leather and yarn ), etc.

Decree of the Council on industrial policy of the countries of CIS

Adopted in 2012 The Council on industrial policy of the countries of CIS is established based on the Cooperation Agreement in the area of industry by the counties-members of CIS as of May 30, 2012 with the aim of coordination cooperation between countries-members of the Agreement in the area of industrial policy. The Council is the CIS structure responsible for industrial collaboration ; it carries out its activities in the framework of its authority and reports to the Council of the heads of governments of CIS.Main goals of the Council are carrying consultations and sharing opinions related to issues of industry development ( industrial policy ) ; submitting proposals on setting up and implementation of monitoring and evaluation of industrial sectors in the countries-members of CIS ; based on the outcomes of the evaluation developing proposals on joint economic activities in the markets of the countries-members of CIS ; elaborating recommendations on enabling favourable conditions for innovative industrial development of countries-members of CIS, etc.

Concept of industrial development in the Republic of Tajikistan

Adopted on December 4, 2003

Concept of industrial development is a logical aggregation of ideas on industrial development in specific conditions in Tajikistan, which will help in developing the middle- and long-term Strategy and different Programs on industrial development.

Decree on organization of works on production, processing and sales of cotton

Adopted on May 15, 2003 ( amended in 2009 )

Current Decree is developed with the aim of further development of the cotton sector of the national economy, improving the investment climate of the Republic of Tajikistan, enhancement of monitoring, streamlining conclusion of contracts on production and sale of cotton ( raw cotton, yarn, lint seeds, plants, etc. ), and bringing them into compliance with the market economy ; protection of interests of cotton producers and investors, etc.

Program on introducing scientific and technical achievements in the industrial production in the Republic of Tajikistan in 2010-2015

Adopted on October 5, 2009

The main goal of the Program is setting up production of competitive goods from domestic raw materials at the domestic manufacturing companies based on economic priorities using scientifically based proposals of scientists, research institutions, inventors and innovators as well as attracting foreign technologies.

51DEVELOPMENT SUPPORT FRAMEWORK

DONORS’ ACTIVITY IN THE TEXTILE AND CLOTHING INDUSTRYDespite the fact that the T & C sector presents significant opportunities for income and employment generation, there is only one project that explicitly targets the indus-try. Nevertheless, a wide range of other interventions are

currently being implemented by development agencies in an attempt to promote sustainable development. These projects are cross-sectoral in nature, and they address various constraints at SMEs, in the regulatory framework, and in the business environment. As such, said interven-tions may indirectly address constraints to the T & C sector. Opportunities for synergetic cooperation should therefore be investigated where appropriate in order to attain effi-ciencies and avoid duplications.

Table 9 : List of donors’ intervention in Tajikistan, affecting T & C

Name of program

Funders and implementers

Financial volume and duration

Targeted sub sectors and value chains

Geographical focus

Objective of program Key partners

ADB ADB through different implementing partners

2013–2014$137 million grant

All economy Tajikistan To support inclusive growth by creating economic opportunities and ensuring greater access to growth

Economic and business development program ( EBDP )

Soros Foundation All economy Tajikistan To assist in the development of small and medium enterprises, which are important elements of the civil society, by ensuring freedom of entrepreneur’s access to investment capital, justice, necessary information and knowledge.

CESVI Zarzamin and Atac as local implementing partners, European Union ( around 70 % of funds ), UNDP, the Italian Ministry of Foreign Affairs, Open Society Institute, the SwissAgency for Development and Cooperation

All economy Tajikistan The decision to go on fostering the private sector is due to the fact that, despite at the macroeconomic level many economic indicators are improving, the development is far to be inclusive for women, vulnerable people and population living in rural areas.

Promotion of Economic Development and Trade through the improvement of the business environment, agricultural diversification andfood security

EU 2011-2013EUR 62 million under the European Commission Indicative Programme,respectively aimed at the Private Sector Development ( EUR 16 million for the Agri-business sub-sector ), Public Finance Management ( EUR8 million ) and Human Development Sector Policy Programme ( EUR 38 million ).

All economy with focus on agro-processing

Tajikistan Business enabling environment improved by enhancing the strategic, legal and regulatory framework for Private Sector Development ( PSD ) as well as the Government’s ability to implement reform ; Private sector’s capacity enhanced to advocate for reform and to access adequate financial products and business development services for farmers and SMEs ; Competitiveness of the agro-processing sector increased with business comparative advantage and good potential for poverty reduction.


Name of program




Geographical focus


CAICP, Central Asia Investment Climate Program ( Tajikistan and Kyrgyzstan )

Switzerland/UK, IFC as implementing partner

2012-20157’987’844 USD

All economy Regional To reform key regulatory obstacles limiting private investment while working with firms and governments to facilitate new investment. The Program has three main components : Business Regulation, Tax Administration, Investment facilitation to Infrastructure

GKI, STC, Inspection agencies, NBT, MJ, MFA, Ministry of Energy, Ministry of Industry, Provincial Governments, Private Sector, Business Associations

Central Asia Corporate Governance Program ( Tajikistan and Kyrgyzstan )


2013-2016USD 1’500’000

All economy Regional The main focus of the this Program is to strengthen the capacities and transferring Corporate Governance ( CG ) knowledge to selected local partner institutions

NBT, Business Associations, Private Sector

ACAFI II, Azerbaijan-Central Asia Financial Market Infrastructure Project ( Tajikistan, Kyrgyzstan and Azerbaijan )


2013-20154’294’373 USD

All economy Regional To continue expanding secure access to finance for individual consumers and SMEs by improving the financial infrastructure : development of credit bureaus, development of collateral registries, conducting public awareness campaigns and improving the institutional capacity of the private sector to enhance its participation in credit reporting and movables financing.

NBT, Private Sector, Academy, Business Associations

ACAMF, Azerbaijan and Central Asia Micro- and Responsible Finance Program ( Tajikistan, Kyrgyzstan, Kazakhstan, and Azerbaijan )

Switzerland/UK , IFC as implementing partner

2013-20164 million USD

All economy Regional Development of the microfinance sector by improving the conditions for both Micro Finance Institutions ( MFIs ) and clients to change their lending and borrowing practices into being more sustainable : 1 ) consumer protection 2 ) responsible finance and 3 ) transformation of microfinance institutions

NBT, Private Sector, Business Associations

EBRD’s Early Transition Countries Funds ( ETCF ) in Armenia, Azerbaijan, Belarus, Georgia, Kyrgyz Republic, Moldova, Mongolia, Tajikistan, Turkmenistan, and Uzbekistan

Switzerland and other donors, EBRD as implementing partner

Since 20044.5 mln EUR ( Swiss contribution )

All economy Regional The initiative aims to stimulate market activity in these countries by using a streamlined approach to financing more and smaller projects, mobilizing more investment, and encouraging ongoing economic reform

Private Sector

EBRD Early Transition Countries Local Currency Initiative in Armenia, Azerbaijan, Belarus, Georgia, Kyrgyz Republic, Moldova, Mongolia, Tajikistan, Turkmenistan, and Uzbekistan

Switzerland and other donors, EBRD as implementing partner

2011-20211.5 mln EUR ( Swiss contribution )

All economy Regional To improve local capital markets and increase local currency lending, in close coordination with the IMF

NBT, IMF, Private Sector

53DEVELOPMENT SUPPORT FRAMEWORK

Name of program




Geographical focus


TCP Trade Promotion Programme/ WTO-Accession Support to Tajikistan

Switzerland, ITC and IPI ( Swiss Federal Institute of Intellectual Property ) as implementing partners

2012-20165’225’000 US $

Textile and Clothing

Tajikistan Support during the WTO post accession process and related to advices on all aspects related to the implementation of WTO provisions, including TRIPS agreements. To contribute to the sustainable expansion and diversification of Small and Medium Enterprises’ exports in Tajikistan through increasing the competitiveness of the textile and clothing ( “T & C” ) and handicraft industry and improving the quality management infrastructure of the country.

MoEDT, Ministry of Industry, Private Sector, Business associations, Chamber of Commerce, National Centre for Patent and Information, Ministry of Culture, Ministry of Agriculture, Academy

Communities Program

UNDP 25 mln. USD All economy Tajikistan » To build capacities of sub-national governments to plan, budget and monitor development on their territories in a participatory and inclusive way and in line with LSIS targets, as well to secure investments and provide public services in such areas as rural economic development, natural resources management, health and disaster risk management, and » To enhance capacities of private sector and civil society to develop, participate in decision-making, exercise influence and hold governments accountable.

MEDT, SCISPM, Local authorities, Private sector organizations

Tajik Women Economic Empowerment - TWEET

EU 2014-2015428,500 EUR ( grant )

All economy – gender focused

Tajikistan Overall objective is to improve the business climate for the establishment and operation of MSME run by women in Tajikistan.Specific objective is to enable the National Association of Business Women in Tajikistan to serve business women’s needs in particular in the handicraft sector.

National Association of Business Women Tajikistan ( NABWTLatvian Business Women Association ( LBWA )Business Women Association of South Kazakhstan, Kazakhstan

Handicraft and business through regional integration and fair trade market

EU 2014-2015587.183,90 EUR ( grant )

Handicrafts Regional To contribute to the development of the Tajik and Kyrgyz private sectors with a special focus on regional integration of the handicraft sector. Specific objective : To reinforce the representative role, the sustainability and the competences on supporting Small Medium Enterprises ( SMEs ), of Tajik and Kyrgyz Handicraft Business Intermediary Organizations ( BIOs )

National Association of Small and Medium Business of the Republic of Tajikistan ( NASMB ).The Union of Craftsmen of Tajikistan ( UCT ).The Public Association “Bishkek Business Club” ( BBC ) in Kyrgyzstan.Metropoli, special agency of the Chamber of Commerce in Florence, Italy.

Tajik Rural Agriculture Finance

Germany/BMZ/KFW 2014-202113 mln Euro

All economy Tajikistan Contribute to the increase of income and economic activity of the rural population of Tajikistan by providing refinancing to financially sustainable institutions with a clear focus on rural micro and small enterprises ( MSEs ). Strengthen the capacity of local private financial institutions to sustainably provide financial services to MSE in rural areas of Tajikistan.

MEDT, Banks and MFI’s

Housing Germany/BMZ/KFW 2014-2024 8 mln Euro

Construction Tajikistan Extension of the sustainable credit business of private financial institutions in the housing ( property, modernization and expansion ). Contribution to the improvement of living conditions of the target group as well as the extending Tajik financial system

MEDT, Banks and MFI’s

Photo: ITC

55FUTURE PERPECTIVES

FUTURE PERPECTIVES

The textile and clothing sector holds great potential as a driver of socioeconomic development in Tajikistan. Unlocking this potential however will require transforma-tions throughout the value chain. These adjustments, as reflected in the future value chain schematic, are the result of targeted efforts to address the constraints identified in the four gears analysis and identify and capitalize upon opportunities to add value.

The following vision has been developed to guide the ex-port development efforts of Tajikistan’s T & C sector.

STRATEGIC VISIONThis vision will be supported through the following stra-tegic objectives :

“A dynamic and competitive T & C industry – the engine for the

sustainable economic development of Tajikistan.

”TARGETS � Volumes of cotton fibre processed locally to increase

to 35 %, from the current 10 % ; � 50 firms have acquired new equipment and related

technical capacities by 2020 ; � 100 new production lines developed by Tajik firms in

yarn, textile and apparel production ; � Production of textile and garment to increase 160 % to

US $ 61.12 million ; � More than 4000 new jobs in the textile and clothing

sector ; and � 60 % of companies complying with international stand-

ards related to working conditions, quality manage-ment and sustainability.


FUTURE VALUE CHAIN


STRUCTURAL ADJUSTMENTS TO THE VALUE CHAIN : VALUE OPTIONS

The following options for value retention, addition, and creation, have been identified for each of the two subsectors.

TEXTILES

Short term » Optimize power consumption through the use of energy efficient motors and introduce modern electricity budgeting on the basis of power units consumed per Kg [UKG method] » Improve productivity through enhanced labour qualifications » Introduce mass colouring of textiles, including fibre and yarn dyeing, fabric dyeing and finishing, as opposed to individual colouring » Import second-hand knitting machines from Europe at 40 % of the cost of new machinery. Knitted goods will save enterprises money on packing costs, while allowing them to add value to carded or combed yarn with minimal investment » Establish SME hubs for the production of knit fabric for fashion clothing through the importation of low cost knitting machines, particularly in the Khujand area » Improve productivity at spinning mills and create new types of yarns utilizing existing materials and machinery » Increase and sustain the use of combed yarn for textile production » Reduce costs of production and improve material yields » Import small quantities of polyester and create blended yarns to enable the production of new yarn products such as woven poly-cotton uniform fabrics » Introduce recycling of cotton waste from spinning mills and repurpose for medical tissue » Diversify production lines and introduce a wider range of yarns and fabrics ( especially dyed yarns ) in order to cater to the demands of garment manufacturers » Aggressively approach the market for school uniforms ( 1.75 million schoolchildren in Tajikistan ) by producing cotton / polyester blended fabrics

Medium term

» Introduce the production of new types of yarns, including coloured yarn, knit yarn, mixed yarn, combed yarn, open-end yarns, viscose staple, bamboo, slub yarn, and vortex yarns » Facilitate the introduction of new machinery and develop modern budgetary practices that account for equipment upgrading » Ensure adequate human and financial resources for regular equipment maintenance » Promote the production of coloured textiles ( ne surovie tkani ) for use in domestic clothing companies » Promote the development of a more efficient transport network for cost savings » Introduce organic cotton yarn and textiles into production and leverage organic branding » Develop production of knit textiles. This will require the replacement of old equipment for woven textile production that costs twice as much to operate as modern equipment and takes more time to produce the same amount of fabric. Knitting will be the core engine of growth for new SMEs in the T & C sector. » Import grey polyester fibres and produce polyester sewing threads for domestic garment manufacturers ( count range 40s to 60s in double ply ) » Facilitate investment in two plants for the creation of polyester fibre from recycled PET bottles with a capacity of 40 tons. ( 2 – 2.5 million USD required ). Bottles can be imported from Europe if local supply is insufficient, and the fibres can be used for textile spun blended yarns and for nonwoven uses, such as fillers for furniture and quilts, etc » Promote the production of packaging materials in order to substitute imports and reduce costs : paper cones, paper tubes, cartons, etc. Facilitate the use of packaging among producers : yarns are fragile, and the lack of packaging may result in damaged goods » Rearrange yarn counts to reduce waste and improve profitability. Yarn number 20 is comprised of 7 different types, which is an inefficient categorization that does not ensure usage of the full range of products. Some types still go to waste, as they cannot be used for spinning or non-woven products » Introduce a range of non-woven goods produced from cotton waste, including paper-like filter products, cosmetic cotton pads, filling for garments such as jackets, terry towels ( consumable item made from carded yarn of low quality cotton : many old power looms can be modified at a low cost with an attachment for terry towelling ), and jacquard for sofa coverings and home textiles ( investment is greater, and demand is lower, but there is significant opportunity for value addition ), » Produce and market medicinal tissues such as hygienic cotton and medicinal bandages using organic cotton and bleaching processes » Develop new fabrics such as Jacquard [in limited quantities for upholstery] or Poly-cotton denim fabrics for Jeans [for economy consumers] » Purchase laser devices to allow for greater product diversity

Long term » Introduce the production of thread yarn and twisted yarn

CLOTHING

Short term » Import blended fabrics for suits, uniforms, and work wear » Optimize sourcing practices of dyes and chemicals from low cost suppliers, such as producers in India » Improve workplace organization for sewing operations » Improve the labour productivity in cutting, sewing, and packaging operations. A 15 % reduction in cost of manufacturing is possible » Introduce technological process optimization ( CAD ) in order to save between 2-5 % of fabric costs in cutting and product development operations » Productivity in the clothing industry could be significantly increased with the use of small work aids and attachments. These relatively inexpensive devices help to convert a standard machine into a specialized workstation for a particular operation, thereby providing consistent quality and enhanced productivity. The understanding of such devices must be improved, and their uptake should be encouraged throughout the sector. » Reduce defect rates through increased quality management efforts » Introduce packaging materials that protect clothing and add aesthetic appeal for buyers in target countries » Add value to clothing by incorporating traditional embroidery skills

Medium term » Facilitate the construction of at least one plant in the country that will produce accessories and packaging materials in order to replace imports » Facilitate the domestic production of lining fabrics and cushioning / quilting materials at weaving enterprises » Diversify product base through the introduction of a wider variety of fabrics. This will allow enterprise to attract new customs and expand the product base for existing customers » Create new accessory products ( such as conference bags, folders, and souvenirs ) as a supplement to core products » Complete the verticalization process in new green field plants by adding knitting, dyeing and clothing manufacturing capacities.

Long term » Establish domestic production of blended and synthetic fabrics suited for clothing production


INDICATIVE TARGET MARKETS

The following analysis of suggested target markets for the Tajik T & C industry is divided into two phases : one related to the immediate, short term perspective and one related to the mid and long term outlook, at which point a significant portion of the plan of action developed under this strategy will have been implemented.

Short term :In order to appeal to various stakeholders, the strategy must target realistic goals. With this in mind, the proposed way forward is to concentrate on reinforcing and secur-ing existing market relationships rather than aiming right away for market diversification. In principle, exporting to an existing market should be easier, as product-specific up-front market entry costs ( distribution channels, etc. ) have already been met. This choice is also motivated by the analyses of the value chain limitations ; indeed, Tajik enterprises may not be able to bear the increased uncer-tainty and additional costs that are often required to pur-sue opportunities in new, more economically advanced markets. Additionally, the need to strengthen existing ex-port relationships through larger scale flows was highlight-ed by sector stakeholders during the first consultation as a response to the current inability to maintain production and export volumes as well as to meet quality require-ments in a consistent manner.

In the short term, it is therefore recommended that Tajikistan reinforce its offering for the domestic market and for existing export markets including Turkey, China, the Russian Federation and Italy.

This approach allows time for Tajikistan to strengthen and upscale its offering, develop economies of scale, and en-hance the quality of the institutional support, all of which will increase enterprise capacities to create and sustain a presence in new markets. In addition, it will allow Tajikistan to strengthen its foothold in some of the world’s fastest growing markets for T & C products.

Nevertheless, it is advisable that stakeholders already begin to gather strategic intelligence, explore new market opportunities, and identify niche segments in anticipation of future market diversification. The strategy’s action plan shall therefore include activities that allow economic op-erators to keep up to date with the latest trends in poten-tial markets with regards to fabrics, colours, style details and accessories.

Middle to long term :As Tajik companies increase their productive capacity and competitiveness by strengthening their offerings to traditional markets, they will become able to cater to the requirements of more demanding buyers. Provided that the strategy’s plan of action is implemented, Tajik firms will be able to target new markets ; preferably in

emerging economies characterized by lesser degrees of competition.

Based on trends in the T & C industry over the last five years, and the subsequent growth of new, alternative market destinations, markets such as the United Arab Emirates, Ethiopia, and countries in North Africa and South America could be seen as interesting destinations. Leading T & C producers, including China, India, Vietnam, Pakistan and Turkey, have already attempted to penetrate these emerging markets with both existing and new prod-uct variations ( for example, sewing thread being exported from India to South America ). Such potential markets pre-sent a natural attractiveness and enable higher returns.

In addition, intra-Asian trade is expected to double in size over the next ten years. Tajikistan can leverage its privi-leged geographic position at the heart of Central Asia in order to capitalize upon this trend. To this end, Tajik firms can enhance their penetration of China and Russia ( where a market presence is already noted ), and diversify into other countries in Asia as well as India. With regards to both Asian and Western markets, Tajik firms can also look to capitalize upon the opportunities that will open up due to China’s increased attention to the domestic market. As Chinese producers look to fill internal demand, a trade gap of roughly 100 million USD is expected to appear in the markets that have historically relied upon Chinese im-ports. It can also seize upon the opportunities created by China’s waning cost competitiveness on global markets.

Lastly, mature markets such as the USA and the EU still have to be taken into account. Those markets are difficult ones to enter : they remain saturated, they have suffered from the global recession, and some European countries face high levels of economic uncertainty. However the re-gion represents an important trade, production and crea-tive hub with access to other growing regions, including the BRIC countries. Accessing these markets can contrib-ute to further upgrading of the quality and competitive-ness of Tajik production. In the long term, Tajik exporters could leverage existing linkages ( such as the joint venture with Italy ) to target European markets.

Even though most of the niches in mature markets are saturated, some remain almost untapped. More detailed analyses will be required in order to identify such oppor-tunities when Tajik firms are ready. For the EU market, CBI suggests niches such as apparel for seniors, socially re-sponsible and environmentally-friendly wear, etc. Tajik ex-porters will have to research and enter market segments and / or target niche areas where growth potential exists and where there are fewer competitors. Selling to smaller, independent speciality shops may also be recommend-ed. Differentiation will also ease market entry. There will be a need to communicate and promote Tajik products in a unique manner. This could be done, for example, by telling a story about how the garment got made, and


who made it, or by focusing on the sustainable and so-cial responsibility aspects. It should be noted that these markets have particularly stringent requirements related to product safety, use of chemicals ( particularly for textiles dyeing ), labelling, and compliance with the Convention on the International Trade in Endangered Species ( CITES ) [if the products that are wild plants or animal based].

INVESTMENT OPPORTUNITIES

The ability of the T & C sector to serve as a long-term driver of sustainable growth will require increases in produc-tivity, quality, and value addition. In order for these im-provements to be realized, the sector’s enterprises must invest in production facilities, machinery and equipment, and human resource development. As noted, the limited access to traditional financial products ( such as longer term investment loans and leasing services ) makes it dif-ficult for T & C enterprises to make the necessary advance-ments. Foreign Direct Investment ( FDI ) however, may offer an attractive alternative. Indeed, FDI has already played an important role in providing equity financing for the T & C sector through various joint ventures with Italian, Russian, Austrian, and Iranian investors, among others.31

The T & C sector currently requires the most investment in upstream services including increased output of combed yarns, blended yarns, yarn dyeing, knitting, sewing, and design. Such investments will have the most direct impact

31. International Trade Centre. Access to Finance in Tajikistan’s Textile and Clothing Sector. Geneva, 2015. Pg. 28 - 29.

on productivity, quality, and value addition, and serve to further the development of more profitable portions of the value chain. Given the presence of quality cotton, together with low cost inputs and labour, this portion of the value chain is a prime target for foreign investors. Top-down de-velopment will also stimulate business for the local spin-ning industry, thereby having a wide impact throughout the sector. In addition, FDI would likely result in technology and knowledge spillovers.

There are no major impediments to the development of FDI in the sector : foreign citizens enjoy the same rights and protections as the local population ; foreign invest-ment is regulated by the Law “On Investments” ( 2007 ), which also provides for various benefits such as tax and duty exemptions as well as state grants ; entry costs are reasonable ; there are no burdensome administrative bar-riers ; the trade and currency regimes are liberal ; and there are a number of free economic zones.32 If anything, the lack of increased FDI activity can be attributed largely to a general lack of awareness of Tajikistan and its oppor-tunities among potential investors. As such, raising such awareness will be an integral part of any attempts to in-crease upstream value addition.

32. Four free economic zones were created in 2008 and 2009 : Panj, Sughd, Danghara, and Ishkoshim. Qualifying enterprises can import and export without being subject to levies and taxes ( with the exception customs clearance taxes ). In addition, entities operating in these zones are full or partially exempt from taxes for a certain period. These zones are governed by the Law “On Free Trading Zones” ( 2011 ), International Trade Centre. Access to Finance in Tajikistan’s Textile and Clothing Sector. Geneva, 2015. Pg. 29.

Photo: ITC


THE ROADMAP

Four strategic objectives have been defined in order to increase the capacities of the T & C industry in Tajikistan. The first one seeks to establish an enabling business en-vironment for the industry, while the next three focus on enhancing the ability of sector stakeholders to improve productivity, diversify production and meet market re-quirements, and access markets through effective mar-keting and promotion. These strategic objectives have been complimented with operational recommendations.

THE STRATEGIC OBJECTIVES AND OPERATIONAL RECOMMENDATIONS1. IMPROVE THE BUSINESS

ENVIRONMENT TO SUPPORT THE DEVELOPMENT OF THE T & C INDUSTRY IN TAJIKISTAN

Although an enabling business environment is a critical success factor for any country seeking to be competitive in the T & C sector, the issue requires particular attention in Tajikistan. As has been discussed throughout this docu-ment, important business environment constraints still impede the ability of Tajik companies to improve their per-formance and competitiveness in existing and emerging markets vis-a-vis other T & C supplier countries like India, China, Viet Nam, and Bangladesh. Such issues include weak institutional coverage and support for the industry, the absence of a strong trade body or federation of T & C enterprises, lack of a legal framework, limited capacity of customs to regulate inflows of smuggled products, limited access to financial services, a lack of adequate govern-ment support, etc. These issues, which are often beyond the ability of companies to influence, must be addressed in a coordinated manner : progress will require the par-ticipation of key public sector actors, TSIs, and a strong business association dedicated to T & C.

The following operational recommendations fall under this strategic objective :

1.1. Establish a solid institutional framework that sup-ports the T & C industry : this will be achieved through the creation of an inclusive business association or federation of T & C enterprises, which will also serve as the public-private coordinating body for the strat-egy’s implementation ;

1.2. Secure and support the implementation of the T & C strategy : this will involve the endorsement of the pre-sent strategy by the Government ; and capacity build-ing for the public-private sector coordinating body ;

1.3. Improve existing capacity building offerings and align to industry’s needs : existing TVET offerings will be reinforced ; services will be established within the new sector association ; TVET structures will gain access to appropriate training equipment ; linkages between universities and enterprises will be strength-ened ; linkages between Tajik and foreign universities will be facilitated ; and available capacity building ser-vices will be advertised ;

1.4. Improve the legal framework relevant to the T & C industry : stakeholders must lobby to promote the creation of a legal framework that supports the T & C industry ; such a framework should adequately re-spond to issues including product labelling and un-regulated imports.

1.5. Increase the capacity of the customs service to regu-late imports of T & C products : this can be achieved through capacity building for border agents ; the in-troduction of modern tracking systems ; increased government funding ; control reinforcements ; and the participation of Tajikstandart at border control points

1.6. Improve trade policy framework related to the indus-try : key steps include streamlining the adoption of the GSP+ scheme ; ensuring the termination of the Jackson-Vanik amendment ; and increasing the tariff rates to the 20 % rate authorized by the WTO on fin-ished cloth and second-hand cloth.

1.7. Improve and modernize functioning of the financial sector : this can be accomplished by providing ca-pacity building for staff at financial institutions ; incen-tivizing the creation of financial tools and services required by the T & C sector ; and promoting FDI for the sector ;

1.8. Establish business and investment friendly nation-al policies : this could be achieved through the es-tablishment of industrial zones with lower taxation rates that are connected to cotton production zones, etc ; and establishing a cotton fibre trade regulation mechanism.

61THE ROADMAP

2. INCREASE THE CAPACITY AND PRODUCTIVITY OF TAJIK T & C ENTERPRISES

The next objective is to increase the level of productivity within Tajik firms while improving their ability to operate efficiently. This, in turn, will help companies to achieve higher profit margins and greater productive capacity. Although some leading firms are already able to attain adequate results, the majority of companies lag behind. A key area of focus will be the upgrading of existing tech-nology and corresponding equipment, particularly for vital production processes such as combing and auto-coner winding in SPG mills, and HT close vessel jigger dyeing for dyeing houses. This can be facilitated through the expansion of financial access and the attraction of FDI. Equally important, the labour supply must be ad-justed to meet the sector’s requirements. As such, the development of the right skills, both on the technical and managerial levels, will constitute a key component of this strategic objective. This will ensure the introduction of best practices and help companies achieve long-term goals.


2.1. Ensure upgrading of the industrial plants’ equip-ment : this could be achieved through trainings to firms on developing technology up-gradation plans ( in steps with defined time lines for the short, middle and long term ) ; training managers and owners on appropriate budgetary practices ; training personnel on the use of new machinery ;

2.2. Increase the level of technical skills within T & C com-panies : this could be achieved by promoting the in-tegration of professional and technical development within firms ( such as 3G Tailor Training System ) ; ena-bling exchange programmes for technical staff ; and bringing technical experts from abroad ;

2.3. Increase the level of managerial skills within com-panies : this could be achieved through capacity building for enterprise owners and managers on is-sues such as HR, innovation, operational manage-ment, quality management, R & D, risk, information systems, and marketing ; incentivizing increases in performance through state or industry awards ; stimu-lating the creation of local consulting firms ; and pro-viding direct assistance to selected enterprises in Lean Management techniques ;

2.4. Improve financial management and increase the abil-ity of SMEs to access finance : This can be achieved by providing trainings in financial literacy and budget-ing ; helping SMEs identify and connect with appropri-ate lenders and helping SMEs to restructure private loans into traditional loans ;

3. INCREASE THE VALUE ADDED IN THE T & C SECTOR AND ALIGN PRODUCTION WITH MARKET REQUIREMENTS

The third strategic objective seeks to enhance the com-petitiveness of Tajik enterprises by increasing value addition and improving the product range. It will help companies design products that meet the requirements of buyers and conform to the latest trends in target mar-kets ( including the domestic market ). In order to increase value added, a logical sequencing needs to be followed. This sequencing is illustrated in the schematic below. Any effort to increase value addition has to begin with a better understanding of market requirements and trends. This newly acquired understanding will lead companies to ad-just their product design and sourcing strategies so as to meet these requirements. Only then will Tajik companies be able to diversify their product range – both by improv-ing the finishing of existing products and creating new product lines. Finally, to ensure long-term relationships with buyers, as well as to facilitate the creation of new re-lationships, firms should be encouraged to integrate new marketing, sales, and post-sales services.

The second and the third strategic objectives together will result in an increased competitiveness of Tajik production.


3.1. Increase the capacity of firms to understand domes-tic and international market requirements, and how to best align product offerings to comply : this can be achieved by training owners and managers to recog-nise trends ; accessing market intelligence from rel-evant overseas agencies ; improving market research capacities ; facilitating the establishment of R & D de-partments within companies ; developing trade intel-ligence courses ; improving the service offerings of TSIs and raising awareness among enterprises about available information and how to use it ;

3.2. Increase the capacity of firms to design products in accordance with buyer requirements and mar-ket trends : this involves building the design capaci-ties in companies and within the association of T & C enterprises ; regional common R^D centres can be made available ;

3.3. Increase firms’ capacity to implement cost efficient and buyer-oriented sourcing strategies : this can be achieved by building sourcing capacities at enter-prises ; and by helping the new T & C association to become a coordinating body for bulk orders ;


3.4. Stimulate diversification and higher value addition of the T & C product offering based on the opportuni-ties identified in the strategy and on market require-ments : this will see the sector’s enterprises pursue value addition in the short, mid, and long-term by in-vesting in and diversifying their product base ; it will also involve promoting the adoption of quality man-agement systems ; building awareness among en-terprises of the potential gains to be had from value addition ;

3.5. Integrate and capacitate marketing, sales and ser-vice departments in T & C firms to ensure sustainabil-ity of buyer-seller relationships : this can be achieved by building capacities of firms to develop and main-tain relationships ; conducting trainings on the devel-opment of company-level brands that are linked to the national brand ;

4. IMPROVE ACCESS TO MARKETS FOR T & C ENTERPRISES

The last strategic objective relates to the capacity of T & C firms to access markets, whether domestic or foreign. This is mostly dependent upon the availability and qual-ity of trade information, as well as the ability of SMEs to use this intelligence to aid their day-to-day operations and shape their long-term strategic objectives. Effective marketing, branding and promotion of Tajik T & C products will also play a key role in helping enterprises expand to new markets.


4.1. Ensure easily accessible and timely market intelli-gence for firms in key areas : create a strategic moni-toring cell to gather sector-specific trade information ; facilitate the exchange and dissemination of relevant trade information among all stakeholders ; prepare consultants to offer trade intelligence services ; in-troduce courses on market analysis ; develop mar-ket profiles for target markets and build the capacity of TSIs to provide such profiles ; encourage existing trading companies to create T & C-specific services ; encourage sourcing companies from major markets to increase their presence in Tajikistan ;

4.2. Facilitate connections between Tajik T & C firms and potential buyers from target markets : this may include inviting potential buyers to visit green-field plants ; establishing a trade fair in Tajikistan ; and promoting Tajikistan as a location for foreign manufacturers ;

4.3. Facilitate common branding and promotion of Tajik T & C products : this can be achieved by agreeing upon a common brand for the entire T & C sector with the help of the sector association ; implementing pro-motional activities under the new brand ;

4.4. Undertake a study of the Tajik textiles and clothing market in order to identify domestic opportunities : this study would provide information on the local mar-ket size and the share of the market captured by Tajik producers for each product category. It would also identify product categories in which Tajik producers have lost market share to imports. Its overall objec-tive would be to identify opportunities within the local market and evaluate their potential.

From strategic directions to concrete actions

The following implementation plan details the comprehensive set of activities to be un-dertaken, grouped by strategic objectives and operational objectives. The PoA takes into account all specific competitiveness constraints and opportunities that have been identified, and it provides a clear and detailed framework for the implementation of the T & C strategy for the upcoming 5 years.

After the first five year period of implementation, the PoA will require an extensive review. The implementation status of the activities will need to be reviewed, and the sector diagnostics will need to be reconfirmed for the upcoming 5 years until 2025.

TAJIKISTAN

TEXTILE AND CLOTHING ( T&C ) INDUSTRY DEVELOPMENT STRATEGY

OF TAJIKISTAN

IMPLEMENTATION PLAN

64 TEXTILE AND CLOTHING (T&C) INDUSTRY DEVELOPMENT STRATEGY OF TAJIKISTAN 2016-2025St

rate

gic

Obje

ctiv

e 1 :

Impr

ove

the

busi

ness

env

ironm

ent t

o su

ppor

t the

dev

elop

men

t of t

he T

& C

indu

stry

in T

ajik

ista

n

Ope

ratio

nal

obje

ctiv

eAc

tiviti

esPr

iorit

y1=

high

,3=

low

Star

ting

perio

dBe

nefic

iarie

sTa

rget

mea

sure

sLe

adin

gim

plem

entin

g pa

rtner

s

Supp

ortin

g im

plem

entin

g pa

rtner

s

Exis

ting

prog

ram

mes

an

d in

tern

atio

nal

finan

cial

and

te

chni

cal p

artn

ers

Estim

ated

co

sts

1617

1819

20

1.1.

Est

ablis

h a

solid

in

stitu

tiona

l fr

amew

ork

supp

ortin

g th

e T &

C in

dust

ry

1.1.

1. C

reat

e a

sect

or a

ssoc

iatio

n th

at u

nite

s al

l tex

tile,

cl

othi

ng, a

nd re

late

d co

mpa

nies

as

well

as re

gion

al

indu

stry

gro

ups.

It w

ould

offe

r lob

byin

g fo

r ser

vice

s,

train

ing,

con

sulti

ng, c

omm

on s

ourc

ing,

and

mar

ket

inte

llige

nce

and

be re

spon

sibl

e fo

r the

coo

rdin

atio

n an

d im

plem

enta

tion

of th

e T &

C st

rate

gy. A

t firs

t the

sec

tor

asso

ciat

ion

shou

ld u

nite

a m

inim

um o

f 20

ente

rpris

es

with

in th

e T &

C va

lue

chai

n.

1x

Entir

e va

lue

chai

n »Se

ctor

ass

ocia

tion

is

crea

ted

»Go

vern

ance

, rul

es o

f pr

oced

ure

and

term

s of

re

fere

nce

defin

ed

Min

istry

of

Indu

stry

and

New

Te

chno

logi

es

( MIN

T )

Min

istry

of

Econ

omic

De

velo

pmen

t and

Tr

ade

( MED

T ),

Sect

or fi

rms,

M

inis

try o

f Ju

stic

e ( M

J ),

Cham

ber o

f Co

mm

erce

and

In

dust

ry ( C

CI ),

univ

ersi

ties

and

prof

essi

onal

sc

hool

s

AKF’

s Ci

vil

Soci

ety

Prog

ram

me

1.1.

2. In

tegr

ate

the

follo

wing

key

val

ue c

hain

pla

yers

of

the

indu

stry

: »At

leas

t 6 s

pinn

ing

com

pani

es »At

leas

t 7 c

ompa

nies

invo

lved

in w

eavi

ng a

nd k

nitti

ng »At

leas

t 7 c

ompa

nies

invo

lved

in c

loth

ing

and

desi

gn

Afte

r con

stitu

tion

of th

e co

re g

roup

of e

nter

pris

es, t

he

follo

wing

inst

itutio

ns’ r

epre

sent

ativ

e sh

ould

bec

ome

obse

rver

s in

the

asso

ciat

ion’

s wo

rk :

»M

INT

and

MED

T »Un

iver

sitie

s »Lo

gist

ics

com

pani

es

1x

Entir

e va

lue

chai

n »At

leas

t 20

ente

rpris

es

repr

esen

ted

in th

e as

soci

atio

n at

firs

t.

MIN

TM

EDT,

TVET

, MJ,

CCI

, un

iver

sitie

s an

d pr

ofes

sion

al

scho

ols

AKF’

s Ci

vil

Soci

ety

Prog

ram

me

1.1.

3. S

et u

p th

e se

cret

aria

t of t

he a

ssoc

iatio

n an

d pr

ovid

e te

chni

cal a

nd fi

nanc

ial s

uppo

rt fo

r two

yea

rs

to m

ake

it su

stai

nabl

e an

d to

incr

ease

its

capa

city

to

coor

dina

te th

e in

stitu

tiona

l net

work

.

1En

tire

valu

e ch

ain

»Fu

nctio

nal a

ssoc

iatio

nM

INT

MED

T, M

J,

Cham

ber o

f Co

mm

erce

an

d In

dust

ry,

univ

ersi

ties

and

prof

essi

onal

sc

hool

s

AKF’

s Ci

vil

Soci

ety

Prog

ram

me

1.2.

Sec

ure

and

supp

ort t

he

impl

emen

tatio

n of

the

T & C

St

rate

gy

1.2.

1. E

ndor

se th

e T &

C st

rate

gy a

s pa

rt of

the

natio

nal p

olic

y to

cre

ate

a le

gal f

ram

ewor

k fo

r its

im

plem

enta

tion.

Entir

e va

lue

chai

n »T &

C as

a n

atio

nal p

riorit

y »T &

C st

rate

gy in

tegr

ated

»Fu

nds

allo

cate

for

impl

emen

tatio

n of

the

stra

tegy

Gove

rnm

ent o

f the

TR

, MIN

TM

EDT,

MJ,

CCI

, un

iver

sitie

s an

d pr

ofes

sion

al

scho

ols

1.2.

2. A

s so

on a

s cr

eate

d, g

ive

the

role

of t

he p

ublic

-pr

ivat

e se

ctor

coo

rdin

atin

g bo

dy a

nd it

s su

bsid

iary

or

gan

to th

e se

ctor

ass

ocia

tion.

Entir

e va

lue

chai

n »As

soci

atio

n re

cogn

ized

at th

e le

ad o

f the

Stra

tegy

im

plem

enta

tion

Gove

rnm

ent o

f the

TR

, MIN

TM

EDT,

MJ,

CCI

, un

iver

sitie

s an

d pr

ofes

sion

al

scho

ols

65IMPLEMENTATION PLANSt

rate

gic

Obje

ctiv

e 1 :

Impr

ove

the

busi

ness

env

ironm

ent t

o su

ppor

t the

dev

elop

men

t of t

he T

& C

indu

stry

in T

ajik

ista

n

Ope

ratio

nal

obje

ctiv

eAc

tiviti

esPr

iorit

y1=

high

,3=

low

Star

ting

perio

dBe

nefic

iarie

sTa

rget

mea

sure

sLe

adin

gim

plem

entin

g pa

rtner

s

Supp

ortin

g im

plem

entin

g pa

rtner

s

Exis

ting

prog

ram

mes

an

d in

tern

atio

nal

finan

cial

and

te

chni

cal p

artn

ers

Estim

ated

co

sts

1617

1819

20

1.2.

Sec

ure

and

supp

ort t

he

impl

emen

tatio

n of

the

T & C

St

rate

gy

1.2.

3. B

uild

cap

acity

of t

he p

ublic

-priv

ate

sect

or

coor

dina

ting

body

thro

ugh

targ

eted

trai

ning

in o

rder

to

mon

itor a

nd c

oord

inat

e th

e st

rate

gy’s

act

iviti

es a

nd to

m

obili

ze re

sour

ces

requ

ired

for i

ts im

plem

enta

tion.

Entir

e va

lue

chai

n »St

rate

gy im

plem

enta

tion

fund

s m

obili

zed

Gove

rnm

ent o

f the

TR

, MIN

TM

EDT,

MJ,

CCI

, un

iver

sitie

s an

d pr

ofes

sion

al

scho

ols

ITC

1.2.

4. P

rovi

de th

e pu

blic

-priv

ate

sect

or s

trate

gy

coor

dina

tion

body

a s

trate

gy im

plem

enta

tion

man

agem

ent s

yste

m th

at c

ould

hel

p m

onito

r and

m

anag

e ac

tiviti

es u

nder

this

stra

tegy

.

Entir

e va

lue

chai

n »St

rate

gy im

plem

enta

tion

man

agem

ent s

yste

m p

ut in

pl

ace

in th

e PP

coo

rdin

atio

n bo

dy ( a

ssoc

iatio

n )

Gove

rnm

ent o

f the

TR

, MIN

TM

EDT,

MJ,

CCI

, un

iver

sitie

s an

d pr

ofes

sion

al

scho

ols

ITC

1.3.

Impr

ove

exis

ting

capa

city

bu

ildin

g of

ferin

gs

and

alig

n to

in

dust

ry’s

ne

eds

1.3.

1. W

ith th

e ov

eral

l coo

rdin

atio

n of

the

sect

or

asso

ciat

ion,

con

duct

a s

kill

gap

and

need

ass

essm

ent

stud

y co

verin

g th

e T &

C va

lue

chai

n, fr

om w

orke

rs u

p to

m

anag

ers

and

deve

lop

cour

se c

urric

ulum

, ass

essm

ent

stan

dard

s an

d in

frast

ruct

ure

requ

irem

ent f

or tr

aini

ng

prog

ram

mes

.Th

e st

udy

shou

ld s

peci

fical

ly e

xplo

re p

ossi

bilit

ies

to d

evel

op n

ew T

& C

rela

ted

prog

ram

mes

in T

ajik

un

iver

sitie

s in

add

ition

to e

xist

ing

prog

ram

mes

in

Khuj

and

Poly

tech

nic

Univ

ersi

ty, t

he T

UT, t

he T

ajik

Sta

te

Univ

ersi

ty o

f Com

mer

ce, t

he U

nive

rsity

of C

entra

l Asi

a an

d th

e Te

chni

cal U

nive

rsity

of T

ajik

ista

n.Th

e st

udy

shou

ld a

lso

expl

ore

poss

ibili

ties

of c

reat

ing

a se

para

te T

VET

stru

ctur

e, a

ttach

ed to

the

MLM

E, b

ut

man

aged

aut

onom

ousl

y.Th

e sk

ill g

ap a

sses

smen

t sho

uld

also

fact

or in

lear

ning

s fro

m o

ther

lead

ing

text

ile a

nd a

ppar

el m

anuf

actu

rer

natio

ns.

TVET

st

ruct

ure,

Un

iver

sitie

s,

T & C

Ente

rpris

es

»Sk

ill g

ap a

sses

smen

t stu

dy

repo

rts in

dica

ting

spec

ific

num

bers

to b

e tra

ined

for

vario

us a

ctiv

ities

»Co

urse

cur

ricul

um fo

r eac

h ar

ea, a

sses

smen

t sta

ndar

ds

for c

ertif

icat

ion

agen

cy a

nd

iden

tific

atio

n of

way

s to

tra

in ( o

n-jo

b, th

eory

, mix

)

Sect

or

asso

ciat

ion,

MIN

T, M

EDT,

M

inis

try o

f Ed

ucat

ion

and

Scie

nce

( MES

)

Inte

rnat

iona

l co

nsul

ting

firm

s,

espe

cial

ly fr

om

lead

ing

T & C

coun

tries

in

the

regi

on s

uch

as C

hina

or

Indi

a ( t

rain

ing

agen

cies

and

co

nsul

ting

firm

s su

ch a

s IF

LS, o

r W

azir )

,M

E, u

nive

rsiti

es

and

prof

essi

onal

sc

hool

s, T

ajik

co

nsul

ting

firm

s

1.3.

2. R

einf

orce

exi

sten

t TVE

T of

ferin

g an

d in

corp

orat

e TV

ET s

ervi

ces

in th

e ne

wly

esta

blis

hed

sect

or a

ssoc

iatio

n ta

rget

ing

both

text

ile a

nd c

loth

ing

com

pani

es. S

peci

fic te

chni

cal a

reas

requ

iring

ski

ll re

info

rcem

ent a

re :

»Op

en-e

nd a

nd a

ir je

t/vo

rtex s

pinn

ing

»Co

mpa

ct s

pinn

ing

»W

eavi

ng b

y ra

pier

and

airj

et lo

oms,

»Fi

bre/

yarn

/fabr

ic d

yein

g an

d fin

ishe

d pr

oces

ses

»In

dust

rial e

ngin

eerin

g fo

r clo

thin

g pr

oduc

tion.

»Li

st o

f ski

lls to

be

com

plet

ed b

ased

on

the

asse

ssm

ent

stud

y 1.

3.1.

In e

ach

of th

ese

area

s, c

reat

e hi

ghly

spe

cific

and

sho

rt te

rm c

ours

es ( 1

-3 w

eeks

), ad

apte

d to

tim

e co

nstra

ints

of

the

empl

oyee

s.

TVET

st

ruct

ure

T & C

Entre

pris

es

»At

leas

t 3 n

ew c

ours

es

on p

riorit

y ar

eas

outli

ned

crea

ted

in th

e fir

st 3

yea

rs,

and

2 in

the

last

2 y

ears

of

the

stra

tegy

impl

emen

tatio

n pe

riod.

Min

istry

of

Labo

ur, M

igra

tion

and

Empl

oym

ent

( MLM

E ),

MES

, Sec

tor

asso

ciat

ion,

un

iver

sitie

s an

d pr

ofes

sion

al

scho

ols

Inte

rnat

iona

l co

nsul

ting

firm

s,

espe

cial

ly fr

om

lead

ing

T & C

coun

tries

in

the

regi

on s

uch

as C

hina

or

Indi

a ( t

rain

ing

agen

cies

and

co

nsul

ting

firm

s su

ch a

s IF

LS, o

r W

azir )

,M

ES

GIZ’

s Pr

ogra

mm

e “S

uppo

rting

Re

form

of t

he

Tech

nica

l and

Vo

catio

nal

Educ

atio

n an

d Tr

aini

ng ( T

VET )

Sy

stem

” ( 2

008

– 20

16 )


rate

gic

Obje

ctiv

e 1 :

Impr

ove

the

busi

ness

env

ironm

ent t

o su

ppor

t the

dev

elop

men

t of t

he T

& C

indu

stry

in T

ajik

ista

n

Ope

ratio

nal

obje

ctiv

eAc

tiviti

esPr

iorit

y1=

high

,3=

low

Star

ting

perio

dBe

nefic

iarie

sTa

rget

mea

sure

sLe

adin

gim

plem

entin

g pa

rtner

s

Supp

ortin

g im

plem

entin

g pa

rtner

s

Exis

ting

prog

ram

mes

an

d in

tern

atio

nal

finan

cial

and

te

chni

cal p

artn

ers

Estim

ated

co

sts

1617

1819

20

1.3.

Impr

ove

exis

ting

capa

city

bu

ildin

g of

ferin

gs

and

alig

n to

in

dust

ry’s

ne

eds

1.3.

3. C

apac

itate

TVE

T st

ruct

ure

with

the

requ

ired

train

ing

equi

pmen

t to

teac

h tra

inee

s th

e pr

oper

han

dlin

g of

the

new

equi

pmen

t use

d in

the

indu

stry

.Se

cond

-han

d sm

all m

odel

s of

mac

hine

ry c

an b

e im

porte

d fro

m c

urre

nt in

dust

ry le

ader

s in

the

regi

on

( Indi

a fo

r ins

tanc

e ).

TVET

st

ruct

ure

T & C

Entre

pris

es

»Ge

tting

lette

r of s

uppo

rt fro

m 1

to 2

com

pani

es o

r m

achi

nery

sup

plie

rs w

ithin

th

e 5

year

per

iod.

MLM

E, S

ecto

r as

soci

atio

n,

univ

ersi

ties

and

prof

essi

onal

sc

hool

s

Inte

rnat

iona

l m

achi

nery

su

pplie

rs

1.3.

4. S

treng

then

link

ages

bet

ween

Taj

ik u

nive

rsiti

es

and

ente

rpris

es :

»Ba

sed

on th

e ga

p as

sess

men

t on

1.3.

1., s

uppo

rt th

e up

date

of c

urric

ula

and

train

ing

prog

ram

mes

in T

ajik

un

iver

sitie

s »In

vite

inte

rnat

iona

l pro

fess

ors

in o

rder

to s

hare

bes

t pr

actic

es o

n TV

ET a

nd im

prov

e in

ter-

univ

ersi

ty

partn

ersh

ips

»Se

nd te

ache

rs o

n in

dust

ry v

isits

to p

rovi

de th

em w

ith

first

-han

d le

arni

ng e

xper

ienc

es a

nd to

hel

p bu

ild

indu

stry

link

ages

»In

vite

gue

st te

ache

rs fr

om in

dust

ry to

del

iver

spe

cial

tra

inin

g se

ssio

ns a

nd m

aste

r cla

sses

for T

ajik

stu

dent

s »In

itiat

e re

sear

ch s

tudi

es c

over

ing

spec

ific

chal

leng

es

face

d by

indu

stry

to g

ener

ate

thou

ght l

eade

rshi

p an

d fin

d ap

prop

riate

sol

utio

ns ( c

omm

unic

ate

resu

lts to

the

Asso

ciat

ion )

»In

volv

e st

uden

ts a

nd te

ache

rs in

inte

rnat

iona

l ex

posu

re/e

xcha

nge

and

inte

rnsh

ip p

rogr

ams

»Gi

ve re

sear

ch/s

tude

nt p

roje

ct b

riefs

to in

dust

ry a

nd

get i

ndus

try fe

edba

ck a

nd s

ugge

stio

ns in

ord

er to

fu

rther

impr

ove

rese

arch

/stu

dent

pro

ject

s

TVET

st

ruct

ure,

Un

iver

sitie

s,

T & C

Ente

rpris

es

»Ne

w cu

rricu

la d

evel

oped

on

Gar

men

t Tec

hnol

ogy

&

Lean

Man

ufac

turin

g »At

leas

t 5 p

rofe

ssor

s in

vite

d pe

r yea

r »Re

quire

men

t put

in p

lace

to

hav

e a

natio

nal o

r in

tern

atio

nal i

ndus

try v

isit

per y

ear f

or u

nive

rsity

te

ache

rs »At

leas

t 1 in

dust

ry

repr

esen

tativ

es v

isits

un

iver

sitie

s pe

r yea

r »At

leas

t 5 n

ew s

tudi

es

initi

ated

»Re

quire

men

t of 1

inte

rnsh

ip

prog

ram

per

dip

lom

a es

tabl

ishe

d »De

velo

pmen

t of c

ours

e cu

rricu

lum

»At

leas

t 2 p

roje

ct fe

edba

cks

from

the

indu

stry

rece

ived

pe

r yea

r.

Khuj

and

Poly

tech

nic

Univ

ersi

ty, t

he

TUT,

the

Tajik

St

ate

Univ

ersi

ty

of C

omm

erce

and

th

e Un

iver

sity

of

Cen

tral

Asia

, Tec

hnic

al

Univ

ersi

ty o

f Ta

jikis

tan

Sect

or

asso

ciat

ion,

MES

1.3.

5. E

stab

lish

univ

ersi

ty c

oope

ratio

n wi

th s

elec

ted

lead

ing

T & C

coun

tries

that

hav

e up

to d

ate

mar

ket

inte

llige

nce

curri

cula

and

that

cou

ld b

ecom

e po

tent

ial

mar

kets

for T

ajik

T &

C pr

oduc

ts.

Educ

atio

nal

Inst

itutio

ns,

Univ

ersi

ties,

T &

C En

terp

rises

»Si

gnin

g M

oU w

ith 3

-4

inte

rnat

iona

l exp

erts

or

fore

ign

inst

itute

s.

Khuj

and

Stat

e Un

iver

sity

, the

TU

T, th

e Ta

jik

Stat

e Un

iver

sity

of

Com

mer

ce a

nd

the

Univ

ersi

ty

of C

entra

l As

ia, T

echn

ical

Un

iver

sity

of

Tajik

ista

n

Sect

or

asso

ciat

ion,

MES

1.3.

6. A

dver

tise

avai

labl

e ca

paci

ty b

uild

ing

serv

ices

to

firm

s an

d ill

ustra

te s

ucce

ss s

torie

s to

sho

w qu

ick

bene

fits

from

inve

stin

g in

to a

hig

hly

qual

ified

labo

ur.

Educ

atio

nal

Inst

itutio

ns,

Univ

ersi

ties,

T &

C En

terp

rises

»Pr

omot

iona

l cam

paig

n on

TVE

T an

d Un

iver

sity

of

ferin

g an

d im

prov

emen

t ef

forts

is p

ut in

pla

ce.

Sect

or

asso

ciat

ion,

MES

MLM

E, M

INT,

M

EDT,

mas

s m

edia

, CCI


rate

gic

Obje

ctiv

e 1 :

Impr

ove

the

busi

ness

env

ironm

ent t

o su

ppor

t the

dev

elop

men

t of t

he T

& C

indu

stry

in T

ajik

ista

n

Ope

ratio

nal

obje

ctiv

eAc

tiviti

esPr

iorit

y1=

high

,3=

low

Star

ting

perio

dBe

nefic

iarie

sTa

rget

mea

sure

sLe

adin

gim

plem

entin

g pa

rtner

s

Supp

ortin

g im

plem

entin

g pa

rtner

s

Exis

ting

prog

ram

mes

an

d in

tern

atio

nal

finan

cial

and

te

chni

cal p

artn

ers

Estim

ated

co

sts

1617

1819

20

1.4.

Impr

ove

the

lega

l fr

amew

ork

rele

vant

to th

e T &

C in

dust

ry

1.4.

1. In

trodu

ce T

& C

spec

ific

regu

latio

ns :

»St

rong

ly re

gula

te a

nd c

ontro

l im

ports

of s

econ

d-ha

nd

clot

hing

( for

inst

ance

from

Uzb

ekis

tan,

Chi

na a

nd

Paki

stan

). »In

trodu

ce re

quire

men

t for

pro

duct

orig

in la

belli

ng.

»Es

tabl

ish

a re

quire

men

t for

an

orig

in c

ertif

icat

e /

resp

ect o

f phy

tosa

nita

ry n

orm

s. »In

trodu

ce in

tere

st ra

tes

subs

idie

s. »In

trodu

ce n

ew re

gula

tions

for c

ontro

l at c

usto

ms

– by

pr

oduc

t nam

e, m

odel

, size

, typ

e, a

rticl

e an

d pr

ice.

»In

trodu

ce re

bate

s on

ene

rgy

cost

s fo

r T &

C fir

ms.

»Ex

empt

T &

C eq

uipm

ent r

elat

ed s

pare

par

ts fr

om

taxe

s. »In

trodu

ce a

law

forb

iddi

ng fu

turis

t tra

ders

of c

otto

n fib

re »Es

tabl

ish

inve

stm

ent f

riend

ly re

gula

tion

( thr

ough

ta

x exe

mpt

ion

to jo

int v

entu

res

or e

stab

lishm

ent o

f in

dust

rial z

ones

).

Entir

e va

lue

chai

n »Ni

ne n

ew re

gula

tions

de

sign

ed a

nd s

ubm

itted

for

appr

oval

with

in th

e 5

year

pe

riod

Supr

eme

Asse

mbl

y of

Ta

jikis

tan,

M

inis

try o

f Fi

nanc

e ( M

F ),

Natio

nal B

ank,

Tax

Co

mm

ittee

,Cu

stom

s Se

rvic

e,M

J

Sect

or

asso

ciat

ion,

M

INT,

MED

T, C

CI

CAIC

P, C

entra

l As

ia In

vest

men

t Cl

imat

e Pr

ogra

m

( Taj

ikis

tan

and

Kyrg

yzst

an )

1.5.

Incr

ease

th

e ca

paci

ty o

f th

e cu

stom

s se

rvic

e to

re

gula

te

impo

rts

of T

& C

pr

oduc

ts

1.5.

1. P

rovi

de tr

aini

ng to

cus

tom

s of

ficer

s to

reco

gnis

e pr

oduc

t cou

ntry

of o

rigin

bas

ed o

n th

e or

igin

cer

tific

ate

and

com

ply

with

new

impo

rt re

gula

tion

norm

s.

Cust

om

serv

ices

Entir

e va

lue

chai

n

»At

leas

t 20

offic

ers

of

Cust

oms

serv

ices

trai

ned

Cust

oms

Serv

ice

unde

r the

Go

vern

men

t of

the

Repu

blic

of

Tajik

ista

n

Sect

or

asso

ciat

ion,

M

INT,

MED

T, C

CI

1.5.

2. In

trodu

ce m

oder

n tra

ckin

g sy

stem

s wi

thin

cu

stom

s of

fices

.Cu

stom

se

rvic

esEn

tire

valu

e ch

ain

»Tr

acki

ng IT

sys

tem

put

in

plac

eCu

stom

s Se

rvic

e Se

ctor

as

soci

atio

n,

MIN

T, M

EDT,

CCI

1.5.

3. In

crea

se g

over

nmen

tal f

undi

ng to

cap

acita

te

cust

oms

serv

ice

and

redu

ce ri

sks

of b

riber

y at

the

bord

ers.

Cust

om

serv

ices

Entir

e va

lue

chai

n

»Fu

ndin

g to

Cus

tom

s se

rvic

es in

crea

sed

by 1

5 %Go

vern

men

t of

the

TR, C

usto

ms

Serv

ice

Sect

or

asso

ciat

ion,

M

INT,

MED

T

1.5.

4. R

einf

orce

the

cont

rol o

f int

er-b

orde

r are

as,

spec

ifica

lly th

ose

that

are

kno

wn to

be

used

for

smug

glin

g of

T &

C pr

oduc

ts.

Cust

om

serv

ices

Entir

e va

lue

chai

n

»At

leas

t two

new

con

trol

poin

ts e

stab

lishe

dCu

stom

s Se

rvic

e Se

ctor

as

soci

atio

n,

MIN

T, M

EDT

1.6.

Impr

ove

trade

pol

icy

fram

ewor

k re

late

d to

the

indu

stry

1.6.

1. S

tream

line

the

adop

tion

of th

e GS

P+ s

chem

e by

ado

ptin

g th

e “C

onve

ntio

n on

the

Prev

entio

n an

d Pu

nish

men

t of t

he C

rime

of G

enoc

ide

( Par

is, 1

948 )

” an

d th

e “C

onve

ntio

n of

Bio

logi

cal D

iver

sity

( 199

2 )”.

Expo

rting

T &

C fir

ms

»GS

P +

sch

eme

is a

dopt

ed

for T

ajik

ista

n by

end

of 5

ye

ar p

erio

d

Supr

eme

Asse

mbl

y of

Ta

jikis

tan

, go

vern

men

t of T

R,

MED

T

Sect

or

asso

ciat

ion,

M

INT


rate

gic

Obje

ctiv

e 1 :

Impr

ove

the

busi

ness

env

ironm

ent t

o su

ppor

t the

dev

elop

men

t of t

he T

& C

indu

stry

in T

ajik

ista

n

Ope

ratio

nal

obje

ctiv

eAc

tiviti

esPr

iorit

y1=

high

,3=

low

Star

ting

perio

dBe

nefic

iarie

sTa

rget

mea

sure

sLe

adin

gim

plem

entin

g pa

rtner

s

Supp

ortin

g im

plem

entin

g pa

rtner

s

Exis

ting

prog

ram

mes

an

d in

tern

atio

nal

finan

cial

and

te

chni

cal p

artn

ers

Estim

ated

co

sts

1617

1819

20

1.6.

Impr

ove

trade

pol

icy

fram

ewor

k re

late

d to

the

indu

stry

1.6.

2. E

nsur

e th

e te

rmin

atio

n of

the

Jack

son–

Vani

k am

endm

ent b

y lo

bbyi

ng a

nd d

emon

stra

ting

com

plia

nce

with

the

freed

om o

f em

igra

tion

prov

ided

by

Tajik

law.

Expo

rting

T &

C fir

ms

»Ja

ckso

n-Va

nik

amen

dmen

t is

term

inat

edSu

prem

e As

sem

bly

of Ta

jikis

tan

, go

vern

men

t of T

R,

MED

T

Sect

or

asso

ciat

ion,

M

INT

1.6.

3. R

evie

w th

e ta

riff s

yste

m a

nd in

crea

se ta

riff r

ates

to

the

20 %

rate

aut

horiz

ed b

y th

e W

TO o

n so

me

key

impo

rts a

t the

upp

er e

nd o

f the

T &

C ch

ain

such

as

finis

hed

clot

h an

d se

cond

-han

d cl

oth.

Entir

e va

lue

chai

n »Im

port

tarif

f stru

ctur

e is

fu

lly re

view

ed in

line

with

W

TO ru

les

in o

rder

to

incr

ease

com

petit

iven

ess

of

Tajik

T &

C pr

oduc

ts

Supr

eme

Asse

mbl

y of

Tajik

ista

n ,

gove

rnm

ent o

f TR,

M

EDT,

Cust

oms

Serv

ice

Sect

or

asso

ciat

ion,

M

INT

1.7.

Impr

ove

and

mod

erni

ze

func

tioni

ng o

f th

e fin

anci

al

sect

or

1.7.1

. Pro

vide

cap

acity

bui

ldin

g on

mod

ern

risk

and

finan

cial

ana

lysi

s to

sta

ff at

lead

ing

finan

cial

inst

itutio

nsFi

nanc

ial

inst

itutio

ns »At

leas

t 50

empl

oyee

s of

fin

anci

al in

stitu

tions

trai

ned

per y

ear

Com

mer

cial

ba

nks,

Nat

iona

l Ba

nk o

f Ta

jikis

tan

( NBT

), M

icro

finan

ce a

nd

mic

ro-l

endi

ng

orga

niza

tions

MF

ACAF

I II,

Azer

baija

n-Ce

ntra

l Asi

a Fi

nanc

ial M

arke

t In

frast

ruct

ure

Proj

ect (

Tajik

ista

n,

Kyrg

yzst

an a

nd

Azer

baija

n )

1.7.

2. In

cent

ivis

e th

e de

velo

pmen

t of f

inan

cial

tool

s an

d se

rvic

es ta

ilore

d to

the

T & C

sect

or in

clud

ing

leas

ing

Fina

ncia

l in

stitu

tions

»At

leas

t 50

empl

oyee

s of

fin

anci

al in

stitu

tions

trai

ned

per y

ear o

n T &

C se

ctor

’s

finan

cial

nee

ds a

nd th

e de

velo

pmen

t of a

dapt

ed

finan

cial

tool

s

Com

mer

cial

ba

nks,

NBT

, M

icro

finan

ce a

nd

mic

ro-l

endi

ng

orga

niza

tions

MF

ACAF

I II,

ACAM

F

1.7.

3. P

rom

ote

FDI i

n th

e se

ctor

by

host

ing

conf

eren

ces

with

pot

entia

l inv

esto

rs, o

rgan

izing

road

show

s ab

road

, he

lpin

g fo

reig

n re

pres

enta

tives

to p

rom

ote

the

sect

or,

and

faci

litat

ing

dire

ct in

tera

ctio

ns b

etwe

en s

elec

t SM

Es

and

targ

eted

inve

stor

s.

Entir

e va

lue

chai

n »On

e ro

adsh

ow e

ach

in

maj

or te

xtile

citi

es in

the

world

and

spe

cific

ally

In

dia

– Lu

dhia

na, D

elhi

, Ah

med

abad

, Mum

bai,

Bang

alor

e an

d Ti

rupu

r »M

eetin

g wi

th 8

–10

inve

stor

s fro

m e

ach

text

ile

city

vis

ited

»Vi

sits

of i

nter

este

d in

vest

ors

( tota

l 8–1

0 ) to

Taj

ikis

tan

Stat

e Co

mm

ittee

on

Inve

stm

ent a

nd

Stat

e Pr

oper

ty

Man

agem

ent

of T

ajik

ista

n ( G

osCo

mIn

vest

), Se

ctor

ass

ocia

tion

MF,

CCI,

MIN

T,

com

mer

cial

at

tach

és o

f TR

abro

ad

ACAF

I II

1.8.

Est

ablis

h bu

sine

ss a

nd

inve

stm

ent

frie

ndly

nat

iona

l po

licie

s

1.8.

1. E

stab

lish

indu

stria

l zon

es w

ith lo

wer t

axat

ion

rate

s, s

urro

undi

ng c

otto

n pr

oduc

tion

area

s.En

tire

valu

e ch

ain

»At

leas

t two

T &

C in

dust

rial

park

s bu

ilt w

ithin

five

yea

rsM

INT,

Sec

tor

asso

ciat

ion

MED

T, F

ree

Econ

omic

Zon

es

( FEZ

)

CAIC

P, C

entra

l As

ia In

vest

men

t Cl

imat

e Pr

ogra

m

( Taj

ikis

tan

and

Kyrg

yzst

an )

1.8.

2. E

stab

lish

a co

tton

fibre

trad

e re

gula

tion

mec

hani

sm, c

ontro

lling

and

san

ctio

ning

ille

gal t

rade

of

cotto

n.

Cotto

n pr

oduc

ers

»Co

tton

mar

ketin

g re

gula

tion

mec

hani

sm in

pla

ceSu

prem

e As

sem

bly

of Ta

jikis

tan

, go

vern

men

t of T

R,

Cust

oms a

nd Ta

x co

mm

ittee

s, M

INT,

Se

ctor

ass

ocia

tion

MED

TCA

ICP,

Cen

tral

Asia

Inve

stm

ent

Clim

ate

Prog

ram

( T

ajik

ista

n an

d Ky

rgyz

stan

)


rate

gic

Obje

ctiv

e 2 :

Incr

ease

the

capa

city

and

pro

duct

ivity

of T

ajik

T &

C en

terp

rises

Oper

atio

nal

obje

ctiv

eAc

tiviti

esPr

iorit

y1=

high

,3=

low

Star

ting

perio

dBe

nefic

iarie

sTa

rget

mea

sure

sLe

adin

gim

plem

entin

g pa

rtner

s

Supp

ortin

g im

plem

entin

g pa

rtner

sEx

istin

g pr

o-gr

amm

es a

nd

inte

rnat

iona

l fi-

nanc

ial a

nd te

ch-

nica

l par

tner

s

Estim

ated

co

sts

1617

1819

20

2.1.

Ens

ure

upgr

adin

g of

the

indu

stria

l pl

ants

’ eq

uipm

ent

2.1.

1. D

evel

op a

nd p

rovi

de a

sup

port

with

the

stra

tegi

c te

chno

logy

pla

n, fi

rst f

or a

list

of i

dent

ified

com

pani

es, t

hen

to a

wid

er g

roup

of b

enef

icia

ries.

1T &

C En

terp

rises

»Te

chno

logy

pla

ns

deve

lope

d fo

r 7

com

pani

es in

the

first

2

year

s.

»Fo

r 20

othe

r co

mpa

nies

in th

e ne

xt 3

yea

rs.

Sect

or

asso

ciat

ion,

M

INT,

MED

T,

Univ

ersi

ties

and

prof

essi

onal

sc

hool

s

Inte

rnat

iona

l con

sulti

ng

firm

s, e

spec

ially

from

le

adin

g T &

C co

untri

es in

th

e re

gion

suc

h as

Chi

na

or In

dia

( IFLS

, or W

azir )

2.1.

2. F

avou

r nat

iona

l/int

erna

tiona

l inv

estm

ents

in th

e fo

llowi

ng s

peci

fic m

achi

nery

requ

ired

in th

e va

lue

chai

n : »Sp

inni

ng : m

oder

niza

tion

of b

lowr

oom

, car

ding

, com

bing

an

d hu

mid

ifica

tion

plan

ts.

»W

eavi

ng : m

oder

nize

all

weav

ing

loom

s to

airj

et a

nd ra

pier

te

chno

logy

. »Kn

ittin

g : in

tegr

ate

knitt

ing

in a

ll co

mpa

nies

– th

roug

h im

port

of s

econ

d-ha

nd m

achi

nes

from

Eur

ope

at a

lowe

r pr

ice.

»Dy

eing

: int

rodu

ce m

ass

dyei

ng o

f yar

n an

d fa

bric

. »Po

lyes

ter f

ibre

: inv

estm

ent i

n pl

ants

for c

onve

rsio

n of

PET

bo

ttles

in p

olye

ster

fibr

e to

sup

ply

loca

l spi

nnin

g in

dust

ry.

»Pa

ckag

ing :

intro

duce

loca

l pac

kagi

ng c

ompa

nies

that

wo

uld

prod

uce

pape

r con

es, p

aper

tube

s, c

arto

ns, e

tc.

»Se

win

g an

d cu

tting

: pur

chas

e of

lase

r dev

ices

to a

llow

grea

ter p

rodu

ct d

iver

sity

and

inve

st in

sm

all w

ork

aids

an

d at

tach

men

ts to

exi

stin

g m

achi

nes.

In g

ener

al,

upgr

ade

sewi

ng m

achi

nes

and

othe

r out

date

d cl

othi

ng

man

ufac

turin

g eq

uipm

ent.

»Ac

cess

orie

s : in

vest

in a

t lea

st o

ne a

cces

sorie

s’ p

rodu

ctio

n pl

ant i

n th

e co

untry

.

1T &

C En

terp

rises

»Go

vern

men

t ad

verti

se a

nd h

ave

prep

ared

a s

trate

gic

appr

oach

towa

rds

inve

stor

s, fo

cusi

ng

on th

e pr

iorit

y ar

eas

high

light

ed »At

leas

t 7 fi

rms

acco

mpa

nied

th

roug

h m

achi

nery

up

grad

atio

n pr

oces

s

Supr

eme

Asse

mbl

y of

Ta

jikis

tan

, go

vern

men

t of

TR, C

usto

ms

and

Tax

com

mitt

ees,

Sect

or

asso

ciat

ion,

M

INT,

MED

T

Inte

rnat

iona

l con

sulti

ng

firm

s, e

spec

ially

from

le

adin

g T &

C co

untri

es in

th

e re

gion

suc

h as

Chi

na

or In

dia

( IFLS

, or W

azir )

, Ta

jik c

onsu

lting

firm

s

2.1.

3. C

ondu

ct tr

aini

ng a

t firm

leve

l for

mid

dle-

leve

l and

hi

gh-l

evel

man

ager

s, a

s we

ll as

the

owne

rs, o

n th

e m

oder

n bu

dget

ary

prac

tices

that

acc

ount

for r

egul

ar e

quip

men

t up

grad

ing.

T & C

Ente

rpris

es »30

to 4

0 co

mpa

ny

man

ager

s an

d 20

ow

ners

trai

ned

per

year

Sect

or

asso

ciat

ion,

M

INT,

MED

T,

univ

ersi

ties

Inte

rnat

iona

l co

nsul

ting

on b

usin

ess

man

agem

ent,

Tajik

co

nsul

ting

firm

s

2.1.

4. P

rovi

de tr

aini

ng to

com

pani

es p

erso

nnel

on

the

usag

e of

new

mac

hine

ry a

nd b

est p

ract

ices

in it

s ha

ndlin

g.T &

C En

terp

rises

»20

0 to

250

wor

kers

tra

ined

per

yea

rSe

ctor

as

soci

atio

n,

MIN

T, M

EDT,

Un

iver

sitie

s an

d pr

ofes

sion

al

scho

ols

Inte

rnat

iona

l con

sulti

ng

firm

s, e

spec

ially

from

le

adin

g T &

C co

untri

es in

th

e re

gion

suc

h as

Chi

na

or In

dia

( IFLS

, or W

azir )

2.2.

In

crea

se

the

leve

l of

tech

nica

l sk

ills

with

in T

& C

co

mpa

nies

2.2.

1. P

rom

ote

the

inte

grat

ion

of p

rofe

ssio

nal d

evel

opm

ent

with

in T

ajik

firm

s’ H

R se

ctio

ns, a

nd e

nabl

e ex

chan

ges

with

fa

st d

evel

opin

g in

tern

atio

nal/r

egio

nal c

ompa

nies

that

pro

vide

su

ch s

ervi

ces

to th

eir s

taff

( fro

m K

yrgy

zsta

n an

d So

uth-

East

As

ia ).

This

pro

fess

iona

l dev

elop

men

t pro

gram

mes

mus

t in

tegr

ate

fore

ign

lang

uage

cou

rses

.

T & C

Ente

rpris

es »At

leas

t 10

com

pani

es

acco

mpa

nied

to

inte

grat

e L &

D de

partm

ents

»At

leas

t 1 e

xcha

nge

prog

ram

me

per y

ear

on L

& D.

Sect

or

asso

ciat

ion,

M

INT,

MED

T,

Univ

ersi

ties

and

prof

essi

onal

sc

hool

s

Inte

rnat

iona

l con

sulti

ng

firm

s, e

spec

ially

from

le

adin

g T &

C co

untri

es in

th

e re

gion

suc

h as

Chi

na

or In

dia

( IFLS

, or W

azir )


rate

gic

Obje

ctiv

e 2 :

Incr

ease

the

capa

city

and

pro

duct

ivity

of T

ajik

T &

C en

terp

rises

Oper

atio

nal

obje

ctiv

eAc

tiviti

esPr

iorit

y1=

high

,3=

low

Star

ting

perio

dBe

nefic

iarie

sTa

rget

mea

sure

sLe

adin

gim

plem

entin

g pa

rtner

s

Supp

ortin

g im

plem

entin

g pa

rtner

sEx

istin

g pr

o-gr

amm

es a

nd

inte

rnat

iona

l fi-

nanc

ial a

nd te

ch-

nica

l par

tner

s

Estim

ated

co

sts

1617

1819

20

2.2.

In

crea

se

the

leve

l of

tech

nica

l sk

ills

with

in T

& C

co

mpa

nies

2.2.

2. P

rom

ote

and

intro

duce

3G

Tailo

r Tra

inin

g Sy

stem

and

ot

her m

oder

n in

tern

al tr

aini

ng te

chni

ques

in s

elec

ted

Tajik

fir

ms.

T & C

Ente

rpris

es »At

leas

t 7 fi

rms

acco

mpa

nied

thro

ugh

syst

em u

pgra

datio

n

Sect

or

asso

ciat

ion,

M

INT,

MED

T,

Univ

ersi

ties

and

prof

essi

onal

sc

hool

s

Inte

rnat

iona

l con

sulti

ng

firm

s, e

spec

ially

from

le

adin

g T &

C co

untri

es in

th

e re

gion

suc

h as

Chi

na

or In

dia

( IFLS

, or W

azir )

2.2.

3. E

nabl

e ex

chan

ge p

rogr

amm

es fo

r tec

hnic

al s

taff

( fore

men

, fitt

ers,

jobb

ers,

sew

ing

tech

nici

ans,

des

igne

rs,

etc.

) for

them

to le

arn

from

oth

er fa

st d

evel

opin

g co

mpa

nies

.

T & C

Ente

rpris

es »At

leas

t 1 e

xcha

nge

prog

ram

me

per y

ear.

Sect

or

asso

ciat

ion,

M

INT,

MED

T,

Univ

ersi

ties

and

prof

essi

onal

sc

hool

s

Inte

rnat

iona

l con

sulti

ng

firm

s, e

spec

ially

from

le

adin

g T &

C co

untri

es in

th

e re

gion

suc

h as

Chi

na

or In

dia

( IFLS

, or W

azir )

2.2.

4. C

reat

e th

e co

nditi

ons

to re

ceiv

e te

chni

cal e

xper

ts

from

abr

oad

to T

ajik

firm

s to

pro

vide

trai

ning

to te

chni

cal

pers

onne

l.

T & C

Ente

rpris

es »In

vita

tions

pr

epar

ed to

lead

te

chni

cal e

xper

ts

from

nei

ghbo

ring

coun

tries

suc

h as

In

dia

Sect

or

asso

ciat

ion,

M

INT,

MED

T

Min

istry

of F

orei

gn

Affa

irs, M

inis

try o

f In

tern

al A

ffairs

2.3.

In

crea

se

the

leve

l of

man

ager

ial

skill

s w

ithin

co

mpa

nies

2.3.

1. C

oach

and

pro

vide

cap

acity

bui

ldin

g tra

inin

g fo

r the

m

iddl

e/hi

gh le

vel m

anag

ers

and

owne

rs o

n m

oder

n bu

sine

ss

man

agem

ent t

echn

ique

s, in

clud

ing

: »Hu

man

reso

urce

s/kn

owle

dge

»In

nova

tion

man

agem

ent

»Op

erat

ion

( esp

. equ

ipm

ent )

man

agem

ent

»Qu

ality

man

agem

ent

»R &

D »Ri

sk »In

form

atio

n sy

stem

»M

arke

ting

T & C

Ente

rpris

es »30

to 4

0 co

mpa

ny

man

ager

s an

d 20

ow

ners

trai

ned

per

year

on

the

8 pr

iorit

y ar

eas

men

tione

d.

Sect

or

asso

ciat

ion,

M

INT,

MED

T,

Univ

ersi

ties

Inte

rnat

iona

l con

sulti

ng

firm

s, e

spec

ially

from

le

adin

g T &

C co

untri

es in

th

e re

gion

suc

h as

Chi

na

or In

dia

( IFLS

, or W

azir )

, Ta

jik c

onsu

lting

firm

s

2.3.

2. In

cent

ivis

e hi

gh p

erfo

rman

ce, b

y en

cour

agin

g th

e en

terp

rises

that

impr

oved

sig

nific

antly

thei

r pro

duct

ivity

and

ap

plie

d ne

w m

anag

emen

t tec

hniq

ues

( thr

ough

indu

stry

/sta

te

awar

d )

T & C

Ente

rpris

es,

Gove

rnm

ent

»At

leas

t one

aw

ardi

ng c

erem

ony

esta

blis

hed

per

year

dem

onst

ratin

g su

cces

s st

orie

s.

Pres

iden

t of

the

TR, M

INT,

As

soci

atio

n of

M

anag

ers

of

the

TR

Sect

or a

ssoc

iatio

n, M

EDT

2.3.

In

crea

se

the

leve

l of

man

ager

ial

skill

s w

ithin

co

mpa

nies

2.3.

3. P

rom

ote

the

crea

tion

of lo

cal c

onsu

lting

firm

s to

pr

ovid

e as

sist

ance

and

effe

ctiv

e bu

sine

ss s

uppo

rt to

T &

C co

mpa

nies

.

T & C

Ente

rpris

es »At

leas

t 2 k

ey p

laye

rs

in th

e co

nsul

ting

indu

stry

bro

ught

to

Tajik

ista

n »At

leas

t 2 e

xist

ing

cons

ultin

g fir

ms

in

Tajik

ista

n tra

ined

on

busi

ness

sup

port

MIN

TSe

ctor

ass

ocia

tion,

Un

iver

sitie

s


rate

gic

Obje

ctiv

e 2 :

Incr

ease

the

capa

city

and

pro

duct

ivity

of T

ajik

T &

C en

terp

rises

Oper

atio

nal

obje

ctiv

eAc

tiviti

esPr

iorit

y1=

high

,3=

low

Star

ting

perio

dBe

nefic

iarie

sTa

rget

mea

sure

sLe

adin

gim

plem

entin

g pa

rtner

s

Supp

ortin

g im

plem

entin

g pa

rtner

sEx

istin

g pr

o-gr

amm

es a

nd

inte

rnat

iona

l fi-

nanc

ial a

nd te

ch-

nica

l par

tner

s

Estim

ated

co

sts

1617

1819

20

2.3.

In

crea

se

the

leve

l of

man

ager

ial

skill

s w

ithin

co

mpa

nies

2.3.

4 Pr

ovid

e co

nsul

ting

advi

ce to

sel

ecte

d pr

ogre

ssiv

e an

d co

mm

itted

clo

thin

g co

mpa

nies

thro

ugh

inte

rnat

iona

l exp

erts

to

hel

p th

em im

plem

ent L

ean

Man

agem

ent t

echn

ique

s fo

r pr

oduc

tivity

and

qua

lity

impr

ovem

ent.

T & C

Ente

rpris

es »At

leas

t 7 fi

rms

acco

mpa

nied

thro

ugh

impl

emen

tatio

n of

Le

an M

anag

emen

t te

chni

ques

Sect

or

asso

ciat

ion,

M

INT,

MED

T

Inte

rnat

iona

l con

sulti

ng

firm

s, e

spec

ially

from

le

adin

g T &

C co

untri

es in

th

e re

gion

suc

h as

Chi

na

or In

dia

( IFLS

, or W

azir )

2.4.

Impr

ove

finan

cial

m

anag

emen

t an

d in

crea

se

the

abili

ty

of S

MEs

to

acc

ess

finan

ce

2.4.

1 Pr

ovid

e tra

inin

g ( a

nd tr

aini

ng o

f tra

iner

s ) in

fina

ncia

l lit

erac

y to

ena

ble

man

ager

s to

def

ine

thei

r fin

anci

ng n

eeds

, de

velo

p a

finan

cing

stra

tegy

, and

eva

luat

e fin

anci

ng o

ptio

ns.

This

will

incl

ude

train

ing

on m

oder

n bu

dget

ing

tech

niqu

es

and

acco

untin

g tra

nspa

renc

y.

T & C

ente

rpris

es,

supp

ort

inst

itutio

ns

»30

to 4

0 co

mpa

ny

man

ager

s an

d 20

ow

ners

trai

ned

per

year

on

finan

ce »1

train

er tr

aine

d pe

r co

mpa

ny

Sect

or

asso

ciat

ion,

Un

iver

sitie

s

Inte

rnat

iona

l fin

anci

al

cons

ultin

g fir

ms

ACAF

I II

2.4.

2 He

lp S

MEs

iden

tify

appr

opria

te le

nder

s, u

nder

stan

d le

ndin

g re

quire

men

ts, a

nd p

repa

re a

nd s

ubm

it ad

equa

te

appl

icat

ions

to v

ario

us s

ourc

es o

f fin

anci

ng in

clud

ing

expo

rt in

sura

nce,

fact

orin

g/re

vers

e fa

ctor

ing,

cre

dit g

uara

ntee

sc

hem

es, l

easi

ng, a

nd tr

aditi

onal

loan

s, a

ccor

ding

to th

e ne

eds

of e

ach

ente

rpris

e

T & C

ente

rpris

es,

finan

cial

in

stitu

tions

»At

leas

t 5 S

MEs

tra

ined

per

yea

r.Se

ctor

as

soci

atio

n,

Univ

ersi

ties

Inte

rnat

iona

l fin

anci

al

cons

ultin

g fir

ms

ACAF

I II

2.4.

3. H

elp

SMEs

rest

ruct

ure

priv

ate

loan

s in

to tr

aditi

onal

lo

ans.

T & C

ente

rpris

es »At

leas

t 5 S

MEs

ac

com

pani

ed in

the

loan

rest

ruct

urin

g pr

oces

s.

Sect

or

asso

ciat

ion,

Un

iver

sitie

s

Inte

rnat

iona

l fin

anci

al

cons

ultin

g fir

ms

ACAF

I II


rate

gic

Obje

ctiv

e 3 :

Incr

ease

the

valu

e ad

ded

in th

e T &

C se

ctor

and

alig

n pr

oduc

tion

with

mar

ket r

equi

rem

ents

Oper

atio

nal

obje

ctiv

eAc

tiviti

esPr

iorit

y1=

high

,3=

low

Star

ting

perio

dBe

nefic

iarie

sTa

rget

mea

sure

sLe

adin

gim

plem

entin

g pa

rtner

s

Supp

ortin

g im

plem

entin

g pa

rtner

s

Exis

ting

pro-

gram

mes

and

in

tern

atio

nal f

i-na

ncia

l and

tech

-ni

cal p

artn

ers

Estim

ated

co

sts

1617

1819

20

3.1.

Incr

ease

th

e ca

paci

ty

with

in fi

rms

to u

nder

stan

d do

mes

tic a

nd

inte

rnat

iona

l m

arke

t re

quire

men

ts

and

how

to

best

alig

n pr

oduc

t of

ferin

gs to

co

mpl

y

3.1.

1. A

ssis

t com

pani

es ( t

hrou

gh b

usin

ess

clin

ic ty

pe o

f as

sist

ance

) to

inte

rpre

t and

und

erst

and

cons

umer

/buy

er

need

s in

spe

cific

T &

C pr

oduc

t cat

egor

ies

and

targ

et

mar

kets

thro

ugh :

»Ta

rget

ed tr

aini

ng o

n ta

rget

ed b

uyer

s’ n

eeds

and

rela

ted

prod

uct c

ateg

orie

s an

d ho

w to

iden

tify

them

; »Vi

sits

to s

elec

ted

prod

uctio

n si

tes ;

»M

onito

ring

the

com

pani

es’ u

se o

f the

acq

uire

d kn

owle

dge.

T & C

ente

rpris

es »At

leas

t 20

firm

s ac

com

pani

ed

thro

ugh

buye

rs n

eeds

un

ders

tand

ing

per y

ear

»30

to 4

0 co

mpa

ny m

anag

ers

and

20 o

wner

s tra

ined

per

yea

r »At

leas

t 1 p

rodu

ctio

n si

te v

isit

per c

ompa

ny

Sect

or

asso

ciat

ion,

M

INT,

M

EDT,

CCI

, co

mm

erci

al

atta

chés

of

TR a

broa

d

Inte

rnat

iona

l co

nsul

ting

firm

s,

espe

cial

ly fr

om

lead

ing

T & C

coun

tries

in th

e re

gion

suc

h as

Ch

ina

or In

dia

( IFLS

, or W

azir )

3.1.

2. E

stab

lish

mar

ket p

rosp

ectio

n de

partm

ents

/re

spon

sibl

e of

ficer

s wi

thin

firm

sT &

C en

terp

rises

»At

leas

t 10

com

pani

es

acco

mpa

nied

to in

tegr

ate

mar

ket

pros

pect

ion

Sect

or

asso

ciat

ion,

M

INT,

MED

T

Inte

rnat

iona

l co

nsul

ting

firm

s,

espe

cial

ly fr

om

lead

ing

T & C

coun

tries

in th

e re

gion

suc

h as

Ch

ina

or In

dia

( IFLS

, or W

azir )

3.1.

3. C

ondu

ct tr

aini

ngs

to m

anag

ers

to s

ensi

tize

them

on

the

need

of h

avin

g a

mar

ket p

rosp

ectio

n fu

nctio

n in

th

e en

terp

rise

and

how

it wi

ll he

lp th

em g

ener

ate

new

busi

ness

.

T & C

ente

rpris

es »30

to 4

0 co

mpa

ny m

anag

ers

and

20 o

wner

s tra

ined

per

yea

r Se

ctor

as

soci

atio

n,

MIN

T, M

EDT

3.1.

4. C

olle

ct a

nd in

trodu

ce to

the

ente

rpris

es th

e op

inio

ns o

f int

erna

tiona

l cus

tom

ers/

buye

rs.

T & C

ente

rpris

es »Su

rvey

con

duce

d »At

leas

t 10

com

pani

es g

et

feed

back

per

yea

r

Sect

or

asso

ciat

ion,

M

INT,

MED

T,

CCI

Inte

rnat

iona

l bu

yers

3.1.

5. D

evel

op tr

aini

ngs

/cou

rses

for S

MEs

on

how

to

anal

yse

trade

inte

llige

nce

and

adju

st th

eir b

usin

ess

stra

tegi

es a

nd o

pera

tions

acc

ordi

ngly

.

T & C

ente

rpris

es »20

com

pani

es tr

aine

d pe

r yea

rSe

ctor

as

soci

atio

n,

MIN

T, M

EDT,

CC

I

Inte

rnat

iona

l co

nsul

ting

firm

s,

espe

cial

ly fr

om

lead

ing

T & C

coun

tries

in th

e re

gion

suc

h as

Ch

ina

or In

dia

( IFLS

, or W

azir )

3.1.

6. Im

prov

e th

e we

bsite

of t

he C

ham

ber o

f com

mer

ce

and

insu

re c

onst

ant s

uppl

y in

tim

ely

mar

ket i

ntel

ligen

ce.

Cham

ber o

f co

mm

erce

»Ch

ambe

r of c

omm

erce

web

site

re

vam

ped

CCI

ITC

3.1.

7. C

arry

info

rmat

ion

cam

paig

ns to

ent

erpr

ises

to

sens

itize

them

abo

ut a

ll av

aila

ble

sour

ces

of in

form

atio

n an

d ho

w to

use

them

.

Entir

e va

lue

chai

n »Pr

omot

iona

l cam

paig

n on

m

arke

t inf

orm

atio

n pu

t in

plac

e.CC

ISe

ctor

as

soci

atio

n,

MIN

T, M

EDT

3.2.

Incr

ease

th

e ca

paci

ty o

f fir

ms

to d

esig

n pr

oduc

ts in

ac

cord

ance

w

ith b

uyer

re

quire

men

ts

and

mar

ket

trend

s

3.2.

1. In

trodu

ce a

nd c

apac

itate

R &

D de

partm

ents

re

spon

sibl

e fo

r inc

reas

ing

exis

ting

prod

uct s

ophi

stic

atio

n an

d de

velo

ping

new

pro

duct

s ba

sed

on m

arke

t pr

ospe

ctio

n wo

rk.

T & C

ente

rpris

es »At

leas

t 10

com

pani

es

acco

mpa

nied

to in

tegr

ate

R & D

depa

rtmen

ts

Sect

or

asso

ciat

ion,

M

INT,

MED

T

Inte

rnat

iona

l co

nsul

ting

firm

s,

espe

cial

ly fr

om

lead

ing

T & C

coun

tries

in th

e re

gion

suc

h as

Ch

ina

or In

dia

( IFLS

, or W

azir )


rate

gic

Obje

ctiv

e 3 :

Incr

ease

the

valu

e ad

ded

in th

e T &

C se

ctor

and

alig

n pr

oduc

tion

with

mar

ket r

equi

rem

ents

Oper

atio

nal

obje

ctiv

eAc

tiviti

esPr

iorit

y1=

high

,3=

low

Star

ting

perio

dBe

nefic

iarie

sTa

rget

mea

sure

sLe

adin

gim

plem

entin

g pa

rtner

s

Supp

ortin

g im

plem

entin

g pa

rtner

s

Exis

ting

pro-

gram

mes

and

in

tern

atio

nal f

i-na

ncia

l and

tech

-ni

cal p

artn

ers

Estim

ated

co

sts

1617

1819

20

3.2.

Incr

ease

th

e ca

paci

ty o

f fir

ms

to d

esig

n pr

oduc

ts in

ac

cord

ance

w

ith b

uyer

re

quire

men

ts

and

mar

ket

trend

s

3.2.

2. P

rovi

de tr

aini

ng to

firm

s on

pro

duct

des

ign

and

iden

tific

atio

n of

bes

t sui

ted/

mor

e co

st e

ffect

ive

raw

mat

eria

ls fo

r the

ir pr

oduc

ts.

T & C

ente

rpris

es »20

com

pani

es tr

aine

d pe

r yea

rSe

ctor

as

soci

atio

n,

MIN

T, M

EDT

3.2.

3. In

clud

e a

“cou

ncil

of d

esig

ners

” wi

thin

the

asso

ciat

ion

of T

& C

ente

rpris

es th

at w

ould

com

mun

icat

e an

d al

so g

et in

form

atio

n on

the

late

st tr

ends

in k

ey ta

rget

m

arke

ts. I

t will

als

o al

low

tech

niqu

e sh

arin

g on

des

ign.

( B

efor

e th

e as

soci

atio

n is

cre

ated

, thi

s co

unci

l can

be

inte

grat

ed in

the

tech

nolo

gica

l ins

titut

e ).

T & C

ente

rpris

esDe

sign

ers

»Co

unci

l of d

esig

ners

put

in p

lace

in

the

tech

nolo

gica

l ins

titut

e an

d th

en th

e as

soci

atio

n

Sect

or

Asso

ciat

ion,

Te

chno

logi

cal

inst

itute

Natio

nal

desi

gner

s

3.2.

4. E

stab

lish

regi

onal

com

mon

faci

lity

cent

res

on

R & D,

usi

ng e

xist

ing

infra

stru

ctur

es ( e

xist

ing

prod

uctio

n tra

inin

g ce

ntre

s fo

r car

pets

– 7

0 ce

ntre

s in

45

rayo

ns )

and

thro

ugh

a sm

all p

artic

ipat

ion

fee

for e

ach

com

pany

. Su

ch re

gion

al fa

cilit

ies

woul

d be

lead

by

larg

e co

mpa

nies

su

ch a

s Ol

im te

xtile

, or Z

inat

and

wou

ld b

e cl

osel

y lin

ked

with

the

Univ

ersi

ties

in D

usha

nbe.

T & C

ente

rpris

es »At

leas

t 1 c

omm

on fa

cilit

y ce

ntre

on

R & D

in e

ach

45 ra

yon

esta

blis

hed

Rayo

n lo

cal

gove

rnm

ents

Sect

or

asso

ciat

ion,

MIN

T, M

EDT

3.3.

Incr

ease

fir

ms’

cap

acity

to

impl

emen

t co

st e

ffici

ent

and

buye

r-or

ient

ed

sour

cing

st

rate

gies

3.3.

1. P

rovi

de tr

aini

ng o

n so

urci

ng te

chni

ques

to

com

pani

es ( i

dent

ifica

tion

of s

ourc

ing

com

pany

bas

ed

on th

e co

mpe

titiv

enes

s of

thei

r pro

duct

s, e

tc. )

from

T &

C in

dust

ry a

nd p

rom

ote

the

use

of th

e se

ctor

ass

ocia

tion

as a

mea

ns to

redu

ce s

ourc

ing

cost

thro

ugh

colle

ctiv

e so

urci

ng.

T & C

ente

rpris

es »30

to 4

0 co

mpa

ny m

anag

ers

and

20 o

wner

s tra

ined

per

yea

rSe

ctor

as

soci

atio

n,

MIN

T, M

EDT

Inte

rnat

iona

l co

nsul

ting

firm

s,

espe

cial

ly fr

om

lead

ing

T & C

coun

tries

in th

e re

gion

suc

h as

Ch

ina

or In

dia

( IFLS

, or W

azir )

, IT

C

3.3.

2. P

lace

the

newl

y es

tabl

ishe

d as

soci

atio

n fo

r T &

C in

dust

ry a

s a

coor

dina

ting

body

for b

ulk

orde

rs to

ens

ure

best

pos

sibl

e pr

ices

for a

ll th

e pl

ayer

s. T

he c

lust

er

appr

oach

is to

be

put i

n pl

ace

at a

regi

onal

leve

l and

can

be

rela

ted

with

the

indu

stria

l zon

es.

Entir

e va

lue

chai

n »Se

ctor

ass

ocia

tion

esta

blis

hed

as c

omm

on s

ourc

ing

faci

lity

Sect

or

asso

ciat

ion

MIN

T, M

EDT

3.4.

Stim

ulat

e di

vers

ifica

tion

and

high

er

valu

e ad

ditio

n of

the

T & C

pr

oduc

t of

ferin

g ba

sed

on th

e op

port

uniti

es

iden

tifie

d in

the

stra

tegy

and

on

the

mar

ket

requ

irem

ents

3.4.

1. E

ncou

rage

firm

s to

und

erta

ke a

num

ber o

f qui

ck

win

s in

ord

er to

div

ersi

fy th

eir p

rodu

ct b

ase :

»Im

port

smal

l qua

ntiti

es o

f pol

yest

er a

nd c

reat

e bl

ende

d ya

rns

to e

nabl

e th

e pr

oduc

tion

of n

ew y

arn

prod

ucts

su

ch a

s wo

ven

poly

-cot

ton

unifo

rm fa

bric

s »In

trodu

ce re

cycl

ing

of c

otto

n wa

ste

from

spi

nnin

g m

ills

and

repu

rpos

e fo

r med

ical

tiss

ue »Su

pply

the

loca

l mar

ket f

or s

choo

l uni

form

s by

cot

ton/

poly

este

r ble

nded

fabr

ics

»In

trodu

ce te

chno

logi

cal p

roce

ss o

ptim

izat

ion

for p

atte

rn

mak

ing

and

mar

ker m

akin

g ( C

AD ) i

n or

der t

o sa

ve

betw

een

2-5 %

of f

abric

cos

ts in

cut

ting

and

prod

uct

deve

lopm

ent o

pera

tions

»Ad

d va

lue

to c

loth

ing

by in

corp

orat

ing

tradi

tiona

l em

broi

dery

ski

lls

T & C

ente

rpris

es »Se

ctor

ass

ocia

tion

to p

rom

ote

the

list o

f qui

ck w

ins

and

sens

itize

its

mem

bers

on

the

shor

t ter

m g

ains

from

thes

e in

vest

men

ts

»At

leas

t 10

firm

s ac

com

pani

ed

thro

ugh

the

adju

stm

ents

in th

eir

proc

esse

s.

Sect

or

asso

ciat

ion,

Indi

vidu

al

firm

s

Inte

rnat

iona

l co

nsul

ting

firm

s,

espe

cial

ly fr

om

lead

ing

T & C

coun

tries

in th

e re

gion

suc

h as

Ch

ina

or In

dia

( IFLS

, or W

azir )


rate

gic

Obje

ctiv

e 3 :

Incr

ease

the

valu

e ad

ded

in th

e T &

C se

ctor

and

alig

n pr

oduc

tion

with

mar

ket r

equi

rem

ents

Oper

atio

nal

obje

ctiv

eAc

tiviti

esPr

iorit

y1=

high

,3=

low

Star

ting

perio

dBe

nefic

iarie

sTa

rget

mea

sure

sLe

adin

gim

plem

entin

g pa

rtner

s

Supp

ortin

g im

plem

entin

g pa

rtner

s

Exis

ting

pro-

gram

mes

and

in

tern

atio

nal f

i-na

ncia

l and

tech

-ni

cal p

artn

ers

Estim

ated

co

sts

1617

1819

20

3.4.

Stim

ulat

e di

vers

ifica

tion

and

high

er

valu

e ad

ditio

n of

the

T & C

pr

oduc

t of

ferin

g ba

sed

on th

e op

port

uniti

es

iden

tifie

d in

the

stra

tegy

and

on

the

mar

ket

requ

irem

ents

3.4.

2. In

a m

iddl

e to

long

per

spec

tive,

enc

oura

ge fi

rms

to o

rient

in th

e fo

llowi

ng in

vest

men

ts in

ord

er to

div

ersi

fy

thei

r pro

duct

bas

e : »In

trodu

ce a

nd d

evel

op th

e pr

oduc

tion

of n

ew ty

pes

of

yarn

s, in

clud

ing

colo

ured

yar

n, k

nit y

arn,

mix

ed y

arn,

co

mbe

d ya

rn, o

pen-

end

yarn

s, v

isco

se s

tapl

e, b

ambo

o,

slub

yar

n, a

nd v

orte

x yar

ns »Pr

omot

e th

e pr

oduc

tion

of c

olou

red

text

iles

( ne

suro

vie

tkan

i ) fo

r use

in d

omes

tic c

loth

ing

com

pani

es »In

trodu

ce o

rgan

ic c

otto

n ya

rn a

nd te

xtile

s in

to

prod

uctio

n an

d le

vera

ge o

rgan

ic b

rand

ing

»Im

port

grey

pol

yest

er fi

bres

and

pro

duce

pol

yest

er

sewi

ng th

read

s fo

r dom

estic

gar

men

t man

ufac

ture

rs »Re

arra

nge

yarn

cou

nts

to re

duce

was

te a

nd im

prov

e pr

ofita

bilit

y.

»In

trodu

ce a

rang

e of

non

-wov

en g

oods

pro

duce

d fro

m

cotto

n wa

ste,

incl

udin

g pa

per-

like

filte

r pro

duct

s,

cosm

etic

cot

ton

pads

, fill

ing

for g

arm

ents

suc

h as

ja

cket

s, te

rry

towe

ls ( c

onsu

mab

le it

em m

ade

from

ca

rded

yar

n of

low

qual

ity c

otto

n ).

»Pr

oduc

e an

d m

arke

t med

icin

al ti

ssue

s su

ch a

s hy

gien

ic

cotto

n an

d m

edic

inal

ban

dage

s us

ing

orga

nic

cotto

n an

d bl

each

ing

proc

esse

s ( 2

5 % o

f fib

re is

lost

pre

sent

ly

but 2

0 % c

an b

e us

ed )

»De

velo

p ne

w fa

bric

s su

ch a

s Ja

cqua

rd [i

n lim

ited

quan

titie

s fo

r uph

olst

ery]

or P

oly-

cotto

n de

nim

fabr

ics

for J

eans

[for

eco

nom

y co

nsum

ers]

»Fa

cilit

ate

the

dom

estic

pro

duct

ion

of li

ning

fabr

ics

and

cush

ioni

ng m

ater

ials

at w

eavi

ng e

nter

pris

es »In

trodu

ce th

e pr

oduc

tion

of th

read

yar

n an

d tw

iste

d ya

rn

( long

er te

rm ).

»Es

tabl

ish

loca

l pro

duct

ion

of a

cces

sorie

s an

d pa

ckag

ing

mat

eria

ls ( l

onge

r ter

m )

»Es

tabl

ish

dom

estic

pro

duct

ion

of b

lend

ed a

nd s

ynth

etic

fa

bric

s su

ited

for c

loth

ing

prod

uctio

n ( lo

nger

term

)

T & C

ente

rpris

es »Se

ctor

ass

ocia

tion

to p

rom

ote

the

list o

f im

porta

nt m

iddl

e-lo

ng

term

adj

ustm

ents

and

sen

sitiz

e its

mem

bers

on

the

shor

t ter

m

gain

s fro

m th

ese

inve

stm

ents

»At

leas

t 7 s

ucce

ssfu

l firm

s ac

com

pani

ed th

roug

h th

e ad

just

men

ts in

thei

r pro

cess

es.

Sect

or

asso

ciat

ion,

Indi

vidu

al

firm

s

Inte

rnat

iona

l co

nsul

ting

firm

s,

espe

cial

ly fr

om

lead

ing

T & C

coun

tries

in th

e re

gion

suc

h as

Ch

ina

or In

dia

( IFLS

, or W

azir )

3.4.

3. P

rom

ote

the

adop

tion

of in

stru

men

ts o

f the

qua

lity

man

agem

ent s

yste

m ( s

uch

as E

COTE

CO, K

aize

n, IS

O,

soci

al re

spon

sibi

lity

stan

dard

s )

T & C

ente

rpris

es »Gu

ide :

’Exp

ortin

g cl

othi

ng a

nd

text

iles

to ta

rget

mar

kets

’ mad

e av

aila

ble

»Gu

ide :

’Man

agin

g qu

ality

in

Taj

ikis

tan :

a d

irect

ory

of

serv

ices

’ mad

e av

aila

ble

Tajik

stan

dart,

Ta

jik

cons

ultin

g fir

ms

Sect

or

asso

ciat

ion,

MIN

T, M

EDT,

ITC

3.4.

4. T

rain

firm

s on

qua

lity

man

agem

ent m

etho

dolo

gy,

spec

ifica

lly o

n :

»Te

chni

cal r

egul

atio

ns ( c

ompu

lsor

y ) »Sp

ecifi

c qu

ality

sta

ndar

ds fo

r tar

get m

arke

ts ( v

olun

tary

)

T & C

ente

rpris

es »20

com

pani

es se

nsiti

zed

on m

an-

dato

ry an

d vo

lunt

ary r

equi

rem

ents

in ta

rget

ed m

arke

ts »5

TISI

s sen

sitize

d on

man

dato

ry

and

volu

ntar

y req

uire

men

ts in

tar-

gete

d m

arke

ts

Tajik

stan

dart,

Ta

jik

cons

ultin

g fir

ms

Sect

or

asso

ciat

ion,

MIN

T, M

EDT,

ITC


rate

gic

Obje

ctiv

e 3 :

Incr

ease

the

valu

e ad

ded

in th

e T &

C se

ctor

and

alig

n pr

oduc

tion

with

mar

ket r

equi

rem

ents

Oper

atio

nal

obje

ctiv

eAc

tiviti

esPr

iorit

y1=

high

,3=

low

Star

ting

perio

dBe

nefic

iarie

sTa

rget

mea

sure

sLe

adin

gim

plem

entin

g pa

rtner

s

Supp

ortin

g im

plem

entin

g pa

rtner

s

Exis

ting

pro-

gram

mes

and

in

tern

atio

nal f

i-na

ncia

l and

tech

-ni

cal p

artn

ers

Estim

ated

co

sts

1617

1819

20

3.4.

Stim

ulat

e di

vers

ifica

tion

and

high

er

valu

e ad

ditio

n of

the

T & C

pr

oduc

t of

ferin

g ba

sed

on th

e op

port

uniti

es

iden

tifie

d in

the

stra

tegy

and

on

the

mar

ket

requ

irem

ents

3.4.

5. B

uild

awa

rene

ss o

f firm

s on

the

pote

ntia

l gai

ns in

va

lue

addi

tion

thro

ugh

the

prev

ious

act

iviti

es th

roug

h th

e se

ctor

ass

ocia

tion

T & C

ente

rpris

es »Se

ctor

ass

ocia

tion

adve

rtise

s ga

ins

from

cer

tific

atio

n to

its

mem

bers

.

Sect

or

asso

ciat

ion

MIN

T, M

EDT,

ITC

3.5.

Inte

grat

e an

d ca

paci

tate

m

arke

ting,

sa

les

and

serv

ices

de

part

men

ts

in T

& C

firm

s to

ens

ure

sust

aina

bilit

y of

buy

er-s

elle

r re

latio

nshi

ps

3.5.

1. In

form

Taj

ik fi

rms

on th

e re

quire

men

t to

sust

ain

exis

ting

buye

r-se

ller r

elat

ions

hips

/mut

ual t

rust

and

pr

ovid

e tra

inin

g on

mar

ketin

g an

d af

ter-

sale

s se

rvic

es /

crea

tion

of a

com

pany

web

site

/ co

mm

unic

atio

n/ c

allin

g ce

ntre

s ( to

offe

r new

pro

duct

s to

exi

stin

g cl

ient

s ), e

tc.

T & C

ente

rpris

es »Se

ctor

ass

ocia

tion

adve

rtise

s ga

ins

from

clie

nt a

fter-

care

sy

stem

s

Sect

or

asso

ciat

ion,

M

INT,

MED

T

Inte

rnat

iona

l co

nsul

ting

firm

s,

espe

cial

ly fr

om

lead

ing

T & C

coun

tries

in th

e re

gion

suc

h as

Ch

ina

or In

dia

( IFLS

, or W

azir )

3.5.

2. C

ondu

ct tr

aini

ng o

n de

velo

pmen

t of c

ompa

ny le

vel

bran

d to

be

linke

d wi

th th

e na

tiona

l bra

nd.

T & C

ente

rpris

es »At

leas

t 7 fi

rms

acco

mpa

nied

th

roug

h de

velo

pmen

t of a

br

andi

ng d

urin

g th

e 5

year

pe

riod

Sect

or

asso

ciat

ion,

M

INT,

MED

T

Inte

rnat

iona

l co

nsul

ting

firm

s,

espe

cial

ly fr

om

lead

ing

T & C

coun

tries

in th

e re

gion

suc

h as

Ch

ina

or In

dia

( IFLS

, or W

azir )

, IT

C


rate

gic

Obje

ctiv

e 4 :

Impr

ove

acce

ss to

mar

kets

for T

& C

ente

rpris

es

Oper

atio

nal

obje

ctiv

eAc

tiviti

esPr

iorit

y1=

high

,3=

low

Star

ting

perio

dBe

nefic

iarie

sTa

rget

mea

sure

sLe

adin

gim

plem

entin

g pa

rtner

s

Supp

ortin

g im

plem

entin

g pa

rtner

s

Exis

ting

prog

ram

mes

an

d in

tern

atio

nal

finan

cial

and

te

chni

cal p

artn

ers

Estim

ated

co

sts

1617

1819

20

4.1.

Ens

ure

easi

ly

acce

ssib

le

and

timel

y m

arke

t in

telli

genc

e fo

r firm

s in

ke

y ar

eas

4.1.

1. C

reat

e a

stra

tegi

c m

onito

ring

cell,

hos

ted

at th

e Ch

ambe

r of c

omm

erce

and

Indu

stry

( CCI

), th

en c

o-sh

ared

with

the

sect

or a

ssoc

iatio

n as

soo

n as

it is

cre

ated

, to

gat

her u

p-to

-dat

e an

d sp

ecifi

c T &

C-s

peci

fic tr

ade

info

rmat

ion

and

to d

etec

t ear

ly s

igna

ls o

n ta

rget

ed m

arke

ts

and

prod

ucts

. The

web

site

of t

he C

ham

ber c

an b

e us

ed

to h

ost t

he m

onito

ring

cell

( link

with

act

ivity

3.1

.6. )

and

conn

ecte

d to

the

MIN

T we

bsite

.

Cham

ber o

f co

mm

erce

T & C

expo

rting

fir

ms

TISI

sM

INT,

MED

T

»On

e m

onito

ring

cell

set u

p »Re

com

men

datio

n re

port

on im

plem

enta

tion

of th

e co

mpe

titiv

e in

telli

genc

e sy

stem

CCI,

com

mer

cial

at

tach

és o

f TR

abro

ad

Sect

or

asso

ciat

ion,

M

INT,

MED

T,

ITC

4.1.

2. P

ut in

pla

ce a

coo

pera

tion

fram

ewor

k to

pro

mot

e th

e ex

chan

ge a

nd d

isse

min

atio

n of

T &

C tra

de in

form

atio

n am

ong

gove

rnm

ent a

genc

ies

( spe

cific

ally

MIN

T an

d M

EDT )

, TIS

Is, m

edia

, aca

dem

ia, r

esea

rch

orga

niza

tions

and

th

e pr

ivat

e se

ctor

.

Cham

ber o

f co

mm

erce

T & C

expo

rting

fir

ms

TISI

sM

INT,

MED

T

»On

e ne

twor

k es

tabl

ishe

dCC

I, co

mm

erci

al

atta

chés

of T

R ab

road

Sect

or

asso

ciat

ion,

M

INT,

MED

T,

ITC

4.1.

3. Im

plem

ent m

easu

res

to a

ctiv

ely

enga

ge th

e di

ssem

inat

ion

of tr

ade

info

rmat

ion

via

vario

us c

hann

els

of c

omm

unic

atio

n ( te

leco

mm

unic

atio

ns, I

nter

net s

ervi

ce

prov

ider

s, p

rint a

nd te

levi

sion

med

ia ).

Inst

itutio

naliz

e pa

rtner

ship

s wi

th d

eliv

ery

entit

ies

to e

nsur

e se

amle

ss

trans

fer o

f con

tent

.

Cham

ber o

f co

mm

erce

T & C

expo

rting

fir

ms

TISI

sM

INT,

MED

T

»Pa

rtner

ship

with

in

form

atio

n di

ssem

inat

ion

coun

terp

arts

est

ablis

hed

CCI,

com

mer

cial

at

tach

és o

f TR

abro

ad

Sect

or

asso

ciat

ion,

M

INT,

MED

T,

ITC

4.1.

4. S

yste

mat

ize th

e di

ssem

inat

ion

of in

form

atio

n on

pr

efer

entia

l tra

de a

gree

men

ts th

at fa

cilit

ate

fore

ign

mar

ket

entry

, and

dev

elop

a s

et o

f rec

omm

enda

tions

to b

e us

ed b

y ex

porte

rs

T & C

expo

rting

fir

ms

»Se

ctor

ass

ocia

tion

to

prov

ide

info

rmat

ion

to

its m

embe

rs a

bout

trad

e ag

reem

ents

»Ex

port

guid

e de

velo

ped

listin

g al

l req

uire

men

ts to

sp

ecifi

c m

arke

ts

CCI,

com

mer

cial

at

tach

és o

f TR

abro

ad

Sect

or

asso

ciat

ion,

M

INT,

MED

T,

ITC

4.1.

5. D

evel

op m

arke

t pro

files

for t

arge

t mar

kets

and

up

date

them

onc

e a

year

, inc

ludi

ng b

usin

ess

cont

acts

, po

ssib

le g

ains

, ris

ks, c

onsu

mpt

ion

trend

s, ta

riff a

nd n

on-

tarif

f bar

riers

but

als

o qu

ality

, pric

e fix

ing,

shi

ppin

g an

d co

ntra

ctin

g re

quire

men

ts.

Build

cap

acity

of t

he C

ham

ber o

f Com

mer

ce to

dev

elop

su

ch p

rofil

es.

Cham

ber o

f co

mm

erce

T & C

expo

rting

fir

ms

»De

velo

pmen

t of t

wo m

arke

t pr

ofile

s an

d tra

inin

g of

Ch

ambe

r of c

omm

erce

st

aff t

o ca

paci

tate

them

to

pre

pare

two

mor

e su

ch

prof

iles

»Th

ree

train

ings

on

com

petit

ive

inte

llige

nce

and

mar

ket p

rofil

es

orga

nize

d an

d co

nduc

ted

CCI,

Tajik

co

nsul

ting

firm

sSe

ctor

as

soci

atio

n,

MIN

T, M

EDT,

IT

C

4.1.

6. In

trodu

ce c

ours

es o

n m

oder

n m

arke

t ana

lysi

s to

ols

and

tech

niqu

es, a

s we

ll as

on

how

to u

se th

em to

est

ablis

h bu

sine

ss p

lans

, in

the

curri

cula

of e

duca

tiona

l ins

titut

ions

an

d to

con

duct

sem

inar

s at

facu

lties

/uni

vers

ities

.

T & C

expo

rting

fir

ms

»M

inim

um o

f 20

com

pani

es

train

ed p

er y

ear

Sect

or

asso

ciat

ion,

Taj

ik

cons

ultin

g fir

ms,

un

iver

sitie

s

MIN

T, M

EDT,

IT

C

4.1.

7. P

repa

re b

usin

ess

cons

ulta

nts

who

will

supp

ort S

MEs

in

mar

ket o

ppor

tuni

ty s

tudi

es th

roug

h tra

inin

g-th

e-tra

iner

s co

urse

s.

T & C

expo

rting

fir

ms

Cons

ultin

g fir

ms

»At

leas

t 20

cons

ulta

nts

train

ed p

er y

ear

Sect

or

asso

ciat

ion,

Taj

ik

cons

ultin

g fir

ms,

un

iver

sitie

s

MIN

T, M

EDT,

IT

C

77IMPLEMENTATION PLAN

Stra

tegi

c Ob

ject

ive

4 : Im

prov

e ac

cess

to m

arke

ts fo

r T &

C en

terp

rises

Oper

atio

nal

obje

ctiv

eAc

tiviti

esPr

iorit

y1=

high

,3=

low

Star

ting

perio

dBe

nefic

iarie

sTa

rget

mea

sure

sLe

adin

gim

plem

entin

g pa

rtner

s

Supp

ortin

g im

plem

entin

g pa

rtner

s

Exis

ting

prog

ram

mes

an

d in

tern

atio

nal

finan

cial

and

te

chni

cal p

artn

ers

Estim

ated

co

sts

1617

1819

20

4.1.

Ens

ure

easi

ly

acce

ssib

le

and

timel

y m

arke

t in

telli

genc

e fo

r firm

s in

ke

y ar

eas

4.1.

1. C

reat

e a

stra

tegi

c m

onito

ring

cell,

hos

ted

at th

e Ch

ambe

r of c

omm

erce

and

Indu

stry

( CCI

), th

en c

o-sh

ared

with

the

sect

or a

ssoc

iatio

n as

soo

n as

it is

cre

ated

, to

gat

her u

p-to

-dat

e an

d sp

ecifi

c T &

C-s

peci

fic tr

ade

info

rmat

ion

and

to d

etec

t ear

ly s

igna

ls o

n ta

rget

ed m

arke

ts

and

prod

ucts

. The

web

site

of t

he C

ham

ber c

an b

e us

ed

to h

ost t

he m

onito

ring

cell

( link

with

act

ivity

3.1

.6. )

and

conn

ecte

d to

the

MIN

T we

bsite

.

Cham

ber o

f co

mm

erce

T & C

expo

rting

fir

ms

TISI

sM

INT,

MED

T

»On

e m

onito

ring

cell

set u

p »Re

com

men

datio

n re

port

on im

plem

enta

tion

of th

e co

mpe

titiv

e in

telli

genc

e sy

stem

CCI,

com

mer

cial

at

tach

és o

f TR

abro

ad

Sect

or

asso

ciat

ion,

M

INT,

MED

T,

ITC

4.1.

2. P

ut in

pla

ce a

coo

pera

tion

fram

ewor

k to

pro

mot

e th

e ex

chan

ge a

nd d

isse

min

atio

n of

T &

C tra

de in

form

atio

n am

ong

gove

rnm

ent a

genc

ies

( spe

cific

ally

MIN

T an

d M

EDT )

, TIS

Is, m

edia

, aca

dem

ia, r

esea

rch

orga

niza

tions

and

th

e pr

ivat

e se

ctor

.

Cham

ber o

f co

mm

erce

T & C

expo

rting

fir

ms

TISI

sM

INT,

MED

T

»On

e ne

twor

k es

tabl

ishe

dCC

I, co

mm

erci

al

atta

chés

of T

R ab

road

Sect

or

asso

ciat

ion,

M

INT,

MED

T,

ITC

4.1.

3. Im

plem

ent m

easu

res

to a

ctiv

ely

enga

ge th

e di

ssem

inat

ion

of tr

ade

info

rmat

ion

via

vario

us c

hann

els

of c

omm

unic

atio

n ( te

leco

mm

unic

atio

ns, I

nter

net s

ervi

ce

prov

ider

s, p

rint a

nd te

levi

sion

med

ia ).

Inst

itutio

naliz

e pa

rtner

ship

s wi

th d

eliv

ery

entit

ies

to e

nsur

e se

amle

ss

trans

fer o

f con

tent

.

Cham

ber o

f co

mm

erce

T & C

expo

rting

fir

ms

TISI

sM

INT,

MED

T

»Pa

rtner

ship

with

in

form

atio

n di

ssem

inat

ion

coun

terp

arts

est

ablis

hed

CCI,

com

mer

cial

at

tach

és o

f TR

abro

ad

Sect

or

asso

ciat

ion,

M

INT,

MED

T,

ITC

4.1.

4. S

yste

mat

ize th

e di

ssem

inat

ion

of in

form

atio

n on

pr

efer

entia

l tra

de a

gree

men

ts th

at fa

cilit

ate

fore

ign

mar

ket

entry

, and

dev

elop

a s

et o

f rec

omm

enda

tions

to b

e us

ed b

y ex

porte

rs

T & C

expo

rting

fir

ms

»Se

ctor

ass

ocia

tion

to

prov

ide

info

rmat

ion

to

its m

embe

rs a

bout

trad

e ag

reem

ents

»Ex

port

guid

e de

velo

ped

listin

g al

l req

uire

men

ts to

sp

ecifi

c m

arke

ts

CCI,

com

mer

cial

at

tach

és o

f TR

abro

ad

Sect

or

asso

ciat

ion,

M

INT,

MED

T,

ITC

4.1.

5. D

evel

op m

arke

t pro

files

for t

arge

t mar

kets

and

up

date

them

onc

e a

year

, inc

ludi

ng b

usin

ess

cont

acts

, po

ssib

le g

ains

, ris

ks, c

onsu

mpt

ion

trend

s, ta

riff a

nd n

on-

tarif

f bar

riers

but

als

o qu

ality

, pric

e fix

ing,

shi

ppin

g an

d co

ntra

ctin

g re

quire

men

ts.

Build

cap

acity

of t

he C

ham

ber o

f Com

mer

ce to

dev

elop

su

ch p

rofil

es.

Cham

ber o

f co

mm

erce

T & C

expo

rting

fir

ms

»De

velo

pmen

t of t

wo m

arke

t pr

ofile

s an

d tra

inin

g of

Ch

ambe

r of c

omm

erce

st

aff t

o ca

paci

tate

them

to

pre

pare

two

mor

e su

ch

prof

iles

»Th

ree

train

ings

on

com

petit

ive

inte

llige

nce

and

mar

ket p

rofil

es

orga

nize

d an

d co

nduc

ted

CCI,

Tajik

co

nsul

ting

firm

sSe

ctor

as

soci

atio

n,

MIN

T, M

EDT,

IT

C

4.1.

6. In

trodu

ce c

ours

es o

n m

oder

n m

arke

t ana

lysi

s to

ols

and

tech

niqu

es, a

s we

ll as

on

how

to u

se th

em to

est

ablis

h bu

sine

ss p

lans

, in

the

curri

cula

of e

duca

tiona

l ins

titut

ions

an

d to

con

duct

sem

inar

s at

facu

lties

/uni

vers

ities

.

T & C

expo

rting

fir

ms

»M

inim

um o

f 20

com

pani

es

train

ed p

er y

ear

Sect

or

asso

ciat

ion,

Taj

ik

cons

ultin

g fir

ms,

un

iver

sitie

s

MIN

T, M

EDT,

IT

C

4.1.

7. P

repa

re b

usin

ess

cons

ulta

nts

who

will

supp

ort S

MEs

in

mar

ket o

ppor

tuni

ty s

tudi

es th

roug

h tra

inin

g-th

e-tra

iner

s co

urse

s.

T & C

expo

rting

fir

ms

Cons

ultin

g fir

ms

»At

leas

t 20

cons

ulta

nts

train

ed p

er y

ear

Sect

or

asso

ciat

ion,

Taj

ik

cons

ultin

g fir

ms,

un

iver

sitie

s

MIN

T, M

EDT,

IT

C

Stra

tegi

c Ob

ject

ive

4 : Im

prov

e ac

cess

to m

arke

ts fo

r T &

C en

terp

rises

Oper

atio

nal

obje

ctiv

eAc

tiviti

esPr

iorit

y1=

high

,3=

low

Star

ting

perio

dBe

nefic

iarie

sTa

rget

mea

sure

sLe

adin

gim

plem

entin

g pa

rtner

s

Supp

ortin

g im

plem

entin

g pa

rtner

s

Exis

ting

prog

ram

mes

an

d in

tern

atio

nal

finan

cial

and

te

chni

cal p

artn

ers

Estim

ated

co

sts

1617

1819

20

4.1.

Ens

ure

easi

ly

acce

ssib

le

and

timel

y m

arke

t in

telli

genc

e fo

r firm

s in

ke

y ar

eas

4.1.

8. E

ncou

rage

exi

stin

g in

tern

atio

nal t

radi

ng c

ompa

nies

in

Taj

ikis

tan

to c

reat

e T &

C tra

ding

ser

vice

s fo

r exp

orts

and

/or

enc

oura

ge s

ourc

ing

com

pani

es fr

om m

ajor

mar

kets

lik

e Ru

ssia

to o

pen

offic

es in

Taj

ikis

tan

to p

rom

ote

mar

ket

linka

ges

T & C

expo

rting

fir

ms

Trad

ers

»M

eetin

gs b

etwe

en T

& C

firm

s ( t

hrou

gh a

ssoc

iatio

n )

and

trade

rs o

rgan

ized

»Tr

ader

s in

volv

ed in

T &

C tra

de fa

irs w

here

Taj

ik fi

rms

are

repr

esen

ted.

Sect

or

asso

ciat

ion,

CCI

MIN

T, M

EDT,

in

tern

atio

nal

tradi

ng

com

pani

es

4.2.

Fa

cilit

ate

conn

ectio

ns

betw

een

Tajik

T &

C

firm

s an

d po

tent

ial

buye

rs

from

targ

et

mar

kets

4.2.

1. In

volv

e/in

vite

pot

entia

l buy

ers

to v

isit

gree

nfie

ld

plan

ts a

nd d

iscu

ss lo

ng te

rm b

usin

ess

rela

tions

T & C

ente

rpris

es »At

leas

t 5 b

uyer

s in

vite

d pe

r yea

rSe

ctor

as

soci

atio

n,

MIN

T, M

EDT,

CC

I

Inte

rnat

iona

l co

nsul

ting

firm

s,

espe

cial

ly

from

lead

ing

T & C

coun

tries

in

the

regi

on

such

as

Chin

a or

Indi

a ( IF

LS,

or W

azir )

4.2.

2. E

stab

lish

a tra

de fa

ir in

Taj

ikis

tan

with

the

lead

ersh

ip

of th

e M

INT,

the

cham

ber o

f Com

mer

ce a

nd d

evel

opm

ent

agen

cies

. The

fair

mus

t be

targ

eted

to k

ey p

oten

tial b

uyer

s an

d bu

sine

ss o

rient

ed.

T & C

ente

rpris

es »Ta

jik tr

ade

fair

esta

blis

hed

Sect

or

asso

ciat

ion,

M

INT,

MED

T,

CCI

ITC

4.2.

3. In

vite

wor

ldwi

de te

xtile

and

app

arel

man

ufac

ture

rs to

se

t up

best

pra

ctic

e m

anuf

actu

ring

faci

litie

s in

the

coun

try

( join

t ven

ture

s or

100

% o

wned

)

Entir

e va

lue

chai

n »At

leas

t 8-1

0 in

vest

ors

invi

ted

in T

ajik

ista

nSe

ctor

as

soci

atio

n,

MIN

T, M

EDT,

CC

I, St

ate

Com

mitt

ee O

n In

vest

men

t and

St

ate

Prop

erty

M

anag

emen

t of

the

Repu

blic

of

Tajik

ista

n

Inte

rnat

iona

l co

nsul

ting

firm

s,

espe

cial

ly

from

lead

ing

T & C

coun

tries

in

the

regi

on

such

as

Chin

a or

Indi

a ( IF

LS,

or W

azir )

4.3.

Fa

cilit

ate

com

mon

br

andi

ng

and

prom

otio

n of

Taj

ik T

& C

pr

oduc

ts

4.3.

1. D

evel

op a

ppro

pria

te b

rand

/sig

n pr

omot

ion

polic

y an

d co

ordi

nate

impl

emen

tatio

n of

act

iviti

es u

nder

“M

ade

in

Tajik

ista

n” ta

g.

3x

Entir

e va

lue

chai

n »On

e na

tiona

l bra

ndin

g st

rate

gy d

evel

oped

Sect

or

asso

ciat

ion,

M

INT,

MED

T,

CCI,

Stat

e Co

mm

ittee

On

Inve

stm

ent a

nd

Stat

e Pr

oper

ty

Man

agem

ent o

f th

e Re

publ

ic o

f Ta

jikis

tan

Inte

rnat

iona

l co

nsul

ting

firm

s,

espe

cial

ly

from

lead

ing

T & C

coun

tries

in

the

regi

on

such

as

Chin

a or

Indi

a ( IF

LS,

or W

azir )

, ITC

4.3.

2. In

itiat

e a

com

petit

ion

thro

ugh

the

MIN

T, c

ham

ber o

f co

mm

erce

web

site

s ) fo

r the

cre

atio

n of

the

logo

and

vis

ual

for t

he n

atio

nal T

& C

bran

d. F

inal

sel

ectio

n is

to b

e do

ne b

y Ta

jik c

ompa

nies

( thr

ough

ass

ocia

tion )

3x

Entir

e va

lue

chai

n »Te

nder

for l

ogo

crea

tion

initi

ated

by

MIN

TM

INT,

CCI

Sect

or

asso

ciat

ion,

M

EDT,

ITC


rate

gic

Obje

ctiv

e 4 :

Impr

ove

acce

ss to

mar

kets

for T

& C

ente

rpris

es

Oper

atio

nal

obje

ctiv

eAc

tiviti

esPr

iorit

y1=

high

,3=

low

Star

ting

perio

dBe

nefic

iarie

sTa

rget

mea

sure

sLe

adin

gim

plem

entin

g pa

rtner

s

Supp

ortin

g im

plem

entin

g pa

rtner

s

Exis

ting

prog

ram

mes

an

d in

tern

atio

nal

finan

cial

and

te

chni

cal p

artn

ers

Estim

ated

co

sts

1617

1819

20

4.3.

Fa

cilit

ate

com

mon

br

andi

ng

and

prom

otio

n of

Taj

ik T

& C

pr

oduc

ts

4.3.

3. P

rom

ote

the

bran

d th

roug

h th

e se

ctor

ass

ocia

tion,

th

e ch

ambe

r of c

omm

erce

and

the

MIN

T.3

xx

Entir

e va

lue

chai

n »Br

and

prom

otio

n ca

mpa

ign

initi

ated

Sect

or

asso

ciat

ion

MIN

T,

cham

ber o

f co

mm

erce

4.4

Unde

rtak

e st

udy

of th

e Ta

jik te

xtile

s an

d cl

othi

ng

mar

ket i

n or

der t

o id

entif

y do

mes

tic

oppo

rtuni

ties

4.4.

1 Co

nduc

t a s

tudy

to u

nder

stan

d :( i

) the

tota

l size

of t

he T

ajik

T &

C m

arke

t, ( i

) the

sha

re th

at

Tajik

com

pani

es c

ontro

l for

eac

h pr

oduc

t cat

egor

y, ( ii

i ) th

e pr

oduc

t cat

egor

ies

that

are

dom

inat

ed b

y im

ports

, ( iv

) the

pr

oduc

t cat

egor

ies

that

offe

r pot

entia

l for

T &

C co

mpa

nies

to

reca

ptur

e th

e m

arke

t fro

m im

porte

rs. T

he s

tudy

sho

uld

also

con

duct

a c

ompe

titio

n/pr

ice

anal

ysis

and

reco

mm

end

conc

rete

ste

ps th

at c

an b

e ta

ken

to a

llow

Tajik

firm

s to

re

capt

ure

mar

ket s

hare

.

T & C

ente

rpris

esSM

EsHa

ndlo

om

prod

ucer

s

»Co

mpr

ehen

sive

stu

dy o

f Ta

jik a

nd re

gion

al T

& C

mar

ket a

s pe

r sta

ted

cove

rage

Sect

or

asso

ciat

ion

Tajik

un

iver

sitie

s,

Inte

rnat

iona

l co

nsul

ting

firm

s,

espe

cial

ly

from

lead

ing

T & C

coun

tries

in

the

regi

on

such

as

Chin

a or

Indi

a ( IF

LS, o

r W

azir )

, Taj

ik

cons

ultin

g fir

ms

79IMPLEMENTATION MANAGEMENT FRAMEWORK

IMPLEMENTATION MANAGEMENT FRAMEWORK

The comprehensive T & C Strategy of Tajikistan endeav-ours to generate the conditions for a favourable expansion of the industry so as to contribute to overall socio-eco-nomic development.

Nevertheless, a strategy in and of itself is not enough to ensure the industry’s sustainable development. Such de-velopment will require the elaboration and coordination of various activities. While the execution of these activities will allow for the strategy’s targets to be achieved, suc-cess will depend upon the ability of stakeholders to plan and coordinate actions in a tactical manner. Apparently unrelated activities must be synchronized across the pub-lic sector, private sector, and NGO communities in order to create sustainable results.

Indeed, the T & C Strategy is not the strategy of any spe-cific institution ; rather it is the strategy of Tajikistan, and to ensure its success, it is necessary to foster an adequate environment and create an appropriate framework for its implementation. The following section presents some of the key success conditions considered necessary for the strategy to be effectively implemented and achieve self-sustainability and long lasting benefits for Tajikistan.

ESTABLISH AND OPERA-TIONALIZE A PUBLIC AND PRIVATE COORDINATING BODY AND ITS SUBSIDIARY ORGANA key success criterion for the T & C strategy is Tajikistan’s ability to coordinate activities, monitor progress and mo-bilize resources for the implementation of the Strategy. It is recommended that the country establishes an inde-pendent committee for public-private deliberations that acts in an advisory capacity to the government and the private sector over issues related to or affecting the T & C sector and its Strategy.

The formal dialogue platform will require a high level in-volvement of the TSN members ( public and private ), as their role is crucial and will impact the effectiveness with which the Strategy is implemented. Likewise, the ability

of the private sector to provide inputs to the strategy im-plementation process will significantly influence the suc-cess of the strategy.

The working group set up for the design process is com-posed of a panel of representatives of key institutions, involving Ministries and the TSN members. It also com-prises private sector representatives of all segments of the industry. As such, once its mandate is appropriately adjusted, the current working group is best positioned to serve as the independent committee responsible for the coordination of the Strategy implementation. It will also be required that an executive secretariat acts as its subsidi-ary organ to coordinate, monitor and mobilize resources for implementing the Strategy in line with other export development plans.

The main functions of the Strategy Coordinating Committee should be the following :

i. Coordinate and monitor the implementation of the Strategy by the government, private sector, institu-tions or international organizations so as to ensure Strategy implementation is on track ;

ii. Identify and recommend allocation of resources nec-essary for the implementation of the Strategy ;

iii. Assess the effectiveness and the impact of the T & C Strategy ;

iv. Ensure consistency with the government’s existing policies, plans, and strategies and align institutions’ and agencies’ internal plans and interventions with the Strategy plans of actions ;

v. Elaborate and recommend revisions and enhance-ments to the Strategy so that it continues to best re-spond to the needs and long-term interests of the national business and export community ;

vi. Propose key policy changes to be undertaken, based on Strategy priorities, and promote these policy changes among national decision makers ;

vii. Guide the Strategy Secretariat in its monitoring, co-ordination, resource mobilisation, and policy advo-cacy & communication functions so as to enable an effective implementation of the Strategy ;

viii. Provide the Strategy Secretariat with the mandate and the necessary resources to fulfil its functions in an ef-fective manner.


As discussed above, the Strategy Coordinating Committee should be supported by an executive sec-retariat to complete the daily operational work related to implementation management of the Strategy. The core responsibilities of the executive secretariat should be to :

A. Support functioning of the Strategy Coordination Committee.

B. Monitor progress and impact of Strategy implemen-tation.

C. Coordinate Aid for Trade partners along Strategy implementation.

D. Mobilize resources to implement the Strategy.E. Follow-up on policy advocacy recommendations from

the Committee.F. Enhance communication.

Specific tasks falling under these broad areas of activi-ties include :

� Formulate projects proposals including budgets for implementation of activities of the T & C Strategy ;

� Prepare communication plans and material to promote the Strategy ;

� Develop annual and bi-annual work plans for approval by the Committee ;

� Collect information from project implementation and prepare regular monitoring reports to be submitted to the Committee ;

� Planning the Strategy Committee monitoring and evaluation meetings ;

� Execute the secretariat work of the Committee ; � Ensure implementation of the Committee resolutions ; � Collect, centralize and preserve all archives and docu-

mentation of the Committee and the Strategy ; � Advocate in favour of the Strategy to public and private

partners ; � Execute any other tasks given required by the Committee.

Build capacities required for managing the implementation

Even with institutional structures in place, Tajikistan and its Strategy implementation framework will not be able to effectively fulfil their assigned functions without suitable capacity development interventions.

The ability and skills of the Secretariat need to be suf-ficient to ensure effective management of Strategy im-plementation. Hence, the Secretariat and its partners should have knowledge of the ideas, challenges, and best practices when monitoring implementation progress, as-sessing overall impact, mobilizing additional resources, programming, and communicating results. Without such skills they will not be in a strong position to assume their respective oversight and management responsibilities along Strategy implementation.

Private sector support and participation

The private sector should benefit from the Strategy im-plementation through improved productive capacities, reduced costs of doing business, facilitated administrative procedures, enhanced access to finance, etc. However, the private sector clearly expressed during the strategy design process its willingness to contribute, directly or in partnership with public institutions, to the implementation of the Strategy. Their implementation efforts can range from providing business intelligence to institutions, con-tributing to development projects, establishing processing and transformation units, advocacy, etc. In brief, the pri-vate sector’s practical knowledge of business operations is essential to ensuring that the activities of the Strategy are effectively implemented and targeted.

Sensitization of implementing institutions to build ownership

The key implementing institutions detailed in the PoA need to be informed of the content of the strategy and the implications for their 2016-2025 programming. This sensitization is essential to building further ownership, and it provides institutions with the opportunity to review the PoA in order to confirm the activities they can imple-ment immediately, in the medium and long term. Such a programming approach will permit better resource alloca-tion within the responsible agencies. This allocation can be formalized by integrating the activity of the Strategy in the programme planning of the institution. While the fi-nancial dimension is often required, the human resource element is no less important.

Financial resource mobilisation for implementation

While resource mobilization is only part of the solution, it plays a crucial and indispensable role in supporting the strategy implementation. An integrated resource mobili-zation plan should be elaborated as soon as the strategy is adopted. Resources mobilisation involves planning the sequencing of communications with donors, project de-sign, project proposals / application and resources col-lection and management. This should facilitate, leverage and strengthen the impact of diverse sources of finance to support sustainable and inclusive implementation, in-cluding national resources, development aid and private investment.

� National resources through direct budget and support program : The Government will need to validate a de-fined minimum budget support toward the implemen-tation of the Strategy. Such support for the Strategy’s activities will demonstrate the Government’s commit-ment to the initiatives.

81IMPLEMENTATION MANAGEMENT FRAMEWORK

� Alignment of donors’ support and interventions with the Strategy : Besides the Swiss development co-operation ( SECO ), little attention and support have been directed towards Tajikistan’s T & C industry from the international donor community. The coordinating committee, together with the authorities, will have to capitalize on the significant momentum gained as part of the Strategy design process and leverage it for a smooth and efficient implementation. International development agencies can indeed use the Strategy as the logical framework for their programs as they will surely benefit from its favourable conditions for opera-tion ( i.e. political endorsement, private sector buy-in, and improved collaboration with national institutions ). The PoA of the Strategy should serve the coordinat-ing committee as well as the national institutions to improve communication and facilitate the negotiation, planning, coordination and evaluation of commitments made in the context of development aid, in particular through the development of programmes and project proposals aligned with the priorities of the strategy.

� National and foreign investment : The current strategy design working group is composed of representa-tives of national institutions, the TSN and the private sector. If the working group becomes the coordinat-ing body of the Strategy, the strategy should benefit from a solid channel of communication, capable of conveying reliable information to the companies about the export-related opportunities in the industry, and in turn of communicating to the Government the needs that investors have identified to operate successfully. Investment flow in Tajikistan could serve as a valu-able driver of export development. Even so, it must be targeted at specific prospects in order to benefit to the industry’s development as detailed in the future perspective section of the present Strategy.



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