AKIPRESS.COM - The Asian Development Bank (ADB) has approved a $50 million policy-based grant to support the government of Tajikistan in accelerating private sector growth by creating a stable financial system, increasing access to financial services, and improving fiscal management. The grant is for the first phase of the Financial Sector and Fiscal Management Improvement Program.
“Tajikistan has the potential to achieve economic growth that is more sustainable, broad-based, and inclusive,” said ADB Public Management Specialist for Central and West Asia Yuji Miyaki. “This program, prepared in close coordination with key development partners, supports government-led reforms to increase private sector confidence in and strengthen the financial sector, combined with improvements in fiscal management, which will help increase private investment. It reflects the strong commitment of the government and ADB to implement critical structural reforms that will boost private sector-led sustainable growth.”
Major reforms include improving public confidence towards the banking sector via setting up backup funding mechanism for the Individuals Deposit Insurance Fund to cover potential shortfalls in reserves, enhancing the ability of the National Bank of Tajikistan to monitor and manage financial stability, expanding the competitiveness of the insurance industry and growing Islamic finance.
The program also supports the Ministry of Finance in strengthening oversight and accountability of state-owned enterprises, facilitating capital market development, and ensuring transparency of the mechanism for the provision of tax and customs incentives.
The program will also improve transparency and accountability of the public financial management system to help ensure that public resources are allocated appropriately to strategic priorities, and are gender inclusive.