Tajikistan EITI assessment identifies issues that deter foreign direct investments

EITI Validation concludes some progress but much work remains to be done.

Wednesday 8 March 2017 – Tajikistan’s efforts to improve its natural resource governance through the EITI Standard were discussed today by the international EITI Board. The Board agreed that Tajikistan has made progress overall in implementing the 2016 EITI Standard but that significant areas of improvement remain. The international EITI Board concluded overall inadequate progress following the recently published EITI Validation Report. Having been an EITI candidate country since 2013, this is Tajikistan’s first Validation under the EITI Standard.

The Report notes that one of the main objectives in implementing the EITI has been the desire of the government to attract more foreign direct investment. Although there has not been clear evidence of achieving this, the EITI has uncovered issues that deter these investments such as cumbersome, lengthy and discretionary licensing procedures, an unclear fiscal regime, hidden company ownership, and the lack of up to date geological data. The signature bonus system was, in particular, regarded as unattractive.

Civil society has played an important role in taking the findings from the EITI Reports to the regions, producing materials that are more easily accessible and comprehensible to the wider public, and ensuring collaboration with the media. The report notes that there is significant potential for EITI’s impact in Tajikistan, especially to deliver information on environmental practices, improving company standards and transparency with regards to social expenditures, and application of the EITI methodology to the hydropower sector, which has the potential to yield substantial revenues for the government in the future.

In its recommendations to the government, the EITI Board highlighted a number of corrective actions that Tajikistan needs to follow-up on. These corrective actions are available here. The full Board decision is available here.

In going through the Validation process, the Chair of the EITI Council in Tajikistan, Mehrinamo Jonmammadova said that, “the EITI Validation helps us to highlight areas for improvement. It stimulates the continuation of reform within the extractives sector and attracts quality investments for sustainable economic growth.”

Fredrik Reinfeldt, Chair of the EITI, said:

“This is Tajikistan’s first attempt at being Validated under the EITI Standard.  It has demonstrated that the country is making important steps towards publically accessible data. I hope that the government will continue its efforts to bring about the reform and attract the foreign direct investments that is aiming for. The EITI stands ready to work with Tajikistan in continuing its quest for improved management of the sector.”

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