President of the Republic of Tajikistan

Statement at the International investment Forum on “Contribution of Entrepreneurship and Investment in to Sustainable Development”

14.10.2015 10:56, Dushanbe city

Distinguished Participants of the Forum!
Distinguished Ladies and Gentlemen!

On behalf of the people of Tajikistan let me welcome all of you – distinguished entrepreneurs and investors, the representatives of the prestigious international financial institutions and organizations, scientists, experts and distinguished guests of the International Entrepreneurship Forum Dushanbe – 2015 and wish you success in the work of the forum.

It has been several days that in the framework of preparation of today’s Forum, You - dear guests and Entrepreneurs getting acquainted with the achievements of independent Tajikistan.

The title of today’s Forum is “Contribution of Entrepreneurship and Investment in to Sustainable Development” and I am confident that together we will succeed.

It is obvious that hosting of the investors and entrepreneurs forums provide wide opportunity for dialogue, review and seeking solutions to important to regional and global economic problems.

At the same time, such activities will contribute to the development of economic and trade cooperation between countries, in particular between entrepreneurs and investors.

As you are aware,  previous years, and especially  this year  we still see the negative impact of the difficult geopolitical situation, slowing down the growth of the economic development  and decreasing value of the national currency of our main trade partners as well as changes in prices of main export and import commodities in the world markets to the economic and social sectors of our countries.

In such circumstances the development and strengthening of external economic relations with all friendly and partner countries using mutual beneficial opportunities is the most important task of our economic policy.

Despite the negative impact of external factors, we, for the past years with the purpose to achieve higher goals, that is to say increase the level of well-being of Tajik people and their living standards have reached the  significant achievements.

Especially during the last eight years, the tendency of the positive economic growth, the solving  of the social problems, the development of various economic sectors and  the development of all regions of the country was provided.

During this period, the average midyear growth rate of gross domestic product has reached 7%, the poverty rate has gone down from 53% in 2007 to 32% in 2014 and the quality and standard of life of the population has been improved gradually.

As well as hundreds of educational institutions, hospitals, roads, bridges, tunnels, power stations, cultural and sports enterprises have been built for the good use of people.

During 2000-2014 the volume of investments to the main capital increased from 109 million somoni to 7.4 billion somoni, or equal to 68 times and the number of industrial enterprises  to 1116 units.

Tajikistan as an active member of the world community cooperates with the international organizations and the countries of the world for solving regional and global issues, and along with this, implements all necessary measures for gradually expanding their political, economic, trade and cultural relations.

Tajikistan as an independent country is in a stage of persistent development and in the political arena and the world economy strengthening its positions day by day.

Tajikistan’s initiatives in the international arena regarding the water resource management and water-use efficiency, as well as drinking water is fully supported by the United Nations and this year the initiative of the Decade of "Water for Life" is finalized.

I believe that Tajikistan’s next proposal regarding the new Decade entitled "Water for Sustainable Development" will be also supported by the UN.

Esteemed Audience!

It should be noted that rapidly changing political and economic situation in the world oblige us to fulfil certain important responsibilities, solving of which will be necessary for ensuring sustainable economic development and rising the level of well-being of the population of our countries.

On this basis and in the framework of the Forum, we would like once again to attract attention of the participants to the issues of development of private sector and small medium enterprises, even more improving of the investment climate and attracting investments as the important factor for mitigation of the negative influences of the financial crisis and threats on the global and the regional scales.

In this sphere, Tajikistan for its part, has achieved some results, but regardless of that, we believe it is important to learn the experience of developed countries as well as making efforts to integrate into the world economy.

In today’s Forum different aspects of entrepreneurial and investment development will be discussed which in turn will contribute to the sustainable development in the future. Also, today in this Forum the process of implementation and results of the first international Forum of entrepreneurs in Dushanbe which was held on 14-15 October 2014, under the title “Entrepreneur-economic engine” will be discussed.

In this regard, the participation of guests of the Forum, presentations, reports and exchange of ideas and the cooperation of the guests of the Forum with Tajik partners will be of benefit for the Forum and I believe that you will be satisfied with its outcomes.

Dear friends and partners!

The entrepreneurial and investment activities which are directed towards improving the quality of life of the population by providing sustainable economic development, employment of the population and domestic production is very much appreciated.

Along with that, entrepreneurship quickly adapts to the developments of scientific and technological innovations, change of demands and the state of the regional and global market and on this basis provide establishment of production of competitive goods.

Taking into account all above-mentioned factors, the Government of Tajikistan considers development of the entrepreneur and investment as one of the main areas of the economic policy.

For the past years, in the field of entrepreneurial promotion and attraction of investment a range of reforms were undertaken which improved investment climate and lowered administrative barriers to business operations.

In order to match with the international norms investment climate, development of the private sector including world economic integration which are considered as the important objectives of the Government of Tajikistan number of serious measures were undertaken. Free competitive conditions were created in terms of the protection of rights of domestic and foreign individuals and companies there are no serious differences.

Alongside of the implemented reforms, the Republic of Tajikistan ratified the Convention of the United Nations on “Recognition and Enforcement of Foreign Arbitral Awards” and the Apostille Convention or Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents. This could completely ease the conduct of business activities for investors and entrepreneurs thereby strengthening the basis for the protection of the rights of entrepreneurs.

As you know, Tajikistan for the purpose of facilitating easy travel for investors introduced special Visa type “Investor”. 

Moreover, due to the on-going revision of the reform, the Government is planning to make the visa rules even more simplified for the entrepreneurs and investors.

Moreover, the rules for granting permit cards to those who seek job opportunities as foreign qualified professionals who are engaged in  giving trainings for local personnel will be reviewed.

Dear investors and entrepreneurs!!!

For the improvement of the protection of legal guarantees of investors and the development of investment activity the Law "On investments" was drafted.

In the period from 2009 to 2014, the Government of the Republic of Tajikistan introduced the reform in the system of issuing working permits which as the result brought the number of working permits from 805 down to 86. Furthermore up to 30 percent of working permits has been issued through electronic system.

In this context, in accordance with the President’s order this year the reform on current system of issuing working permits is intended. The main purpose of which is to further reduce the range of activities undertaken on the basis of working permits and the mitigations of administrative barriers for entrepreneurs.

On this basis, to further support businesses that manufacture products under the brand "Made in Tajikistan", it is necessary to implement tariff and customs policy which could promote the development of domestic production.

A Business Support Fund was established for the purpose of development of small and medium business and the access of the entrepreneurs to the preferential credit resources which has received 133 million somoni from the state budget until now and the capital of which is planned to reach up to 1 billion somoni by 2020.

The aforementioned Business Fund from the beginning of its activity until today has allocated more than 95 million somoni as long-term preferential loans with low interest rate to 117 business entities in 47 cities and districts of the country.

According to the business plan, there has been intended to create more than 2000 jobs by those entities which received preferential loans from the said fund.

Moreover, for the purpose of supporting and developing business sector there has been allocated almost 9 billion somoni from the credit resources of the banking system in 2014 and 7 billon somoni in 8 month of the 2015.

The current legislation of the Republic of Tajikistan provides more than 40 types of guarantees and privileges for the investors and the new Tax Code provides more than 240 privileges and concessions to develop the small and medium business sector.

Only for the last year the total amount of the provided privileges amounted 3,6 billion somoni and this year it reaches 4 billion somoni. These funds will remain in businessmen possession and contributes to development of their activities.

In the period of 2011 and 8 month of this year through the country’s customs territory were imported industrial and technological equipment and agricultural machinery in amount of 312 million US dollars by the foreign economic institutions and they have been exempted from the customs fee in amount of 360 million somoni.

Alongside with that to strengthen the development of small and medium business and to increase the import of modern technology, it is necessary for the Government to consider the issue of widening the list of privileged import of machinery and equipment.

A taken measures in the field of regulation of entrepreneur and investment environment allowed that the country’s indicators improve according to international estimates and in 2015 Tajikistan in the third time was included among those 10 countries which are carrying out reforms.

Moreover, for the past 10 years from all sources of financing there were attracted more than 5 US billion foreign investment which mainly directed to the  fields of energy, transport and road construction, industry, agriculture, rural development, communication, finance and banking.

As a result of implementing policy for the business support the contribution of the private sector has increased year by year and made up 67 percent in the last year.

In recent years there has been established a number of small and big enterprises by domestic and foreign businessmen which have very productive outcomes. In the time being the private sector provides 65 percent of economically active population with the jobs.

In the meanwhile, businessmen continually support the programs and initiatives of the Government and with their constructive activities built hundreds of industrial, educational, health, transport, energy, sport and cultural facilities. At the same time they show a high sense of generosity to people in need, especially orphan and disabled people deliver humanitarian aid.

Using this opportunity on behalf of the Government I express the appreciation to all businessmen and investors for their good deeds and contribution to the constructive work and charity.

Currently, for the fulfillment of orders which were announced in the President’s message and his statement at the Dushanbe Economic and Investment Forum-2014 and for the purpose of ensuring the further development of business, the project of a number of legal regulations were prepared and submitted. Today the amendments to the tax Code and Government decisions in order to improve the taxation system of institutions and individual entrepreneurs which make up the largest segment of taxpayer and who engaged in the processing of minerals are in the consideration of relevant ministries and agencies.

In the mentioned projects there are provided proposals on improvement of tax management, level and quality of service to the citizens and businessmen, as well as favorable taxation system for mineral wealth users and individual entrepreneurs are planned.

The proposed amendments in general aimed at supporting entrepreneurship in the future and from this point of view the Government should pay attention to the consideration and adoption of those amendments on time.

By the initiative of the President of the country moratorium was announced on the inspections of the business institutions in the field of industry.

But despite the achievements, there are still the cases that disrupt the business activities. In this connection, I would like to mention that one of the ways of business support is to regulate the inspections of the activities of economic entities by the relevant agencies and prevent the unjustified inspections.

For this purpose, in 2015 the Law of the Republic of Tajikistan on “Inspection of the activities of business entities” was adopted under the new edition, but nevertheless until now we are still witnessing unreasonable intervention to the activities of entrepreneurs and conducting of extraordinary and repeated inspections on the request of the law enforcement bodies and authorized agencies.

Therefore, I would like to emphasize that the abiding the procedures for conducting inspections are requirements of the law and the purpose of these inspections, first of all is to prevent offences, and in case of revealing of inappropriate usage of funds or hidden taxes, recover and return the funds to the budget. Sectoral inspections must be conducted by the authorized bodies.

At the same time, it should be noted that the investigation of the financial audits and operational and investigative activities conducted by relevant authorities revealed that some entrepreneurs do not comply with the legislative requirements and commit illegal actions, such as illegal import of goods and products, tax concealments and custom payments, inflated costs of the volume of construction and reconstructions from budgetary funds. Furthermore, for the purpose of hiding their financial problems and concealing the crime some entrepreneurs resort miscalculation and even commit briberies.

Particularly, in the activities of business entities for the years of 2011-2014 and 9 months of 2015 the amount of financial loss was equal to 231 million somonis mainly from the insufficient funds and financial instruments, inflated costs of the volume of the construction work, the financial losses from disorders, situations of incorrect calculation and hiding of taxes.

Even though the Government of Tajikistan provided a number of significant tax and customs privileges to support small and medium-sized businesses and attract investment, however still these advantages in some areas has not the desired effect, the process of creating new jobs, enabling new manufacturing enterprises and workshops and attraction of modern technologies can not satisfy us.

Business entities and newly established ventures which are engaged in the processing of cotton fiber to the final product, as well as the foreign investors which are working in the field of geological studies and extraction of natural resources are not efficiently using provided privileges.

(Verbal additions: For example, there are twelve ventures which were initially established for the purpose of processing cotton fiber up to the final product, but currently only one of them is operating and only at half capacity.

Also, foreign investors whose goals initially were to extract natural resources, after signing of agreement and obtaining their licenses, as well as receiving various tax privileges do not begin their activities, but instead they sell their shares to other investors)

Therefore, it is necessary to consider and thoroughly study the issue of ensuring the effectiveness of the established privileges.

Unfortunately, up to this day in many cases, the natural resources are exported abroad in the form of raw materials without industrial processing. In this regard, it is important and necessary for the Government to find the measures of processing of natural resources in the territory of the country and exports the processed products abroad.

Also, before signing the investment agreements a serious attention should be paid to this issue. In particular, the process of establishment and operation of the industrial enterprises, which were mentioned in previous agreements and that considered to be mentioned in subsequent agreements should be under the control.

Therefore, the State Committee on Investment and State Property Management under the Government of Republic of Tajikistan is given the order to arrange the monitoring of implementation of investment agreements, especially on fields of creation of processing enterprises and report the results annually.

In order to boost the process of solving the problems of entrepreneurs and investors in Tajikistan there is a need to assemble a platform for dialog between the Government and the private sector on the national and regional levels. For this goal the Advisory Council under the President is operating in order to improve the investment climate. Under this framework local and foreign investors can bring their suggestion directly to the attention of the President of the country.

Also, for the purpose of reviewing entrepreneur’s problems under the Heads of regions, cities and districts of the country there have been established entities in order to facilitate the dialogue between the private sector and the Government.

It is necessary to further strengthen such dialogues and cooperation between the Government and the private sector.  

I would like to mention that the Government of Tajikistan is not pleased with abovementioned achievements and continues looking for the additional means to improve the Investment Climate and to further simplify business and investment activities       

Dear Friends,

Tajikistan has real and promising opportunities for the provision of sustainable development, including rich deposit of hydro energy and clean water resources, minerals and biological and ecological clean agricultural products the rational use of which will be of benefit for our trade partners.

The development of the agro industry and rising of the production and export potential for the purposes of reaching of strategically important goal of the country: ensuring of food security is in the centre of our consideration.  Tajikistan has all conditions for the improvement of this sphere including appropriate water, climate and ground, raw materials and cheap workforce thus this sphere may be one of the beneficial direction of our cooperation.

You have already seen our agro potential when you attended the agro exhibition in the morning.

Using the opportunity of implementation of projects in the sphere of agro-products and textile, produce of the high quality beverages, construction materials and their export to the regional and world markets is considered beneficial for our partners. 

In our country there are opportunities for the production and sale of various types’ of ready products and products from primary aluminium.

Our country has affluent resources of minerals and medical herbs that create good opportunities for the promotion of chemical industry, medicine and pharmaceuticals spheres. In this regard, the development of these fields may be assessed as different promising fields for the attraction of investors as well as mutually beneficial cooperation. 

The Republic of Tajikistan also possesses rich historical and cultural heritages, prosperous nature and gorgeous landscapes, high mountains, extraordinary lakes, rare flora and fauna that are very important for the expansion of tourism. Therefore, the Government of the country pays a special attention to the growth of tourism through the attraction of small and medium entrepreneurship and foreign investments. This may be considered another broad field of successful cooperation of our countries.

Moreover, we have wide opportunities for the involvement of investors in the processing of mineral resources. There are more than 600 deposits of known natural and non-mineral resources that are ready to exploration. Nowadays, of them one hundred deposits that produce 40 types of minerals, are in use. Our country has all types of stones, precious metals and necessary raw materials, thus their mining and processing is considered as advantageous direction of cooperation.

The energy sector is one of the important sectors of our reliable economic development and ensuring energy independence is considered as one of the strategic goals of the Government of the country.

It is well known that nowadays the further development of economy, in particular industrial sector highly depends on the development of hydropower potentials. In the nearest future Tajikistan may be converted to the largest electricity producer country which can provide neighbour countries and region with cheap and clean electricity.

Furthermore, we pay a distinctive attention to the improvement of economic structures, construction of new industrial enterprises, through attraction of foreign investments and implementation of modern technologies, and customizing the activities of the existing industrial facilities to the current conditions.

Another direction of interest for investors is small and large projects in the infrastructure, transportation and communication sectors.

The Republic of Tajikistan together with its international partners is implementing a number of huge infrastructural projects regarding the construction of regional highways, railways, electricity and gas transmission lines and small and medium power plants.

One of such regional projects is “CASA-1000” that connects the Tajikistan`s energy transmission system with the South Asia, South- East countries and lays a basis for the promotion of energy market.

The implementation of Gas pipeline transmission project between Turkmenistan – Uzbekistan – Tajikistan – Kirghizstan – China considered as big regional project that has a great economic importance for Tajikistan and neighbour countries. 

In this regard, Tajikistan will use all its opportunities for the realization of mentioned project and other huge infrastructural projects.

Currently, Tajikistan have four free economic zones where we have guaranteed all appropriate preferential conditions for wide economic, financial, trade, information, service and other activities.

These measures give opportunities for the entrepreneurs and investors in order to produce competitive goods in our country and export to other countries of the world.

Distinguished participants!

Taking into consideration the participation of foreign entrepreneurs and investors who have enough experience in rational use of capitals, in the sidelines of today`s Forum  bilateral meetings will be organized between the local and foreign entrepreneurs and investors, which will be a good opportunity for strengthening beneficial cooperation and greater involvement of investment.

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