Statement by the Discussant
Ambassador LEE Taeho of the Republic of Korea First Trade Policy Review of Tajikistan
(6 December 2021)
Introduction
Thank you, Chair,
It is my great honor and pleasure to participate in this TPR exercise on the Republic of Tajikistan as discussant today. Let me echo the Chair in welcoming the delegation from the Republic of Tajikistan, headed by H.E. Mr. Zavqizoda Zavqi Amin, Minister of Economic Development and Trade. It would have been much better had the Minister been able to attend both the MC-12 and today!s TPR. However, the fact that this TPR is taking place with your presence is a reminder that Omicron did not
succeed in grinding the work of the WTO to a halt.
Today!s TPR is very special: not just because it is the first TPR of this young and dynamic country, but also because this year marks the 30th anniversary of
Tajikistan!s independence. To put the significance of today into perspective, we may look back at how Tajikistan made its way into the WTO. It was during the 10th anniversary of its independence in 2001 that Tajikistan applied for a membership of the WTO. It took less than 10 years to go from the first meeting of the Working Party on Tajikistan!s Accession to the WTO!s approval of its membership in 2012, not long after the 20th anniversary of its independence. This is no mean feat, especially when we consider the amount of time it has recently been taking for countries to accede to the WTO. It is a credit to Tajikistan!s consistent political commitment to reform, which is part and parcel of a swift accession process.
What is worth noting is the level of ambition shown by Tajikistan in committing itself to the multilateral trading system, notwithstanding the modest level of its per capita income. As you noted in your opening statement, Chair, Dushanbe committed to
applying all WTO provisions from the date of its accession without recourse to transitional periods. It signed the Information Technology Agreement upon
accession. In line with its commitment, it also applied for GPA accessions in early 2015. One year after its entry, Tajikistan notified the WTO of its commitments in Category A under the Trade Facilitation Agreement for implementation in full upon the entry into force of the TFA.
Macroeconomic trends
So how has Tajikistan been doing on the macro-economic level in the years since it joined the WTO in 2013?
Let!s start with the positive side of the picture.
First, the economic growth rate throughout the review period was a robust 6.7 percent, with growth slowing to 4.5 percent last year due to the pandemic. To be sure, the average growth rate for the 8 years preceding WTO entry was actually slightly higher – 6.84 percent. But the fact that Tajikistan!s export basket has been diversifying, from one being dominated by aluminum and cotton, to one that includes more textiles, cement and mineral products is an unmitigated plus.
Second, people below the national poverty line fell from 35.6 percent of the population in 2013 to 27.4 percent in 2018.
Third, the share of tourism in GDP rose from 1.4% to 2.2% during the review period, with inbound tourists increasing more than sixfold. This is an outcome that the Government attributes to its reforms. This is an encouraging development since -- much like our host country -- Tajikistan is blessed with beautiful mountains and scenic fresh lakes which can be tapped in the service of its economy. Speaking of water, more than 60% of the water resources in Central Asia are said to originate in Tajikistan -- a huge opportunity for the development of green energy. Indeed, some analysis place Tajikistan 6th in green energy production.
Now, turning to the other side of the picture.
Although real GDP growth has been robust, GDP per capita has not been growing.
Moreover, only half of its working-age population are officially employed, suggesting a high degree of informality in the economy and labour migrants abroad. Indeed, Tajikistan remittance inflows account for about one third of its GDP. Furthermore, trade in goods and services, as a share of GDP, fell from 74% when it entered the WTO, to less than 60 percent in the last several years.
Trade and investment regime
What about Tajikistan!s trade and investment policy regime during the review period?
Again, let me start with the positive side.
It!s hard to overstate the importance of trade facilitation and transit trade for a
landlocked developing country such as Tajikistan. In this regard, the range of efforts Dushanbe has made to streamline trade and investment procedures are
commendable.
In particular, I wish to highlight the single window. In 2019 Tajikistan ratified the Trade Facilitation Agreement and launched a trade portal which provides information related to import/export & transit procedures, followed by the launch of a pilot Single Window to connect authorities that issue relevant authorizations. As some Members have suggested in their written questions, it would be very useful to have an update 1 on the functioning of this Single Window System, which went into full implementation last year.
The efforts to establish a single window for investors merit mentioning here. This regime is intended to facilitate the issuance of licenses, permits, and visas for
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investors. This is part of a broader push to enhance the role of private investment and diversify its industrial base, as laid out in the National Development Strategy 2016-30 and the Mid-Term Economic Development Programme for 2016-20.
Tajikistan!s determination to make life easier for investors is underlined by the fact that Tajikistan is currently participating in the JSI on investment facilitation here at the WTO.
Efforts to enhance transparency in government procurement are also underway, including with a single window. Moreover, the legal framework for procurement has been undergoing important reforms to ensure compliance with the GPA.
These are laudable initiatives that will help Tajikistan to better integrate itself into the global value chain and more fully harness the benefits of an open economy.
Now we must circle back to the other side of the picture.
No government is perfect. The recent Trade Policy Reviews, including that on Korea, showed that Members have much work to do. Tajikistan is no exception.
First of all, there are aspects of Tajikistan!s trade policy regime that were not evident at the time of accession, but which seem to have become more apparent in recent years. The Secretariat report indicates that Tajikistan has been implementing an
"import substitution programme” since 2013 -- the year of accession -- and that this programme has been integrated into Tajikistan!s development strategy 2030. 2 Several Members have expressed their interest in knowing more about this program and raised relevant points in their written questions. Minister Zavqizoda’s 3
explanation as well as Tajikistan's advance responses to the questions about the recent changes that have been made to this programme shed some light to this issue and I appreciate that.
Paras. 1.23, 2.19 of the Report by the Secretariat.
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On a second -- and somewhat related -- point, it seems that Tajikistan has some work to do in terms of its notifications to the WTO. To be sure, a number of notifications have been submitted to the WTO, including its intellectual property legislations, for instance. But some remain outstanding : not least, notifications under the TRIMS. More transparency about TRIMS could help address questions surrounding import substitution.
Third, I take note of Dushanbe!s worthy strategic goal of easing the so-called
"communication deadlock” and develop the country!s transit potential. As some Members have pointed out,4 accelerated implementation of TFA commitments should be conducive to achieving that goal.
Conclusion
Chair,
I wish to wrap up my observations on a very positive note. To remain optimistic, I need go no further than the Government!s report, which states – and I quote #$
"priorities would be given to ensuring democratic governance, the rule of law, the protection of human rights and empowerment in the country.” 5
Thank you.
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Para.7.5 of the Report by Tajikistan.
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