Minutes of the second meeting of the Consultative Council on improvement of investment climate under the President of the Republic of Tajikistan
(dated 18 December, 2008)

Chairman

President of the Republic of Tajikistan E. Rahmon

Members:

Prime-Minister of the Republic of Tajikistan O. Okilov

Chairman, State Committee on Investments and State Property Management of the Republic of Tajikistan- F. Khamraliev

Head of the EBRD Country Office M. Le Blan

Director, United States Agency on International Cooperation (USAID) in Tajikistan - C. Bryan

Director General of the LLC "Rukhom" M. Mukhabbatov

Chairman of the Board of the National Association of Small and Medium Enterprises - M. Uljabaeva

President, «Tethys Tajikistan Limited» D. Robson

Head of Secretariat of the Consultative Council Sh. Zardov

Invitees:

Project Manager, BEE Project in Tajikistan W. Werner

The President of the Republic of Tajikistan has opened the Council Session and declared the Agenda. When consideration the first issue of the Agenda the Chairman of the Council has noted that the efficiency of the Council activity depends on proper and timely implementation of the approved resolutions. He has also said that during the first Council meeting the corresponding resolutions have been made in regard to six considered issues.

Mr. Zardov, the head of the Council Secretariat has updated the Council members on progress in implementation of the resolutions by the first Council meeting. Particularly, the reporter noted that the working group under the State Committee on investments and state property management of the Republic of Tajikistan has developed the correspondent drat law aimed at effective and timely implementation of the moratorium for inspections of small and medium sized enterprises.

The Council members have been also informed on the activity by the working group comprising the representatives of state bodies, business associations and donor organizations which dealt with review of normative legal acts regulating the issuance of permits documents using the method of quick deregulation.

The head of the Secretariat has informed the participants that the Law "On state registration of immovable property and rights of ownership" has been adopted in the country in March 2009. He has also noted that the work on development of normative legal acts directed on protection of entrepreneurs' and foreign investors' property rights.

In regard to the second issue of the agenda concerning the implementation of the Presidential Decree "On declaration of moratorium for inspections of small and medium sized enterprises" - Mr. Khamraliev, the Chairman of the State Committee on Investments and State Property Management of Republic of Tajikistan made a report.

The reporter has noted that business structures of the country have perceived the given law with great inspiration. He has also informed the Council members that the broad PR-company and direct meetings with private sector representatives explaining the main goals and objectives of the given Decree have been conducted. He also added that during the meetings with regional branches of the State Committee on investments the business associations of the country take active part, too. All the state agencies involved in the inspections process have made effective measures for this Decree implementation.

The reporter has said that along with the presented measures the activity on protection of the consumers' rights and interests as well as implementation of the anti-monopoly legislation, has been carried out resulted in reduce of the prices for the fuel and main food items. The inter-agency working group under the Goscominvest where private sector is also presented was established and has already developed draft Law "On moratorium for inspections of small and medium sized enterprises in Republic of Tajikistan". This draft law has been submitted to the Government of Tajikistan in an established order.

The Chairman of the Consultative Council has stressed that during the moratorium period the corresponding normative legal acts have to be improved and inspection bodies should bring their internal acts into line with the Law requirements. The business associations should also carry out active work among entrepreneurs of the country on their strictly performance of all law requirements when doing business. It was noted that when breaking the law and nonpayment of taxes the correspondent measures shall be used to punish unfair businessmen. The moratorium has been declared not aiming to carry out illegal activity but for the reasons to concentrate entrepreneurs' efforts for improving the services and goods provided.

When considering the third issue of the Council agenda Mr. Khamraliev stressed that the issue of permits system reforming was initiated by business community itself, supported by the Council members during the first meeting. Taking into account the complexity of the existing permits system this issue is rather topical for private sector development and strengthening. In this regard the draft normative legal acts, directed to reduce in a number of administrative procedures and permits system reforming in the country, have been submitted to the Council members for consideration.

The IFC Project Manager, Mrs. Werner has talked on the same topic and noted that the state budget spends much money to maintain the permits system instead of receiving advantages form this system activity. She has also presented the results of the business environment study in CIS countries.

The Council members, taking into account the worldwide practice, have emphasized the necessity of implementation of the Analysis of regulative impact (ARI) in the Republic of Tajikistan, on the basis of which the analysis of all governmental and institutional decisions in the area of entrepreneurship regulation should be conducted.

The Chairman of the Council in regards to this issue has noted that it is crucial to further improve the existing permits system for the purposes to private sector development and improvement of investment climate as well as to promoting direct foreign investments.

The proposed mechanism of reviewing the documents for permits issuance is to be considered the timely and needed activity. Based on this the Chairman of Goscominvest together with involved ministries was charged to submit the draft normative legal acts on reforming the permits system to the Government of Republic of Tajikistan in an established order.

The Council members have also considered the Plan on implementation of specific measures directed to Tajikistan rating improvement that was developed by the working group under the Goscominvest together with the Council Secretariat, USAID funded BEI Project and active representatives of business associations of the country.

The Chairman of Goscominvest has informed the participants that presented Plan covers the specific measures and its timing terms for improving the main "Doing Business" indicators such as: "Starting a business", "Licensing", Protection of investors" and "Closing the business". It is anticipated to approve the normative legal acts aimed at improvement of Tajikistan ratings and investment climate by the March - May, 2009.

Then Mrs. C. Bryan, the Director of USAID in Tajikistan made a speech where she informed the Council members that suggestions on Tajikistan ratings improvement in construction area have been developed by the Goscominvest based on "Analysis of legislation of Tajikistan in construction area" which was conducted by USAID project together with involved construction associations. The Analysis has shown that it is very important to improve the existing legislation in construction area.

M. Uljabaeva, the Chairperson of National association of small and medium sized business has noted that presented suggestions being based on "One-stop-shop" system implementation are directed to reduction of in number and timing of administrative procedures and cost of permits documents required for construction activity.

M. Uljabaeva has thanked the President of Tajikistan in the name of business associations of the country for supporting the "One-stop-shop" system when registering the companies and informed the Council members that the draft law "On state registration of legal entities and individual entrepreneurs" has been developed. She has also expressed the opinion by business community that it would be reasonable to give effect to this law form 1 March, 2009.

The Prime Minister of Tajikistan, Mr. A. Akilov has made a speech regarding implementation of the proposed Plan in the part of sequence and time of performance in conducting the measures of the Plan in construction area.

When summarizing the results of the meeting the President of Tajikistan has noted that the proposed Plan will promote the investment climate improvement and particularly to foreign investments attraction in the construction area.

The Chairman of Goscominvest was charged to finalize the Plan further to be submitted for approval in an established order. He was also entrusted together with corresponding ministries to submit the draft laws for improvement of administrative procedures in construction area to the Government of Tajikistan.

Then head of the Council Secretariat, Mr. Zardov has informed the participants on donors' projects of technical assistance implemented in Tajikistan. Particularly, he has stressed that there are three kinds of donors' projects implemented in the country the activity of which is focused on institutional changes, capacity building of state bodies and finance support.

In the whole, the aims and objectives of the projects involved in institutional changes are matched with the aim and objectives of the Consultative Council aims. The analysis of these projects implementation has showed that most of studies and researches prepared by this projects are not used under various subjective and objective reasons.

The Council Chairman in regard to this issue has emphasized that social and economic achievements in Tajikistan have made a sound foundation for a new stage of accelerated implementation of economical reforms. He has also said that donor's support has played a significant role in solving a wide range of burning problems.
Taking into account the changes in social and economic requirements of the country and with the purpose to implementing the Paris Declaration on aid effectiveness, the time when donors and the Government should jointly and interactively implement the reforms oriented to improving of investment climate in the country and to be jointly responsible for anticipated results.

In the framework of Consultative Council activity there would be reasonable to study the recommendations given by donor organizations and also adapt donors' new programs to prioritized directions of Tajikistan's strategies.

In conclusion of the Consultative Council meeting the President of Tajikistan has stressed that Tajikistan along with other early transition countries has been on the threshold of serious economic reforms which should be implemented in terms of world financial crisis. Economic reality and today's indicators require effective measures from Tajik Government to support the private sector and conduct the modernization of the economy itself.

Decisions of the second meeting of the Consultative Committee on improvement of the investment climate under the President of the Republic of Tajikistan

1. To consider the Resolutions by the second Consultative Council meeting as a whole executed;

2. To recommend the Government of Republic of Tajikistan to strengthen the control over execution of the approved resolutions by the Council;

3. To approve the attached Plan on first-priority activities of the Government of Republic of Tajikistan in improvement of Tajikistan international ratings and recommend to hold the Government RT responsible for performance and implementation of the present Plan in established dates;

4. To charge State Committee on Investments and state property management of RT jointly with the corresponding ministries to submit in established order draft normative legal acts on reforming the permitting system of Republic of Tajikistan to the President and Government RT;

5. To charge State Committee on Investments and state property management of RT jointly with the corresponding ministries to submit in established order draft normative legal acts on improvement of administrative procedures related with conduction of the construction activity in Republic of Tajikistan;

6. To consider the submitted by the Secretariat information on projects on business environment improvement implementing by various donor organizations in Republic of Tajikistan as being taken into account in order to be used during next Council meetings;

7. To recommend the Government of Republic Tajikistan and donor organizations being guided by Regulations of Paris Declaration on effective aid delivery for more intensive use of technical assistance in the area of improvement of business environment and to promote effective coordination and harmonization of the put forward recommendations/resolutions by the Consultative Council;

8. To prolong the President of the company «Tethys Tajikistan Limited», Mr. D. Robson's membership for 4 next Council meetings;

9. To charge State Committee on Investments and state property management of RT jointly with Secretariat of the Council:

- to present as the key issues to the third Council meeting: «Assessment of execution of all resolutions approved during the second Council meeting» and the draft program "200 days of reforms»;
- to submit to the next Council meeting the proposals on modification of the Council structure and increase the membership of local and foreign investors from 3 to 5 persons by submitting the list of candidates for membership in the Consultative Council;
- to prepare together with donor organizations the plan on promoting implementation of the large projects on improvement of business environment and investment climate via the Council meetings with participation of heads of projects and corresponding ministries and institutions;
- to present for the next Council meeting the map of donor's aid and proposals on effective use of projects recommendations in the Council activity;
- to constantly conduct monitoring on implementation of the Resolutions by the Consultative Council and on a regular basis to inform the Council members on their execution.

Chairman of the State Investments and State Property
Management Committee of the Republic of Tajikistan - F. Khamraliev

Head of the Secretariat of the
Consultative Council on Improving Investment Climate
under the President of the Republic of Tajikistan - Sh. Zardov