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IFC to Support the Development of the SME Sector in Tajikistan through Inspections Reform


In Dushanbe
Daniil Ilyasov

Tel.: (992-372) 210-756

Fax: (992-372) 216-743, 210-381

E-mail:
DIlyasov@ifc.org


November 29, 2004, Dushanbe, Tajikitstan—The International Finance Corporation, the private sector arm of the World Bank Group, with support from the Swiss State Secretariat for Economic Affairs (seco), launched a two-year technical assistance project to reform the business inspections regime in Tajikistan.

Small and Medium Enterprises in Tajikistan suffer from repeated, and not always properly regulated, inspections. In 2002, SMEs were inspected on average 16 times, losing a total of 17 working days. Not only is the structure and organization of inspections sometimes not adequate, but entrepreneurs have very low knowledge of their rights and obligations – close to 80% of SMEs have insufficient knowledge of the laws governing their activities. These were some of the findings of a survey on “Business Environment in Tajikistan as seen by Small and Medium Businesses”, conducted by IFC with donor funding from seco, the results of which were released in spring 2004.

To improve the business enabling environment for Tajik SMEs IFC will work with the  State Agency for Antimonopoly Policy and Support to Entrepreneurship starting with reforming the business inspections practices.

According to Mr. Amirali Naimov, Deputy Director of the State Agency for Antimonopoly Policy and Support to Entrepreneurship, “improvement of the inspection process and increase of legal awareness are fields where we hope and look forward to cooperate with the International Finance Corporation”. In order to achieve effective changes benefiting SMEs as well as the State and the general public, and so as to keep track of the ongoing changes in the regulatory environment, the project will focus on the following:
       Legal reform, to ensure that inspections are conducted in a framework that regulates their scope and frequency, reduces overlapping inspections, clarifies rights and obligations of inspectors and entrepreneurs;

       Reform of inspectorates’ internal procedures, to help key inspecting structures meet their goals and use their resources more effectively;

       Information campaign, to inform entrepreneurs of their rights and responsibilities in the inspection process;

       Second survey of regulatory environment for SMEs, to be conducted in 2006 to monitor the evolution of the situation.

Though the project will aim at achieving improvement in all types of inspections, it will particularly focus, in agreement with the relevant State bodies, on tax, sanitary and fire safety inspections. Other inspections may be included on the basis of further work and discussions.

Florentin Blanc, Project Manager for IFC in Tajikistan, underlined that “the aim of IFC and seco is to achieve concrete, measurable improvements in the regulatory environment for SMEs. We see regular monitoring through repeated surveys and a very practical approach as the ways to achieve it. The project should not just help to improve the rules, it shall help all sides to properly enforce them.”

International Finance Corporation (IFC)
is the private sector investment arm of the World Bank Group. IFC promotes sustainable private sector investment in developing countries, helping to reduce poverty. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides advice to governments and businesses through technical assistance.


The State Secretariat for Economic Affairs (seco)
. Switzerland actively participates in the international community’s efforts to help developing countries with transition economies to built sustainable democratic society and viable market economy. Each year Switzerland spends approximately 1.5 bln. Swiss franks on development aid to countries. The Swiss Cooperation Program for Tajikistan includes technical, financial and humanitarian assistance components.