Economic development in Tajikistan’s high-mountain regions

Project description

Title: Supporting the local economy in selected high-mountain regions
Commissioned by: Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Tajikistan
Lead executing agency: Ministry of Economic Development and Trade
Overall term: 2016 to 2019

Context

With a population of around nine million people and a per capita gross domestic product of roughly USD 871, Tajikistan is the poorest of the former Soviet republics and one of the 20 poorest countries in the world. The country has made little progress in transitioning to a strong market economy.

More than half the population is under the age of 25. Remote and inaccessible high-mountain regions are particularly affected by the lack of economic dynamism. The agricultural sector, which is the most important sector in the country’s economy, does not provide enough jobs. Furthermore, due to a lack of economic integration and of value-added products (agricultural products are not processed), the non-farm sector is weak. The central government has yet to develop strategies to exploit the potential of micro, small and medium-sized enterprises to generate economic value and create jobs.

High rates of underemployment and unemployment are causing young people and young adults to become increasingly frustrated with the lack of opportunities and prospects. Young people’s profes-sional expectations are largely focused on academic qualifications. They have little knowledge about the skills required in the economy or about local employment opportunities.

Objective

Measures aimed at local economic development are designed to create the stable conditions required for young women and men to be self-employed or find employment.

Approach

The project helps to train young people to work in existing enterprises or engage in their own entrepre-neurial activities. 

In addition to providing training courses, which have been attended by 205 participants so far, the project has also started cooperating with various public and private training providers. A support pro-gramme for start-up businesses that includes coaching and mentoring has been agreed with Acceler-ate Prosperity, an initiative of the Aga Khan Foundation. The project is run in various districts in the Gorno-Badakhshan Autonomous Region and the Rasht Valley. Technical training measures are being developed in collaboration with the University of Central Asia. These measures focus on agriculture (including agroprocessing) and transport.

The project supports agricultural producers (including small producers) in the Rasht Valley using an approach aimed at value chain promotion, that is, supporting the actors (producers, service providers, processors and distributors) in the value chains for selected agricultural products. The products pro-moted are dried apples, potatoes and dairy products. Organised cooperation between producer groups, agricultural advisors and leading enterprises has helped increase yields.

The project has entered into a financing agreement with a local microfinance institution to regulate the establishment of a line of microcredit for micro enterprises. 

Results

To date, 80 businesses have increased their business potential by taking part in training courses on developing business ideas and business plans, marketing and certification. Together with two local education providers, the project has developed technical training modules and modified them in line with current requirements. Of the 120 participants who took part in training geared to company de-mands, 49 succeeded in finding jobs. Another 28 people who attended business start-up seminars have set up their own companies. The new line of credit has made it easier for young entrepreneurs to take advantage of funding opportunities.