Budget Priorities Disputed

As the Tajik parliament prepared to discuss the government budget for 2007, NBCentralAsia economic analysts say more of the spending should go towards industry, agriculture and developing energy resources, rather than welfare.



Parliamentary committees are currently discussing the budget, and it should be passed by the lower house on November 22.



Revenues are projected at 3.2 billion somoni, over 900 million US dollars, and expenditure at 3.28 billion somoni. The budget figures are much higher than in previous years in part because calculations on the revenue side for the first time capture the full range of funding sources, including loans and grants.



The bulk of revenues – 82 per cent - are expected to come from taxation and customs fees. A source in the Tajik finance ministry highlights the risk of a revenue shortfall because of what he regards as an excessive amount of concessionary customs deals.



For instance, a new set of arrangements applying to the Tajik aluminium plant at Tursunzade – a major taxpayer - has resulted in a 17 per cent reduction in customs payments. Under the new system, no customs duty is imposed on imports of alumina, the raw material consumed by the plant.



Other economists argue that the budget does not earmark nearly enough money for state support of key economic sectors so as to support future growth.



“This will be the second year that the emphasis is on social spending. This year social spending stands at 50 per cent of the budget, and in 2007 it will be slightly lower,” a source at the economy and trade ministry told NBCentralAsia. “That is all well and good, but there is a need to attend to the real economy, with funding support for… agriculture and especially light industry.”



Another view was offered by member of parliament Shodi Shabdolov, who would like to see more spending on oil and gas exploration as a way of attracting investment to the energy sector.



Tajikistan currently spends 25 million dollars a year on importing natural gas and around 200 million dollars on petroleum products, and this is a major burden on the government budget. Shabdolov believes the country has reserves of oil and gas that if developed, could meet domestic demand and even allow some exports.



“The reason for the fuel shortages is that no survey work gets done from year to year,” he said.



(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)