Domestic Producers Need Help

Some economists in Tajikistan are backing plans to introduce protectionist measures, arguing that this could help domestic producers prepare for when they have to compete on the world market.



The Avesta news agency reported last week that the Tajik parliament is reviewing a draft bill drawn up by the ministry for economic development and trade which aims to protecting local producers from foreign competition.



A source from the ministry’s department for analysis told NBCentralAsia that locally-produced goods often remain unsold because of their high manufacturing cost, hence the need for a new law.



Preferential terms and protectionist measures should stimulate production, said the source, adding that this will help curb inflation, create new jobs and increase tax revenues.



Economist Sodik Ismoilzoda is in favour of the measures, arguing that the most vulnerable economic sectors - agriculture and textiles – should be targeted first. He suggests that local producers should be given a 15 per cent discount on the export price of cotton.



“If firms have access to cheap resources, their production costs will fall accordingly, and their goods will become marketable.”



Other commentators caution that any protectionist measures will have to be in line with the requirements of the World Trade Organisation, WTO, which is broadly anti-protectionist. The Tajik government has been conducting membership negotiations with the WTO over the last few years, and has started harmonising its legislation with WTO requirements. Parliament has already passed laws cutting customs duties, a measure which will open up the Tajik market to manufacturers in other WTO members.



Larisa Kislyakova, deputy minister for economic development and trade, said that in spite of the country’s WTO ambitions, local producers should retain a privileged position and the state should use the negotiations to insist on a long transition period to help them become more competitive in export markets.



An analyst from the same ministry underscored the view that protectionism can only be a temporary measure to help prepare the economy to cope with tough competition. Simultaneously, inefficient state-run enterprises should be reorganised into joint-stock companies to help them modernise, improve product quality and increase productivity.



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