European Union Budget Support in Tajikistan
The European Union (EU) has
been cooperating with Tajikistan in the field of development since 1991, in a
variety of sectors such as rule of law and good governance, health and
education, water, energy, and rural development. Most recently, this development
cooperation has been focused on three priority areas as defined by the latest
Multiannual Indicative Programme (MIP) for 2021-2027: 1) Inclusive Green and
Digital Economy, 2) Human development and 3) Natural resources management,
efficiency, and resilience. In particular, Specific Objective 4 of the MIP
seeks to “improve the relevance and quality of the general secondary education
and vocational education and training (VET) for better employability and labour
market integration”, with three expected results:
• R4.1) Improved governance,
evidence-based policy making and public finance management (PFM) of the
education sector;
• R4.2) Improved learning
outcomes for female learners and persons with disabilities; and
• R2.3) Improved labour
market integration with a focus on youth, women and returnee migrants through innovation
and digitalisation.
This request for services specifically targets
the TVET and Employment Sector Reform Contract, a budget support programme that
addresses these three results, as well as the key challenges for the education
and employment sectors identified in the National Development Strategy
2016-2030. It is also in line with the EU Global Gateway, as it seeks to foster
the green and digital sectors.
Relevant Employment and Vocational Education
and Training Background
As stated by the Tajikistan
Ministry of Foreign Affairs: “investing in the young generation is essential to
achieving long-term economic growth, social cohesion and sustainable
development”. The Budget Support programme strongly focuses on improving the
employability of youth, women, and returnee migrants, and raising employment in
critical sectors: agriculture, energy, green and digital industries.
Tajikistan, a landlocked,
mostly mountainous country, indeed has a high share of youth in its population,
who are increasingly entering the labour market (more than 50% of able-bodied
persons are under the age of 25). However, despite its GDP growth averaging 7%
when not slowed by the covid-19 pandemic, Tajikistan does not see enough job
creation. 27.4% of the population lives below the national poverty line, and
the National Development Strategy (NDS) links this poverty to a lack of access
to productive employment: 41% of the population is self-employed, and 28% works
in State Owned Enterprises (SOE) or for the Government. The activity rate of
59% also hides very strong gender disparities, with the women activity rate
barely reaching 45.5% against 73.3% for men (2017). The unemployment rate is
estimated for 2020 (ILO) at 7.5%, although
many do not register with the employment services, or have seasonal
employment in the agriculture sector – so this number is likely higher.
It is worth noting that state
expenditure in education has been increasing steadily since 2000, but financial
needs continue gradually increasing. Both the National Development Strategy and
the National Strategy for Education Development (NSED 2021-2030) point out that
the issue is less so in the access to education than its relevance and quality.
For TVET, there is a strong need to work more closely with the private sector
and match TVET with labour market needs.
Key challenges and weaknesses
in TVET as identified in Tajikistan’s National Strategy for Education Development
(NSED) include:
• The infrastructure and
availability of proper learning and teaching equipment and materials in most
initial VET institutions is limited and needs updating;
• There is a shortage of qualified teachers
across all levels of education; and the management of the education sector is
hindered by a lack of results-based planning, monitoring systems, and weak PFM.
Relevant
Public Finance Management Background
PFM is a key pillar in the EU SRPC for VET and Employment, not only as a
general condition for EU Budget Support, but also within the education sector
in Tajikistan, to better be able to respond to the gradual increase in
financial needs for the sector.
PFM in Tajikistan is driven by the NDS, which outlines national
priorities in the areas of PFM such as program budgeting, linking the budget
process with strategic planning, tax administration, fiscal decentralisation
and transparency and accountability; and by the PFM Reform Strategy (PFMRS
2030), with the following priority areas:
1. strengthen the framework of macroeconomic forecasting and revenue
projections;
2. improve public investment planning, strengthen internal control and
audit;
3. increase revenue mobilisation;
4. implement public procurement reforms;
5. strengthen external scrutiny and parliamentary oversight of the
budget.
Progress
in the implementation of the PFMRS is slow, and the capacity for data
collection and monitoring of this progress is limited. The PEFA (2022)
assessment indicates that 10 out of 31 PEFA performance indicators showed
improvement compared to the 2017 exercise, and concludes that overall, the PFM
environment has improved in the five years between 2017 and 2022. This partly
justifies that, whilst Budget Support to Tajikistan was suspended in 2018 due
to the lack of achievement / progress with the eligibility criteria, it has now
been restarted.
The overall objective of this assignment is to provide a detailed review
and assess the progress in the implementation of the TVET and Employment SRPC
against the general conditions and the targets of the performance indicators,
to enable the EU to use the outcomes of the reviews for decisions on the
disbursement of the 2nd and 3rd fixed tranches and the 1st to 3rd variable
tranches. The EU takes a final decision on disbursement, taking into account
the external verification report.
To conduct one review mission annually during the fiscal years 2024, 2025
and 2026 for the disbursement of the fixed and variable instalments:
• The first review mission will verify compliance with conditions
attached to the release of the 2nd fixed and 1st variable tranches (€4 million
and €6 million, respectively), indicatively scheduled for Quarter 2 of 2024.
• The second review mission will verify compliance with conditions
attached to the release of the 3rd fixed and 2nd variable tranches (€4 million
and €6 million, respectively), indicatively scheduled for Quarter 2 of 2025.
• The third (final) review mission will verify
compliance with conditions attached to the release of the 3rd variable tranche
(€5.8 million), indicatively scheduled for Quarter 2 of 2026.