This policy note is part of the WorldBank's Programmatic Public Expenditure Review (PER)work program for FY2012-2014. The PER consists of a seriesof fiscal policy notes, which aim at providing theGovernment of Tajikistan with recommendations to strengthenbudgetary processes and analysis. This policy note, thesixth in the series continues the fiscal policy dialogueconducted in the previous notes. It is structured asfollows. Chapter 2 sets a macro-fiscal context for theanalysis with a particular focus on fiscal policychallenges. Chapter 3 analyzes the composition and trends incapital expenditures to identify issues and offer solutionsfor improving efficiency of capital spending. Chapter 4reviews a public investment management process in Tajikistanto identify weaknesses in the capital budgeting cycle(planning, budgeting, implementation, and audit), and torecommend measures and remedies to address shortcomings inthese processes. Chapter 5 provides the main conclusions: 1)although Tajikistan has enjoyed high economic growth andsubstantial external assistance, increasing uncertaintiesabout the global environment and the Russian growth outlookput Tajikistan's growth prospects at high risk, and thefiscal space will be very tight; 2) Tajikistan needs toaddress both equity and sector allocation efficiency issuesto better mobilize resources in support of nationalpriorities; 3) analysis of the public investment managementsystem suggests that lack of a unified methodologicalframework, fragmentation, and poor institutional linksdiscourage efficient use of limited domestic resources andattraction of external financing; and 4) the proposedreforms need to be sequenced to take into accountimplementation capacity and expected benefits. This noteprovides detailed recommendations to the Governmentregarding public investment management.
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