Poverty is the central development issuein Tajikistan. The country is now one of the poorest in theworld. It was made worse by the civil conflict in the early1990s. This report suggests that there should be four keypillars to a poverty reduction program strategy: a) thestimulation of high labor productivity and economic growth;b) the provision of basic social services; c) the targetingof assistance to the poorest; and d) the development of awell-governed and safe environment. The report recommendsthe following: 1) further analysis should be undertaken ofthe incidence of public spending, to ensure that keyprograms are adequately funded and that spending contributesas much as possible to poverty reduction. 2) The Governmentshould set specific targets for welfare indicators andpoverty reduction. 3) A list should be compiled of possibleprojects of a targeted program of interventions that couldimpact rapidly on poverty; the projects should be fullycosted and implementation arrangements studied. 4)Alternative funding sources, including the Government'sown budget and external donors, should be explored for thefinancing of the list of possible targeted interventions.