This report, Second Programmatic PublicExpenditure Review (PPER 2), is a sequel to PPER, which waspublished in July 2007. PPER 2 provides a detailed analysisof key public expenditure issues in Tajikistan and reportson the nonlending policy dialogue and technical assistanceprograms managed and coordinated by the World Bank. PPER 2has a special focus on social sectors, especially the healthand education sectors. Public Expenditure Tracking Surveys(PETS) carried out for the first time in Tajikistan in 2007contributed to the findings in this report. The report alsoupdates the macroeconomic and fiscal situation to takeaccount of important developments in 2007 and analyzes theimplications of energy sector reforms and investments forfiscal sustainability. This report is intended to contributeto improving the quality of life in Tajikistan through acomprehensive reform program.It spells out themacroeconomic, energy, and budget reforms necessary toachieve the growth the country seeks and, at the same time(and frequently via the same measures) the social welfaretargets of the Millennium Development Goals (MDGs).