Policy advice on the design and management of a comprehensive public financial management reform programme – Tajikistan 2010 – 2014

The Republic of Tajikistan is engaged in a wide ranging programme of public financial management reforms.  These include introducing a multi year budget (MTEF), reforms to accounting, treasury, internal and external audit as well as the implementation of a new Financial Management Information System and training financial management staff across the whole of government.

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Michael Parry acted as adviser to the Public Financial Coordination Council.  This body operated under the Minister of Finance to bring together all those involved in the reform of public financial management.  The role included advising on updating the reform programme and sequence, developing a monitoring framework, developing strategies for specific sectors, e.g. training, human resource management, institutional reform, supporting the development of terms of references for a series of consulting contracts, coordinating the activities of different consultants and firms, and communication with key stakeholders on the reform progress.

Implementing PFM reforms in Tajikistan presented multiple challenges:

  • The country only emerged from a post-Soviet Union civil war in 2007 and remains a fragile nascent democracy with documented high levels of corruption
  • Shortage of skilled human resources – in part because of the educational impact of the civil war, and in part because of the fact that many skilled workers have migrated to other countries
  • Tajikistan is transitioning from a centralised to a market economy, requiring radical changes to governance and to institutions
  • Multiple development partners each with its own priorities, methodology and agenda

Despite these challenges significant progress in PFM reform was achieved.  These included initiating a Medium Term Expenditure Framework (MTEF), implementing a Treasury Single Account, new Treasury IT systems and a new Unified Chart of Accounts consistent both with the budget classification and with IMF GFS 2001. Ongoing reforms include developing Tajikistan Public Sector Accounting Standards consistent with international Standards (IPSAS), a new Financial Management Information System, a modernised Treasury and an extensive programme of training. Most PFM reforms are still primarily technical, but lay the foundation for improved governance and addressing the many problems facing Tajikistan.

Key lessons from this case study include:

  • The need for Government to take control of the reform process, and to use advisers to provide technical support according to government priorities
  • PFM reforms need to be appropriately sequenced taking account of both issue priorities and the feasibility of sustainable reform
  • The challenge of coordinating multiple development partners, each with their own  agenda and methnology, to take account of the both of the above lessons