The Role of the State in the XXI Century
We have entered the XXI century, but we still live in states of the XX century design. What things should be different?...
Tajikistan hit “the very bottom” regarding freedom and fairness of electoral process. As its score in Freedom Barometer 2017 indicates, there are not any freedoms in political life of this country. Parties are able to exist and operate unless they are not expressing criticism of government actions, and above all of President Emomali Rahmon. Methods for dealing with critical voices vary from intimidation and harassment, to physical violence and imprisoning. The repression and crackdown on opposition politicians was even expanded during the period under review, targeting associates and family members of the opposition leaders who were arrested or who fled the country. Opposition politicians from the Islamic Renaissance Party (IRPT), which was banned in 2015 on the ground of
terrorism, who were arrested previously, have been sentenced to jail in 2016. Beside, constitutional referendum was held in Tajikistan, and consequently adopted, removing any limitations regarding number of presidential terms in office and restricting by the law all political parties that are based on faith – among other amendments. Although there were no elections, electoral process in the country abounds with irregularities, abuses and frauds, without space for political pluralism.
There are no unconstitutional veto players who are interfering into decision making process by the President. His dominance over executive, judicial and legislative branch of power, strict control over security forces and abuse of state offices and resources for personal interest, makes no space for democracy in Tajikistan. President is surrounded by close allies and family members, who control and dominate entire society. There are other influential people who belong to political and military elite of the country, but they are holding close relations with the President. Large scale corruption is reserved for and performed by this circle, without consequences.
There is no freedom of media in Tajikistan. Government controls and regulates media reporting through intensive political and legislative pressure. Access to independent and critical views is highly limited. It only applies to topics that are not of particular interest by the government, and certainly if they are not on corruption or on the President and his family. In August, the guideline was adopted by the government, giving the right to The State Committee on Television and Radio to censor the content of both privately and state owned broadcasting media. Physical and verbal violence is often used against journalists in order to boost their self-censorship. Insulting of the President is punishable by the law. Online content is monitored and regulated through legislation that
obligates providers to use systems controlled by the government for providing their services.
Despite optimism by local business elite (itself being tied to the regime, yet influencing the results of many foreign sponsored evaluations), judiciary in Tajikistan has gone from bad to worse during the past years. According to Freedom House`s report Nations in Transit 2017, the justice system is highly politicized. It is used selectively, among other things also to silence political dissent, intimidate human rights lawyers and their families, or provide impunity to loyal government officials. Criminal investigation system is mainly confession-based, while conditions in custody or prisons are poor and torture and extorting of confessions are common. Instead of establishing more civic and democratic control over secret services,
their privileges increased. Amnesty of convicts in August 2016, encompassing 12,000 people, has eased the pressure on prisons. It included a few (of many) political prisoners.
Tajikistan provides a clear-cut example of grand corruption, whereby the extracted amounts of money considerably diminish the national wealth. Freedom House has labeled it “kleptocracy”. Corruption pervades all across society, from the top, where the President and his cronies control the most lucrative businesses, through nepotism, extortion or bribe-seeking by public officers, to the widespread petty corruption. Bribe is common also in politics, e.g. in the election process. It also facilitates drug smuggling from the neighboring Afghanistan. Year and again, the situation did not improve. In its Corruption Perceptions Index 2016, Transparency International ranked Tajikistan as 151 of 176 countries, with the score 25/100, the worst
one of all 45 countries monitored by the Freedom Barometer. Bribery rate is 50%. The anti-graft struggle is confined to low levels of administration (allegedly 1100 officials were arrested between 2011 and 2016) or to politicians who distance themselves from the government.
Dramatic worsening of the human rights situation in the second half of 2015 and a referendum in May 2016 that, among other things, proclaimed President Emomali Rahmon as “The Leader of the Nation”, marked the entire subsequent period. In November 2016, amendments to the Penal Code stipulated that insulting The Leader was punishable by up to five years in jail. Suffocating of the NGOs, closure of non-compliant media, numerous arrests of political opponents, or other authoritarian measures are rapidly leading Tajikistan towards one-party system. The official narrative, blaming anything non-authorized coming from the West (or from other Muslim countries) as treacherous, anti-national and “extremist”, little by little takes
a totalitarian shape. The only legitimate outside influence seems to be the one from Russia. For instance, the law on CSOs is shaped as a light version of the Russian “foreign agent law”, in that CSOs are obliged to report each and every donation they get from abroad. Although homosexuality as such is not illegal, authorities conducted two inquiries during 2016 with the aim of compiling a list of (preferably all the outed) gays and lesbians until autumn 2017.
Private property is not adequately secured in Tajikistan. Judiciary lacks independence from strong influences of government officials and politically connected groups that take interest in profitable private ventures. In several cases, government regulatory agencies were used to pressure businesses into ceding properties and business assets. Court rulings could also be inconsistent when applying laws, spelling divergent verdicts in similar cases. Poor enforcement of contracts is a matter for concern: court procedures could be lengthy and bear significant costs - most notably, of the legal enforcement of court decisions, which impedes access to justice since enforcement could take twice as much time as the trial and judgment themselves. Out-of-court settlements have not been
systematically developed, since the role of Third Party Arbitration Courts was brought to minimum. Low court automation and ineffective adjournment procedures considerably weaken the judiciary process. At the same time, clientele networks, nepotism and corruption among public officials are widespread, which basically undermines the liberal stance towards foreign investments. All land is by law in state ownership, but first and second tier land use rights are leased - to Tajik natural persons and companies indefinitely, while to foreign entities up to 50 years. Weak performance of the land registry diminishes security of property rights in the agricultural sector.
The size of government in Tajikistan, taken the total public spending of 32% of GDP in 2016, is considerably smaller as compared to developed European countries, leaving fiscal room for lower taxes but also lower level of government services. Growth is considerable, partially led by strong exports and public investments, but economic vacillations in Russia pose a significant risk for future prospects. Especially remittances have been strongly affected, mostly by adverse economic situation in Russia, the main emigration destination of Tajikistani workers, coupled with new discriminatory measures taken by the Russian authorities towards migrant workers coming from outside the Eurasian Economic Union (EEU). Remittances have therefore decreased from 50% of GDP in 2014 to only 28% in
2016, curbing private consumption and imports. Accumulated public debt is envisaged to reach nearly 50% of GDP in 2017, almost doubling its 2014 level, and calling for a significant deficit reduction, possibly accompanied by an IMF program. The role of the state in the economy is still considerable, via numerous big state-owned companies active in many fields, even in those where state interference is obviously unnecessary (finances, food processing and mining). The most important SOEs are industrial facilities such as the largest company in the country, the aluminum company Talco. SOEs receive a large share of government procurements, and are also financed by banks via preferential loans, that can be waived or taken over by the government. Many of these SOEs have reported high financial losses during the previous years, which burdens public finances. SOEs management is not professional, due to strong political influences from the government, but being a strong part of the clientele network. Share of non-performing loans (NPL) in banks reached 54% in the end of 2016, making banking system unstable and many banks close to insolvency, which may have strong repercussion on public finance in case of bailouts. Although road tax has been decreased, this was followed by a land tax increase.
Business environment in the country cannot be described as business friendly due to complicated and often non-transparent regulations, involving lengthy and costly procedures, such as those in tax administration. However, arbitrary and discriminatory implementation of regulations is burdensome problem, closely related to the high level of corruption in the country. In getting electricity and obtaining construction permits, Tajikistan stands at the bottom of the world economies – on average it takes more than 8 months to get a construction permit. This regulatory framework, makes corruption an essential tool in tackling administration, leading to its omnipresence. Although starting a business has recently been made more difficult by broadening the scope of VAT registration of
small businesses, and plagued by unnecessary bureaucracy, it is still a reasonable task. Labour regulations are mostly rigid: working hours are not flexible; there are redundancy rules and third party notifications. Although notice periods remain the same, severance pay increases with the years in tenure. Since trade unions are weak and mostly concentrated in the public sector, collective bargaining is not widespread. The minimum wage is rather low in comparison to the average wage, not bringing too much distortion in the economy. There is a legal requirement that at least 70% of the workforce must be domestic (75% if the CEO is a foreign national, or 80% and even 90% for projects signed by the Tajikistan government).
Tajikistan has since 2013 been a full member of the World Trade Organization (WTO), encouraging international trade. However, the average tariff rate is still high, standing at 8.1% (and being higher for agricultural than for manufacturing products). The action plan for full implementation of Tajikistani obligations towards the WTO that was adopted in 2014 is still under slow implementation. There are several Free Economic Zones within the country that facilitate trade and foreign investments, but their imprint has not been very significant. International trade faces hurdles, e.g. geographical position, or bad transportation infrastructure. Those are making exports and imports expensive and lengthy. However, custom procedures prove to be even a bigger obstacle than mountainous
roads. Even though submitting customs declarations could now be done electronically, Tajikistani foreign trade procedures have been burdensome, requiring more than 200 working hours and 13 different documents. Obstacles in movement of goods are complemented by capital controls, which are used to maintain the exchange rate of the national currency. Procedures for obtaining residence permit for foreign nationals are also burdensome and provide for only up to one year of residence.