BEE Coordination Working Group Meeting Minutes, 22 August 2008

Present at the meeting:

1. Opening remarks

Matthieu Le Blan welcomed participants to EBRD offices and thanked Sherali Zardov for coming to speak about the Investment Council. Wendy Werner began the meeting by introducing new participants: Temur Rakhimov (AmCham) and Beau Taylor (ADB).

Mr. Rakhimov updated the group on progress towards formation of the American Chamber of Commerce, Tajikistan. The group is already registered in the U.S. and is in the process of local registration in Tajikistan. It is designed to represent the business interests of its members, who are American companies, other foreign companies and Tajik companies. There are 3 other AmChams in Central Asia, in Kyrgyzstan, Uzbekistan and Kazakhstan. Its founding in Tajikistan is a project of the Eurasia Foundation of Central Asia.

2. Presentation of draft Action Plan for BEE Coordination Working Group

Shukhrat Rahmatboev thanked all members of the working group for their active participation in the meetings so far. He stressed that all members have equal opportunities and responsibilities to contribute to the group. He presented the draft action plan (see Attachments A and B) for the group's consideration. The action plan is the result of consultations and voting at prior meetings. The document is designed to focus on a few issues, and to be flexible rather than set in stone. It will help the working group share common priorities and tasks, and align its activities with the Investment Council. All five issues identified in the action plan are already in process; the BEE Coordination Working Group will simply help these issues keep moving to completion. Mr. Rahmatboev thanked participants again for their active participation and asked for any comments to be submitted to himself and/or Christine Bowers.

Ms. Bowers asked participants to share any information they had about progress on the 4th issue on the action plan, commercial property rights. Sobir Kurbanov agreed that commercial property rights is an important topic.

3. Update on Investment Council

 Sherali Zardov shared results of the first Investment Council meeting, held on July 31. He emphasized that the Asia-Plus' media article was incorrect; the donors present were EBRD and USAID, not WB, IMF or ADB as reported. He said the Secretariat would issue a press release for the next meeting, in hopes of receiving more accurate news coverage. Charlotte Adriaen expressed her concern that the donor representatives were not given enough time to prepare for the meeting and collect input from other donors on the agenda items. Mr. Zardov agreed and said the Secretariat and donors were informed only 2 days beforehand about the meeting. He said a pre-meeting of USAID, EBRD, the business association representative and private sector representative discussed talking points and questions they wanted to raise during the meeting with the President. He had requested at least 2 weeks' notice of the date and agenda of the first meeting. He asked that the BEE Coordination Working Group look ahead and help the Secretariat with the hard work of preparing draft decrees and other background documents. The Secretariat has already agreed action plans with IFC, Pragma and USAID on individual topics.

Mr. Zardov submitted the minutes of the first meeting to the President's office, but their approval has been delayed by preparations for the Shanghai Cooperation Organization summit meeting in Dushanbe. He read much of the draft minutes to the group. The first part of the Investment Council meeting covered organizational issues for the functioning of the Investment Council. Membership of the Council was approved:

1. Matluba Uljabaeva, Head of the National Association of SMEs, for the first three meetings
2. David Robson, President of Tethys Petroleum, for the first two meetings
3. Aurelia Lovisa Beem, Company Diplomatix, for the third meeting
4. Muhabatov Mufarakh, General Director of Ruhom, for the first two meetings
5. Matthieu Le Blan, Head of EBRD Office Tajikistan, for the first four meetings
6. Caroline Bryan, USAID Country Director, for the first three meetings

Other organizational issues include:

1. Mechanism of rotation approved
2. Resolution on Secretariat of the Investment Council approved
3. Sherali Zardov approved as Head of the Secretariat
4. Agenda for next meeting approved (improvement of permits and regulatory system in Tajikistan)
5. The President confirmed his willingness to consider issues not specifically on the agenda

The rest of the Investment Council meeting included decisions on a number of issues put by the business representatives, according to Mr. Zardov. These include:

1. Developing a mechanism for protecting the property rights of foreign investors.
2. Line ministries to review all legislation and normative acts which impair private sector development
3. Improvement of international indicators for Tajikistan (such as Doing Business)
4. Government, donors and business associations to make recommendations on inspection implementation
5. Secretariat to prepare report on who is doing what, and how to use the reports and analyses created by donors

Full details will be clear in the minutes, which will be circulated once they are signed by the President.

Michael Pedersen volunteered to participate in investors' rights' protection, in particular with getting a sovereign credit rating assigned to Tajikistan.

Ms. Adriaen urged Mr. Zardov to seek information about who is doing what from GosKomInvest. She said the last decision by the government and donor community was that GosKomInvest would be responsible for centralizing all information from donors and distributing it to line ministries upon request. Mr. Zardov confirmed that the Secretariat would not be coming back to donors for this information, but would instead rely on GosKomInvest and the Joint Country Support Strategy currently in development.

Mr. Rahmatboev added that the head of GosKomInvest represents the public sector on the Investment Council. He agreed with Mr. Zardov that the Investment Council does not duplicate GosKomInvest. The Investment Council takes up one issue and gets a top decision, ready for implementation.

Mr. Le Blan asked the donors to be patient with the process, and said that donor involvement in Tajikistan in the Investment Council is much higher than it has been in the other regional Investment Councils. He hopes for results within 9 months.

Anna Schwarz asked about the legislative form of the minutes, once signed by the President. She also encouraged the donor representatives to be in frequent contact with the BEE Working Group and thoroughly prepared, as it's entirely possible that the next Investment Council meeting will also come as a surprise. Mr. Zardov led a small discussion about the legislative form question. He said the President's signature renders the minutes as an order of the President. They are of an advisory nature, and legislative acts can be developed based on them.

4. Status update on ongoing BEE initiatives

Ms. Werner said that the Inspections Moratorium (see Attachments C and D) was signed just before the first Investment Council meeting. The text of the moratorium was a surprise to those, in the donor community and in government, who had worked on earlier drafts. It is a two-year moratorium on all inspections of small businesses, the longest duration of any moratorium in the region. Mr. Rahmatboev mentioned that while the earlier drafts called for exclusions to the moratorium, the final version with no exclusions speaks to the government's willingness to make radical decisions. He suggested that this might bode well for the regulatory "guillotine".

5. Closing remarks

The next meeting will discuss the One-Stop Shop for business registration (OSS). The OSS working group finishes a working session on August 23, and it will circulate a draft resolution for comment. Ms. Werner pointed out that the draft Action Plan calls for preparatory work ahead of the next meeting.

List of attachments:

1. Draft Action Plan for BEE Coordination Working Group - English
2. Draft Action Plan for BEE Coordination Working Group - Russian
3. Investment Moratorium - original Presidential decree, text in Russian and Tajik
4. Investment Moratorium - unofficial translation of decree into English

25.8.08/CB