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IFC’s Private Enterprise Partnership for Eastern Europe and Central Asia launched the Tajikistan Business Enabling Environment Project to help streamline regulatory procedures and improve the business enabling environment for SMEs. With funding from the Swiss government, the project conducts regular surveys of the small and medium business sector and works with government agencies to address the key issues facing SMEs. Amending the inspections process One key reform has been in the inspections procedures. In Tajikistan, entrepreneurs averaged over a dozen inspections in 2005. This cost them around 7 business days and an estimated $154 (or 9% of annual profits) in fines and unofficial payments. Other issues, such as taxation, licensing and permits, made it difficult and expensive for entrepreneurs to operate their businesses. Sectoral laws in Tajikistan gave sweeping rights and powers to inspecting bodies, who often conducted inspections of the same business multiple times a year. The lack of a unified inspection law meant that each inspection (for fire, sanitaryepidemiologic, etc.) could have different rules. Entrepreneurs, therefore, had no idea what to expect from an inspection, or even which authorities were allowed to conduct them. To reform the inspection practice, the Tajikistan Business Enabling Environment Project took a participatory approach from the start. The project team organized a series of round table discussions among entrepreneurs, business associations, inspecting agencies, government officials and donors, giving a platform for all stakeholders to voice their views about the inspection process. The dialogue resulted in widespread agreement on the need for reform, and defined the key areas to be addressed. The project team combined this bottom-up approach with a top-down one, helping the World Bank include inspections reform conditionality in its loan to the Tajik government. The result? A new law on inspections. This participatory approach takes longer in the beginning, "but we minimized the opposition later in the process," says IFC’s Florentin Blanc. The new inspection law limits the frequency and duration of inspections based on the risk a firm’s activities pose to public health, safety, and the environment. It establishes an official list of inspecting bodies and requires inspectorates to create and abide by checklists, which will be distributed to the public through the official sources. The Inspections Registration Book (IRB) is another powerful tool to keep the inspections under control by the entrepreneurs themselves. It will allow entrepreneurs to comply with requirements and prevent violations by providing advance notice of inspections and a clear record of inspection activities. In July 2006, the Inspections Law and proposed amendments to the Tax Code were adopted by Parliament and signed into force by the President. The challenge for IFC’s Tajikistan Business Enabling Environment Project now is to address the new law’s implementation. "The approval of the law is necessarily only the first step of the change process", says project manager Andrea Dall’Olio. "It is crucial now to make sure to implement it into key inspectorates’ working practices". IFC is coordinating a working group to address the key issues, and launched an information campaign to raise awareness of officials, entrepreneurs and media on key provision of the law. The project has already succeeded in signing a Memorandum of Understanding with the Tajik government, outlining a strategy for collaboration between the government and IFC. Malika Kalandarova, a mini-market owner in Dushanbe, responded to the announcement of the law enthusiastically. "The unofficial payments which unfortunately became standard practice will disappear from my financial plan". | SITE TOOLS  
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