Subsidies for the Poor Go Up

06-Apr-07

The Tajik government has vowed to continue offering gas and electricity subsidies to low-income families, but NBCentralAsia observers say it will not make much difference if energy supplies continue to be erratic.

President Imomali Rahmon announced at a cabinet meeting on March 31 that the state will cover around half of all electricity and gas bills for low-income families.

Gurez Bakoev, acting head of the budget policy department at the ministry of finance, told NBCentralAsia that 26 million somoni, or 7.5 million US dollars, will be allocated from the government budget to fund the initiative.

Last year, around 410,000 families received electricity subsidies and 160,000 more got help with their gas bills, at a total cost of around seven million dollars.

According to Davron Boboev, head of the social protection department in the ministry of labour and social welfare, “energy” subsidies have been available in Tajikistan since 2004. People who earn less than 20 somoni, or seven dollars, a month are classed as low-income, and any benefit will have a substantial impact on their lives.

“Although it is not a lot, every little helps,” said Boboev.

Economist Hojimuhammad Umarov says the value of these benefits is decreasing as the energy crisis continues, with frequent cuts in the gas and electricity supplies.

“People should first be provided with electricity and gas, and after that [the government] can say it cares about low-income families by covering their costs,” said Umarov.

Tajikistan suffers severe energy shortages every winter. In the winter that has just passed, electricity was only available for two hours a day in many areas, and some regions have gone without gas since the end of February.

Political scientist Parviz Mullojanov suggests the amount of money allocated to energy subsidies is not enough and does not keep pace with inflation.

“Compared with most countries in the Commonwealth of Independent States, the Tajik government’s contribution to the social sector remains at a very low level. Most benefit payments fall well short of inflation rates and don’t answer the real needs of Tajikistan’s poorest people,” Mullojanov explained.

He argues that state subsidies will remain inadequate until a middle class emerges that earns consistently well and pays the taxes the government needs to help low-income families.

“The problem is that there is virtually no middle class, and they are the major taxpayers in most developed countries,” he said.

(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)