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Tajikistan Economical Facts

 

Economical overview

Tajikistan is a poor country whose economy is mainly based on aluminum production, cotton cultivation and money shipments - remittances - from Tajik guest workers in mainly Russia. All in all, it makes the country vulnerable to economic downturns.

Tajikistan is the poorest country among all former Soviet republics, according to the EIU (Economist Intelligence Unit). Nearly three-quarters of Tajiks live in rural areas and many of them live on self-farming agriculture. They are largely outside the formal economy.

  • Countryaah.com: Major imports by Tajikistan, covering a full list of top products imported by the country and trade value for each product category.

High unemployment means that many Tajiks, especially men, travel to Russia or Kazakhstan to work there. In 2013, their referrals accounted for more than half the country's GDP, with a margin more than in any other country in the world. When the Russian economy slowed down in 2014 (oil prices fell and the EU and US imposed sanctions on Russia because of the Ukraine crisis), it became more difficult for the Tajiks to get work there and the remittances dropped sharply. They began to increase again from 2017, accounting for a third of GDP the following year.

The contribution of foreign workers goes to private consumption and contributes to growth in small companies in the service sector. When cash flow declines, it hits the entire economy. The government is unwilling to acknowledge the contribution of foreigners to the economy, possibly to reduce the country's dependence on Russia. The dependency makes Tajikistan subject to pressure from Moscow, which on several occasions has threatened to deport migrant workers.

  • Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including TJK which represents the country of Tajikistan.

The economy is crushed by the war

Economical Facts of Tajikistan

During the Soviet era (1920–1991), the Republic of Tajikistan depended on subsidies and trade in the Union's internal market. With the dissolution of the Soviet Union in 1991, the economic system was devastated. In addition, a large proportion of Tajikistan's well-educated population disappeared (see Population and Languages). The Civil War 1992-1997 further contributed to crushing the country's economy. After the turn of the millennium, however, growth accelerated, albeit from a low level. The proportion of poor people was halved in 15 years.

The privatization of state-owned enterprises began in the late 1990s. The majority of them were sold within a few years, preferably small businesses in commerce and other services. Because the corruption is widespread, the new owners, who often belonged to the old social elite, were able to buy the companies at an underpriced price. In addition, sales of large companies have been slow. The state's income from privatization has therefore become small.

The global financial crisis led to a major slowdown in the economy in 2009, when energy and food crises hit hard on Tajikistan. Sharply reduced cash flow from abroad and falling prices for aluminum and cotton meant that the state was almost facing bankruptcy.

The trend quickly reversed again, but five years later, the Russian crisis posed a new challenge, while electricity shortages threatened the industry. The country's central bank used half its foreign exchange reserve to support its own currency, Somoni, which, despite government intervention, lost about 11 percent of its value against the US dollar during the year.

Large foreign debt

The second half of the 2010 was characterized by continued economic problems despite high growth. In 2016, the banking system was in crisis when two major banks approached bankruptcy. Lenders like the IMF and the World Bank demanded emergency rescue efforts from the government, which raised electricity prices and lowered fuel subsidies for large companies. Investment in tourism suffered setbacks when Islamists in July 2018 killed four foreign bicycle tourists in an assault.

However, improved relations with Uzbekistan meant increased trade and better energy supply, when Tajikistan began to sell electricity to Uzbekistan, which in turn resumed the supply of natural gas to Tajikistan. Uzbekistan is now one of the country's most important trading partners.

Tajikistan lacks almost entirely its own investment capital. The country is therefore dependent on help from the outside world. At the end of the 2010, foreign debt rose rapidly to a level that exceeded the World Bank and IMF's recommendation of one third of GDP.

China sailed as the largest lender in the 2010s, followed by the World Bank, Asian Development Bank and Islamic Development Bank. China is also responsible for many of the foreign investments. Direct aid (not loans) as a share of GDP has declined substantially since the beginning of the 2000s, mainly due to robust growth.

Drug smuggling through the country generates large cash flows outside the official economy. According to UN estimates, about 100 tonnes of heroin a year are shipped through Tajikistan. At the same time, the smuggling means that the powerful drug mafia is believed to have acquired tentacles into the state apparatus.

FACTS - FINANCE

GDP per person

US $ 827 (2018)

Total GDP

US $ 7,523 million (2018)

GDP growth

7.3 percent (2018)

Agriculture's share of GDP

21.2 percent (2017)

Manufacturing industry's share of GDP

10.0 percent (2017)

The service sector's share of GDP

41.4 percent (2017)

Inflation

7.4 percent (2019)

Government debt's share of GDP

47.9 percent (2018)

External debt

US $ 5,881 M (2017)

Currency

Somoni

Merchandise exports

US $ 874 million (2018)

Imports

US $ 2,762 million (2018)

Current account

- US $ 379 million (2018)

Commodity trade's share of GDP

49 percent (2018)

Main export goods

aluminum, cotton, electricity (2018)

Largest trading partner

Uzbekistan, Russia, China, Turkey, Egypt, Kazakhstan (2018)

2006

November

The president is re-elected but the election is postponed

President Rachmonov is re-elected for a third seven-year term, with just over 79 percent of the vote. The turnout is reported to amount to over 90 percent, but the election is not considered democratic.

August

Life imprisonment for former ÖB

The country's former commander-in-chief Gaffor Mirzojev is sentenced to life imprisonment for terrorism and plans to overthrow the government. His supporters claim that the trial is politically motivated.

Islamist politicians die

The leader of the Islamic renewal party, Said Abdullah Nuri, is dying of cancer. He is succeeded by Muhiddin Kabiri.

 

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