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
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
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)
US $ 7,523 million (2018)
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)
7.4 percent (2019)
Government debt's share of GDP
47.9 percent (2018)
US $ 5,881 M (2017)
US $ 874 million (2018)
US $ 2,762 million (2018)
- 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
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.
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.