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Asia and Oceania
Tajikistan |
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Country information
ECONOMY
Basic Economic Facts
GDP: US$3.7bn (2007)
Annual GDP Growth: 7% (2007)
Inflation: 20% (2007)
Major Industries: Nonferrous metallurgy, mining, hydro-power, textiles, cotton, fruit.
Major trading partners: Russia, China, Turkey, EU, Iran
Foreign direct investment: US$ 70 mn (2007 projection)
Debt: US$ 1.175 mn (2007 projection)
Tajikistan has the lowest per capita GDP ($427 in 2006) among the 15 former Soviet republics, on a par with much of sub-Saharan Africa as the economy has suffered badly with the loss of its traditional markets after the collapse of the Soviet Union, compounded by the destructive effect of the civil war. The poor state of the roads, limited external transportation links and other infrastructure weaknesses hinders development. The rationing of electricity in winter - when most of the country outside the capital receives no more than four hours (or less) of electricity a day - has serious implications for the ability of industry or IT to operate. Most of the manufacturing plants from Soviet times have been abandoned, but have not been replaced by new production. Around 75% of exports derive from a single large aluminium plant, TALCO. Cotton is the most important crop (although this involves some child labour during the harvest period), accounting for about 9% of exports. Other exports include fruits, vegetables and nuts.
Around 57% (2003) of the population is estimated to live below the official poverty line as defined by the World Bank's indicator of living on less than $2.15 a day. The lack of job opportunities drives up to a million Tajiks to seek work abroad as migrant labourers and their remittances form a major part of the Tajik economy. Although now much reduced, Tajikistan is still dependent on international humanitarian assistance for some of its basic subsistence needs, and needed additional assistance to cope with the humanitarian crisis caused by this year's severe winter. International donors continue to work with the Tajik Government to address the serious development issues with the aim of fulfilling the National Development Strategy and Poverty Reduction Strategy for 2007-09 and reaching the Millennium Development Goals by 2015. The Development Forum which took place in Dushanbe in June 2007 concluded that priority should be given to the development of the health and education sectors, to remove constraints on the development of the SME sector and foreign investment, to develop the energy sector, to implement reforms in the cotton sector, particularly with regard to the cotton debt issue, to encourage full participation by women and to put in place a public external debt strategy. Late in 2007 it transpired that the National Bank of Tajikistan had deliberately misled the IMF on seven separate occasions on the nature of its external debt. Senior National Bank figures were involved in a conflict of interest and the President removed the Chairman and all his deputies in a reshuffle in January 2008. The IMF has now ordered the Tajik authorities to repay five IMF disbursements that were obtained on the basis of false information.
Despite the problems, economic growth has averaged around 9% since the end of the civil war. Inflation remained within single figures for some years but recent price hikes for fuel and consumer goods mean that it reached 20% by the end of 2007 and continued high in early 2008. Tajikistan has considerable economic potential and the government has prioritised infrastructure development, particularly hydro-power and road-building as key to the country's development. Russia, China and Iran are becoming increasingly involved in construction projects. There is some, limited, potential for oil and gas exploitation, while the mountains contain valuable mineral resources including gold, silver, uranium, antimony and tungsten. Western investors, however, find Tajikistan a difficult country in which to work given the high levels of corruption, complex and not entirely transparent bureaucracy, and limited infrastructure. There are no major Western companies currently working in Tajikistan.
