Tajikistan has a developing economy. The economy is heavily dependent on remittance from Tajik labor migrants in Russia, making up nearly half of Tajikistan's GDP. Since independence, it has gradually followed the path of transition economy, reforming its economic policies. With foreign revenue precariously dependent upon exports of cotton and aluminium, the economy is highly vulnerable to external shocks. Tajikistan's economy also incorporates a massive black market, primarily focused on the drug trade with Afghanistan. Heroin trafficking in Tajikistan is estimated to be equivalent to 30-50% of national GDP as of 2012.
In the fiscal year (FY) 2000, international assistance remained an essential source of support for rehabilitation programs that reintegrated former combatants of the Tajikistani Civil War into the civilian economy, thus helping maintain the peace. International assistance also was necessary to address the second year of severe drought that resulted in a continued shortfall of food production. Tajikistan's economy grew substantially after the war. The gross domestic product (GDP) of Tajikistan expanded at an average rate of 9.6% over the period of 2000-2007 according to the World Bank data. This improved Tajikistan's position among other Central Asian countries (namely Turkmenistan and Uzbekistan), which have degraded economically ever since. As of August 2009, an estimated 60% of Tajikistani citizens live below the poverty line. The 2008 financial crisis hit Tajikistan hard, both domestically and internationally. Tajikistan has been hit harder than many countries because it already has a high poverty rate and because many of its citizens depend on remittances from expatriate Tajikistanis.
Economic history
This is a chart of trend of gross domestic product of Tajikistan at market prices estimated by the International Monetary Fund with figures in millions of ruling currency.
{| class="wikitable"
|-
! Year || Gross Domestic Product || US Dollar Exchange
|-
| 1995 || 65,000 || 123.33 Tajik roubles
|-
| 2000 || 1,807 || 1.82 somoni
|-
| 2005 || 7,201 || 3.11 somoni
|}
For purchasing power parity comparisons, the US Dollar is exchanged at SM 0.82 only.
The Tajikistani economy has been gravely weakened by six years of civil conflict and loss of markets for its products. Tajikistan thus depends on international humanitarian assistance for much of its basic subsistence needs. Even if the peace agreement of June 1997 is honoured, the country faces major problems in integrating refugees and former combatants into the economy. The future of Tajikistan's economy and the potential for attracting foreign investment depend upon stability and continued progress in the peace process.
In 2006 GDP per capita of Tajikistan was 85% of 1990s level. While population has increased from 5.3 million in 1991 to 7.3 million in 2009.
Despite resistance from vested interests, the Government of Tajikistan continued to pursue macroeconomic stabilization and structural reform in FY 2000. In December 1999, the government announced that small-enterprise privatization had been successfully completed, and the privatization of medium-sized and large-owned enterprises (SOEs) continued incrementally. The continued privatization of medium-sized and large SOEs, land reform, and banking reform and restructuring remain top priorities. Shortly after the end of FY 2000, the Board of the International Monetary Fund gave its vote of confidence to the government's recent performance by approving the third annual Poverty Reduction and Growth Facility Loan for Tajikistan. Improved fiscal discipline by the Government of Tajikistan has supported the return to positive economic growth. The government budget was nearly in balance in 2001 and the government's 2002 budget targets a fiscal deficit of 0.3% of GDP, including recent increases in social sector spending.
The following table shows the main economic indicators in 1997–2024. Inflation below 5% is in green.
{| class="wikitable" style="text-align:center; vertical-align:middle;"
|- style="font-weight:bold;"
! Year
! GDP<br />(in billion US$ PPP)
! GDP per capita<br />(in US$ PPP)
!GDP<br />(in billion US$ nominal)
! GDP growth<br />(real)
! Inflation<br />(in Percent)
! Gov. debt<br />(Percentage of GDP)
|-
|1993
|6.43
|1,154
|0.68
|−11.1%
|2,600.7%
|n/a
|-
|1994
|5.17
|921
|0.83
|−21.4%
|350.4%
|n/a
|-
|1995
|4.61
|814
|0.57
|−12.5%
|612.5%
|n/a
|-
|1996
|4.49
|784
|1.05
|−4.4%
|418.5%
|n/a
|-
|1997
|4.65
|798
|1.12
|1.7%
|88.0%
|n/a
|-
|1998
|4.95
|834
|1.32
|5.3%
|43.2%
|96.6%
|-
|1999
|5.21
|851
|1.09
|3.7%
|27.5%
|107.8%
|-
|2000
|5.77
|928
|0.99
|8.3%
|32.9%
|111.4%
|-
|2001
|6.50
|1,027
|1.06
|10.2%
|38.6%
|99.4%
|-
|2002
|7.20
|1,116
|1.21
|9.1%
|12.2%
|98.3%
|-
|2003
|8.09
|1,230
|1.56
|10.2%
|16.4%
|69.8%
|-
|2004
|9.19
|1,369
|2.07
|10.6%
|7.2%
|49.4%
|-
|2005
|10.11
|1,475
|2.31
|6.7%
|7.3%
|45.8%
|-
|2006
|11.15
|1,593
|2.81
|7.0%
|10.0%
|36.8%
|-
|2007
|12.35
|1,726
|3.71
|7.8%
|13.2%
|34.3%
|-
|2008
|13.58
|1,858
|5.14
|7.9%
|20.4%
|30.2%
|-
|2009
|14.20
|1,900
|4.98
|3.9%
|6.4%
|36.9%
|-
|2010
|15.30
|2,002
|5.64
|6.5%
|6.5%
|36.8%
|-
|2011
|16.77
|2,146
|6.52
|7.4%
|12.4%
|35.5%
|-
|2012
|18.37
|2,297
|7.59
|7.5%
|5.8%
|32.5%
|-
|2013
|20.06
|2,453
|8.51
|7.4%
|5.0%
|29.3%
|-
|2014
|21.78
|2,604
|9.24
|6.7%
|6.1%
|27.9%
|-
|2015
|23.30
|2,726
|7.86
|6.0%
|5.8%
|35.0%
|-
|2016
|25.15
|2,879
|6.99
|6.9%
|5.9%
|42.2%
|-
|2017
|27.41
|3,073
|7.54
|7.1%
|7.3%
|46.3%
|-
|2018
|28.57
|3,137
|7.76
|7.6%
|3.8%
|46.6%
|-
|2019
|32.97
|3,549
|8.30
|7.4%
|7.8%
|43.5%
|-
|2020
|35.62
|3,760
|8.13
|4.4%
|8.6%
|51.8%
|-
|2021
|39.73
|4,114
|8.93
|9.4%
|9.0%
|42.1%
|-
|2022
|45.96
|4,673
|10.49
|8.0%
|6.6%
|32.5%
|-
|2023
|51.55
|5,148
|11.86
|8.3%
|3.7%
|30.9%
|-
|2024
|56.37
|5,533
|13.00
|6.8%
|4.5%
|30.7%
|}
Gross domestic product
thumb|300px|right|Real GPD per capita development of Tajikistan
In 2005 Tajikistan's GDP grew by 6.7%, to about US$1.89 billion, and growth for 2006 was about 8%, marking the fifth consecutive year of annual growth exceeding 6%. The official forecast for GDP growth in 2007 is 7.5%. Per capita GDP in 2005 was US$258, lowest among the 15 countries of the former Soviet Union. In 2005 services contributed 48%, agriculture 23.4%, and industry 28.6% to GDP. The recent global recession has reduced Tajikistan's GDP growth rate to 2.8% in the first half of 2009. Remittances from expatriate Tajikistanis is estimated to account for 30-50% of Tajikistan's GDP.
Industries
Agriculture
Although the government has announced an expedited land reform program, many Soviet-era state farms still existed in 2006, and the state retains control of production and harvesting on privatized farms. Privatization of cotton farms has been especially slow, and unresolved debts of cotton farmers remained a problem in 2006. In the early 2000s, the major crops were cotton (which occupied one-third of arable land in 2004 but decreased after that date), cereals (mainly wheat), potatoes, vegetables (mainly onions and tomatoes), fruits, and rice. Cotton makes an important contribution to both the agricultural sector and the national economy. Cotton accounts for 60 percent of agricultural output, supports 75 percent of the rural population, and uses 45 percent of irrigated arable land. More than 80% of the 8,800 square kilometers of land in use for agriculture depends on irrigation. Tajikistan must import grain from Kazakhstan and Uzbekistan.
Forestry
3% of Tajikistan is forested, mainly at elevations between 1,000 and 3,000 meters. No forest region is classified as commercially usable; most are under state protection. Wood production is negligible, but local inhabitants harvest non-wood forest products.
Fishing
Streams and lakes produce a limited amount of fish, and some fish is produced by aquaculture. In 2003 some 158 tons of fish were caught and 167 tons raised on fish farms. Sangtuda 1 Hydroelectric Power Plant of 670 megawatts (MW) capacity, operated by Russian Inter RAO UES, commenced operations on 18 January 2008 and was officially commissioned on 31 July 2009. Other projects at the development stage include Sangduta 2 by Iran, Zerafshan by Chinese SinoHydro and Rogun power plant, which, at , is projected to supersede the Nurek Dam as tallest in the world if completed. The Rogun Dam was originally planned to be built by Russia's Inter RAO UES, but following disagreements, Russia pulled out. In 2010, production resumed with Iranian investment and Chinese assistance. Besides hydropower, other energy resources include sizable coal deposits and smaller reserves of natural gas and petroleum. In December 2010, Russian Gazprom announced discovery of significant natural gas reserves in Sarykamish field with 60 bcm of natural gas, enough for 50 years of Tajikistan's domestic consumption. The national power company is Barqi Tojik.
Tajikistan is a partner country of the EU INOGATE energy programme, which has four key topics: enhancing energy security, convergence of member state energy markets on the basis of EU internal energy market principles, supporting sustainable energy development, and attracting investment for energy projects of common and regional interest.
Services
Throughout the early 2000s, the overall output of the services sector has increased steadily. The banking system has improved significantly because of strengthened oversight by the National Bank of Tajikistan, relaxed restrictions on participation by foreign institutions, and regulatory reform. The system includes 16 commercial banks and the central bank, or National Bank. The state controls the system, although in principle most banks have been privatized. An internationally assisted restructuring program was completed in 2003. Banks provide a narrow range of services, concentrating on providing credit to state-owned enterprises. Only an estimated 10% of the capital in Tajikistan moves through the banking system, and small businesses rarely borrow from banks.
Abdujabbor Shirinov, Chairman of the National Bank of Tajikistan announced 142 credit organizations, including 16 banks and 299 their branches, two non-bank financial institutions and 124 microfinance organizations functioned in Tajikistan at the first of 2013.
Tourism
The tourism industry of Tajikistan was eliminated by the civil war, but has been re-established in recent years. In 2018, the British Backpacker Society ranked Tajikistan as the 7th best adventure travel destination on earth.
Labour
In 2003 Tajikistan's active labour force was estimated at 3.4 million, of whom 64% were employed in agriculture, 24% in services, and 10% in industry and construction. After declining in the early 2000s, the real wages of state employees were raised in 2004 and 2005. Because of the continued dominance of state farms, the majority of workers are government employees, although only a small number rely completely on wages. Driven by high unemployment, in 2006 an estimated 700,000 workers found seasonal or permanent employment in Russia and other countries. Their remittances, estimated at US$600 million in 2005, are an important economic resource in Tajikistan; in 2004 an estimated 15% of households depended mainly on those payments. In May 2009 remittances to Tajiks had fallen to $525 million, a 34% decline from the previous year. Immediately before the 2008 financial crisis, there were an estimated 1.5 million foreign workers sending remittances back to Tajikistan. In 2006 the average wage was US$27 per month. The national unemployment rate was estimated unofficially as high as 40% in 2006, but in rural areas, unemployment has exceeded 60%. Unemployment has been higher in the southern Khatlon Province than in the northern Soghd Province. and in 2008 passed a decree creating two zones: the Panj Free Economic Zone and the Sughd Free Economic Zone. In 2003 foreign direct investment totaled US$41 million; it increased to US$272 million in 2004 because of the debt-reduction transaction with Russia. In the first half of 2005, the figure was US$16 million. Beginning in 2005, the Russian Rusal aluminium company resumed operations to complete the hydroelectric station at Rogun on the Vakhsh River and expand aluminium production at the Tursunzade plant. That plant was scheduled for possible sale to Rusal in 2007. Also in 2005, Russia and Iran resumed work on the Vakhsh River Sangtuda hydroelectric project. Gazprom, the Russian natural gas monopoly, allocated US$12 million for oil and gas exploration in Tajikistan in 2007 after spending US$7 million in 2006. In 2005 the Russian telecommunications company VimpelCom bought a controlling share of Tajikistan's Tacom mobile telephone company. As of 2006, Turkey tentatively planned to invest in a luxury hotel and a cotton processing plant.
See also
- Visa policy of Tajikistan
References
External links
- Habib Borjian, , Encyclopædia Iranica. (mostly about its economic history)