Economy of Tajikistan

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.

[15] 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.

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.

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.

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.

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.

Despite resistance from vested interests, the Government of Tajikistan continued to pursue macroeconomic stabilization and structural reform in FY 2000.

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.

In 2006 an estimated one-third of Tajikistan's 700 major industrial enterprises were completely idle, and the remainder were operating at 20 or 25% of capacity.

Some small light industrial plants produce textiles and processed foods, using mainly domestic agricultural products.

The construction industry, about half of which is state-owned, has suffered from low investment in capital projects and from shoddy workmanship that has discouraged international contracts.

The rivers of Tajikistan, such as the Vakhsh and the Panj, have great hydropower potential, and the government has focused on attracting investment for projects for internal use and electricity exports.

[30][31][32] Besides hydropower, other energy resources include sizable coal deposits and smaller reserves of natural gas and petroleum.

"[37] 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.

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.

Immediately before the 2008 financial crisis there were an estimated 1.5 million foreign workers sending remittances back to Tajikistan.

[20] In the post-Soviet era, Tajikistan has substantially shifted its markets away from the former Soviet republics; in 2005, more than 80% of total exports went to customers outside the Commonwealth of Independent States (CIS), including more than 70% to countries of the European Union (EU) and Turkey.

In 2005, the top overall buyers of Tajikistan's exports, in order of value, were the Netherlands, Turkey, Russia, Uzbekistan, Latvia, and Iran.

In 2005 the largest suppliers of Tajikistan's imports, in order of value, were Russia, Kazakhstan, Uzbekistan, Azerbaijan, China, and Ukraine.

Those import rankings are determined largely by the high value of fuels and electric power that Tajikistan buys from its neighbours.

[20] In the early 2000s, foreign direct investment has remained low because of political and economic instability, corruption, the poor domestic financial system, and Tajikistan's geographic isolation.

To attract foreign investment and technology, Tajikistan has offered to establish free economic zones in which firms receive advantages on taxes, fees, and customs.

The Working Party held its sixth meeting in July 2011 to continue the examination of Tajikistan's foreign trade regime.

As part of bilateral market access negotiations, Tajikistan agreed to lower tariffs on cooking equipment, refrigerators, ovens and water heaters in discussions to gain Thailand's backing.

Earlier, the government of Tajikistan confirmed that it had concluded negotiations with Japan, and had received support from the nation for its accession in an agreement signed on July 31, 2012.

Real GPD per capita development of Tajikistan
Tajikistani exports in 2006