Economy of Tajikistan

Tajikistan was the poorest country in Central Asia following a civil war in 1991. With foreign revenue precariously dependent upon exports of cotton and aluminium, the economy is highly vulnerable to external shocks. In fiscal year (FY) 2000, international assistance remained and essential source of support for rehabilitation programs that reintegrated former civil war combatants into the civilian economy, thus helping keep 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 GDP of Tajikistan expanded at an average rate of 9.6% over the period of 2000-2004 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.

Overview

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.

Current GDP per capita] of Tajikistan shrank by 67% in the 1990's.

Macro-economic trend

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.

Year	Gross Domestic Product	US Dollar Exchange
1995	65,000	123.33 Tajikistani Rubless
2000	1,807	1.82 Somoni
2005	7,201	3.11 Somoni

For purchasing power parity comparisons, the US Dollar is exchanged at 0.82 Somoni only.

Cotton is the most important crop. Mineral resources, varied but limited in amount, include silver, gold, uranium, and tungsten. Industry consists only of a large aluminium plant (in Tursunzade), hydropower facilities, and small obsolete factories mostly in light industry and food processing. The Tajikistani economy has been gravely weakened by six years of civil conflict and by the loss of subsidies from Moscow and of markets for its products. Tajikistan thus depends on aid from Russia and Uzbekistan and on international humanitarian assistance for much of its basic subsistence needs. Even if the peace agreement of June 1997 is honored, 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.

Notes

See also

See also : Tajikistan