Tajikistan, is under Taliban threat
Tajikistan is going through a difficult period with the Taliban regime rising to power in Afghanistan. Tajikistan, Sharing a 1,303-kilometre-long border between Afghanistan and the Taliban administration, faces a major migration threat. This could destabilise Tajikistan and other neighbouring countries that are not economically ready.
Tajikistan, the country with the lowest per capita GDP in Central Asia, whose economy is based on agriculture and mineral resources, is going through a difficult period with the Taliban regime rising to power in Afghanistan.
Tajikistan, Sharing a 1,303-kilometrelong border between Afghanistan and the Taliban administration, faces a major migration threat. This could destabilise Tajikistan and other neighbouring countries that are not economically ready. In addition, a possible attack and problems such as terrorism and drug trafficking can also cause headaches in Tajikistan administration.
The fact that Russia stepped in and took military steps shows that the problem has the potential to deepen. Russia held joint military exercises with Tajikistan and Uzbekistan on the Afghanistan border at the beginning of August. Russia then called for joint action with his allies in Central Asia to prepare for possible security threats from Afghanistan. Russia announced its readiness to provide weapons and military equipment to Uzbekistan and Tajikistan at special low prices.
AN ECONOMY BASED ON AGRICULTURE, THE MAIN PRODUCT IS COTTON
The main product is cotton in the economy of Tajikistan. Agriculture is at the forefront in the country. Most of the cotton cultivation is performed through irrigation. Tajikistan’s lands are suitable for agriculture and water resources are fairly abundant compared to other Central Asian countries. However, the agricultural sector was not enough to raise the level of public welfare.
An economy that was highly dependent on cotton exports was formed due to the fact that Tajik lands were used by Moscow for cotton production in the time of the USSR. Grapes, sesame, wheat, barley, melon, vegetables are also cultivated. Livestock has an important place in the country’s economy. Ovine and silkworm breeding is widespread.
Flower cultivation is also common.
THE TARGET IS POVERTY REDUCTION AND EMPLOYMENT DEVELOPMENT
Tajikistan, which is part of the World Bank’s low-income country group, is working to ensure macroeconomic stability and create the necessary infrastructure for the development of the private sector.
Tajikistan’s per capita national income is only $844. The Tajik administration, which aims to reduce poverty and improve employment in the country, has improved the investment environment while providing improvements on issues such as transition to the market economy, privatisation, and constitutional reforms. It is aimed to develop the infrastructure and energy sector in addition to other sectors within the scope of the development strategy; however, the country still needs international assistance for infrastructure investments.
Mining, hydropower production, oil extraction, and cotton processing are among the main industrial enterprises in the country. In addition, food processing machines, chemical substances, and carpeting have an important place in the industry. There are also medium and heavy industrial branches such as power transformers and cables and agricultural tools production in addition to light industrial branches such as knitted goods production, silk fabric, carpeting.
THE ECONOMY GREW BY AN AVERAGE OF 7% ANNUALLY
Tajikistan has made steady progress in reducing poverty and expanding its economy over the past decade.
Tajikistan’s per capita income is only $844. The Tajik administration, which aims to reduce poverty and improve employment in the country, has improved the investment environment while providing improvements on issues such as transition to the market economy and privatisation. It is aimed to develop the infrastructure and energy sector in addition to the industry, and international assistance is needed for infrastructure investments.
Tajikistan has made steady progress in reducing poverty and expanding its economy over the past decade. The poverty rate fell from 83% of the population to 27.4% as a result of the works conducted. The economy grew by an average of 7% annually. However, the economy, which was vulnerable to external shocks, could not keep up with the growing population in terms of creating employment.
The poverty rate fell from 83% of the population to 27.4% between 2000-2018 and the economy grew by an average of 7% annually. However, the economy, which was vulnerable to external shocks, could not keep up with the growing population in terms of creating employment.
The role of the private sector in the economy remained limited and its contribution to total investments was only 15%. Poverty in rural areas is still high, with only 36% of the population in rural areas having access to safe drinking water.
The National Development Strategy (NDS) aims to increase domestic revenues by 3.5 times and reduce poverty by 50% until 2030. This goal is predicted to be achieved if Tajikistan transforms its current growth model and is given more opportunities to invest, create employment, and contribute to the economy in the private sector. TAJIKISTAN ACHIEVED 4.5% GROWTH IN 2020
The coronavirus outbreak and the closure of Tajikistan’s borders to its
Cotton is at the forefront in Tajikistan, an economy based on agriculture. However, Tajikistan, which has an economy that is highly dependent on cotton exports, is suitable for agriculture. Water resources are also fairly abundant compared to other Central Asian countries. However, the agricultural sector was not enough to raise the level of public welfare.
neighbours carry significant risks in terms of deteriorating the outlook of the 2020-2021 period economy. However, the country’s GDP rose by
4.5% to $7.3 billion in 2020, the year of the coronavirus crisis. Annual inflation was 9.4%. Tajikistan grew 7.5% in 2019, reaching GDP of $7.9 billion.
The agricultural sector had the highest share in the country’s GDP with 22.6% in 2020 according to the data. The industrial sector received a share of 17.4%, the trade sector received a share of 15.9%, and the taxes received a share of 9.1% in this period. DAM CONSTRUCTION IS PROBLEMATIC, IMF ASKS FOR REFORM AND PRIVATISATION
The construction of the high-cost Rogun Hydroelectric Dam poses a serious risk in terms of deteriorating financial stability and further cutting social spending, given budget revenues in addition to the large external risks.
In addition, agricultural reform and sector financing, reforms to strengthen the banking sector, transparency in the economy, privatisation, prevention of money laundering and improvement of the working-work environment were the recommendations raised in IMF programmes.
The fact that the budget and current account balance continues to be deficit due to the decreasing public revenues because of the coronavirus outbreak, the high public debt is one of the main problems mentioned in the Review
Report prepared by the IMF Board on April 29, 2020.
TAJIKS WORKING IN RUSSIA SEND 29% OF NATIONAL INCOME
Tajikistan’s foreign debt stock is about $6.6 billion. 21% of this debt is shortterm. The country also benefits from project-based loan/grant funds from the
World Bank (IBRD, IDA) and the Islamic Development Bank, as well as from the IMF as part of the outsourcing.
Approximately 1.5 million Tajiks working abroad, mainly in Russia, sent money transfers to their countries, reaching $2.3 billion in 2019. This amount accounts for about 29% of national income. The income in question is also increasing depending on the growth performance of the Russian economy.
TURKEY IS ONE OF THE LARGEST TRADING PARTNERS
Foreign trade is deficit even though Tajikistan’s exports regularly increase in the period of 2014-2020. It imported $3.1 billion against $1.3 billion in exports and had a foreign trade deficit of $1.8 billion in 2020.
Turkey became the second country where Tajikistan exports the most in
2020 with $203 million and a 15% share in total. Tajikistan made $120 million from Turkey in 2020. Thus, Turkey became the fifth country that Tajikistan imports the most with a 4% share. Bilateral trade was more in favour of Turkey in 2019 and 2020.
Tajikistan’s main trading partners are Russia, Kazakhstan, Uzbekistan, Switzerland, Germany, and China.
The main agreements signed between Turkey and Tajikistan are as follows: Agreement on Trade and Economic Cooperation (1993), Agreement on the Mutual Promotion and Protection of Investments (1996), Agreement on the Prevention of Double Taxation on Income Taxes (1996).