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Country Context

Tajikistan has the lowest Gross Domestic Product (GDP) per capita among the countries of Commonwealth of Independent States (CIS). The current HDI of 0.627 which is a bit higher than its 1990 (pre-independence) equivalent. Tajikistan is included in the group of medium development countries per HDI, and ranks the lowest in Central Asia. Tajikistan is poorly integrated into the global economy. Main exports and sources of budget revenues of Tajikistan are aluminum, cotton, remittances and energy.

Given the reliance of the economy on remittances from migrant labour and the export of a few commodities (aluminium and cotton) and because of its dependence on import for food, fuel and consumer products, Tajikistan and its population are highly vulnerable to economic shocks.

The economy is highly state-controlled. The private sector development is hampered by excessive regulation, difficulties of business opening and registration, difficult business environment and regulations related to tax administration, permits, licenses, closing the business, etc. Tajikistan is ranked in 128th position according to the Doing Business 2017 Report among the 190 countries. The national economy is predominately agrarian comprising more than 21% of GDP and employing 46% of labour force. The national economy, despite the annual average growth of 6-7% since 2009-2016, is vulnerable to external factors such as world and regional economic crisis, and fluctuation of the energy resources market in the region (especially Russia). Due to lack of job opportunities, as many as one million men left their homes looking for work in Russia, Kazakhstan and other CIS countries. In 2012, the labour migrants’ remittances comprised 47% of GDP. This is now considerably lower due to the economic crisis in Russia, prompting many migrants to return to Tajikistan without a job to go to. Meanwhile, a severe financial crisis has hit the banking sector with the result that two major banks are now insolvent. Tajikistan is currently negotiating with the IMF for a bailout package.

Tajikistan is ranked 136th in the Corruption Perception Index, behind Kazakhstan and Kyrgyzstan, but above Uzbekistan and Turkmenistan. The Centre for Strategic Research under the President of Tajikistan noted that corruption in the public sector is systemic. The population perceives that health and education sectors are the most corrupt. Foreign investors are not keen to invest in the Tajik economy due to prevalence of corruption and weak rule of law. In addition, thepolitical and security fragility are factors impeding economic development.

The population of Tajikistan is 8.48 million of people out of which 73.5% reside in rural areas. 49.5% are women. Tajikistan has a very high rate of young population. Average age of the population in 2007 was 24.9 years of age while median age was 20.8 years. According to 2015 data 31.3% of the population are poor (living below national poverty line). The number of people living in extreme poverty decreased from 20% in 2012, to 16.8% in 2014. Arguably, this decrease in poverty, and extreme poverty, in particular, is attributed to two factors: 1) macro-economic stability and 2) increased income of households due to growth of labour migration and remittances of migrant workers. However, the economic crisis in Russia may jeopardise the achievements of the country related to reducing poverty rate.


Even though Tajikistan’s economy has grown fast in recent years, there remain challenges that hamper development. For one, Tajikistan remains the poorest country in the former Soviet sphere. Although Tajikistan’s economy has grown significantly since 2000, recent advances are at risk of being lost. Tajikistan’s economy is particularly susceptible to the global economic crisis, due to its reliance on labor migration. In 2008, 33% of the economically active population was engaged in external labor migration and remittances comprised approximately 50% of GDP. In 2009, a 30% decrease in remittance inflows is expected and will likely further increase the current rate of unemployment (presently at 33%, as stated by the World Bank).

Tajikistan’s relations to its neighbors could also be called challenging. The projected withdrawal of NATO troops from Afghanistan in 2014 raises fears in Tajikistan of militant insurgence and big numbers of Afghan refugees arriving at the border. Relations with Uzbekistan are tense. Uzbekistan is angered by the construction of a Tajik dam that they fear will restrict irrigation water supply in Uzbekistan. Tajikistan accused Uzbekistan subsequently of upholding an economic blockade. Demarcation of the borders to Kyrgyzstan and China has lead to disputes between the neighboring countries.


Additional development challenges include the following:

  • Risk of exponential increase in HIV/AIDS, tuberculosis and malaria, if not immediately addressed
  • Insecure borders can stimulate challenges related to international terrorist and religious‐extremist organizations, drug and weapons smuggling, and illegal migration. Present principles of border management of the country are largely inadequate to address these challenges
  • Difficult terrain, environmental hazards, and energy availability disrupt economic progress, as electricity in many areas of the country are limited to 4‐8 hours per day during the winter



Following the civil war period (1992‐97), Tajikistan slowly transitioned from the status of post‐conflict recovery into an economically viable nation‐state, promoting sustainable development based upon nascent democratic and market economy principles.

Tajikistan joined NATO's Partnership for Peace in 2002, and most recently became a member of the World Trade Organization in March 2013.

A Partnership and Cooperation Agreement (PCA) between the EU and Tajikistan was signed in October 2004 and it is currently being ratified by the EU Member States, while it has already been ratified by Tajikistan. Pending its ratification, an Interim Agreement on trade and trade-related matters is being implemented since May 2005.The future EC assistance will focus on the following priority areas: rural development and poverty reduction, agriculture and land reform, promotion of good governance and economic reforms.


Brief history timeline to independence:

c 2500 - Aryan followers of King Yama crossed the Oxus River from Central Asia into Tajikistan and created a new calendar with the new year (Now Roz, Now-Ruz) marked by spring.

999  - Turkish dynasties became the rulers of Transoxania, and area that covered much of what later became Uzbekistan, Turkmenistan and Tajikistan.

1924 - Stalin divided remnants of Turkestan into the current Central Asian republics.

1929 - Tajikistan was created by Stalin to divide and rule the ethnic Muslim peoples of Central Asia.

1963 - The Soviet Union planned to harness hydroelectric power and feed a huge aluminum smelter in Tajikistan.

1991 - Tajikistan gained independence from the Soviet Union.

1992 - Civil war and fighting between the Russian-backed government and rebels began. It lasted till 1997.

1996 - Dec 4, Government troops repulsed an attack by Islamic rebels. Pres. Emomali Rakhmonov was to meet with the Muslim opposition. Russia had 25,000 troops guarding the 900-mile border with Afghanistan where the rebels had bases.

1997 - Jun 27, A Tajikistan formal peace accord was signed in Moscow that was brokered by Russia and Iran. A power sharing arrangement was foreseen between President Emomali Rakhmon and opposition leader Said Abdullo. At least 50,000 people were killed during the 5-year civil war.

2003 - Jun 22, Tajiks voted on changes to their constitution that would allow President Emomali Rakhmon to potentially stay in power for another 17 years. An overwhelming majority of voters approved the constitutional change.    

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