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TAJIKISTAN


 

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 1,303 1,208 1,100 148
         
GNI per capita
 US $ 190 180 180 197
Ranking is given out of 208 nations - (data from the World Bank)

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REPUBLICAN REFERENCE

Area (sq.km) 
143,100 

Population 
7,011,556

Principal 
ethnic groups 
Tajiks 62.3%
Uzbeks 23.5%
Russians 17.6%

Capital 
Dushanbe

Currency 
Tajik Somoni

President 
Emomali Rakhmonov



Update No: 294 - (28/06/05)

UN peace-keeping mission to continue
United Nations Secretary General Kofi Annan has, with the agreement with the UN Security Council, prolonged the activity of the UN peace-building office in Tajikistan for another 12 months till June 1st, 2006. This is in view of pressing needs in the post-civil war Central Asian country, Interfax News Agency reported recently. 
In a message to the UN Security Council chairman, Annan said that over the past five years of peace-building the Tajik society has gone a long way in terms of healing the wounds left by the civil war, but still much work is to be done to promote national unity and consolidate peace. The UNTOP was established on June 1st, 2000 after the withdrawal of the UN observer mission from Tajikistan. 
The civil war in Tajikistan, lying immediately to the west of China and north of Afghanistan, lasted from 1992 to 1997. UNTOP had also assisted the country with reforming national legislation to fit with its treaty obligations, strengthening the rule of law through training the staff of the new ministry of the interior in human rights standards, forensic techniques and modern law enforcement, according to Annan.

Economy picks up; but so does inflation
Statistically, the Tajik economy is doing very well. But it is vital to realise that this is from a very low base. Tajikistan remains the poorest country in the FSU, excepting possibly right now Kyrgyzstan, which has experienced the cathartic, but disruptive, ordeal of revolution.
Tajikistan's GDP expanded 7.1% year-on-year in January-April to 1.664bn somonis in current prices (554m euro). Its state budget surplus was 45.8m somonis in the first quarter of this year, Interfax News Agency reported recently, citing figures released by the State Statistics Committee. Revenue grew 18.5% year-on-year to 296.2m somonis and spending grew 29.3% to 250.4m somonis, the committee said.
But also, unfortunately, inflation is rising. It was at 1.9% in April, compared with 0.6% in March. Food prices increased 3.8% and non-food prices grew 0.1% while service charges declined to 1.5%. Inflation averaged 0.95% monthly in January-April, compared with 0.3% in the same period of last year.
Tajikistan's trade deficit is also worsening, but only slightly. It grew 0.7% year-on-year to 82m Euro in the first quarter of this year, the committee said. Foreign trade fell 8% year-on-year to 656.9m Euro over the period. Exports dropped 9.1% to 287.4m Euro and imports by 7% to 369.5m Euro.
Russia continues to be Tajikistan's main trading partner, accounting for 94.478m Euro of trade turnover. Tajikistan exported products to Russia worth 24.76m Euro and imported products from Russia worth 69.717m Euro.

Kyrgyzstan-Tajikistan energy bridge opens
But another vital country for Tajikistan is its neighbour, Kyrgyzstan. Acting President of Kyrgyzstan Kurmanbek Bakiyev, who is widely expected to win the coming elections and become the next full president, made his first trip abroad to Dushanbe, a signal mark of the importance he attaches to good relations with the Tajiks.
One of the most significant outcomes of his one-day visit was the official launch of the Kyrgyz-Tajik energy "bridge." This will link both states for mutual deliveries of electric energy, Interfax News Agency reported. At the opening ceremony on May 18th in Kanibadam, Bakiyev said: "Implementation of this line will elevate reliability of power supply to a great extent, optimise the work of energy systems and carry on mutual deliveries of power and mutual aid in critical emergencies."
Environmental issues do not respect man-made political divides. It is believed that implementation of the Kyrgyz-Tajik energy "bridge, "Aigul-tash-Kanibadam, will adjust the work of the Naryn-Syrdariya cascade of reservoirs to counter the problem of lower water passage during winter period, that has led in the past to under-floodings of southern oblasts of Kazakstan.

USTDA provides grant to Tajikistan 
The United States Trade and Development Agency (USTDA) has provided a grant worth US$415,850 to Tajikistan's Ministry of Energy, Interfax News Agency reported recently. This assistance will be earmarked for a feasibility study for the restructuring of the Kairakum and Varzob hydroelectric power plants.
According to BISNIS, part of the US Department of Commerce, Washington DC, USTDA said that "the grant marks the opening of USTDA'S assistance programme to Tajikistan and is cited as an example of the agency's commitment to assist Tajikistan in its efforts to expand its electricity production for further promotion of economic development." 
Meanwhile, Tajik Deputy Premier Asadullo Ghulomov announced the re-construction of the Pamir-1 hydroelectric power plant in Gorno Badakhshan will be completed on October 31st, 2005. The plant needs US$9.7m to be reconstructed. The PamirEnergy energy company said the operation of the plant's two generating units was suspended in May to allow the work to take place.

EBRD chief to Tajikistan for microfinance deals
Last, but not least, the micro-economy is being given vital assistance by the European Bank for Reconstruction and Development (EBRD). Its president, Jean Lemierre, made a two-day trip to the Central Asian state on June 15th-16th, during which he held talks with President Emomali Rakhmonov, the Prime Minister and other government, diplomatic and business leaders. He also signed two innovative microfinance deals and a trade finance agreement on behalf of the Bank. After the signings in Dushanbe, Mr Lemierre hosted a press conference at Kohi Vahdat conference centre. 
Lemierre signed a US$2m credit line with Agroinvestbank, the fourth banking partner in the EBRD's US$7m Tajik Micro and Small Enterprise (MSE) Finance Facility. Since its launch less than two years ago, the facility has financed 4,556 businesses, lending US$11.8m in total. The first three partners are Eskhata Bank, Tajiksoridotbank and TajPromBank. With Agroinvestbank, the 7m Euro facility will be fully placed. 
In a second deal, Agroinvestbank also joined the EBRD's Trade Facilitation Programme (TFP); the US$2m trade-related guarantee limit extended to it brings the EBRD's cumulative limit opened to four Tajik banks to US$9.5m. The TFP was initiated in 1999 to support trade to, from and within the Bank's 27 countries of operations. The EBRD guarantees payment obligations of local issuing banks to their international confirming counterparts in respect of trade-finance instruments. 
This visit was also an opportunity to celebrate a new type of microfinance lending introduced by the EBRD to Tajikistan, where 65 per cent of people earn less than US$2.15 a day. In the wake of its successful micro-lending programme through Tajikistan's banks, the Bank has also set up a US$10 million framework for non-bank organisations in Early Transition Countries (ETC), its seven poorest countries of operation. Non-bank organisations are active in more remote and rural locations. 
US$1m may seem modest by Western standards; but it goes a long way in Tajikistan. A US$1m loan to Tajikistan's International Micro-Loan Fund "Imon" - which is the new name for the Mercy Corps microlending programme operated by the National Association of Business Women, Tajikistan, since 1999, making very small loans without collateral - makes this the first organisation to benefit. By working with a broader range of local financial institutions with a focus on smaller borrowers, the EBRD has an opportunity to both expand and deepen its outreach, Mr Lemierre said. 
Tajikistan is one of seven Commonwealth of Independent States countries included in the Bank's ETC Initiative since 2004. The Bank's goal with countries in this programme is to stimulate market activity by using a streamlined approach to financing more and smaller projects, mobilising more investment, and encouraging economic reform. The Bank accepts higher risk while still respecting sound banking principles.

Vital conference on banking
Lemierre also attended the first day of a two-day international banking conference on the condition, problems and development prospects of the banking system in Central Asia, which took place in the Tajik capital on June 16th-17th. During the conference each Central Asian national delegation was able to outline a topic for a separate session on reforming its credit organizations. 
Limits on activities of foreign commercial banks will be lifted in Tajikistan, President Rakhmonov said at the conference . He pointed to the growth of the number of micro-credits to the population. According to Rakhmonov, over 125,000 Tajiks were granted these credits since 1994. 

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FOREIGN AID

EU to provide humanitarian assistance for Tajikistan

The European Commission has approved a six million Euro humanitarian aid package to continue meeting the forgotten needs of vulnerable communities throughout Tajikistan, Irin-news reported.
The fund would be utilised in the three main areas' of health, drinking water and sanitation and food, said the EU's executive body in a statement. International agencies and NGOs operating in the country will implement projects funded with this package.
These funds are being allocated through DG Humanitarian Aid- ECHO, a service of the European Commission under the responsibility of Commissioner, Louis Michel. ECHO has been providing aid for Tajikistan since 1992, in which time it has allocated over 153m Euro.
Despite recent improvements in economic growth and stability over the past few years, Tajikistan continues to have humanitarian needs that remain largely forgotten by the international community. Tajikistan is the poorest of the Central Asian republics, with 64% of the population living on less than US$2.15 per day.
Since 2002, chronic malnutrition in children is 30% throughout the country without improvement, access to safe drinking water remains limited, access to health services is deteriorating in some areas and health indicators are the worst in the world. New threats such as malaria and HIV/AIDS are emerging.
The main target of the package is the elderly and children. Around 13,000 people will receive food aid, over 15,000 children under five will receive supplementary feeding, and a further 2,500 rural households will benefit from cash for work projects. Two hundred thousand people will have access to safe drinking water and sanitation facilities will be improved through the rehabilitation or construction of over 200 water and sanitation systems, while the whole population stands to benefit from improved access to primary health care.
Interventions will include awareness raising, education and training, capacity-building of local communities, development of coordination mechanisms and hand-over of some activities to the relevant authorities. Even though the project will be operated throughout the country, the poorest region Khatlon will be the main focus.
This decision marks the second stage of a three-year phasing out strategy for ECHO, reflecting improvements in the general humanitarian situation and greater engagement by other development actors and the government. ECHO's phasing out strategy is coordinated with the activities of other commission instruments, such as EuropeAid which are also providing essential assistance to help alleviate poverty and contribute to Tajikistan's millennium development goals.

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FOREIGN ECONOMIC RELATIONS

US envoy discusses economy in Tajikistan

The United States believes that real economic reforms and democratic stability will provide the conditions for economic security in Tajikistan and other countries of the region, Richard Hoagland, the US ambassador to Tajikistan, said in a speech to the Tajik Academy of Sciences in Dushnabe on May 12th, Interfax News Agency reported.
Hoagland elucidated that democracy provides political stability which in turn is a requirement for economic development. Hoagland is also cooperating with Tajikistan's Ambassador to the United States Hamrahon Zaripov to promote US investment in Tajikistan.
"When citizens believe that their government respects them, they cooperate with it. They feel empowered," he added. Once the citizens feel empowered then they automatically become economically productive. Hoagland congratulated the Tajik government for taking important steps to reform its legal code and the banking and financial sectors. These measures will help to create conditions that attract foreign investment but added that the reforms must be implemented. There must also be "everyday good governance and international standards of transparency in data recording and reporting, open fiscal and monetary policy and practice, and honest and open-to-the-public corporate records. Any thing less than this will scare off foreign investors," he said.
In addition, he stressed the importance of competition in a market economy, saying competition "increases choice, efficiency, and ultimately, profit. Without competition, an economy cannot grow, and people's lives will not improve."
The United States has been helping countries in the region develop the elements of democracy, such as fair and transparent elections and an independent media in order to build strong stable, and prosperous countries.
Hoagland also discussed a wide range of issues including agricultural reforms, energy and business initiatives, tourism and regional trade. He stated that the ancient Silk Road helped sustain and enrich great civilisation in the past, and Tajikistan can once again be in the centre of a prosperous flow of goods from China to South Asia and Europe and the rest of the world.

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