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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: 295 - (26/07/05)

The uneasy peace
Tajikistan is the only Central Asian country to have experienced civil war, which killed over 100,000 of its 7 million people between 1992 and 1997. Now, the country enjoys tense social peace under its increasingly authoritarian leader, Imomali Rakhmanov. "There is an ever-present threat of upheaval in Tajikistan, but everyone remembers the civil war and wants to avoid getting back to that," says Mr. Malashenko.
Tajikistan is benefiting from the new-found favour in which it is held in Washington. It has been a vital conduit for US and other coalition troops into Afghanistan. The war against the Taleban and al-Qaeda would not have been possible without full Tajik cooperation along the lengthy border and in airfields behind it.
US aid has been pouring in, over US$100m to date, not a vast sum in the West, but a huge one in Central Asia. 

Economy picks up; but so does inflation
Statistically, the Tajik economy is doing very well. But this is of course from a very low base, the lowest in the FSU. 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. President of Kyrgyzstan Kurmanbek Bakiyev, who recently was elected and 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 bridge 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.

New bridge to boost economic ties between Tajikistan, Afghanistan 
President Rakhmonov is reaching further afield, however. He and Afghan President Hamid Karzai went to the Tajik town of Nizhny Pyandzh, about 200 kilometres south of the Tajik capital, Dushanbe, to unveil the US funded project that is expected to be completed by 2007.
On June 18, both leaders laid the cornerstone for a new US funded bridge on the volatile border between the two nations, Interfax reported. Norway and Japan are also expected to contribute. This bridge would further boost the economies of both Tajikistan and Afghanistan.
The 672-metres long automobile bridge is built to international seismic standards. The bridge would cost about USD 29 million linking Nizhny Pyandzh to the Afghan port of Shirkhan.
On the Afghan side, the bridge will connect to the Afghan Ring Road, a primary arterial road linking almost all of Afghanistan's principle cities and is the main route from the Nizhniy Pyanzh Bridge to the Afghan capital, Kabul, via Kunduz.
It was reported that the ceremony marking the beginning of the bridge construction has been postponed twice due to unstable security situation in Afghanistan. "The Nizhiniy Pyanzh bridge will unlock the economic vitality of the two countries through expanded trade opportunities, advance Tajik-Afghan efforts to combat international terrorism and weapons and drug trafficking, and improve international cooperation in the region," US Ambassador to Tajikistan Richard Hoagland told IRIN in Dushanbe.
Around 1,000 cars and trucks are expected to cross daily to take goods between the two countries. Hoagland added that currently there is only one bridge between Uzbekistan and Afghanistan that links the goods of South Asia to Central Asia," Hoagland explained this noting the economic potential to the region, reminiscent of the Great Silk Road and trade network that connected East Asia with Europe and beyond. According to Hoagland, in many ways, the future of both Tajikistan and Afghanistan are linked, from hydroelectricity and the trade of goods and services to cultural and social cooperation.
For his part, Rakhmanov stressed: "In the future we will lay electricity, gas and water lines through this bridge. We also hope that next to this bridge will be built another bridge designed for the Dushanbe-Kurghonteppa-Kunduz railway."
Rakhmanov's counterpart Karzai also stressed the regional impact the bridge would have both in terms of trade and transport. He stated that Afghanistan is hopes to become a regional trade hub through transit routes linking ports in Pakistan and Iran with Central Asia.
"Afghanistan wants to be the hub of trade and transit in that region. Afghanistan's highways and roads will (shorten) journeys by weeks for that part of the world," Karzai stated. "The journey from Tashkent (Uzbekistan) to (Pakistan's) port of Karachi will be less than 32 hours, for cargo, for transportation of goods. The same will be to the Iranian port city of Bandar-Abbas. And that is the future we are seeking."

Drugs Traffic
Tajikistan, this impoverished ex-Soviet nation damaged by a five-year civil war in the 1990s, has been a major transit route for opium and heroin from Afghanistan, the world's largest producer, flowing to Russia and further into Western Europe.
The border between Tajikistan and Afghanistan was quite tense and destabilised due to the conflict between border guards and drug traffickers, but with the kind of money involved, bribery of border guards and police has always been a factor.

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.

Tajikistan-Russia ties strengthen 
Tajik President Emomaly Rakhmonov last week met with his Russian Vladimir Putin and said that he was quite pleased with Russia's cooperation with Tajikistan including military cooperation adding that Russia's trade with Tajikistan advanced 30 per cent in 2004, Interfax News Agency reported.
Rakhmonov, who was at a country government retreat, said labour migration had been the only problem in bilateral relations. He added it had been resolved the previous year and also agreed with Putin's view that there are no problems in Russian-Tajik relations now.
Rakhmonov said Russia participated in large-scale metallurgy and hydro-power projects in Tajikistan, such as the Rogunskaya and Sangtudinskaya hydroelectric power plants. Agreements between the two countries on hydropower engineering and nonferrous metallurgy sectors development are being implemented successfully.
Rakhmonov announced that the construction of the Sangtuda-1 hydropower plant has been started and the designing of the Rogun hydropower plant has been launched. This year alone, 25m Euro will be invested in this project. 
"Russia has greatly contributed to settling peace and stability in Tajikistan," he said. 
Meanwhile, Russian Defence Minister Sergei Ivanov and his Tajik counterpart Sherali Khairullayev signed transfer acts on the movable property of the Russian military base in Dushanbe on June 24. 
After the ceremony, Ivanov said, "The documents like the ones signed earlier permit for long-term plans of building both a Russian military base and the Nurek optical observation facility." 
He added, "Even though it is the most advanced electronic facility having no analogues in the world we shall always be thinking of the future and looking at decades ahead." 
According to Ivanov, Russia is putting large financial resources into this base, and in its capital construction and modernisation, being well aware in what region it is located and what tasks it would have to accomplish, including jointly with the Tajik Defence Ministry and Border Service.
Russian Emergency Situations Minister Sergei Shoigu highly praised the current level of Russian-Tajik relations. After meeting Rakhmonov on June 28, Shoigu recalled that in 2003-2004, the growth in bilateral trade was 136 percent adding that in future the volume of cooperation in terms of money too will increase. During the talks, Shoigu and Rakhmonov had discussed cooperation in the energy sector, industry and in border protection.
It could reasonably be said that Russia is going flat out to re-establish its influence in this former Soviet republic, as it is in the other Central Asian republics of the FSU.

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FOREIGN RELATIONS

Dushanbe and Tehran ready to expand energy cooperation


Iran is willing to cooperate and develop close relations with Tajikistan, Iranian President, Mohammad Khatami, announced recently, after Khatami received a letter from his Tajik counterpart Imomali Rakhmanov, Interfax News Agency reported.
Khatami said both countires have taken important steps that would lead to progress and development along with regional stability and security. This was possible due to the policy of mutual respect followed by both Iran and Tajikistan, non-intervention in each other's affairs and expansion of multilateral and bilateral cooperation.
He praised the policies of Rakhmanov in establishing democracy adding that both countries have launched fruitful cooperation in different economic, commercial and energy fields, including construction of Anzab tunnel and the Sang-Tudeh project.
Tajikistan has also expressed an interest to promote ties with Iran. Khatami's visit to Tajikistan and Rakhmonov's Iran visit are turning points in promoting bilateral ties that called for further cooperation in the construction of power plant for energy generation. On June 11, Iran's Energy Minister, Habibollah Bitaraf and his Tajik counterpart, Jurabeck Nurmahmadov signed a memorandum of understanding (MoU) on the second Sangtudeh dam and hydroelectric power plant to be constructed in Tajikistan.
According to the terms of the document which was drawn up in 19 articles, Iran will construct the dam and power plant in Nurek district, west of Tajikistan.
The ministry of energy will undertake preliminary measures required to establish an enterprise to be called Sangtudeh II Co, which is to be registered as an Iranian joint stock company. The dam and power station, which is to be constructed over Vakhsh River will require 220m Euro in total.
Iran will offer 180m Euro under a 10-year loan with a 5% interest rate. Besides, a credit of 40m Euro will be extended to Sangtudeh II Co by Tajikistan.
Under the MoU, Sangtudeh II Co will be committed to establish the dam and power station by using the financial facilities to be extended by Iran's export development bank and the credits to be provided by Tajik ministry of energy, which will get the proprietorship of the dam and power station. This will be possible upon implementation of the project and once the banking facilities and the relevant expenses and turnover of the company are paid back to Iran.

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