Economy - overview: Tajikistan is a poor, mountainous country with an economy dominated by minerals extraction, metals processing, agriculture, and reliance on remittances from citizens working abroad. The 1992-97 civil war severely damaged an already weak economic infrastructure and caused a sharp decline in industrial and agricultural production. Today, Tajikistan has one of the lowest per capita GDPs among the 15 former Soviet republics. Less than 7% of the land area is arable and cotton is the most important crop. Tajikistan imports approximately 70% of its food. Mineral resources include silver, gold, uranium, antimony, and tungsten. Industry consists mainly of small obsolete factories in food processing and light industry, substantial hydropower facilities, and a large aluminum plant - currently operating well below its capacity.
Because of a lack of employment opportunities in Tajikistan, more than one million Tajik citizens work abroad - roughly 90% in Russia - supporting families back home through remittances that in 2014 were equivalent to nearly 50% of GDP. Some experts estimate the value of narcotics transiting Tajikistan is equivalent to 30-50% of GDP.
Since the end of the civil war, the country has pursued half-hearted reforms and privatizations in the economic sphere, but the poor business climate remains a hurdle to attracting foreign investment. Tajikistan has sought to develop its substantial hydroelectricity potential through partnership with Russian and Iranian investors, and is pursuing completion of the Roghun dam - which, if built according to plan, would be the tallest dam in the world. However, the project is a sensitive issue for downstream neighbors and faces large financing shortfalls. In 2016, Tajikistan officially contracted with Italian firm Salini Impregilo to construct the dam over a 13 year period for $3.9 billion.
Recent slowdowns in the Russian and Chinese economies, low commodity prices, and currency fluctuations are hampering economic growth in Tajikistan. By some estimates, the dollar value of remittances from Russia to Tajikistan dropped by more than 65% in 2015. The government faces challenges financing the public debt, which is equivalent to 35% of GDP, and the National Bank of Tajikistan has aggressively spent its reserves to bolster the weakening somoni, leaving little space for fiscal or monetary measures to counter any additional economic shocks.
Definition: This entry briefly describes the type of economy, including the degree of market orientation, the level of economic development, the most important natural resources, and the unique areas of specialization. It also characterizes major economic events and policy changes in the most recent 12 months and may include a statement about one or two key future macroeconomic trends.
Source: CIA World Factbook - This page was last updated on July 9, 2017