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Afghanistan vs. Tajikistan

Economy

AfghanistanTajikistan
Economy - overview

Prior to 2001, Afghanistan was an extremely poor, landlocked, and foreign aid-dependent country. Increased domestic economic activity occurred following the US-led invasion, as well as significant international economic development assistance. This increased activity expanded access to water, electricity, sanitation, education, and health services, and fostered consistent growth in government revenues since 2014. While international security forces have been drawing down since 2012, with much higher U.S. forces’ drawdowns occurring since 2017, economic progress continues, albeit uneven across sectors and key economic indicators. After recovering from the 2018 drought and growing 3.9% in 2019, political instability, expiring international financial commitments, and the COVID-19 pandemic have wrought significant adversity on the Afghan economy, with a projected 5% contraction.

Current political parties’ power-sharing agreement following the September 2019 presidential elections as well as ongoing Taliban attacks and peace talks have led to Afghan economic instability. This instability, coupled with expiring international grant and assistance, endangers recent fiscal gains and has led to more internally displaced persons. In November 2020, Afghanistan secured $12 billion in additional international aid for 2021-2025, much of which is conditional upon Taliban peace progress. Additionally, Afghanistan continues to experience influxes of repatriating Afghanis, mostly from Iran, significantly straining economic and security institutions.

Afghanistan’s trade deficit remains at approximately 31% of GDP and is highly dependent on financing through grants and aid. While Afghan agricultural growth remains consistent, recent industrial and services growth have been enormously impacted by COVID-19 lockdowns and trade cessations. While trade with the People’s Republic of China has rapidly expanded in recent years, Afghanistan still relies heavily upon India and Pakistan as export partners but is more diverse in its import partners. Furthermore, Afghanistan still struggles to effectively enforce business contracts, facilitate easy tax collection, and enable greater international trade for domestic enterprises.

Current Afghan priorities focus on the following goals:

  • Securing international economic agreements, many of which are contingent on Taliban peace progress;
  • Increasing exports to $2 billion USD by 2023;
  • Continuing to expand government revenue collection;
  • Countering corruption and navigating challenges from the power-sharing agreement; and
  • Developing a strong private sector that can empower the economy.

Tajikistan is a poor, mountainous country with an economy dominated by minerals extraction, metals processing, agriculture, and reliance on remittances from citizens working abroad. Mineral resources include silver, gold, uranium, antimony, tungsten, and coal. 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. The 1992-97 civil war severely damaged an already weak economic infrastructure and caused a sharp decline in industrial and agricultural production. Today, Tajikistan is the poorest among the former Soviet republics. Because less than 7% of the land area is arable and cotton is the predominant crop, Tajikistan imports approximately 70% of its food.

Since the end of the civil war, the country has pursued half-hearted reforms and privatizations in the economic sphere, but its poor business climate remains a hindrance to attracting foreign investment. Some experts estimate the value of narcotics transiting Tajikistan is equivalent to 30%-50% of GDP.

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 2017 were equivalent to nearly 35% of GDP. Tajikistan’s large remittances from migrant workers in Russia exposes it to monetary shocks. Tajikistan often delays devaluation of its currency for fear of inflationary pressures on food and other consumables. Recent slowdowns in the Russian and Chinese economies, low commodity prices, and currency fluctuations have hampered economic growth. The dollar value of remittances from Russia to Tajikistan dropped by almost 65% in 2015, and the government spent almost $500 million in 2016 to bail out the country’s still troubled banking sector.

Tajikistan’s growing public debt – currently about 50% of GDP – could result in financial difficulties. Remittances from Russia increased in 2017, however, bolstering the economy somewhat. China owns about 50% of Tajikistan’s outstanding debt. Tajikistan has borrowed heavily to finance investment in the country’s vast hydropower potential. In 2016, Tajikistan contracted with the Italian firm Salini Impregilo to build the Roghun dam over a 13-year period for $3.9 billion. A 2017 Eurobond has largely funded Roghun’s first phase, after which sales from Roghun’s output are expected to fund the rest of its construction. The government has not ruled out issuing another Eurobond to generate auxiliary funding for its second phase.

GDP (purchasing power parity)$78.557 billion (2019 est.)

$75.6 billion (2018 est.)

$74.711 billion (2017 est.)

note: data are in 2017 dollars
$31.502 billion (2019 est.)

$29.438 billion (2018 est.)

$27.435 billion (2017 est.)

note: data are in 2017 dollars
GDP - real growth rate2.7% (2017 est.)

2.2% (2016 est.)

1% (2015 est.)
7.1% (2017 est.)

6.9% (2016 est.)

6% (2015 est.)
GDP - per capita (PPP)$2,065 (2019 est.)

$2,034 (2018 est.)

$2,058 (2017 est.)

note: data are in 2017 dollars
$3,380 (2019 est.)

$3,235 (2018 est.)

$3,090 (2017 est.)

note: data are in 2017 dollars
GDP - composition by sectoragriculture: 23% (2016 est.)

industry: 21.1% (2016 est.)

services: 55.9% (2016 est.)

note: data exclude opium production
agriculture: 28.6% (2017 est.)

industry: 25.5% (2017 est.)

services: 45.9% (2017 est.)
Population below poverty line54.5% (2016 est.)26.3% (2019 est.)
Household income or consumption by percentage sharelowest 10%: 3.8%

highest 10%: 24% (2008)
lowest 10%: NA (2009 est.)

highest 10%: NA (2009 est.)
Inflation rate (consumer prices)5% (2017 est.)

4.4% (2016 est.)
7.7% (2019 est.)

3.9% (2018 est.)

7.3% (2017 est.)
Labor force8.478 million (2017 est.)2.295 million (2016 est.)
Labor force - by occupationagriculture: 44.3%

industry: 18.1%

services: 37.6% (2017 est.)
agriculture: 43%

industry: 10.6%

services: 46.4% (2016 est.)
Unemployment rate23.9% (2017 est.)

22.6% (2016 est.)
2.4% (2016 est.)

2.5% (2015 est.)

note: official rate; actual unemployment is much higher
Distribution of family income - Gini index29.4 (2008)34 (2015 est.)

34.7 (1998)
Budgetrevenues: 2.276 billion (2017 est.)

expenditures: 5.328 billion (2017 est.)
revenues: 2.269 billion (2017 est.)

expenditures: 2.374 billion (2017 est.)
Industriessmall-scale production of bricks, textiles, soap, furniture, shoes, fertilizer, apparel, food products, non-alcoholic beverages, mineral water, cement; handwoven carpets; natural gas, coal, copperaluminum, cement, coal, gold, silver, antimony, textile, vegetable oil
Industrial production growth rate-1.9% (2016 est.)1% (2017 est.)
Agriculture - productswheat, milk, grapes, vegetables, potatoes, watermelons, melons, rice, onions, applesmilk, potatoes, wheat, watermelons, onions, tomatoes, vegetables, cotton, carrots/turnips, beef
Exports$784 million (2017 est.)

$614.2 million (2016 est.)

note: not including illicit exports or reexports
$873.1 million (2017 est.)

$691.1 million (2016 est.)
Exports - commoditiesgold, grapes, opium, fruits and nuts, insect resins, cotton, handwoven carpets, soapstone, scrap metal (2019)gold, aluminum, cotton, zinc, antimony, lead (2019)
Exports - partnersUnited Arab Emirates 45%, Pakistan 24%, India 22%, China 1% (2019)Turkey 24%, Switzerland 22%, Uzbekistan 16%, Kazakhstan 12%, China 10% (2019)
Imports$7.616 billion (2017 est.)

$6.16 billion (2016 est.)
$2.39 billion (2017 est.)

$2.554 billion (2016 est.)
Imports - commoditieswheat flours, broadcasting equipment, refined petroleum, rolled tobacco, aircraft parts, synthetic fabrics (2019)refined petroleum, wheat, natural gas, bauxite, aircraft (2019)
Imports - partnersUnited Arab Emirates 23%, Pakistan 17%, India 13%, China 9%, United States 9%, Uzbekistan 7%, Kazakhstan 6% (2019)China 40%, Russia 38%, Kazakhstan 19%, Uzbekistan 5% (2019)
Debt - external$284 million (FY10/11)$6.47 billion (2019 est.)

$5.849 billion (2018 est.)
Exchange ratesafghanis (AFA) per US dollar -

7.87 (2017 est.)

68.03 (2016 est.)

67.87 (2015)

61.14 (2014 est.)

57.25 (2013 est.)
Tajikistani somoni (TJS) per US dollar -

8.764 (2017 est.)

7.8358 (2016 est.)

7.8358 (2015 est.)

6.1631 (2014 est.)

4.9348 (2013 est.)
Fiscal year21 December - 20 Decembercalendar year
Public debt7% of GDP (2017 est.)

7.8% of GDP (2016 est.)
50.4% of GDP (2017 est.)

42% of GDP (2016 est.)
Reserves of foreign exchange and gold$7.187 billion (31 December 2017 est.)

$6.901 billion (31 December 2015 est.)
$1.292 billion (31 December 2017 est.)

$652.8 million (31 December 2016 est.)
Current Account Balance$1.014 billion (2017 est.)

$1.409 billion (2016 est.)
-$35 million (2017 est.)

-$362 million (2016 est.)
GDP (official exchange rate)$20.24 billion (2017 est.)$2.522 billion (2019 est.)
Taxes and other revenues11.2% (of GDP) (2017 est.)31.8% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-15.1% (of GDP) (2017 est.)-1.5% (of GDP) (2017 est.)
GDP - composition, by end usehousehold consumption: 81.6% (2016 est.)

government consumption: 12% (2016 est.)

investment in fixed capital: 17.2% (2016 est.)

investment in inventories: 30% (2016 est.)

exports of goods and services: 6.7% (2016 est.)

imports of goods and services: -47.6% (2016 est.)
household consumption: 98.4% (2017 est.)

government consumption: 13.3% (2017 est.)

investment in fixed capital: 11.7% (2017 est.)

investment in inventories: 2.5% (2017 est.)

exports of goods and services: 10.7% (2017 est.)

imports of goods and services: -36.6% (2017 est.)
Gross national saving22.7% of GDP (2017 est.)

25.8% of GDP (2016 est.)

21.4% of GDP (2015 est.)
24.9% of GDP (2017 est.)

15.4% of GDP (2016 est.)

11.8% of GDP (2015 est.)

Source: CIA Factbook