View source for Economy of Tajikistan

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{{Infobox economy
| country = [[Tajikistan]]
| image = File:Dushanbe 2010 06 Hotel Hyatt.jpg
| image_size = 310px
| caption = [[Dushanbe]]
| currency = [[Somoni]] (ISO code: TJS<br/>abbreviation: SM)
| year = calendar year
| organs = [[International Monetary Fund|IMF]], [[World Bank]], [[Commonwealth of Independent States|CIS]], [[Shanghai Cooperation Organisation|SCO]], [[World Trade Organization|WTO]], [[Commonwealth of Independent States Free Trade Area|CISFTA]]
| group = {{plainlist|
*[[Developing country|Developing/Emerging]]<ref>{{cite web |url=https://www.imf.org/external/pubs/ft/weo/2019/01/weodata/weoselco.aspx?g=2200&sg=All+countries+%2f+Emerging+market+and+developing+economies |title=World Economic Outlook Database, April 2025 |publisher=[[International Monetary Fund]] |website=IMF.org |access-date=29 April 2025 |archive-date=22 December 2019 |archive-url=https://web.archive.org/web/20191222001529/https://www.imf.org/external/pubs/ft/weo/2019/01/weodata/weoselco.aspx?g=2200&sg=All+countries+%2f+Emerging+market+and+developing+economies |url-status=live }}</ref>
*Lower-middle income economy<ref>{{cite web |url=https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups |title=World Bank Country and Lending Groups |publisher=[[World Bank]] |website=datahelpdesk.worldbank.org |access-date=29 September 2019 |archive-date=28 October 2019 |archive-url=https://web.archive.org/web/20191028223324/https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups |url-status=live }}</ref>}}
| gdp = {{plainlist|
*{{increase}} $14.836 billion (nominal, 2025 est.)<ref name="IMFWEOTJ">{{cite web |url=https://www.imf.org/external/pubs/ft/weo/2023/02/weodata/weorept.aspx?pr.x=57&pr.y=17&sy=2017&ey=2021&scsm=1&ssd=1&sort=country&ds=.&br=1&c=923&s=NGDPD%2CPPPGDP%2CNGDPDPC%2CPPPPC%2CPCPIPCH&grp=0&a= |title=World Economic Outlook Database, April 2025 |publisher=[[International Monetary Fund]] |website=IMF.org |access-date=15 April 2025}}</ref>
*{{increase}} $62.656 billion ([[Purchasing power parity|PPP]], 2025 est.)<ref name="IMFWEOTJ"/>}}
| gdp rank = {{plainlist|
*[[List of countries by GDP (nominal)|143th (nominal, 2025)]]
*[[List of countries by GDP (PPP)|125th (PPP, 2025)]]}}
| growth = {{plainlist|
*7.6%&nbsp;(2018) 7.4%&nbsp;(2019)
*4.4%&nbsp;(2020) 9.4%&nbsp;(2021)<ref>{{cite book |title=Global Economic Prospects, June 2020 |page=80 |url=https://openknowledge.worldbank.org/handle/10986/33748 |website=openknowledge.worldbank.org |date=2020 |publisher=[[World Bank]] |doi=10.1596/978-1-4648-1553-9 |isbn=978-1-4648-1553-9 |access-date=16 June 2020 |archive-date=10 June 2020 |archive-url=https://web.archive.org/web/20200610144143/https://openknowledge.worldbank.org/handle/10986/33748 |url-status=live }}</ref>}}
| per capita = {{plainlist|
*{{increase}} $1,431 (nominal, 2025 est.)<ref name="IMFWEOTJ"/>
*{{increase}} $6,048 (PPP, 2025 est.)<ref name="IMFWEOTJ"/>}}
| per capita rank = {{plainlist|
*[[List of countries by GDP (nominal) per capita|161nd (nominal, 2025)]]
*[[List of countries by GDP (PPP) per capita|145th (PPP, 2025)]]}}
| sectors = agriculture: 23.3%, industry: 22.8%, services: 53.9% (2012 est.)
| inflation = 7.1% (2020 est.)<ref name="IMFWEOTJ"/>
| poverty = {{plainlist|
*{{decreasePositive}} 27.4% (2018)<ref>{{cite web |title=Poverty headcount ratio at national poverty lines (% of population) - Tajikistan |url=https://data.worldbank.org/indicator/SI.POV.NAHC?locations=TJ |website=data.worldbank.org |publisher=World Bank |access-date=21 March 2020 |archive-date=21 March 2020 |archive-url=https://web.archive.org/web/20200321163047/https://data.worldbank.org/indicator/SI.POV.NAHC?locations=TJ |url-status=live }}</ref>
*{{increaseNegative}} 2.7% on less than $1.90/day (2020f)<ref name="Spring2020">{{cite journal |title=Europe Central Asia Economic Update, Spring 2020 : Fighting COVID-19 |url=https://openknowledge.worldbank.org/handle/10986/33476 |website=openknowledge.worldbank.org |date=9 April 2020 |publisher=[[World Bank]] |access-date=9 April 2020 |pages=73, 74 |archive-date=28 December 2020 |archive-url=https://web.archive.org/web/20201228053712/https://openknowledge.worldbank.org/handle/10986/33476 |url-status=live }}</ref>}}
| gini = 34.0 {{color|darkorange|medium}} (2015)<ref>{{cite web |title=GINI index (World Bank estimate) - Tajikistan |url=https://data.worldbank.org/indicator/SI.POV.GINI?locations=TJ |website=data.worldbank.org |publisher=World Bank |access-date=21 March 2020 |archive-date=25 January 2023 |archive-url=https://web.archive.org/web/20230125192209/https://data.worldbank.org/indicator/SI.POV.GINI?locations=TJ |url-status=live }}</ref>
| hdi = {{plainlist|
*{{increase}} 0.691 {{color|orange|medium}} (2023)<ref>{{cite web |url=http://hdr.undp.org/en/indicators/137506 |title=Human Development Index (HDI) |publisher=[[Human Development Report|HDRO (Human Development Report Office)]] [[United Nations Development Programme]] |website=hdr.undp.org |access-date=8 March 2025}}</ref> ([[List of countries by Human Development Index|128th]])
*0.594 {{color|darkorange|medium}} [[List of countries by inequality-adjusted HDI|IHDI]] (2023)<ref>{{cite web |url=http://hdr.undp.org/en/content/table-3-inequality-adjusted-human-development-index-ihdi |title=Inequality-adjusted Human Development Index (IHDI) |publisher=[[Human Development Report|HDRO (Human Development Report Office)]] [[United Nations Development Programme]] |website=hdr.undp.org |access-date=11 December 2022}}</ref>}}
| labor = {{steady}}2.1 million (2012)
| occupations = agriculture: 47.9%, industry: 10.9%, services: 41.2% (2012 est.)
| unemployment = {{increase}}2.5% (2012 est.)
| industries = aluminium, cement, vegetable oil
| exports = {{increase}}$1.753 billion (2022 est.)<ref>{{Cite web |title=Exports of goods and services (BoP, current US$) |url=https://data.worldbank.org/indicator/BX.GSR.GNFS.CD?most_recent_value_desc=true |access-date=2023-08-20 |website=World Bank Open Data}}</ref>
| export-goods = aluminium, electricity, cotton, fruits, vegetable oil, textiles
| export-partners = {{plainlist|
*{{flag|Switzerland}} 25.6% 
*{{flag|Kazakhstan}} 17.1% 
*{{flag|Turkey}} 11.4% 
*{{flag|China}} 7.5%
*{{flag|Uzbekistan}} 6.1%
*{{flag|Hong Kong}} 6.04%
*{{flag|Belgium}} 4.2%
*{{flag|Afghanistan}} 3.9%
*{{flag|Italy}} 3.7%
*{{flag|Russia}} 3.4% (2021)<ref>{{cite web|url=https://oec.world/en/visualize/tree_map/hs92/export/tjk/show/all/2021/ |title=Export Partners of Tajikistan|publisher=The Observatory of Economic Complexity|year=2021|access-date=2023-04-06}}</ref>}}
| imports = {{increase}}$5.182 billion (2022 est.)<ref>{{Cite web |title=International Trade Statistics |url=https://www.trademap.org/Country_SelProduct.aspx?nvpm=1%7c%7c%7c%7c%7cTOTAL%7c%7c%7c2%7c1%7c1%7c1%7c1%7c1%7c2%7c1%7c1%7c1 |access-date=18 August 2023 |website=[[International Trade Centre]]}}</ref>
| import-goods = petroleum products, aluminium oxide, machinery and equipment, foodstuffs
| import-partners = {{plainlist|
*{{flag|China}} 31.8% 
*{{flag|Russia}} 22.7% 
*{{flag|Kazakhstan}} 14.2%
*{{flag|Uzbekistan}} 6.7%
*{{flag|Turkey}} 5.3%
*{{flag|India}} 2.1%
*{{flag|United Arab Emirates}} 1.7%
*{{flag|Iran}} 1.4%
*{{flag|Sweden}} 1.3%
*{{flag|Germany}} 1.2% (2021)<ref>{{cite web|url=https://oec.world/en/visualize/tree_map/hs92/import/tjk/show/all/2021/ |title=Import Partners of Tajikistan|publisher=The Observatory of Economic Complexity|year=2021|access-date=2023-04-07}}</ref>}}
| debt = {{decrease}}US$2.2 billion (31 December 2012 est.)
| revenue = US$2.046 billion (2012 est.)
| expenses = US$2.066 billion (2012 est.)
| aid = ''recipient'': US$67 million from US (2005)
}}
The '''economy of Tajikistan''' is dependent upon agriculture and services.<ref name = Britannica>{{cite web | title = Tajikistan | url = https://www.britannica.com/place/Tajikistan/People#ref73599 | website = Encyclopædia Britannica | access-date = 29 October 2019 | archive-date = 25 February 2021 | archive-url = https://web.archive.org/web/20210225231634/https://www.britannica.com/place/Tajikistan/People#ref73599 | url-status = live }}</ref> Since independence, [[Tajikistan]] has gradually followed the path of [[transition economy]], reforming its economic policies. With foreign revenue precariously dependent upon exports of [[cotton]] and [[aluminium]], the economy is highly vulnerable to external shocks. Tajikistan's economy also incorporates a massive [[black market]], primarily focused on the drug trade with [[Afghanistan]]. Heroin trafficking in Tajikistan is estimated to be equivalent to 30-50% of national GDP as of 2012.<ref>{{cite web|url=https://www.economist.com/asia/2012/04/21/addicted|title=Addicted|publisher=the Economist|access-date=2016-10-17|date=2012-04-21|archive-date=2016-12-03|archive-url=https://web.archive.org/web/20161203042657/http://www.economist.com/node/21553092|url-status=live}}</ref>

In the [[fiscal year]] (FY) 2000, international assistance remained an essential source of support for rehabilitation programs that reintegrated former combatants of the [[Tajikistani Civil War]] into the civilian economy, thus helping maintain the peace. International assistance also was necessary to address the second year of severe drought that resulted in a continued shortfall of food production. Tajikistan's economy grew substantially after the war. The [[gross domestic product]] (GDP) of Tajikistan expanded at an average rate of 9.6% over the period of 2000-2007 according to the [[World Bank]] data. This improved Tajikistan's position among other Central Asian countries (namely [[Turkmenistan]] and [[Uzbekistan]]), which have degraded economically ever since.<ref>{{cite news|url=https://news.bbc.co.uk/2/shared/spl/hi/guides/456900/456938/html/nn4page1.stm|title=BBC's Guide to Central Asia|work=BBC News|access-date=2006-11-01|date=2005-06-20|archive-date=2006-12-01|archive-url=https://web.archive.org/web/20061201060041/http://news.bbc.co.uk/1/shared/spl/hi/guides/456900/456938/html/nn4page1.stm|url-status=live}}</ref> As of August 2009, an estimated 60% of Tajikistani citizens live below the poverty line.<ref name=POVERTY>[http://www.eurasianet.org/departments/insight/articles/eav041007.shtml President attempts to give Tajikistan a cultural makeover] {{Webarchive|url=https://web.archive.org/web/20140413145911/http://www.eurasianet.org/departments/insight/articles/eav041007.shtml |date=2014-04-13 }} EurasiaNet</ref> The [[2008 financial crisis]] hit Tajikistan hard, both domestically and internationally. Tajikistan has been hit harder than many countries because it already has a high poverty rate and because many of its citizens depend on [[remittances]] from expatriate Tajikistanis.

==Economic history==
This is a chart of trend of gross domestic product of Tajikistan at market prices [http://www.imf.org/external/pubs/ft/weo/2006/01/data/dbcselm.cfm?G=2001 estimated] by the International Monetary Fund with figures in millions of ruling currency.
{| class="wikitable"
|-
! Year || Gross  Domestic Product || US Dollar Exchange
|-
| 1995 || 65,000 || 123.33 [[Tajikistani rouble|Tajik rouble]]s
|-
| 2000 || 1,807 || 1.82 somoni
|-
| 2005 || 7,201 || 3.11 somoni
|}

For purchasing power parity comparisons, the US Dollar is exchanged at [[somoni|SM]]&nbsp;0.82 only.

The Tajikistani economy has been gravely weakened by six years of civil conflict and loss of markets for its products. Tajikistan thus depends on international humanitarian assistance for much of its basic subsistence needs. Even if the peace agreement of June 1997 is honoured, the country faces major problems in integrating [[refugees]] and former combatants into the economy. The future of Tajikistan's economy and the potential for attracting foreign investment depend upon stability and continued progress in the peace process.

In 2006 [[GDP per capita]] of Tajikistan was 85% of 1990s level.<ref>{{cite web|url=http://earthtrends.wri.org/text/economics-business/variable-638.html |title=GDP per capita in current US dollars per person |publisher=EarthTrends |access-date=2006-11-01 |url-status=dead |archive-url=https://web.archive.org/web/20080131140920/http://earthtrends.wri.org/text/economics-business/variable-638.html |archive-date=2008-01-31 }}</ref> While population has increased from 5.3 million in 1991 to 7.3 million in 2009.

Despite resistance from vested interests, the Government of Tajikistan continued to pursue macroeconomic stabilization and structural reform in FY 2000. In December 1999, the government announced that small-enterprise privatization had been successfully completed, and the privatization of medium-sized and large-owned enterprises (SOEs) continued incrementally. The continued privatization of medium-sized and large SOEs, land reform, and banking reform and restructuring remain top priorities. Shortly after the end of FY 2000, the Board of the [[International Monetary Fund]] gave its vote of confidence to the government's recent performance by approving the third annual Poverty Reduction and Growth Facility Loan for Tajikistan. Improved fiscal discipline by the Government of Tajikistan has supported the return to positive economic growth. The government budget was nearly in balance in 2001 and the government's 2002 budget targets a fiscal deficit of 0.3% of GDP, including recent increases in social sector spending.

The following table shows the main economic indicators in 1997–2024.<ref>{{Cite web |title=Report for Selected Countries and Subjects |url=https://www.imf.org/en/Publications/WEO/weo-database/2024/October/weo-report?c=923,&s=NGDP_RPCH,NGDPD,PPPGDP,NGDPDPC,PPPPC,PCPIPCH,GGXWDG_NGDP,&sy=1990&ey=2029&ssm=0&scsm=1&scc=0&ssd=1&ssc=0&sic=0&sort=country&ds=.&br=1 |access-date=2025-01-25 |website=IMF |language=en}}</ref>
{| class="wikitable" style="text-align:center; vertical-align:middle;"
|- style="font-weight:bold;"
! Year
! GDP<br />(in billion US$ PPP)
! GDP per capita<br />(in US$ PPP)
!GDP<br />(in billion US$ nominal)
! GDP growth<br />(real)
! Inflation<br />(in Percent)
! Gov. debt<br />(Percentage of GDP)
|-
|1993
|6.43
|1,154
|0.68
|−11.1%
|2,600.7%
|n/a
|-
|1994
|5.17
|921
|0.83
|−21.4%
|350.4%
|n/a
|-
|1995
|4.61
|814
|0.57
|−12.5%
|612.5%
|n/a
|-
|1996
|4.49
|784
|1.05
|−4.4%
|418.5%
|n/a
|-
|1997
|4.65
|798
|1.12
|1.7%
|88.0%
|n/a
|-
|1998
|4.95
|834
|1.32
|5.3%
|43.2%
|96.6%
|-
|1999
|5.21
|851
|1.09
|3.7%
|27.5%
|107.8%
|-
|2000
|5.77
|928
|0.99
|8.3%
|32.9%
|111.4%
|-
|2001
|6.50
|1,027
|1.06
|10.2%
|38.6%
|99.4%
|-
|2002
|7.20
|1,116
|1.21
|9.1%
|12.2%
|98.3%
|-
|2003
|8.09
|1,230
|1.56
|10.2%
|16.4%
|69.8%
|-
|2004
|9.19
|1,369
|2.07
|10.6%
|7.2%
|49.4%
|-
|2005
|10.11
|1,475
|2.31
|6.7%
|7.3%
|45.8%
|-
|2006
|11.15
|1,593
|2.81
|7.0%
|10.0%
|36.8%
|-
|2007
|12.35
|1,726
|3.71
|7.8%
|13.2%
|34.3%
|-
|2008
|13.58
|1,858
|5.14
|7.9%
|20.4%
|30.2%
|-
|2009
|14.20
|1,900
|4.98
|3.9%
|6.4%
|36.9%
|-
|2010
|15.30
|2,002
|5.64
|6.5%
|6.5%
|36.8%
|-
|2011
|16.77
|2,146
|6.52
|7.4%
|12.4%
|35.5%
|-
|2012
|18.37
|2,297
|7.59
|7.5%
|5.8%
|32.5%
|-
|2013
|20.06
|2,453
|8.51
|7.4%
|5.0%
|29.3%
|-
|2014
|21.78
|2,604
|9.24
|6.7%
|6.1%
|27.9%
|-
|2015
|23.30
|2,726
|7.86
|6.0%
|5.8%
|35.0%
|-
|2016
|25.15
|2,879
|6.99
|6.9%
|5.9%
|42.2%
|-
|2017
|27.41
|3,073
|7.54
|7.1%
|7.3%
|46.3%
|-
|2018
|28.57
|3,137
|7.76
|7.6%
|3.8%
|46.6%
|-
|2019
|32.97
|3,549
|8.30
|7.4%
|7.8%
|43.5%
|-
|2020
|35.62
|3,760
|8.13
|4.4%
|8.6%
|51.8%
|-
|2021
|39.73
|4,114
|8.93
|9.4%
|9.0%
|42.1%
|-
|2022
|45.96
|4,673
|10.49
|8.0%
|6.6%
|32.5%
|-
|2023
|51.55
|5,148
|11.86
|8.3%
|3.7%
|30.9%
|-
|2024
|56.37
|5,533
|13.00
|6.8%
|4.5%
|30.7%
|}

==Gross domestic product==
[[File:GPD per capita development of Tajikistan.jpg|thumb|300px|right|Real GPD per capita development of Tajikistan]]
In 2005 Tajikistan's GDP grew by 6.7%, to about US$1.89 billion, and growth for 2006 was about 8%, marking the fifth consecutive year of annual growth exceeding 6%. The official forecast for GDP growth in 2007 is 7.5%. Per capita GDP in 2005 was US$258, lowest among the 15 countries of the former Soviet Union. In 2005 services contributed 48%, agriculture 23.4%, and industry 28.6% to GDP.<ref name=cp>[http://lcweb2.loc.gov/frd/cs/profiles/Tajikistan.pdf Tajikistan country profile] {{Webarchive|url=https://web.archive.org/web/20050226190634/http://lcweb2.loc.gov/frd/cs/profiles/Tajikistan.pdf |date=2005-02-26 }}. [[Library of Congress]] [[Federal Research Division]] (January 2007). ''This article incorporates text from this source, which is in the [[public domain]].''</ref> The recent global recession has reduced Tajikistan's GDP growth rate to 2.8% in the first half of 2009. Remittances from expatriate Tajikistanis is estimated to account for 30-50% of Tajikistan's GDP.

==Industries==

===Agriculture===
{{Main|Agriculture in Tajikistan}}
Although the government has announced an expedited land reform program, many Soviet-era state farms still existed in 2006, and the state retains control of production and harvesting on privatized farms. Privatization of [[cotton]] farms has been especially slow, and unresolved debts of cotton farmers remained a problem in 2006. In the early 2000s, the major crops were cotton (which occupied one-third of arable land in 2004 but decreased after that date), [[cereal]]s (mainly wheat), [[potato]]es, [[vegetable]]s (mainly onions and tomatoes), [[fruits]], and [[rice]]. Cotton makes an important contribution to both the agricultural sector and the national economy. Cotton accounts for 60 percent of agricultural output, supports 75 percent of the rural population, and uses 45 percent of irrigated arable land.<ref>{{cite news |url=http://bs-agro.com/index.php/news/other-countries/23909-tajikistan-over-392-5-thousand-tons-of-cotton-picked-in-tajikistan |title=Tajikistan: Over 392.5 thousand tons of cotton picked in Tajikistan |publisher=BS-AGRO |date=December 12, 2013 |url-status=usurped |archive-url=https://web.archive.org/web/20131220200124/http://bs-agro.com/index.php/news/other-countries/23909-tajikistan-over-392-5-thousand-tons-of-cotton-picked-in-tajikistan |archive-date=December 20, 2013 }}</ref> More than 80% of the 8,800 square kilometers of land in use for agriculture depends on [[irrigation]]. Tajikistan must import grain from [[Kazakhstan]] and Uzbekistan.<ref name=cp/>

Tajikistan produced in 2018:

* 964 thousand tons of [[potato]];
* 778 thousand tons of [[wheat]];
* 680 thousand tons of [[onion]];
* 641 thousand tons of [[watermelon]];
* 443 thousand tons of [[tomato]];
* 356 thousand tons of [[carrot]];
* 308 thousand tons of [[vegetable]];
* 300 thousand tons of [[cotton]];
* 241 thousand tons of [[grape]];
* 238 thousand tons of [[apple]];
* 237 thousand tons of [[maize]];
* 211 thousand tons of [[cucumber]];
* 116 thousand tons of [[cabbage]];
* 108 thousand tons of [[barley]];
* 90 thousand tons of [[rice]];

In addition to smaller productions of other agricultural products, like [[apricot]] (31 thousand tons).<ref>{{cite web| url = http://www.fao.org/faostat/en/#data/QC/| title = Tajikistan production in 2018, by FAO| access-date = 2020-11-01| archive-date = 2020-05-29| archive-url = https://web.archive.org/web/20200529074007/http://www.fao.org/faostat/en/#data/QC/| url-status = live}}</ref>

===Forestry===
3% of Tajikistan is forested, mainly at elevations between 1,000 and 3,000 meters. No [[forestry|forest]] region is classified as commercially usable; most are under state protection. Wood production is negligible, but local inhabitants harvest non-wood forest products.<ref name=cp/>
<ref>{{cite web|url=http://naturalresources-centralasia.org/assets/files/Forestry%20sector%20analysis%20of%20the%20republic%20of%20Tajikistan%20eng.pdf|title=Forestry Sector Analysis of the Republic of Tajikistan|website=Naturalresources-centralasia.org|access-date=2 October 2018|archive-date=11 July 2019|archive-url=https://web.archive.org/web/20190711203439/http://naturalresources-centralasia.org/assets/files/Forestry%20sector%20analysis%20of%20the%20republic%20of%20Tajikistan%20eng.pdf|url-status=live}}</ref>

===Fishing===
Streams and lakes produce a limited amount of [[fish]], and some fish is produced by [[aquaculture]]. In 2003 some 158 tons of fish were caught and 167 tons raised on fish farms.<ref name=cp/>

===Mining and minerals===
{{main|Mining in Tajikistan}}
Tajikistan has rich deposits of [[gold]], [[silver]], and [[antimony]]. The largest silver deposits are in [[Sughd Province]], where Tajikistan's largest gold [[mining]] operation is also located. Russia's Norilsk nickel company has explored a large new silver deposit at Bolshoy Kanimansur. Tajikistan also produces [[strontium]], [[salt]], [[lead]], [[zinc]], [[fluorspar]], and [[mercury (element)|mercury]]. [[Uranium]], an important [[mineral]] in the Soviet era, remains in some quantity but is no longer extracted. [[Fossil fuel]] deposits are limited to coal, of which about 30,000 tons are mined annually. Tajikistan's extensive aluminium processing industry depends entirely on imported ore.<ref name=cp/>

===Industry and manufacturing===
The output of most [[Industry (economics)|industries]] declined sharply during the mid-1990s; despite widespread privatization, in the early 2000s industry rallied very slowly. In 2006 an estimated one-third of Tajikistan's 700 major industrial enterprises were completely idle, and the remainder were operating at 20 or 25% of capacity. The causes are outmoded equipment, low investment levels, and lack of markets. To revitalize the sector, in 2006 the government was considering renationalizing some enterprises. Tajikistan's only major heavy industries are [[aluminium processing]] and [[chemical industry|chemical production]]. The former, which provided 40% of industrial production in 2005, is centered at the [[Tajik Aluminium Company|Tursunzoda processing plant]], the latter in [[Dushanbe]], [[Qurghonteppa]], and [[Yovon]]. Aluminium production increased by 6% in 2005. Some small light industrial plants produce [[textiles]] and [[food processing|processed foods]], using mainly domestic agricultural products. The textile industry processes about 20% of domestically grown [[cotton]]. The expansion of light industry output contributed significantly to GDP growth in 2005. The construction industry, about half of which is state-owned, has suffered from low investment in capital projects and from shoddy workmanship that has discouraged international contracts. However, new infrastructure projects and increased housing construction brought a 60% increase in output from 2004 to 2005.<ref name=cp/> As of 2009, one third of industrial plants and factories are inactive, according to Tajikistan's Institute of Economic Studies. Industrial output has fallen by 13% in the first six months of 2009, leading to a fall in export revenues of 48%.

===Energy===
{{See also|List of power stations in Tajikistan}}

The rivers of Tajikistan, such as the [[Vakhsh River|Vakhsh]] and the [[Panj River|Panj]], have great [[hydropower]] potential, and the government has focused on attracting investment for projects for internal use and electricity exports. Tajikistan is home to the hydroelectric power station [[Nurek Dam|Nurek]], the second highest dam in the world.<ref name=dams>
{{cite web
 |url=http://npdp.stanford.edu/damhigh.html 
 |title=Highest Dams (World and U.S.) 
 |publisher=ICOLD World Register of Dams 
 |year=1998 
 |access-date=2008-03-08 
 |url-status=dead 
 |archive-url=https://web.archive.org/web/20080405065705/http://npdp.stanford.edu/damhigh.html 
 |archive-date=2008-04-05 
}}</ref>  [[Sangtuda 1 Hydroelectric Power Plant]] of 670&nbsp;megawatts (MW) capacity, operated by Russian [[Inter RAO UES]], commenced operations on 18 January 2008 and was officially commissioned on 31 July 2009.<ref name=vesti>
{{cite news
 |url=http://npdp.stanford.edu/damhigh.html 
 |title=Первая очередь Сангтудинской ГЭС в Таджикистане будет запущена 18 января (''First stage of the Sangtuda HPS launched on 18 January'') 
 |publisher=Vesti 
 |date=2007-12-25 
 |access-date=2008-03-08 
 |language=ru 
 |url-status=dead 
 |archive-url=https://web.archive.org/web/20080405065705/http://npdp.stanford.edu/damhigh.html 
 |archive-date=2008-04-05 
}}</ref><ref name=todayenergy>
{{cite news
 |url         = http://www.energytoday.eu/articles/81528.php
 |title       = Sangtuda-1 HPS launched on January 18, 2008
 |publisher   = Today Energy
 |date        = 2008-01-05
 |access-date  = 2008-03-08
 |url-status     = dead
 |archive-url  = https://web.archive.org/web/20090116041605/http://www.energytoday.eu/articles/81528.php
 |archive-date = January 16, 2009
}}</ref><ref name=reuters310709>{{cite news
  | title = Russia boosts C.Asia ties, opens plant in Tajikistan
  | work = [[Reuters]]
  | url = http://uk.reuters.com/article/idUKLV616217?sp=true
  | author = Roman Kozhevnikov, Anastasia Onegina
  | date = 2009-07-31
  | access-date = 2009-08-04
  | archive-date = 2020-11-17
  | archive-url = https://web.archive.org/web/20201117021623/https://uk.reuters.com/article/idUKLV616217?sp=true
  | url-status = dead
  }}</ref><ref name=market>
{{cite news
 |title       = In Tajikistan, started Sangtuda HPP-1
 |publisher   = Market Analysis
 |url         = http://dotnetpalm.net/Company-News/in-tajikistan-started-sangtuda-hpp-1/
 |date        = 2009-07-31
 |access-date  = 2009-08-08
 |url-status     = usurped
 |archive-url  = https://web.archive.org/web/20090811031343/http://dotnetpalm.net/Company-News/in-tajikistan-started-sangtuda-hpp-1/
 |archive-date = 2009-08-11
}}
</ref>  Other projects at the development stage include [[Sangtuda 2 Hydroelectric Power Plant|Sangduta 2]] by Iran, Zerafshan by Chinese [[SinoHydro]] and [[Rogun Dam|Rogun power plant]], which, at {{convert|335|m|ft|0}}, is projected to supersede the Nurek Dam as tallest in the world if completed.<ref>[[Richard Foltz]], ''A History of the Tajiks: Iranians of the East'', London: [[Bloomsbury Publishing|Bloomsbury]], 2019, p. 161.</ref> The Rogun Dam was originally planned to be built by Russia's Inter RAO UES, but following disagreements, Russia pulled out. In 2010, production resumed with Iranian investment and Chinese assistance.<ref name=irna>
{{cite news
 |url         = http://www2.irna.com/en/news/view/line-18/0704240278195019.htm
 |title       = Iran participates in power plant project in Tajikistan
 |publisher   = IRNA
 |date        = 2007-04-24
 |access-date  = 2008-03-08
 |url-status     = dead
 |archive-url  = https://web.archive.org/web/20130428215008/http://www2.irna.com/en/news/view/line-18/0704240278195019.htm
 |archive-date = 2013-04-28
}}</ref><ref name=rferl1>{{cite news
|url=http://www.rferl.org/featuresarticle/2007/01/c7eca5d9-67f9-4659-88f9-696875ac873e.html
|title=Chinese To Build Tajik Hydroelectric Plant
|publisher=Radio Free Europe / Radio Liberty
|date=2007-01-18
|access-date=2008-03-08
|archive-date=2008-03-15
|archive-url=https://web.archive.org/web/20080315013838/http://www.rferl.org/featuresarticle/2007/01/c7eca5d9-67f9-4659-88f9-696875ac873e.html
|url-status=live
}}</ref><ref name=energyland>
{{cite news
|url=http://www.energyland.info/news/world_news/2007/09/14/news_1264
|title= РАО "ЕЭС России" построит "Рогунскую ГЭС" в Таджикистане (''RAO UES to construct Rogun HPS in Tajikistan'')
|publisher=EnergyLand.info
|date= 2007-09-14
|access-date=2008-03-08
|language=ru
|archive-url = https://web.archive.org/web/20080429001530/http://www.energyland.info/news/world_news/2007/09/14/news_1264 <!-- Bot retrieved archive --> |archive-date = 2008-04-29}}</ref>  Besides hydropower, other energy resources include sizable coal deposits and smaller reserves of natural gas and petroleum. In December 2010, Russian Gazprom announced discovery of significant natural gas reserves in Sarykamish field with 60 bcm of natural gas, enough for 50 years of Tajikistan's domestic consumption. The national power company is [[Barqi Tojik]].<ref>{{cite web|url=http://www.atimes.com/atimes/Central_Asia/MA14Ag01.html|archive-url=https://web.archive.org/web/20110115070121/http://www.atimes.com/atimes/Central_Asia/MA14Ag01.html|url-status=unfit|archive-date=15 January 2011|title=Asia Times Online|website=Atimes.com|access-date=2 October 2018}}</ref>

Tajikistan is a partner country of the [[European Union|EU]] [[INOGATE]] energy programme, which has four key topics: enhancing [[energy security]], [[Technological convergence|convergence]] of member state [[energy market]]s on the basis of [[Internal energy market|EU internal energy market]] principles, supporting [[sustainable energy]] development, and attracting investment for energy projects of common and regional interest.<ref>{{cite web|url=http://www.inogate.org/|title=INOGATE|website=Inogate.org|access-date=2 October 2018|archive-date=18 November 2019|archive-url=https://web.archive.org/web/20191118080914/http://www.inogate.org/|url-status=live}}</ref>

===Services===
Throughout the early 2000s, the overall output of the services sector has increased steadily. The banking system has improved significantly because of strengthened oversight by the [[National Bank of Tajikistan]], relaxed restrictions on participation by foreign institutions, and regulatory reform. The system includes 16 commercial banks and the central bank, or National Bank. The state controls the system, although in principle most banks have been privatized. An internationally assisted restructuring program was completed in 2003. Banks provide a narrow range of services, concentrating on providing [[credit (finance)|credit]] to state-owned enterprises. Only an estimated 10% of the capital in Tajikistan moves through the banking system, and small businesses rarely borrow from banks.

Abdujabbor Shirinov, Chairman of the National Bank of Tajikistan announced 142 credit organizations, including 16 banks and 299 their branches, two non-bank financial institutions and 124 microfinance organizations functioned in Tajikistan at the first of 2013.<ref>{{cite web|url=http://news.tj/en/news/tajikistan-ready-coming-new-foreign-banks-says-tajik-central-bank-head|title=Tajikistan ready for coming of new foreign banks, says Tajik central bank head - Tajikistan News ASIA-Plus|website=News.tj|access-date=2 October 2018|archive-url=https://web.archive.org/web/20140106061456/http://news.tj/en/news/tajikistan-ready-coming-new-foreign-banks-says-tajik-central-bank-head|archive-date=6 January 2014|url-status=dead}}</ref>

=== Tourism ===
The [[tourism industry]] of Tajikistan was eliminated by the civil war, but has begun to re-establish itself in recent years. In 2018, the [[British Backpacker Society]] ranked [[Tajikistan]] as the 7th best [[adventure travel]] destination on earth.<ref>{{Cite web|url=https://www.lonelyplanet.com/news/2018/01/05/pakistan-top-backpacker-destintion/|title=Pakistan rated top destination by the British Backpacker Society|last=Planet|first=Lonely|website=Lonelyplanet.com|language=en|access-date=2018-05-24|archive-date=2018-01-05|archive-url=https://web.archive.org/web/20180105222451/https://www.lonelyplanet.com/news/2018/01/05/pakistan-top-backpacker-destintion/|url-status=live}}</ref> The Tajik Committee on Tourism Development responded to this accolade by stating that "the inclusion of [[Tajikistan]] in the [[British Backpacker Society|British Backpacker Society's]] top 20 adventure travel destinations testifies the development of tourism in [the] country."<ref>{{Cite news|url=https://www.azernews.az/region/124989.html|title=Tajikistan ranked 7th place in the top 20 adventure travel destinations of the world|date=2018-01-04|work=AzerNews.az|access-date=2018-05-24|language=en-US|archive-date=2018-05-24|archive-url=https://web.archive.org/web/20180524222107/https://www.azernews.az/region/124989.html|url-status=live}}</ref>

==Labour==
In 2003 Tajikistan's active labour force was estimated at 3.4 million, of whom 64% were employed in agriculture, 24% in services, and 10% in industry and construction. After declining in the early 2000s, the real wages of state employees were raised in 2004 and 2005. Because of the continued dominance of state farms, the majority of workers are government employees, although only a small number rely completely on wages. Driven by high [[unemployment]], in 2006 an estimated 700,000 workers found seasonal or permanent employment in [[Russia]] and other countries. Their remittances, estimated at US$600 million in 2005, are an important economic resource in Tajikistan; in 2004 an estimated 15% of households depended mainly on those payments. In May 2009 remittances to Tajiks had fallen to $525 million, a 34% decline from the previous year. Immediately before the [[2008 financial crisis]], there were an estimated 1.5 million foreign workers sending remittances back to Tajikistan. In 2006 the average wage was US$27 per month. The national unemployment rate was estimated unofficially as high as 40% in 2006, but in rural areas, unemployment has exceeded 60%. Unemployment has been higher in the southern Khatlon Province than in the northern Soghd Province.<ref name=cp/> Mean wages were $0.66 per [[man-hour]] in 2009.

Tajikistan's informal employment sector has been reported to use both [[child labour]] and [[forced labour]] in the country's cotton industry according to the [[U.S. Department of Labor]]'s ''[[List of Goods Produced by Child Labor or Forced Labor]]''.

==Currency, exchange rate, and inflation==
The [[somoni]] (SM) was introduced in 2000 to replace the [[Tajikistani rouble]], which had been the currency since 1995. In December 2015, some 7 somoni equaled US$1.<ref name=cp/> Throughout the post-Soviet era, [[inflation]] has been a serious obstacle to economic growth and improvement of the standard of living. For the years 2001–3, Tajikistan's inflation rates were 33%, 12.2%, and 16.3%, respectively, but in 2004 the rate fell to 6.8%, and the rate for 2005 was 7.1%. In late 2006, inflation approached the 10% level. The official forecast for 2007 is 7%.<ref name=cp/>

==Government budget==
The year 2004 was the first year of budget deficit after three consecutive years of budget surpluses, which in turn had followed four years of deficits between 1997 and 2000. In 2005 revenues totalled US$442 million (aided by improvements in tax collection), and expenditures were US$542 million, a deficit of US$100 million. The approved 2007 state budget calls for revenues of US$926 million and expenditures of US$954 million, leaving a deficit of US$28 million.<ref name=cp/>

==Foreign economic relations==
[[Image:2006Tajikistani exports.PNG|thumb|left|Tajikistani exports in 2006]]
In the post-Soviet era, Tajikistan has substantially shifted its markets away from the former Soviet republics; in 2005, more than 80% of total exports went to customers outside the [[Commonwealth of Independent States]] (CIS), including more than 70% to countries of the [[European Union]] (EU) and [[Turkey]]. However, because most of Tajikistan's food and energy are imported from CIS countries, in 2005 only about 53% of total trade activity was outside the CIS. In 2005, the top overall buyers of Tajikistan's exports, in order of value, were the [[Netherlands]], Turkey, [[Russia]], [[Uzbekistan]], [[Latvia]], and [[Iran]]. Besides aluminium, which accounts for more than half of export value, the main export commodities are cotton, electric power, fruits, vegetable oils, and textiles. In 2005 the largest suppliers of Tajikistan's imports, in order of value, were Russia, Kazakhstan, Uzbekistan, Azerbaijan, China, and Ukraine. Those import rankings are determined largely by the high value of fuels and electric power that Tajikistan buys from its neighbours. Another significant import is alumina (aluminium oxide) to supply the aluminium industry. The major suppliers of alumina are Azerbaijan, Kazakhstan, and Ukraine.<ref name=cp/>

Tajikistan has suffered trade deficits throughout the post-Soviet era. In 2003, the deficit was US$97 million, based on exports of US$705 million and imports of US$802 million. In 2004, exports were worth US$736 million and imports, US$958 billion, creating a trade deficit of US$222 million. The deficit increased again in 2005, to US$339 million, mainly because cotton exports decreased and domestic demand for goods increased.<ref name=cp/>

In 2005, the current account deficit was US$86 million, having shown a general downward trend since the late 1990s. The estimated current account deficit for both 2006 and 2007 is 4.5% of GDP, or about US$90 million in 2006. In 2005 the overall balance of payments was US$14 million. The estimated overall balance of payments for 2006 is US$8 million.<ref name=cp/>

At the end of 2006, Tajikistan's external debt was estimated at US$830 million, most of which was long-term international debt. This amount grew steadily through the 1990s and early 2000s because of state borrowing policy. In 2004 Tajikistan eliminated about 20% of its external debt by exchanging debt to Russia for Russian ownership of the [[Nurak|Nurek]] space tracking station, and by 2006, rescheduling negotiations had reduced the debt by about two-thirds as a percentage of gross domestic product.<ref name=cp/>

In the early 2000s, foreign direct investment has remained low because of political and economic instability, corruption, the poor domestic financial system, and Tajikistan's geographic isolation. The establishment of businesses nearly always requires [[Bribe|bribing]] officials and often encounters resistance from entrepreneurs with government connections. To attract foreign investment and technology, Tajikistan has offered to establish free economic zones in which firms receive advantages on taxes, fees, and customs. In 2004, the parliament passed a law on free economic zones<ref>Law of the Republic of Tajikistan on free economic zones, {{cite web |url=http://www.labour.tj/files/%D0%9E%20%D1%81%D0%B2%D0%BE%D0%B1%D0%BE%D0%B4%20%D1%8D%D0%BA%D0%BE%D0%BD%D0%BE%D0%BC%20%D0%B7%D0%BE%D0%BD%D0%B0%D1%85.pdf |title=Archived copy |access-date=2010-11-06 |url-status=dead |archive-url=https://web.archive.org/web/20120324043525/http://www.labour.tj/files/%D0%9E%20%D1%81%D0%B2%D0%BE%D0%B1%D0%BE%D0%B4%20%D1%8D%D0%BA%D0%BE%D0%BD%D0%BE%D0%BC%20%D0%B7%D0%BE%D0%BD%D0%B0%D1%85.pdf |archive-date=2012-03-24 }} (in Russian)</ref> and in 2008 passed a decree creating two zones: the [[Panj Free Economic Zone]] and the [[Sughd Free Economic Zone]].<ref>Decree on creating free economic zones "Panj" and "Sughd", {{cite web |url=http://www.tajinvest.tj/downloads/zakon/032.pdf |title=Archived copy |access-date=2010-11-06 |url-status=dead |archive-url=https://web.archive.org/web/20120314181249/http://www.tajinvest.tj/downloads/zakon/032.pdf |archive-date=2012-03-14 }} (in Russian)</ref> In 2003 foreign direct investment totaled US$41 million; it increased to US$272 million in 2004 because of the debt-reduction transaction with Russia. In the first half of 2005, the figure was US$16 million. Beginning in 2005, the Russian [[Rusal]] aluminium company resumed operations to complete the hydroelectric station at [[Rogun]] on the [[Vakhsh River]] and expand aluminium production at the [[Tursunzade]] plant. That plant was scheduled for possible sale to Rusal in 2007. Also in 2005, Russia and Iran resumed work on the Vakhsh River Sangtuda hydroelectric project. [[Gazprom]], the Russian natural gas monopoly, allocated US$12 million for oil and gas exploration in Tajikistan in 2007 after spending US$7 million in 2006. In 2005 the Russian telecommunications company [[VimpelCom]] bought a controlling share of Tajikistan's Tacom mobile telephone company. As of 2006, Turkey tentatively planned to invest in a luxury hotel and a cotton processing plant.<ref name=cp/>

===WTO===
Tajikistan joined the [[World Trade Organization]] (WTO) on 2 March 2013, becoming the 159th country to join the organization. The Working Party on the accession of Tajikistan was established by the General Council on 18 July 2001. Tajikistan completed its membership negotiations on 26 October 2012, when the Working Party adopted the accession package. The General Council approved the accession on 10 December 2012. The Working Party held its sixth meeting in July 2011 to continue the examination of Tajikistan's foreign trade regime. As part of bilateral market access negotiations, Tajikistan agreed to lower tariffs on cooking equipment, refrigerators, ovens and water heaters in discussions to gain Thailand's backing. Earlier, the government of Tajikistan confirmed that it had concluded negotiations with Japan, and had received support from the nation for its accession in an agreement signed on July 31, 2012.<ref>{{cite web|url=http://www.wto.org/english/thewto_e/countries_e/tajikistan_e.htm|title=WTO - Tajikistan - Member information|website=Wto.org|access-date=2 October 2018|archive-date=2 March 2021|archive-url=https://web.archive.org/web/20210302080056/https://www.wto.org/english/thewto_e/countries_e/tajikistan_e.htm|url-status=live}}</ref>

==See also==
{{Portal|Tajikistan}}
*[[Visa policy of Tajikistan]]

==References==
{{CIA World Factbook}}
{{Reflist}}

==External links==
* Habib Borjian, {{usurped|1=[https://web.archive.org/web/20090815004132/http://www.iranica.com/newsite/index.isc?Article=http%3A%2F%2Fwww.iranica.com%2Fnewsite%2Farticles%2Funicode%2Fv8f1%2Fv8f1133xii.html Economy of Tajikistan]}}, Encyclopædia Iranica. (mostly about its economic history)

{{Tajikistan topics}}
{{World Trade Organization}}
{{Asia in topic|Economy of}}

{{DEFAULTSORT:Economy Of Tajikistan}}
[[Category:Economy of Tajikistan| ]]