Economy

1. Economic reform and private sector development

Implementation of the initiatives of the
Founder of Peace and National Unity, the Leader of the Nation,
President of the Republic of Tajikistan, H.E. Emomali Rahmon on national
economic reforms, particularly on improvement of investment climate,
support to the private sector and  the implementation of the necessary
activities on development of priority sectors had a positive impact on
the development of Tajikistan and created a favourable environment for
sustainable economic development.

Since its early independence, Tajikistan
has implemented a series of national economic reforms by transferring
from a planned economy to a market based economy and has undertaken
various important steps in this direction, including adoption of a
number of laws and regulations defining and regulating economic
relations.

The emergence of different forms of
ownership, creation of various economic activities, privatization of
public property, introduction of national currency, liberalization of
pricing, establishment of joint ventures, ensuring free foreign trade
and addressing priority social issues are among the serious steps in
strengthenening Tajikistan’s economy.

More comprehensive and targeted economic
reforms started in the mid 90s, which made it possible to avoid decline
in production and ensure sustainable economic development.

Consistent implementation of
institutional reforms in important public sectors, particularly in
governance, finance, banking, real sectors of the economy, as well as in
education, health, and social security by drafting and implementing a
number of socio-economic development programs and undertaking effective
measures contributed to the overall development of the country's
economy. The GDP per capita increased by 19.6 times during the last 15
years alone (2000-2015) (see the chart below please).

GDP per capita in 2000-2015 (TJS)

Tajikistan also enjoyed substantive
growth of GDP during the last 25 years of its independence thanks to the
Tajik Government’s successful economic reforms. In this context, the
public budget revenue increased by 55.3 times compared to 2000. (Please
see Tajikistan’s overall macroeconomic indicators in Table 1).

Table 1

Macroeconomic Indicators of the Republic of Tajikistan

  2009 2010 2011 2012 2013 2014 2015 2016
GDP in nominal price,
billion TJS
20,6 24,7 30,1 36,2 40,5 45,6 48,4 54,5
Growth rate % 103,9 106,5 107,4 107,5 107,4 106,7 106,0 106,9
Industrial output,
billion TJS
6,5 8,2 7,9 9,5 9,9 10,5 12,2 15,1
Growth rate (%) 93,6 109,2 105,7 110,8 103,8 105,0 111,3 116,0
Agricultural output,
billion TJS
8,8 9,4 14,9 16,5 16,8 21,0 21,6 22,2
Growth rate, % 110,5 106,8 107,9 110,4 107,6 104,5 103,2 105,2
Fixed Capital Investment,
billion TJS
3,9 4,7 5,0 4,5 5,8 7,5 9,7 11,1
Inflation Rate,
periodic, %
5,0 9,8 9,3 6,4 3,7 7,4 5,1 6,1
Unemployment rate, % 2,2 2,1 2,3 2,4 2,3 2,4 2,3 2,4
Public Budget Expenditures,
billion TJS
5,7 6,7 8,5 9,1 11,6 13,2 15,7 18,4

 

Note: 2016 indicators are based on preliminary summary

Development of various sectors of the
economy and improved living standards of the population made it possible
to increase average monetary income of the population by 25.4 times in
2000-2015.

Monetary income of population in 2000-2015 (billion TJS)

 

The foreign trade as another important
indicator of the national economy development accounted for USD 131.1m
only in 1991 and it increased by 33 times during the last 25 years.

Foreign Trade in 2000-2015 years (billion USD)

Effective measures have been undertaken
during the independence period with a view to monitoring the process of
economic reforms and developing  economic objectives to meet the current
demands. Thus, the National Development Council under the Office of the
President of the Republic of Tajikistan was established, which is
directly lead by the Founder of Peace and National Unity, the Leader of
the Nation, President of the Republic of Tajikistan, H.E. Emomali
Rahmon. The Council determines the areas of operation and priorities for
further development of the national economy.

To ensure further economic development
of the country, the Government defined its important strategic
objectives, including energy security, food security and the country’s
connectivity. A lot of activities have been undertaken to achieve these
objectives.

With a view to ensuring energy security
and tunring Tajikistan into an exporter of affordable and clean
electricity, a number of economic and structural reforms have been
implemented in the framework of strategic documents, including the
Republic of Tajikistan Energy Development Concept to 2015 through
establishment of a number of industrial and fuel and energy complexes as
well as construction of small and large hydropower plants.

The agriculture plays a crucial role in
Tajikistan’s economy, especially in ensuring its food security. Having
taken into account this fact, a number of measures such as granting
farmers the freedom of crop choice, supply of population and enterprises
with raw materials, and creating jobs in the agricultural sector have
been undertaken, which gave a new impetus to improve the country's
export potential.

With a view to ensuring the country’s
connectivity and turning it into a transit area, construction of a
number of roads, bridges and tunnels of national and international
importance is completed in this period and construction and
rehabilitation of several important highways of Dushanbe – Chanok,
Dushanbe - Tursunzoda (to Uzbekistan border), Dushanbe - Kulma (to
Chinese border), Dushanbe-Saritosh (to the Kyrgyz border) and bridges
across the Panj River to connect Tajikistan with Afghanistan are
ongoing.

The Government of Tajikistan conducted
institutional reforms by moving to public administration based on new
market relations in various sectors with a view to running effective
public policy and ensuring effective operation of public entities.

This system of public administration,
given liberalization of economic relations, made it possible for all
branches of the real sector of economy to formulate and develop in the
context of emergence of private property and free operation of the
private sector and thereby facilitated the creation of new enterprises
and new jobs.

Сreation of conducive environment for
formulation and development of various forms of ownership and in this
context increased number of new types of services, during 25 years of
independence enabled  better conditions for entrepreneurship and
investment activities.

The main idea of the economic reforms
starts with the privatization of public property and the formation of
various forms of ownership. The most important stage in the transition
to market economy is the emergence of private property and its
protection.

The Government of of Tajikistan started
implementing its single policy on public property privatization in early
independence period. The Law of the Republic of Tajikistan "On Public
Property Privatization in the Republic of Tajikistan" was adopted in
1997. This law laid the foundation for formation of a new structure of
economy and opened horizons to free market-based economy. Public
property privatization also created favorable environment to attract
domestic and foreign investments.

The public property privatization was
conducted in two stages based on its goals and objectives. The first
stage covered privatization of small enterprises such as trade, public
food, consumer services enterprises and vehicles, and the second stage
was implemented after renovation of major and medium industrial,
transport, communications and construction enterprises. During 1991-2015
some 11,410 small facilities and 1,367 medium and large enterprises
were privatized in Tajikistan.

Tajikistan’s public economic policy
focus on comprehensive support of the private seector and entrepreneurs’
initiatives. The Government has undertaken significant activities aimed
at eliminating artificial administrative barriers to ensure
transparency of legal regulations for business entities.

With a view to attracting more
investments, the legislation on investment and entrepreneurship provides
customs and tax privileges, especially in the priority sectors such as
agriculture, extraction of minerals, final processing, energy and so on.

The new Tax Code of the Republic of
Tajikistan is adopted within the taxation system reform, which reduced
the number of taxes from 21 to 10 types. This number was even further
reduced to nine types on January 1, 2017.

The Government of Tajikistan reformed
the permit system and reduced the number of permits from 650 to 74
during the independence period. The Unified Public Electronic Register
of Permits is introduced within these reforms.

With a view to ensuring economic
development of the country through improvement of the investment climate
and business environment Consultative Council on Improvement of
Investment Climate under the Office of the President of the Republic of
Tajikistan was established in 2007. The Council is comprised of
representatives from governmental agencies, the private sector and
development partners.

The Government of Tajikistan has pursued
‘Open Doors’ policy since the beginning of Tajikistan’s independence
and has established direct economic and trade relations with more than
120 countries of the world.

The reforms made it possible to improve
Tajikistan’s image at the global level and within the international
rating, in particular within the World Bank’s ‘Doing Business’ Report.
The country's rank has improved by tens of points from 2009 to 2016, and
Tajikistan was included into the list of top ten reformers three times
in this period.

2. Financial and Banking System Stabilization

The country's financial system,
including its legislation, was brought in line with international
standards and a new financing system based on the principles of
transparency, accountability and effectiveness was introduced during the
independence period.

Electronic treasury management system
meeting international standards was also introduced in the financial
system of the country, which provides transparent payment system and
quality services to customers.

Tajikistan’s current monetary policy
mainly focus on strengthening of the economic and financial sectors,
improvement of public welfare and macroeconomic indicators.

Adoption of the Law of the Republic of
Tajikistan "On Microfinance Institutions" promoted the development of
microfinance services and entrepreneurship development in the country.
While in 1995 the credits invested into the economy amounted  TJS 9.1m,
only in 2015 they accounted for TJS 12.5bn with 42 % of microloans.

Introduction and effective operation of
electronic payment systems, bank cards, and ATMs is also one of the
achievements of the banking system during the independence period.
Circulation of the national currency, creation of domestic foreign
exchange market and international transactions system, accession to
reputable international financial institutions, as well as ensuring
regulatory and legal framework and sovereign guarantees for national
currency exchange are among significant achievements of Tajikistan’s
financial policy during 25 years of its independence.

3. Industrial Development

Currently the Tajik industry is equipped
with a comprehensive developed framework and technical infrastructure
and covers various sectors. The sector is represented by more than 90
types of production and more than 140 varieties of products covering
mineral extraction and processing, coal mining, light and chemical
industry, engineering, metal processing, construction materials and food
industry.

The Government of Tajikistan constantly
attaches a particular importance to acceleration of industrial
development and ensuring its sustainability, comprehensive institutional
reforms, establishment of private enterprises with attraction of
domestic and foreign investment to improve economic efficiency,
introduction of technical and technological innovations in industrial
production.

Dozens of agreements on cooperation
between the Government and local as well as international companies on
establishment of new enterprises of metallurgy, cement production and
other construction materials, extraction and refining of coal, oil and
gas, chemical products, engineering and metal processing are signed and
successfully implemented to achieve this objective.

Strategic papers, local development and
sectorial programs define the country’s industrial priorities in terms
of establishment of new production capacities in the regions based on
availability of raw materials and agricultural products.

Hundreds of small and large production
enterprises and jobs have been restored with mobilization of domestic
and foreign investment during 25 years of independence. Now 2068
production enterprises are operative, which employ more than 86 400
residents of the country with permanent jobs.

Investments amounting 3.3 billion U.S.
dollars in total were made in the country’s industry during 2005-2015,
including 2.8 billion U.S. dollars of direct investments and 474.8
million U.S. dollars of other investments. The industrial output reached
12.2 billion Tajik Somoni in 2015.

Industrial Output in 1991-2015 (billion TJS)

Tajikistan's food industry and agrarian
sector play an important role in achieving one of its strategic
objectives - food security and also in addressing a series of issues
like employment of population particularly in rural areas, contributing
to the country’s GDP and improvingits export capacity. The number of
enterprises in this sector increased from 300 in 1990 to 700 small and
medium enterprises in 2015, which employ more than 7,500 working-age
population.

Light industry as one of the key
priority areas of industry, not only solves the challenges of employment
and production of high-quality domestic products, but also contributes
to the development of other sectors, particurlarly agriculture.

Tajikistan has abundant resources of
non-mineral raw materials for production of construction materials and
is ranked as one of the leading countries for these resources in the
world. More than 400 deposits containing 30 different types of raw
materials (limestone, granite, granodiorite, marble, marble limestone,
alebaster, soil, quarts sand and so on) have been discovered and studied
in the country.

The construction materials industry is
developing through implementation of programs and concepts aimed at
doubling production, creatiing new jobs and thereby reducing poverty
rate. While there were only 30 industrial enterprises in this sector in
the 90s of the last century, in 2015 their total number reached 450
enterprises employing 8431 people, which is almost three times more than
in 1991.

Establishment of scrap metal and
ferrious and non-ferrious metal waste processing enterprises within the
engineering enterprises started in 2005 and now 33 such enterprises are
operative. These enterprises mainly produce building bars, angle beams,
metal wires, aluminum pulleys, and other products from metal waste, and
market their products in the markets inside and outside the country.

Tajikistan is a mountainous country with
huge subsoil resources, development of which is one of the main
priorities for the national economy development.

In 2016, the industrial products output
accounted for TJS 2.3b and the production of metal No 1 and metal No 2
made 112.5% ​​and 143.5% accordingly. Production of plumbum dust made
60,000 tons, zinc dust - 108,000 tons, copper dust - 20,000 tons  and
antimony 33 500 tons accordingly.

There were only 10 chemical and
petrochemical enterprises in 1991, while their number reached 45 in
2015, and these companies produced products for TJS 86m.

The coal mining is the most important
sector in fuel and energy complex and can play a decisive role in
reducing energy constraints and ensuring the country's energy security
in cooperation with domestic and foreign investors. The coal production
reached 1.4m tons in 2015 due to the increased demand in coal in various
areas.

4. Pathway Towards the Energy Security

The Government of Tajikistan has
undertaken specific measures during the independence period to achieve
one of its strategic objectives - energy security.

Tajikistan generated 398.7bn kW/h of
electricity and 20.9 Gcal of thermal power,  exported 20.5 bn kW/h and
imported 23.1 bn kW/h of power during the 25 years of its independence.
During this period a number of investment energy projects was
implemented funded by foreign investors, and USD 1,861.8 bn in total
were channeled to this sector from all sources of financing.

With a view to ensuring sustainable
development of the energy sector, a number of small and large hydropower
plants, , high-voltage power transmission lines and substations were
constructed and launched within implementation of strategic objectives
during the independence period. The regional power transmission line
project of CASA-1000 and the restoration and finalization of the Roghun
HPP has started recently.

The following major facilities were constructed and launched during this period:

- HPP Sangtuda-1 (670 MW);

- HPP Sangtuda-2 (220 MW);

- Thermal power plant of Dushanbe-2 (400 MW);

- South-North 500 kV power transmission line;

- Kanibadam-Batken 220 kV power transmission line;

- Lolazor-Khatlon 220 kV power transmission line;

- Tajikistan-Afghanistan 220 kV power transmission line.

These measures made it possible to
increase the country’s generation and export capacity to some extent,
and the expanded power transmission infrastructure created new
opportunities for socio-economic development and improved the people's
welfare and their access to electricity.

The energy sector’s achievements during
the independence period will be more significant through implementation
of the CASA-1000 power transmission line project and construction of the
Roghun HPP. This will make it possible for the energy sector to develop
substantively in the nearest future and fully achieve one of the
country's strategic objectives – energy security.

  1. Country’s Connectivity

Development of the transport sector is
crucial for Tajikistan in ensuring the country’s connectivity, which is
indeed one of its strategic objectives. The actual development of the
transport sector in the period of independence began in 1997. At that
time only 42 % of national and only 20% of local roads were paved, of
which 73% was in poor condition, 26 % of moderate condition and only one
percent was in good technical condition.

One of the objectives of the transport
sector during the indepence was to establish transport infrastructure to
ensure the country’s connectivity. With a view to achieving this
objective 45 public investment projects amounting more than TJS 12bn
were implemented, within which more than 2 000 km of roads, 31 km of
tunnels, 200 bridges and 173.2 km of railways were constructed and
rehabilitated. There are 16 ongoing investment projects in the country.

The Government has been increasing
public budget funding for road maintenance every year. While in 2000 TJS
3.8m was allocated for this purpose, in 2015 the funding accounted for
TJS 60.9m, which increased by more than 16 times compared to 2000.

During 2008 - 2016 38 investment
projects on construction and reconstruction of highways funded by
foreign investments were implemented. Construction and reconstruction of
the roads of “Murghob-Kulma”, “Shohon-Zighar, (phases 1, 2 and 3)”,
“Shkev-Zighar”, “Dushanbe-Kurghonteppa-Danghara-Kulob”, “Dusti-Panji
Poyon, (phases 1 and 2)”, “Dushanbe-Kyrgyz border (phases 1, 2 and 3),
“Dushanbe-Chanoq-Uzbekistan border”, “Kurghonteppa-Dusti,(phase 1)”,
“Dushanbe-Tursunzode-Uzbekistan border”, “Aini-Panjakent-Uzbekistan
border, as well as the tunnels of "Istiqlol", "Shahriston”, “Dusti”,
“Ozodi” and “Khatlon” were completed during this period.

Tajikistan signed bilateral agreements
on transportation with 21 far abroad and 13 near abroad countries in
this period. The country also acceded to 9 international conventions and
agreements with a view to improving Tajikistan’s international
cooperation on transport, which facilitated international
transportation.

Nine international freight terminals and
five passenger terminals were constructed and launched during the
independence period. The number of transport companies also increased
and currently 220 transport companies, 57 passenger terminals, 18
freight terminals, 836 passenger delivery routes and 41 international
transportation companies operate in the country.

The air transport sector also gradually
developed during this period.  The relevant authorities signed air
transport agreements with 21 countries, including seven CIS countries:
Russia, Belarus, Ukraine, Azerbaijan, Turkmenistan, Kazakhstan,
Kyrgyzstan, 10 Asian countries: Turkey, Iran, Afghanistan, India,
Pakistan, China, Thailand, Saudi Arabia, Bahrain, South Korea and four
European countries: Luxembourg, Germany, Austria and Latvia.

Currently domestic air companies carry
out flights in 33 destinations to nine far and near abroad countries and
the local aviation authorities provide aeronautical services to 200
domestic and foreign air companies.

New modern terminals were constructed in
Dushanbe and Khujand international airports and Kulob airport was
renovated according to international standards in this period.

Qurghonteppa-Kulob railway with the
length of 132km was launched in 1999. The construction of Vahdat-Yovon
section in Dushanbe-Khatlon railway with the total length of 40.7 km was
completed and launched on the eve of the 25th  Anniversary of the State
Independence of the Republic of Tajikistan. The construction and
reconstruction of 33 railway stops and two railway stations also
completed.

Also the first enterprise on railroad
car repair was launched in Konibodom district in 1995 and the first
ferroconcrete sleeper plant in Sarband town started operating in 2003.
During this period, SUE "Rohi ohani Tojikiston (Tajik Railway Company)"
strengthened its capacity having procured 937 new carriages and nine
locomotives.

The communications sector has also
developed significantly during the indepence period and contributed to
the development of other social and economic sectors of the country.
Several private operators started providing various communications
services in the market and the amount of provided services accounted for
TJS 5.5m in 2000, TJS 436.3m in 2005, TJS 1,778.4bn in 2010, TJS
2,716.0bn in 2015. Analysis of this data shows that the serevices
increased by 494 times in 2015 compared to 2000.

National radio and tv companies and
communications agencies fully switched to digital broadcasting and
ensured adequate access to the latest information services by population
in all regions of the country.

Telecommunication network expanded, the
volume of services, the number of users and the income of this sector
increased between 2005-2015 in Tajikistan. The number of internet
subscribers made 67,134 people in 2005, 1.3 million people in 2010, and
currently it makes 2.9 million people.

6. Food Security

Agriculture is one of the important
sectors of the national economy. One of Tajikistan's strategic
objecctives is to ensure food security, which particularly depends on
the development of this area. Сurrently this sector comprises  20-23.5%
of GDP, and contributes to stable and adequate supply of population with
food products by increasing agricultural production in a consistent and
sustainable manner, improving profitability and ensuring employment, as
well as protecting natural resources, which are essential for the
expansion of rotated production. The agricultural output accounted for
TJS 21.6bn in 2015, which increased by 68.8% compared to 1991. The crop
and livestock sectors increased to TJS 14.6bn and TJS 7.0bn accordingly.

With a view to ensuring food security
given the population growth and the increasing demand in agricultural
products  9,600 hectares of new lands were developed in the agriculture
during the independence period. Implementation of agricultural reforms
made it possible to increase cereal production by more than 2.5 times,
potatoe by 6.9 times, vegetables by almost 4.8 times, melons by almost
9.2 times, fruits by 2.6 times, meat production by almost three times,
milk by 3.8 times, and eggs by 52 times in 2015 compared to 1997.

The gross agricultural output increased
by 3.7 times in 2015 compared to 1997. The grain producers increased
grain production to 1.39 million tons during the 25 years of
independence, which indicates that it will be possible to supply the
country’s population with food products through the effective use of
arable land, introduction of secondary production  with the use of
quality seeds and adequate compliance with the methods of crop
production. The average grain yield increased from 1.28 tons in 1991 to
2.86 tons in 2015.

With a view to developing horticulture
and gradually increasing the production of fruits and grapes, 11,700 ha
of new ochards and 1.2 ha of new vineyards were developed 1.7 ha of
existing orchards and 360.6 ha of vineyards were rehabilitated in 2011.

While there were eight paultry farms
until 2007, now 118 of them operate in the country. As of Junuary 1,
2016 all of the paultry farms raised 5 143 000 birds and produced 3 572
000 eggs. In 2015 217.700 tons of meat and 889.000 tons of dairy
products were produced, which increased by 67.000 and 301.800 tons
respectively compared to 1991.

While in 1991 there were 1,390,700
cattle (including 585.900 female cows), 3,355,000 ruminants, and 52,600
horses, in 2015 their number increased significantly, including
2,209.200 cattle, which increased by 58.8% (including 1,131.900 female
cows or increased by 93.1%), 5,279.300 rimunants and 78,300 horses,
which increased by 48.8%.

As of January 1, 2016 bee keepers
developed 2,103,000 honey bee colonies and produced 3,852.8 tons of
honey across the country. Implementation of a program on apiculture made
it possible to increase the number of bee colonies by 29.700 and honey
production to 2652.8 tons compared to 2011.

Aquaculture also developed during the
independence period. In 2008 there were eight fish farms, which produced
225 tons of fish. During the last seven years the number of fish farms
reached 220 and the total amount of fish products reached 2023.3 tons.
 Thus, the number of farms increased by 213 units and fish production
increased by 1518.8 tons compared to 2008. The total area used by
fisheries also reached 5961.01 ha and their aquatorium area increased to
2720.19 ha, which is more by 222.6% and 173.4% respectively compared to
2008.

7. Investment in Economic and Social Areas

The Government of Tajikistan has
attached a particular attention to investment in various sectors of the
country’s economy during the independence period and has been
undertaking necessary measures to ensure favorable environment for
investment and attract more foreign investments, which made it possible
to increase both domestic and foreign investments into the country’s
economy every year.

More than 90 public investment projects
amounting TJS 12bn were implemented in the country only during the last
ten years. Currently 63 projects with the total amount of more than TJS
19bn are under implementation.

During 2006 - 2015 TJS 28.3bn of
financing with real price, including TJS 9.3bn of fixed assets from
public fund was absorbed, and the investments amounted to TJS 48.6bn,
including TJS 18.3bn of public investments.

Within the absorbtion of the above-mentioned funds ​​8,970,000m2 of housing was constructed, 7,574.500m2 of which was financed by population funds and 291,000 m2  was financed by public (state) funds.

Construction of general secondary
educational institutions for 184,719 seats,  preschool facilities for
2,373 seats, hospitals for 2,953 beds, and out-patient facilities with
the capacity of 8,389 patient coverage in one shift was completed with
the use of funds from all sources.

During 1991 – 2015 foreign investments
amounting USD 8,112.1bn in total, including USD 3,562.4bn of foreign
direct investment, which makes 44% of the total foreign investments,
were chanelled into various sectors of the country’s economy.

8. Transformations in Trade and Services

During the independence period the
country's consumer market developed and it went through substantive
structural changes due to the process of privatization, trade
liberalization and the transition from a planned economy to a market
economy.

The initial years of independence was
the most difficult period for the economy of Tajikistan, because the
decline in main economic indicators, unemployment, decrease in
population’s real income and high inflation rate negatively impacted on
the country’s consumer market.

The State defined the supply of the
consumer market, improvement of the quality of goods and services, and
ensuring healthy competition in the consumer market  as one of its main
objectives during the independence period.

The statistics analysis shows that the
favourable economic environment, development of entrepreneurship and
increased real income of population promoted increase in retail trade
and fee-based services in 2006-2015.

The retail trade turnover of Tajikistan
reached TJS 14,676.7bn in 2015, which played a significant role in
formation of the country's GDP in recent years. While in 2006 the retail
trade per capita made TJS 392.3, in 2015 this indicator reached TJS
1738.2.

The share of food products declined and
the share of long-term use products increased in the structure of retail
trade, which proves the improvement of population’s living standards.
While in 2006 the share of food products was 52.7 %, and the share of
non-food items was 47.3% in the retail trade, thanks to the increased
real income of the population in 2015 the share of food products
decreased to 48.7 %, and the share of non-food items increased by 51.3%
in the retail trade in 2015. The share of construction materials,
vehicles and automotives increased in the total trade of non-food items.
While in 2006 there were 24 motorcars per 1000 people, in 2014 their
number reached 43 units per 1000 people.

Also the state of food security
improved, and the public supply with nutritional products improved
during the independence period. For example, in 2014 the consumption of
meat products almost doubled, sugar and confectionery products increased
by 15.7%, and vegetable oil increased by 25.1% compared to 2006.

The gradual upgrade of the Tajik economy
contributed to the development of service sector and creation of new
types and expansion of audit, consulting, design, communications and
internet services.

Analyses show significant changes in the
paid services sector and the majority of the enterprises providing paid
services are privatized. While at the initial years of indepence the
service sector accounted for 76.3% of the public sector and 23.7% of the
private sector, in 2015 its share decreased to 15.5% in the public
sector and increased by 84.5% in the private sector.

Improvement of business environment and
attraction of investment into the service sector ensured rapid
development of this sector. While in 2006 the volume of paid services
per capita was TJS 30.1, in 2015 this indicator reached TJS 1137.8. The
share of expenditures for personal services within the total family
expenditures increased significantly. In 2000 personal services payment
amounted to only three percent of the total family expenditures, while
in 2014 it increased to 12%.

9. Foreign Trade and Economic Activities

The Government's policy focusing on
economic integration with the international community made it possible
to expand Tajikistan’s economic and trade relations based on the
principles of mutually beneficial cooperation, and the international
community acknowledged Tajikistan as a country with open economy.
Accession to the World Trade Organization Tajikistan’s trade and
economic cooperation have been expanding, its foreign trade has been
becoming more transparent and dministrative and technical barriers have
gradually been overcome.

Tajikistan enjoys trade and economic
cooperation with 120 countries of the world currently. Expansion of its
cooperation made it possible to significantly improve foreign trade
during 25 years of national independence. Thus, while in 1991 the
foreign trade turnover amounted to USD 131.1m, it reached USD 1,459,3bn
in 2000, which increased by 11.1 times. This trend was maintained during
2007 – 2015 and the gross foreign trade turnover increased from USD
4,015,3bn to USD 4,325,5 bn.

Effective trade reforms, improved legal
and regulatory framework, reduced administrative and technical barriers
to trade made it possible to increase the Tajik foreign trade by 33
times during the indepence period. The process of diversification of
export-oriented production and implementation of production development
programs in various spheres of the national economy made it possible to
significantly change the commodity and geographical coverage of the
country's exports. The share of finished industrial products,
 agricultural products, energy, minerals, and precious stones gradually
increased in the export structure.

Currently, as a result of political and
economic crises  competitition has become more intense in the
international markets. In this regards, the Government decided within
its midterm export strategy to focus on improvement of the
competitiveness of products in domestic and foreign markets and
improvement of quality in accordance with the rules and standards of
WTO, Eurasian Economic Union and other potential markets, improvement of
packaging and labeling, introduction of innovations in export-oriented
production and import substitution, arrangement of logistic services,
transport infrastructure and the quality assurance.

To achieve these objectives based on the
country’s production capacity and natural resources, the Government
adopted Public Program for Promotion of Export and Import Substitution
of the Republic of Tajikistan  (2016-2020).

This Program focuses on identification
of specific promising areas and target markets, creation of
institutional and legal environment for export development and import
substitution, improvement of domestic products competitiveness, creation
of adequate export infrastructure, elimination of non-tariff barriers,
financial support of export companies, creation of modern public
services and enforcement of ‘Single Window’ based on modern information
and communication technologies as strategic prioritites for export
development and import substitution.

Rapid development of the country's
economy, implementation of vitally important programs on energy, road
and infrastructure, social and industrial sectors, as well as improved
purchasing power of the population made it possible to increase import
of production equipment and technologies and public consumption goods.
The country usually imports fuel, wood, ferrous metal, light industry
products, engineering products, vehicles, agricultural machinery, energy
equipment, transport, food and other materials.

Establishment and effective operation of
intergovernmental commissions on trade, economic, research and
technical cooperation play an important role in expanding foreign
economic relations. Tajikistan has intergovernmental commissions on
trade, economic, research and technical cooperation with 42 countries of
the world up to date, which regulate the economic activities of our
country within the bilateral relations. Tajikistan presents its
investment climate, business opportunities and natural resources through
these intergovernmental commissions, which has been increasing direct
and indirect investments into energy, industry, transport and
communications, science, education, social protection and healthcare
sectors.

10. Strategic Plans of Tajikistan

The National Development Strategy of the
Republic of Tajikistan (to 2030) is adopted to specify Tajikistan’s
strategic plans. Medium and long-term socio-economic development plans
are harmonized and, national objectives are specified and targets and
action plans are identified within this Strategy. This important paper
speficies the ultimate objective of the country's transition from
agrarian to an industrial country

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