Tajikistan is the poorest of the states of former Soviet
Central Asia. The basis of the country's economy consists of
cotton cultivation and the aluminum industry. In addition to
these industries, transfers from Tajik residents living
outside the country's borders are also of great importance.
COUNTRYAAH, Tajikistan has for many years been a transit country for
drug trafficking, which has contributed to a large
unofficial economy and widespread corruption.
Business life before independence was characterized by
the central planning of the Soviet period. Governance and
structure largely followed the Soviet Union as a whole,
albeit with a larger agricultural sector and with
significantly lower per capita production and income levels
than the all-union average. The economic reforms initiated
since independence mainly include the right to use
agricultural land, new corporate forms and reduced state
ownership in the business sector. The change in business and
the civil war in 1992-97 brought great financial strain and
a large proportion of the well-educated labor force
disappeared from the country.
Although the country was hit hard by the international
financial crisis, the economic situation improved during the
1990s. This is mainly due to increased international demand
for aluminum and cotton. The country also has great
potential for the extraction of water energy.
Only 7 percent of Tajikistan's land is suitable for
agriculture. Despite the limited agricultural area,
agriculture employs about half of the country's workforce.
The majority of the arable land is found in the country's
southern and northwestern parts, while the country's eastern
parts are suitable for grazing land. Of a total of 850,000
ha of arable land, more than 700,000 ha are irrigated.
The most important crops are cotton, fruits, vegetables
and cereals (mainly wheat). Potatoes and tobacco are also
produced in considerable quantities, while rice is grown to
a more limited extent. The country's natural geographical
conditions make livestock management a central feature of
the agricultural sector. Unlike cereals, Tajikistan is
largely self-sufficient with animal products. For many
households, silkworm and beekeeping are also important
sources of income.
At independence, agriculture was organized in state and
collective agriculture. During the 1990s, this structure was
loosened up and in 1998 a privatization of the agricultural
sector began. The process has been slow, and in many cases
the new private owners have been the same people who
previously operated the state-owned units. Nor has
privatization meant that the large group of farm workers
have had the opportunity to acquire agricultural land.
Minerals and energy
Tajikistan has long benefited from its significant assets
on both precious metals, especially gold and silver, as well
as industrially valuable minerals. Among the latter are
tungsten, antimony, bismuth and mercury, as well as zinc,
lead and tin.
Vattenel dominates the domestic production of energy, and
the addition of the hydroelectric power plants Nurek and
Rogun allows both local consumption and exports. The supply
of uranium is considered significant, while small amounts of
oil and natural gas are extracted and coal mining occurs on
a limited scale. Fossil fuel imports are therefore of
central importance to the country's economy. The energy
supply systems are poorly integrated, and especially the
northwestern part of Tajikistan is cut off from domestic
energy sources in other parts of the country.
Industrial operations in Tajikistan have long been
dominated by a small number of large state-owned
enterprises. In the main, the production consists of
consumer goods, mainly food, but also tobacco, textiles and
clothing and leather goods. Metallurgy and the heavy
engineering industry increased in importance during the
1970s and 1980s, not least thanks to good access to
electrical energy. In addition to refining and some
processing of domestic mineral resources, there is one of
the world's largest aluminum smelters. Chemical and
construction equipment industries are other sectors that
expanded during the end of the Soviet period.
Aluminum and cotton are the most important export goods;
the aluminum plant in Tursunzoda, west of Dushanbe, alone
accounts for half of the export revenue. Imports are
dominated by raw materials, mainly cereals and fossil fuels.
In general, imports have increased faster than exports,
which is why today Tajikistan has a growing trade deficit.
The Russian Federation, Kazakhstan and Uzbekistan have long
been Tajikistan's most important trading partners, but in
recent years trade with China and Turkey has grown in