January 2007

COUNTRY

Formal Name: Republic of Tajikistan (Jumhurii Tojikiston).

Short Form: Tajikistan.

Term for Citizen(s): Tajikistani(s).

Capital: Dushanbe.

Other Major Cities: Istravshan, Khujand, Kulob, and Qurghonteppa.

Independence: The official date of independence is September 9, 1991, the date on which Tajikistan withdrew from the Soviet Union.

Public Holidays: New Year’s Day (January 1), International Women’s Day (March 8), Navruz (Persian New Year, March 20, 21, or 22), International Labor Day (May 1), Victory Day (May 9), Independence Day (September 9), Constitution Day (November 6), and National Reconciliation Day (November 9).

Flag: The flag features three horizontal stripes: a wide middle white

stripe with narrower red (top) and green stripes. Centered in the white

stripe is a golden crown topped by seven gold, five-pointed stars. The

red is taken from the flag of the Soviet Union; the green represents

agriculture and the white, cotton. The crown and stars represent the

country’s sovereignty and the friendship of nationalities.

HISTORICAL BACKGROUND

Early History: Iranian peoples such as the Soghdians and the Bactrians are the ethnic forbears of the modern Tajiks. They have inhabited parts of Central Asia for at least 2,500 years, assimilating with Turkic and Mongol groups. Between the sixth and fourth centuries B.C., present-day Tajikistan was part of the Persian Achaemenian Empire, which was conquered by Alexander the Great in the fourth century B.C. After that conquest, Tajikistan was part of the Greco-Bactrian Kingdom, a successor state to Alexander’s empire. Between the first and fourth centuries A.D., the area was part of the Kushan Empire, which spread Buddhism among the Soghdians and Bactrians of the region. The Chinese also were active in the region during this period. In the years before the eighth century, the Sassanians exerted a strong Persian cultural and linguistic influence on the area. In the eighth century, Arabs conquered modern-day Tajikistan and brought with them Islam, which within one century was the predominant religion of the region. Between the Arab conquest and the year 999, the strongest influence was that of the Persian Samanid Dynasty. The conquest of that dynasty by the Qarakhanid Turks intensified the introduction of Turkic peoples and culture into the region. Between the eleventh and the sixteenth centuries, modern-day Tajikistan was ruled successively by Turks, Mongols, and Uzbeks.

Under the Russian Empire and the Soviet Union: The Uzbek state that conquered the region in the sixteenth century divided into several khanates that ruled until the Russian Empire began taking over Central Asia in the mid-nineteenth century. Part of modern-day Tajikistan was included in the Russian Governorate General of Turkestan (in existence 1867–1917). During this period, Tajikistan felt the influence of economic changes such as the introduction of cotton and of political forces such as the Jadadist reform movement and the bloody revolt against Russian conscription that began in 1916. After the Russian Revolution of 1917, Soviet forces gradually overcame the widely dispersed resistance of indigenous Central Asian insurgents, some of whom were based in Tajikistan. In 1924 Tajikistan became an autonomous republic within the new Soviet republic of Uzbekistan, and in 1929 the country became a full-fledged Soviet republic. In the years between the world wars, the economy of Tajikistan was absorbed into the Soviet economic system, which designated Tajikistan as a cotton-growing republic. Tajiks exerted very little influence in Soviet political affairs during this time, and many Tajik party members were purged from the republic’s communist party.

In the post-World War II Soviet era, irrigation was expanded in Tajikistan’s agricultural system, industries developed, and the level of education rose. During this period, political life was dominated by a series of nondescript party functionaries. In the late 1980s, the openness of the Soviet regime of Mikhail S. Gorbachev (in office 1985–91) stimulated a nationalist movement in Tajikistan, and Tajik leaders reluctantly declared sovereignty in 1991, when the dissolution of the Soviet Union became inevitable. The last of the communist party leaders, Rakhmon Nabiyev, was elected the first president of independent Tajikistan in 1991. A year later, a conflict between the government and reform groups led to the collapse of the Nabiyev government and then to a civil war that lasted five years and cost between 50,000 and 100,000 lives. Imomali Rakhmonov, who had taken power after the collapse of the coalition government that followed Nabiyev’s fall, was elected president in 1994 without the participation of opposition parties.

The Post-Soviet Era: In the mid-1990s, rebel forces gained control of large parts of eastern Tajikistan, even though the government had Russian troops at its disposal. After sporadic cease-fires and negotiations, in 1997 the Rakhmonov government signed a peace accord with the United Tajik Opposition (UTO), a coalition of Islamic leaders and secular politicians. In the years that followed, insurgent groups of the UTO remained active in some parts of the country, and a series of assassinations resulted. In 1999 the UTO responded to the addition of more UTO representatives in government positions by disbanding its armed forces, and the UTO fighting force was integrated into the armed forces of Tajikistan. However, at the same time the extremist Islamic Movement of Uzbekistan (IMU) was building bases in the mountains of Tajikistan and establishing a large-scale trade in narcotics from Afghanistan. In the early 2000s, the narcotics trade was an increasingly serious problem, even after the defeat of the IMU in Afghanistan in early 2002.

Rakhmonov easily won re-election in the presidential election of 1999, and the parliamentary elections of 2000 gave Rakhmonov’s party a strong majority. In both instances, some opposition candidates were barred. In the wake of this success, Rakhmonov restructured the government in ways that further strengthened his power. In 2003 a controversial referendum approved constitutional amendments that theoretically would allow Rakhmonov to remain in power until 2020. In June 2004, Tajikistan signed an agreement with Russia calling for a permanent Russian military base in Tajikistan, as well as increased Russian investment in Tajikistan’s economy. In the parliamentary elections of 2005, international monitors again questioned the one-sided victory of the ruling party. The leaders of two opposition parties were arrested prior to those elections. In 2006 Rakhmonov removed several provincial governors in order to strengthen his base for the presidential election, which he won easily in November. A series of border incidents and mutual accusations kept tensions with neighboring Uzbekistan at a high level in 2006. Tajikistan continued to grow more dependent on Russia economically, as a series of major Russian investments occurred or were planned in 2006.

GEOGRAPHY

Location: Tajikistan is located on the southern edge of the

Central Asian group of nations, bordering Afghanistan to the

south, China to the east, Kyrgyzstan to the north, and Uzbekistan

to the west.

Size: The smallest of the five former Soviet republics of Central

Asia, Tajikistan has an area of 143,100 square kilometers,

of which 400 square kilometers is water.

Land Boundaries: The border with Afghanistan is 1,206 kilometers; with Uzbekistan, 1,161 kilometers; with Kyrgyzstan, 870 kilometers; and with China, 414 kilometers.

Disputed Territory: Tajikistan has a territorial dispute with Kyrgyzstan over land in the Isfara Valley in the far northeast, and full demarcation of the border with Uzbekistan has been delayed by Uzbekistan’s mining of its borders.

Length of Coastline: None. Tajikistan is landlocked.

Topography: About 93 percent of Tajikistan is mountainous, dominated by the Alay Range in the north and the Pamir Mountains to the southeast, which include the highest elevations in the country. More than half of the country is more than 3,000 meters in elevation. The lowest elevations are located in the northwest, the southwest, and the Fergana Valley, which dominates Tajikistan’s far northern section. The mountain chains are interspersed with deep valleys formed by a complex network of rivers. The eastern mountains contain many glaciers and lakes. The Fedchenko Glacier, which covers 700 square kilometers, is the largest non-polar glacier in the world.

Principal Rivers: In Tajikistan's dense river network, the largest rivers are the Syr Darya, the Amu Darya (called the Panj in its upper reaches in Tajikistan), the Vakhsh (called the Surkhob in its upper reaches in Tajikistan), and the Kofarnihon. The Amu Darya carries more water than any other river in Central Asia. The Vakhsh is an important source of hydropower.

Climate: The climate is mainly continental, with drastic differences according to elevation. The climate is very dry in the subtropical southwestern lowlands, which also have the highest temperatures. The summer temperature range in the lowlands is from 27° C to 30° C, and the winter range is from –1° C to 3° C. In the eastern Pamirs, the summer temperature range is from 5° C to 10° C, and the winter range is from –15° C to –20° C. In some areas, however, winter temperatures drop to –45° C. Rainfall in the mountain valleys averages 150 to 250 millimeters per year; at the higher elevations, rainfall averages 60 to 80 millimeters per year. The highest precipitation rate, 2,236 millimeters per year, is near the Fedchenko Glacier in eastern Tajikistan.

Natural Resources: Tajikistan’s most notable resources are rich deposits of gold, silver, and antimony and the water power provided by its rivers. About 85 percent of arable land requires irrigation to grow cotton and grain, the main crops.

Land Use: Some 6.6 percent of Tajikistan is classified as arable land, 5 percent is forested, and 0.9 percent is devoted to permanent crops. The remainder is mountains, valleys, glaciers, and desert.

Environmental Factors: The major environmental problems are concentrations of agricultural chemicals and salts in the soil and groundwater, pockets of high air pollution caused by industry and motor vehicles, water pollution from agricultural runoff and disposal of untreated industrial waste and sewage, poor management of water resources, and soil erosion. Soil erosion affects an estimated 70 percent of irrigated land, and overgrazing also contributes to soil erosion. Air pollution is a particular problem during times of the year when atmospheric conditions hold industrial and vehicle emissions close to the surface in urban areas. In summer, dust and sand from the deserts of Uzbekistan and Turkmenistan cause air pollution across the entire southwestern lowland region. Forest degradation also is a serious problem as trees are cut to expand pastureland on collective farms.

A large Soviet-era uranium mining operation left poorly constructed repositories of radioactive waste in northwestern Tajikistan. Other operations in Tajikistan extracted and processed gold, antimony, tungsten, mercury, and molybdenum, each of which is known to leave toxic waste. The Kofarnihon, Zarafshon, and Vakhsh rivers pass through heavily polluting industrial regions of the country, carrying pollutants into the Amu Darya and thence to the Aral Sea. The expansion of aluminum processing at Tursunzade, a key but long-delayed economic goal, would increase industrial pollution in the Dushanbe region. Tajikistan's withdrawal of water for irrigation from the Syr Darya and tributaries of the Amu Darya also influences the quantity of water downstream. Therefore, Tajikistan’s water management policies are a regional concern.

The resolution of these problems has been delayed by the overall poverty of the country and the civil war of 1992–97. Although the civil war reduced industrial and agricultural activity substantially, it also interrupted environmental monitoring and maintenance activities put in place by the Soviet Union's Committee on Nature Protection, leaving Tajikistan with a severely reduced infrastructure for both economic and environmental activity.

Time Zone: Tajikistan’s time zone is five hours ahead of Greenwich Mean Time.

SOCIETY

Population: In 2006 Tajikistan’s population was estimated at 7,320,815 people. The growth rate was 2.19 percent per year. The average density was 51.3 people per square kilometer, but the population was concentrated heavily in the western, southwestern, and northwestern regions. Some 30 percent of the population was classified as urban, the lowest percentage among the former Soviet republics. In 2006 an estimated 700,000 Tajikistanis, mostly men, spent some or all of the year as migrant workers in Russia and other countries, creating a significant male-female imbalance in the adult population. In 2006 the net migration rate was about –2.5 per 1,000 population.

Demography: In 2006 some 37.9 percent of the population was 14 years of age or younger, and only 4.8 percent was 65 years of age or older. The birthrate was 32.6 births per 1,000 population. The death rate was 8.3 per 1,000 population. In the early 2000s, estimates of the infant mortality rate have varied widely, from 54 to 111 deaths per 1,000 live births, according to differing standards of calculation. In 2006 overall life expectancy was 64.9 years: 62 years for males, 68 years for females. The fertility rate, four children per woman, was the highest among the former Soviet republics.

Ethnic Groups: According to the 2000 census, 79.9 percent of the population was Tajik, 15.3 percent Uzbek, 1.1 percent Russian, and 1.1 percent Kyrgyz. Smaller ethnic groups include Germans, Jews, Koreans, Turkmens, and Ukrainians. Between the censuses of 1989 and 2000, the Uzbek population decreased from 23.5 percent to 15.3 percent, and the Russian population decreased from 7.6 percent to 1.1 percent. In the same period, the Tajik population increased from 62.3 percent to nearly 80 percent. Particularly in the Fergana Valley, intermarriage between Tajiks and Uzbeks has essentially merged the two groups. The Russian population is concentrated in Dushanbe and Khujand. Since 2000 the rate of Russian emigration has slowed. Tajikistanis also have a strong regional affiliation: mountains divide the country into northern and southern regions, whose rivalry spurred the civil war of the 1990s.

Languages: The official state language is Tajik, which is related to Persian. Russian is widely used in government and business, and Uzbek is the main language of about 25 percent of the population. Variants of Tajik are spoken in the mountains of the autonomous province of Gorno–Badakhshan, Tajikistan’s eastern region.

Religion: Some 85 percent of the population is Sunni Muslim and 5 percent, Shia Muslim. The Pamiri population of the autonomous province of Gorno–Badakhshan is mainly of the Ismaili sect of Shia Islam. About 3 percent of the population is Christian, mainly Russian Orthodox and concentrated in Dushanbe. Small groups of other Christian denominations and a small Jewish community also exist.

Education and Literacy: School attendance is mandatory between the ages of seven and 17, but many children fail to attend because of economic needs and security concerns in some regions. The core years of school attendance include four years of primary school and two stages of secondary school, lasting five and two years, respectively. In 2001 preprimary enrollment was less than 6 percent of eligible children. At all levels, Tajikistan’s education system suffers from a depleted infrastructure and an acute shortage of teachers, which will increase because of the relatively high birthrate. The state-supported Soviet system remains in place, but the poor condition of the national economy and years of civil war sharply reduced funding in the early 2000s, although government spending began to increase in 2004. In 2005 the total government expenditure on education was about US$80 million, 15.9 percent of the national budget. The figure was scheduled to rise to US$108 million, 17.3 percent of the budget, in 2006. A presidential program raised the salaries of teachers by 25 percent in 2005. The official literacy rate is 98 percent, but the poor quality of education since 1991 has reduced skills in the younger generations. Some private schools and colleges have appeared in urban centers, and some Russian and Uzbek schools exist. Tajik is the main language of instruction through secondary school, but in 2003 Russian was restored as a mandatory subject. Some 33 institutions of higher learning were operating in 2003, when a constitutional amendment abolished free higher education. That year total enrollment was 96,600.

Health: In Tajikistan indicators such as infant and maternal mortality rates are among the highest of the former Soviet republics. In the post-Soviet era, life expectancy has decreased because of poor nutrition, polluted water supplies, and increased incidence of cholera, malaria, tuberculosis, and typhoid. The leading causes of death are cardiovascular diseases, respiratory disorders, and infectious and parasitic diseases. Because the health care system has deteriorated badly and receives insufficient funding and because sanitation and water supply systems are in declining condition, Tajikistan has a high risk of epidemic disease. Several typhoid epidemics have occurred since 1991. Many Russian doctors left Tajikistan after 1991, leaving the country with the lowest ratio of doctors to population in the former Soviet Union. The necessity of importing all pharmaceuticals has created an acute shortage of some critical items. The shortage of facilities, materials, and personnel is especially serious in rural areas. A presidential program doubled the wages of health workers in 2005. In 2003 a constitutional amendment eliminated the right to free health care for all citizens.

Since the late 1990s, the high volume of illegal narcotics trafficked through the country has caused a rapid increase in narcotics addiction, which has become a major health issue. In 2006 the number of addicts was estimated at between 60,000 and 100,000, two-thirds of whom are younger than 30 years of age. No substantial drug treatment programs are in place. Although reliable statistics are not available on the occurrence of human immunodeficiency virus (HIV), in 2005 the United Nations estimated Tajikistan’s figure at 5,000. Beginning in 2003, the incidence of new cases has increased more sharply each year. It is estimated that about 60 percent of HIV cases are drug-related. Since the late 1990s, HIV occurrence has increased rapidly in areas such as the autonomous province of Gorno–Badakhshan, where the flow of narcotics is heavy and poverty is endemic.

Welfare: In 2006 the United Nations estimated that 64 percent of Tajikistanis were living below the national poverty line (US$2.15 per day), compared with 82 percent in 1999. However, in the interim the disparity increased between those below and above the line. Pensioners have been among those most severely affected by Tajikistan’s economic crisis and the lingering effects of the civil war. Pensions are paid for old age, disability, loss of the wage earner, and for dependents. Most of the state’s welfare expenditure goes to pensions for retired workers who have worked a minimum number of years (25 years for men, 20 years for women). The age criteria are lowered for some disabled workers and mothers with five or more children. Persons who have never worked for wages receive a reduced old-age pension. Dependents and widows receive pensions that are half the minimum allowance. In the post-Soviet era, the welfare system has not served the public well because of unpredictable state revenue and the erosion of pension value by high inflation. The national budgets for 2005 and 2006 included substantial increases in spending for the social sector.

ECONOMY

Overview: Tajikistan’s economy, which had been the poorest in the Soviet Union, was severely disrupted by the collapse of the Soviet Union in 1991 and the civil war of 1992–97. With independence, Tajikistan lost the nearly 50 percent of its state revenue that had come as transfers from Moscow, as well as barter arrangements that brought food from other republics in exchange for cotton and aluminum. The civil war disrupted both agricultural and industrial production. Particularly hard-hit was the cotton industry, a key economic element in the Soviet era. The output of aluminum, Tajikistan’s most important industrial product, has not approached the pre-independence level in the early 2000s. Economic reform has been uneven, privatization has occurred mainly in the services sector, and the overall economy remains a command-and-control system. Because many enterprises ceased to function or reduced production drastically after privatization, output and investment in the industrial sector have remained very low. In 2005 the economy remained fundamentally agricultural and highly dependent on the export of aluminum and cotton, although significant growth occurred in light industries and services. Soghd Province in the north accounts for the majority of industrial and agricultural output. Clan leaders control some legal enterprises and most of Tajikistan’s extensive criminal economy. The black market, heroin smuggling, and informal transactions account for a significant part of the economy.

Gross Domestic Product (GDP): In 2005 Tajikistan’s GDP grew by 6.7 percent, to about US$1.89 billion, and growth for 2006 was about 8 percent, marking the fifth consecutive year of annual growth exceeding 6 percent. The official forecast for GDP growth in 2007 is 7.5 percent. Per capita GDP in 2005 was US$258, lowest among the 15 countries of the former Soviet Union. In 2005 services contributed 48 percent, agriculture 23.4 percent, and industry 28.6 percent to GDP.

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 totaled 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.

Inflation: 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 percent, 12.2 percent, and 16.3 percent, respectively, but in 2004 the rate fell to 6.8 percent, and the rate for 2005 was 7.1 percent. In late 2006, inflation approached the 10 percent level. The official forecast for 2007 is 7 percent.

Agriculture: 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), cereals (mainly wheat), potatoes, vegetables (mainly onions and tomatoes), fruits, and rice. More than 80 percent of the 8,800 square kilometers of land in use for agriculture depends on irrigation. Tajikistan must import grain from Kazakhstan and Uzbekistan.

Forestry: About 5 percent of Tajikistan is wooded, mainly at elevations between 1,000 and 3,000 meters. No forest region is classified as commercially usable; most are under state protection. Wood production is negligible, but local inhabitants harvest non-wood forest products.

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.

Mining and Minerals: Tajikistan has rich deposits of gold, silver, and antimony. The largest silver deposits are in Soghd Province, where Tajikistan’s largest gold mining operation also is located. Russia’s Norilsk nickel company has explored a large new silver deposit at Bolshoy Kanimansur. Tajikistan also produces strontium, salt, lead, zinc, fluorospar, and mercury. Uranium, an important mineral in the Soviet era, remains in some quantity but no longer is extracted. Fossil fuel deposits are limited to coal, of which about 30,000 tons are mined annually. Tajikistan’s extensive aluminum processing industry depends entirely on imported ore.

Industry and Manufacturing: The output of most 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 percent 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 aluminum processing and chemical production. The former, which provided 40 percent of industrial production in 2005, is centered at the Tursunzoda processing plant, the latter in Dushanbe, Qurghonteppa, and Yavan. Aluminum production increased by 6 percent in 2005. Some small light industrial plants produce textiles and processed foods, using mainly domestic agricultural products. The textile industry processes about 20 percent of domestically grown cotton. The expansion of light industry output contributed significantly to gross domestic product 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 percent increase in output from 2004 to 2005.

Energy: All phases of energy production are controlled by state-run companies or government agencies. In 2003 Tajikistan met about 50 percent of its domestic power needs. About 90 percent of electricity generating capacity is hydroelectric, but completion of new dams has suffered long delays, and only an estimated 5 percent of Tajikistan’s potential hydroelectric capacity (most based on the Vakhsh River) is in use. Winter blackouts have been common. In 2005 and 2006, Russia announced substantial investments in the long-delayed Rogun and Sangtuda hydroelectric plants, which, when completed around 2009, could make Tajikistan a net exporter of electricity—particularly because domestic energy demand is not expected to increase significantly in the ensuing five years. An October 2006 memorandum of understanding called for Kyrgyzstan and Tajikistan to supply power to Pakistan via Afghanistan in a new regional network. The largest operating hydroelectric station, at Nurek, has a rated capacity of 3,000 megawatt-hours. Two separate electric power grids, one in the north and one in the south, are both connected with the Uzbekistan system. The isolation of those grids by the east-west Alay mountain chain makes Tajikistan a net electricity importer even as some power is exported to Russia and Afghanistan. Because oil drilling has not recovered since the civil war, Tajikistan imports nearly all of its oil, mainly from Uzbekistan. Some natural gas is extracted in the province of Khatlon, but 95 percent of domestic demand is satisfied by imports from Uzbekistan and Turkmenistan. Tajikistan’s coal reserves are estimated at 3.6 billion tons, with the largest field in Soghd Province. Tajikistan would be a member of the Shanghai Cooperation Organization’s Asian Energy Club, which Russia proposed in 2006 to unify oil, gas, and electricity producers, consumers, and transit countries in the Central Asian region in a bloc that is self-sufficient in energy. Other members would be China, Kazakhstan, Kyrgyzstan, and Uzbekistan.

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 to state-owned enterprises. Only an estimated 10 percent of the capital in Tajikistan moves through the banking system, and small businesses rarely borrow from banks. Despite substantial potential, the tourism industry, which was eliminated by the civil war, has not re-established itself since the war because of poor infrastructure, lack of promotion, and security concerns. Some small insurance companies began operations in the early 2000s.

Labor: In 2003 Tajikistan’s active labor force was estimated at 3.4 million, of whom 64 percent were employed in agriculture, 24 percent in services, and 10 percent 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 percent of households depended mainly on those payments. In 2006 the average wage was US$27 per month. The national unemployment rate was estimated unofficially as high as 40 percent in 2006, but in rural areas unemployment has exceeded 60 percent. Unemployment has been higher in the southern Khatlon Province than in the northern Soghd Province.

Foreign Economic Relations: In the post-Soviet era, Tajikistan has substantially shifted its markets away from the former Soviet republics; in 2005 more than 80 percent of total exports went to customers outside the Commonwealth of Independent States (CIS), including more than 70 percent 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 percent 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 aluminum, 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 neighbors. Another significant import is alumina (aluminum oxide) to supply the aluminum industry. The major suppliers of alumina are Azerbaijan, Kazakhstan, and Ukraine.

Trade Balance: 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.

Balance of Payments: 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 percent 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.

External Debt: 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 percent of its external debt by exchanging debt to Russia for Russian ownership of the Nurek space tracking station, and by 2006 rescheduling negotiations had reduced the debt by about two-thirds as a percentage of gross domestic product.

Foreign Investment: 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 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 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 aluminum company resumed operations to complete the hydroelectric station at Rogun on the Vakhsh River and expand aluminum 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.

Currency and Exchange Rate: The somoni was introduced in 2000 to replace the Tajikistan ruble, which had been the currency since 1991. Since 2001 the exchange rate has remained relatively stable. In January 2007, some 3.21 somoni equaled US$1.

Fiscal Year: Tajikistan’s fiscal year is the calendar year.

TRANSPORTATION AND TELECOMMUNICATIONS

Overview: Most of Tajikistan’s transportation system was built during the Soviet era, and since that time the system has deteriorated badly because of insufficient investment and maintenance. Neither the Soviet system nor subsequently built infrastructure addressed the topographical division between the northern and southern regions of the country. Beginning in 2005, a series of major transportation projects sought to rectify this problem. The first such project, the Anzob Tunnel, was completed in 2006, providing a year-round road link from Dushanbe to northern Tajikistan. Air transport is considered unreliable.

Roads: Tajikistan has an estimated 30,000 kilometers of roads, nearly all of which were built before 1991. One main north-south artery runs across the mountains between the northwestern city of Khujand and Dushanbe. A second main artery runs east from Dushanbe to Khorog in the Gorno–Badakhshan autonomous province, then northeast across the mountains to the Kyrgyz city of Osh. Because the Khujand–Dushanbe route is closed in winter, the Anzob Tunnel was built to bypass the mountain crossing and open a route connecting Tashkent (Uzbekistan) and points north with Afghanistan and Pakistan to the south, via Tajikistan. In mid-2005 construction began on a bridge across the Panj River to Afghanistan, and plans called for construction of several other bridges ultimately connecting Tajikistan to warm-water ports to the south.

Railroads: The railroad system totals only 480 kilometers of track, all of it broad gauge. The system connects the main urban centers of western Tajikistan with points in neighboring Uzbekistan and Turkmenistan. In 2000 a new line connected the southern cities of Qurghonteppa and Kulob. Passenger transit through Tajikistan has been hindered by periodic failures of Tajik Railways to pay transit tariffs and by safety issues.

Ports: Tajikistan has no access to the sea.

Inland Waterways: Tajikistan has no navigable inland waterways.

Civil Aviation and Airports: In 2006 Tajikistan had 40 airports, 17 of which had paved runways and two, runways longer than 3,000 meters. The largest airport, at Dushanbe, has flights to only a few international destinations. Few flights connect Dushanbe with Tashkent, which is the nearest airport offering connections to major European destinations. The next-largest airports are at Khujand and Kulob. State-run Tajikistan Airlines, whose safety record has been questionable, offers flights to other Central Asian countries, with the exception of Uzbekistan, and weekly flights to Germany and Russia.

Pipelines: Tajikistan’s 549 kilometers of gas pipeline bring natural gas from Uzbekistan to Dushanbe and transport gas between points in Uzbekistan across northwestern Tajikistan. Tajikistan also has 38 kilometers of oil pipeline.

Telecommunications: The conventional telephone system is in poor condition because it has received little investment in the post-Soviet era. In 2006 some 287,000 main lines were in use, a ratio of only one per 255 people. Many towns are not connected to the national network. In the early 2000s, the state telecommunications agency, Tajiktelekom, received some international aid to upgrade the telephone system. In 2006 an estimated 750,000 mobile telephones were in use, compared with only 47,300 in 2003. Among several cellular networks, the Babilon Mobile Company, a U.S.-Tajik joint venture, claimed to have 40 percent of the market in 2006. The June 2006 launch of the KazSat communications satellite from Kazakhstan was expected to reduce the dependence of all the Central Asian countries on European and U.S. telecommunications satellites. Launch of a second KazSat is planned for 2009. Internet use has grown slowly; in 2004 seven Internet service providers were in operation. In 2005 an estimated 5,000 people were using the Internet, primarily in urban centers.