2017 Index of Economic Freedom

Tajikistan

overall score58.2
world rank109
Rule of Law

Property Rights45.5

Government Integrity32.7

Judicial Effectiveness45.6

Government Size

Government Spending74.1

Tax Burden90.9

Fiscal Health95.8

Regulatory Efficiency

Business Freedom65.6

Labor Freedom49.2

Monetary Freedom69.8

Open Markets

Trade Freedom73.9

Investment Freedom25.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 8.5 million
  • GDP (PPP):
    • $23.3 billion
    • 3.0% growth
    • 6.4% 5-year compound annual growth
    • $2,749 per capita
  • Unemployment:
    • 10.9%
  • Inflation (CPI):
    • 5.8%
  • FDI Inflow:
    • $226.8 million
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Tajikistan’s many ongoing challenges include rebuilding infrastructure, improving the entrepreneurial environment, and attracting dynamic investment. Progress on reforms to foster sounder macroeconomic management and improvement of the business climate has been only marginal. The potential for growth is high, but government interference has left the economy vulnerable in a repressive political environment.

Despite some progress in privatizing small and medium-size public enterprises, private-sector development has been slow. Remittances continue to be an important source of external financing. Foreign investment is deterred by burdensome bureaucratic regulations and inconsistent administration. Tajikistan remains one of the world’s most corrupt nations.

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Background

President Emomali Rahmon has been in power since 1994. His ruling party won parliamentary elections in March 2015 that were criticized by international monitors. For the first time since 1991, the Communists and the Islamic Renaissance Party failed to clear the 5 percent threshold needed to win seats. Relations with neighboring Uzbekistan are strained, and the Russian military patrols the border with Afghanistan. Abuse of human rights is widespread. Tajikistan relies heavily on revenues from aluminum and cotton exports. It is estimated that the illegal drug trade and remittances from migrant workers, primarily in Russia, account for over 45 percent of GDP. Tajikistan has been negatively affected by the economic slowdown in Russia.

Rule of LawView Methodology

Property Rights 45.5 Create a Graph using this measurement

Government Integrity 32.7 Create a Graph using this measurement

Judicial Effectiveness 45.6 Create a Graph using this measurement

Under Tajik law, all land belongs to the state. The judiciary lacks independence. Many judges are poorly trained and inexperienced, and bribery is reportedly widespread. Corruption is pervasive. Patronage networks and regional affiliations are central to political life. At least two of President Rahmon’s children hold senior government posts, and various family members reportedly maintain extensive business interests in the country.

Government SizeView Methodology

The top individual income tax rate is 13 percent, and the statutory corporate tax rate is 15 percent. Other taxes include a value-added tax. The overall tax burden equals 22.8 percent of total domestic income. Government spending has amounted to 29.4 percent of total output (GDP) over the past three years, and budget deficits have averaged 1.0 percent of GDP. Public debt is equivalent to 35.9 percent of GDP.

Regulatory EfficiencyView Methodology

Entrepreneurial activity is hampered by state interference that increases regulatory costs and uncertainty through various bureaucratic impediments. Labor regulations are not flexible enough to facilitate dynamic employment growth. The government influences prices through regulation and large subsidies to numerous state-owned and state-trading enterprises. The economy is highly dollarized, and central bank institutional capacity is weak.

Open MarketsView Methodology

Trade is important to Tajikistan’s economy; the value of exports and imports taken together equals 55 percent of GDP. The average applied tariff rate is 5.6 percent. All land is owned by the government. The government screens foreign investment, and state-owned enterprises distort the economy. The government’s continuing interference and the financial sector’s limited overall capacity are serious impediments to development of the private sector.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Hong Kong89.81.2
2Singapore88.60.8
3New Zealand83.72.1
4Australia810.7
5Taiwan76.51.8
6South Korea74.32.6
7Malaysia 73.82.3
8Macau70.70.6
9Brunei Darussalam69.82.5
10Japan69.6-3.5
11Kazakhstan695.4
12Vanuatu67.46.6
13Thailand 66.22.3
14Philippines65.62.5
15Azerbaijan63.63.4
16Fiji63.44.6
17Tonga633.4
18Indonesia61.92.5
19Kyrgyz Republic 61.11.5
20Cambodia59.51.6
21Bhutan58.4-1.1
22Samoa58.4-5.1
23Tajikistan58.26.9
24China57.45.4
25Sri Lanka57.4-2.5
26Nepal55.14.2
27Solomon Islands558.0
28Bangladesh 551.7
29Mongolia54.8-4.6
30Micronesia54.12.3
31Laos544.2
32Pakistan 52.8-3.1
33India52.6-3.6
34Burma52.53.8
35Vietnam52.4-1.6
36Uzbekistan52.36.3
37Papua New Guinea50.9-2.3
38Kiribati50.94.7
39Maldives50.3-3.6
40Afghanistan48.9N/A
41Turkmenistan47.45.5
42Timor-Leste46.30.5
43North Korea4.92.6
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