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- GDP (PPP):
- $19.1 billion
- 7.4% growth
- 6.5% 5-year compound annual growth
- $2,354 per capita
- Inflation (CPI):
- FDI Inflow:
Tajikistan’s economic freedom score is 52.7, making its economy the 140th freest in the 2015 Index. Its score is up by 0.7 point since last year, with improvements in six of the 10 economic freedoms, including business freedom, the control of government spending, and freedom from corruption, offsetting a large decline in financial freedom. Tajikistan is ranked 31st out of 42 countries in the Asia–Pacific region, and its overall score is lower than the world average.
Tajikistan’s relatively stable overall level of economic freedom in recent years masks large score declines in financial freedom and labor freedom that offset more modest gains in other areas. Over the past five years, economic freedom in Tajikistan has declined by 0.8 point, with losses in four of the 10 economic freedoms.
A five-year civil war destroyed much of Tajikistan’s economic infrastructure and institutions. The rule of law is extremely weak, and the president’s family dominates key positions in government and business. Poverty is rampant, and inefficient business regulations inhibit individuals from lifting themselves from poverty. The trade environment limits investment and the transfer of productive technologies.
The 1992–1997 civil war between an Islamist/democratic coalition and the ruling Communists severely damaged an already weak economy and caused a sharp decline in industrial and agricultural production. Emomali Rahmon, president since 1994 and re-elected to another seven-year term in November 2013 in an election that was neither free nor fair, controls all three branches of government. Corruption, Islamic terrorism, and narco-trafficking are endemic. Most Tajiks survive by working in the underground economy. Relations with neighboring Uzbekistan are strained. Government abuses of human rights are widespread. Tajikistan is heavily dependent on revenues from aluminum and cotton exports. The illegal drug trade and remittances from migrant workers, primarily in Russia, account for over 45 percent of GDP. Tajikistan became a member of the World Trade Organization in 2013.
Corruption is pervasive. Patronage networks 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. The judiciary lacks independence. Many judges are poorly trained and inexperienced, and bribery is reportedly widespread. Under Tajik law, all land belongs to the state.
The top individual income tax rate is 13 percent, and the top corporate tax rate is 15 percent. Some companies, including foreign entities, pay different rates. Other taxes include a value-added tax and a sales tax. The overall tax burden is equal to 19.9 percent of domestic production. Government spending equals 24.6 percent of domestic output, and public debt equals 29 percent of GDP.
The business environment has improved with implementation of more simplified business registration in recent years, but entrepreneurial activity remains seriously hampered by inconsistent bureaucracy. The labor market remains underdeveloped. The government influences prices through regulation and large subsidies to numerous state-owned and state trading enterprises. Nearly half of the recipients of social protection subsidies are “non-poor.”
Tajikistan’s average tariff rate is 5.2 percent. Goods may face delays clearing customs, and it is expensive to import products into the country. Foreign investors may not own land, and proposed new investments may be subject to review by government agencies. Financial-sector assets have grown rapidly, but continuing state interference seriously handicaps private-sector development.