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- GDP (PPP):
- $17.7 billion
- 7.5% growth
- 6.7% 5-year compound annual growth
- $2,229 per capita
- Inflation (CPI):
- FDI Inflow:
Tajikistan’s economic freedom score is 52.0, making its economy the 139th freest in the 2014 Index. It score has decreased by 1.4 points since last year, with relatively large declines in labor freedom, trade freedom, freedom from corruption, and business freedom offsetting an improvement in investment freedom. Tajikistan is ranked 30th out of 42 countries in the Asia–Pacific region, and its overall score is lower than the world average.
Tajikistan’s economic freedom was first rated in the 1998 Index, and its score has advanced since then by nearly 11 points. From a low base, it has achieved double-digit score improvements in three of the 10 economic freedoms, most notably an increase of more than 65 points in monetary freedom, which contributed strongly to lifting Tajikistan out of the “repressed” category. However, potential economic gains from these improvements have been undermined considerably by deteriorations in labor freedom, the control of government spending, and property rights.
Institutional shortcomings, particularly in the area of rule of law, continue to undermine Tajikistan’s chances for long-term economic development, slowing down its transition to a more market-oriented economy. Lagging far behind many other developing countries in terms of economic and human development, Tajikistan’s economy remains “mostly unfree.”
Tajikistan’s post-Communist transition has been stunted ever since the 1992–1997 civil war between an Islamist/democratic coalition and the ruling Communists. President Emomali Rahmon has been in power for over 20 years, dominating all three branches of government. Social and economic challenges include political corruption, Islamist terrorism, spillover from the war in Afghanistan, and tensions with neighboring Uzbekistan. Government abuses of human rights are widespread. Tajikistan is heavily dependent on revenues from aluminum and cotton exports. The drug trade and remittances from its 1 million migrant workers, primarily in Russia, account for over 45 percent of GDP.
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. 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. A 25 percent tax is applied to companies in the transportation, telecommunications, and service industries. Other taxes include a value-added tax (VAT) and a sales tax. Overall tax revenue amounts to 19.5 percent of the domestic economy. Public expenditures are 27 percent of GDP. Government debt is 33 percent of gross domestic output.
With no minimum capital required, launching a business takes five procedures and over a month. State interference increases regulatory costs. Completing licensing requirements takes more than 200 days and costs over six times the level of average annual income. The labor market remains underdeveloped. The government influences prices through regulation and subsidies provided to numerous state-owned and state trading enterprises.
The average tariff rate for Tajikistan is 5.9 percent. Although Tajikistan joined the World Trade Organization in 2013, it remains costly and time-consuming to import goods. Foreign investment is subject to government screening. The financial sector remains underdeveloped and subject to heavy state control. Continued government interference and the sector’s limited overall capacity pose serious handicaps to private-sector development.