2021 Index of Economic Freedom

Tajikistan

OVERALL SCORE55.2
WORLD RANK134
Rule of Law

Property Rights41.6

Judicial Effectiveness48.8

Government Integrity35.2

Government Size

Tax Burden91.9

Government Spending68.6

Fiscal Health75.1

Regulatory Efficiency

Business Freedom62.3

Labor Freedom46.2

Monetary Freedom68.5

Open Markets

Trade Freedom69.6

Investment Freedom25.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 9.3 million
  • GDP (PPP):
    • $34.1 billion
    • 7.5% growth
    • 7.0% 5-year compound annual growth
    • $3,520 per capita
  • Unemployment:
    • 11.0%
  • Inflation (CPI):
    • 7.8%
  • FDI Inflow:
    • $212.8 million

Tajikistan’s economic freedom score is 55.2, making its economy the 134th freest in the 2021 Index. Its overall score has increased by 3.0 points, primarily because of an improvement in fiscal health. Tajikistan is ranked 29th among 40 countries in the Asia–Pacific region, and its overall score is below the regional and world averages.

The economy of Tajikistan is mostly unfree again this year. Still shackled by an authoritarian post-Soviet regime, Tajikistan needs radical reforms that strengthen the rule of law, modernize the labor market, and create a more welcoming investment climate to put it on the road to greater freedom.

IMPACT OF COVID-19: As of December 1, 2020, 86 deaths had been attributed to the pandemic in Tajikistan, and economic growth was forecast to decline to 1.0 percent for the year.

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Background

The land of the Tajiks, a mountainous landlocked region north of Afghanistan in Central Asia, was buffeted and absorbed by ancient empires and, in the 20th century, by the Soviet Union. Modern Tajikistan gained full sovereign independence after the Soviet Union collapsed in 1991. Autocratic President Emomali Rahmon has been in power since 1994, and abuse of human rights is widespread. His party’s parliamentary election victory in 2015 was criticized by international monitors. Tajikistan relies heavily on revenues from exports of aluminum, gold, and cotton. With less than 10 percent of its land arable, and given high state-mandated cotton production, the country must import most of its food. The economy is growing but remains one of Asia’s poorest, partly dependent on remittances and narco-trafficking.

Rule of LawView Methodology

Property Rights 41.6 Create a Graph using this measurement

Judicial Effectiveness 48.8 Create a Graph using this measurement

Government Integrity 35.2 Create a Graph using this measurement

All land belongs exclusively to the state. The cadaster system used by the government to record, protect, and facilitate acquisition and disposition of first-tier or second-tier land-use rights needs to be improved.?The executive branch controls the nominally independent judiciary. Many judges are poorly trained and inexperienced, and bribery is reportedly widespread. Corruption is pervasive and rarely punished. Nepotism, hiring bias, patronage networks, and regional affiliations are central to political life.

Government SizeView Methodology

The top individual income tax rate is 13 percent, and the top corporate tax rate is 15 percent. Other taxes include a value-added tax. The overall tax burden equals 20.5 percent of total domestic income. Government spending has amounted to 32.3 percent of total output (GDP) over the past three years, and budget deficits have averaged 3.6 percent of GDP. Public debt is equivalent to 44.6 percent of GDP.

Regulatory EfficiencyView Methodology

Dealing with construction permits has become more complicated, and costs related to insolvency have risen. Dismissing an employee has become more difficult. The government influences prices through regulations and large subsidies to numerous large Soviet-era state-owned and state-trading enterprises that continue to incur large losses.

Open MarketsView Methodology

Tajikistan has two preferential trade agreements in force. The simple average tariff rate is 7.7 percent, and one formal nontariff measure is in effect. However, other barriers to trade persist. The government screens foreign investment, and state-owned enterprises distort the economy. Nontransparent regulations and inconsistent administration remain impediments to foreign investment. About half of adult Tajikistanis use formal banking services.

Country's Score Over Time

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Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Singapore89.70.3
2New Zealand83.9-0.2
3Australia82.4-0.2
4Taiwan78.61.5
5Malaysia74.4-0.3
6Japan74.10.8
7South Korea740.0
8Kazakhstan71.11.5
9Thailand69.70.3
10Indonesia66.9-0.3
11Brunei Darussalam66.60.0
12Philippines64.1-0.4
13Kyrgyz Republic63.70.8
14Mongolia62.46.5
15Fiji62.2-1.2
16Samoa61.9-0.2
17Vietnam61.72.9
18Vanuatu60.5-0.2
19Papua New Guinea58.90.5
20China58.4-1.1
21Uzbekistan58.31.1
22Bhutan58.3-3.8
23Tonga57.5-1.3
24Cambodia57.30.0
25Bangladesh 56.50.1
26India56.50.0
27Solomon Islands56.53.6
28Sri Lanka55.7-1.7
29Tajikistan55.23.0
30Burma55.21.2
31Maldives55.2-1.3
32Laos53.9-1.6
33Afghanistan53-1.7
34Pakistan51.7-3.1
35Nepal50.7-3.5
36Micronesia50.4-1.6
37Turkmenistan47.40.9
38Timor-Leste44.7-1.2
39Kiribati44.4-0.8
40North Korea5.21.0
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