tajikistan economy

Written by Maha Afzal Chaudhary 7:37 pm Articles, Current Affairs, International Relations, Published Content

Tajikistan’s Geoeconomic Significance: Unfolding New Dimensions

According to certain economic assessments, Tajikistan has had consistent development since the end of the Tajik civil war in 1992, as well as an overall rise in the standard of living and foreign investment. To Maha Afzal Chaudhary, the country’s great hydroelectric potential and geostrategic significance make it a prominent player in regional affairs.
About the Author(s)
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Ms Maha Afzal Chaudhary is an undergraduate student currently pursuing a degree in International Relations from the National University of Modern Languages. 

Introduction

Tajikistan’s southern border lies with Afghanistan, the western border with Uzbekistan, the northern border with Kyrgyzstan, and the eastern border with China. The major economic sector in Tajikistan is agriculture, which employs 45.7% of the labor force and accounts for 22.6% of the nation’s GDP.  However, the sector’s ongoing reliance on a small number of important crops, like cotton, hinders the potential of its economy.

Tajikistan, one of the nations with the largest hydropower potential in the world, distributes its excess summer electricity to its impoverished neighbors. The CASA-1000 project seeks to supply Afghanistan and Pakistan with hydropower electricity from Tajikistan and Kyrgyzstan. Additionally, Dushanbe is heavily reliant on the transportation systems of its neighbors, particularly Uzbekistan.

Since gaining its independence in 1991, Tajikistan has battled poverty and instability after being torn apart by a five-year civil war. The long-term economic and social cohesion of Tajikistan, however, appears to be of interest to all three of the major regional and trans-regional countries, namely Russia, China, and the United States.

Economy of Tajikistan

The economy of Tajikistan, a low-income, mountainous nation, is based mostly on mining, metals processing, agriculture, and remittances from its residents who are employed overseas. Tajikistan doesn’t have significant proven oil or natural gas reserves like some of its neighbors and hence it has steadily changed its economic policies to pursue the path of a transition economy.

The economy is extremely exposed to outside shocks as its reliance on cotton and aluminum exports for foreign cash is insecure. The economy of Tajikistan also includes a sizable black market that is mostly driven by the narcotics traffic in Afghanistan. Russia, Kazakhstan, and China are Tajikistan’s top three trading partners, followed by Turkey, Uzbekistan, and Switzerland.

Metal ores, gold, cotton, energy, textiles, and apparel are some of its key exports. It imports food products, industrial equipment, and oil. Tajikistan has been a part of several economic unions in Central Asia, notably the now-defunct Eurasian Customs Union and Eurasian Economic Community (EEC). Since the creation of the Eurasian Economic Union (EEU) in 2015, Tajikistan has been considering its application.

Geo-economic Dimension

In War by Other Means: Geo-economics and Statecraft, Robert Blackwill and Jennifer Harris discuss “the use of economic instruments to promote and protect national interests and to create favorable geopolitical results; and the consequences of other nations’ economic actions on a country’s geopolitical ambitions”.

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Tajikistan is one of the main players in the regional political structure because of its position, particularly in the bitter Central Asian water feud. The lack of water has a significant impact on local politics; nearly eighty percent of the water in the region is found in Kyrgyzstan and Tajikistan, however, it is also used by Uzbekistan, Kazakhstan, and Turkmenistan.

The CASA-1000 Project

With the help of new energy infrastructure, the ambitious CASA-1000 project will transport 1,300 megawatts of excess electricity from Central Asia to South Asian electrical markets. This international, multi-donor infrastructure project improves Central and South Asia’s access to renewable energy sources, providing significant advantages to the region’s power grids and individual electricity users.

With over 90% of its total electricity production coming from hydropower, Tajikistan produces some of the cleanest electricity in the entire globe. By putting the CASA-1000 Project into action, Tajikistan will acquire infrastructure prospects for expanding its exports by connecting to the unified power grid of Central Asia, exporting power to Afghanistan via the existing 220 kV Surkhan-Puli-Khumri transmission line, and building a new 500 kV transmission line to connect the two nations.

CASA-1000 offers the electrical sector in Tajikistan additional internal prospects along with regional advantages. The Tajik national power utility company will benefit financially from the profits from electricity exports, enabling Tajikistan’s electrical utilities to finance the construction of new generation and transmission infrastructure and the reconstruction of existing power infrastructure.

TAT Railway

The projected Turkmenistan-Afghanistan-Tajikistan (TAT) railway would be extended through northern Afghanistan to the Tajik border in a railway corridor that will connect Turkmenistan, Afghanistan, and Tajikistan. The TAT Railway will allow transit traffic to enter Tajikistan without having to go through Uzbekistan, supporting the economic integration of these countries. The TAT Railway is expected to cost between US$1.5 and US$2 billion.

Geo-economic Importance of Wakhan Corridor

A narrow strip of territory situated in Afghanistan known as the Wakhan Corridor dissociates Gilgit-Baltistan in Pakistan with the Gorno-Badakhshan Autonomous Region of Tajikistan and stretches to China. This deep valley in the mountains is where the Panj and Pamir rivers join to form the Amu Darya.

Being a component of the ancient Silk Road, the corridor is extremely valuable historically. Building a road through Wakhan will improve regional trade and business, notably for Pakistan, Central Asia, and Afghanistan. It might also present the quickest commercial route for China to get to Afghanistan and for Pakistan to get to Central Asia.

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Tajikistan: Pakistan’s Gateway to Central Asia

The Wakhan Corridor divides Tajikistan from Pakistan. As a result of the construction of the China-Pakistan Economic Corridor (CPEC) and the broader One Belt One Road (OBOR) program, Pakistan now has access to Tajikistan, allowing it to sidestep Afghanistan. This means that Tajikistan is Pakistan’s closest neighbor in Central Asia and, as a result, Pakistan’s entryway to the region.

On October 2022, Prime Minister Shehbaz Sharif stressed the significance of fostering connectivity in the area and reaffirmed Pakistan’s preparedness to grant Tajikistan access to the Gwadar and Karachi ports. PM Sharif underlined the growth of cooperation in the areas of road transport and air linkages during a conversation with President Emomali Rahmon in Kazakhstan’s capital city of Astana.

Tajikistan and China: Growing Economic Ties

China has assumed economic leadership and is expanding its footprint in all spheres of the Tajik economy since it is the most potent and reliable geopolitical player in the area. After years of persistent efforts to advance the Belt and Road Initiative (BRI), China’s economic and trade connections with Tajikistan have significantly improved. According to People’s Daily, 300 Chinese-funded companies are investing in Tajikistan and have grown to be the country’s top taxpayers.

Tajikistan has increased its capacity for infrastructure, particularly in the areas of logistics and transportation, and attracted new investment, technology, and markets thanks to the BRI. The BRI has supported Tajikistan’s exports, balanced the expansion of its sectors, and provided prospects for Tajikistan to modernize its industries and create a green and digital economy.

Tajik-Russo: Reciprocal Relations

Tajikistan is a part of many Russian-dominated military and economic partnerships which include the Commonwealth of Independent States, the Collective Security Treaty Organization, the Eurasian Economic Community, and—most significantly—the Shanghai Cooperation Organization.

1.6 million Tajik nationals, or almost a fourth of the country’s total population, migrated to Russia for employment between January and September 2021, and that is only the official estimate. Vladimir Putin, the president of Russia, picked Tajikistan for his first international trip since he deployed his country’s armed forces into Ukraine in late February.

The “internal situation” in Tajikistan, the potential support Dushanbe could provide to Moscow in avoiding the overall ramifications of Western sanctions, the necessity for Tajik President Emomali Rahmon to accept Taliban rule in Afghanistan’s neighbor, and the critical issue of the succession process was all on the agenda for this working visit.

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Tajikistan and the US: Budding Interests

To improve collaboration on economic, security, and other concerns, the United States and Tajikistan started annual bilateral consultations (ABCs) in February 2010. Over $330 million has been spent by the US government on Tajikistan’s security sector since 1992.

The New Silk Road, which was first proposed in 2011, aims to connect Afghanistan, India, and Pakistan with the Central Asian nations of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan by liberalizing trade and constructing infrastructures like roads, bridges, electrical grids, railways, and pipelines.

A key component of the American plan has been to create a regional energy market for Central Asia. In essence, the project seeks to use Afghanistan as a middleman to link the resource-rich nations of Central Asia with the roughly 1.6 billion consumers in South Asia.

Conclusion

The nation is characterized by a lax application of the law, a lack of activism on the part of civil society, high rates of corruption, and reliance on foreign handouts. Tajikistan requires an administration more concerned with maintaining national unity than ensuring its political survival. The future stability and development of Central Asia will depend on Tajikistan’s capacity to overcome its existing obstacles.

The complex interdependence theory emphasizes the intricate ways in which transnational actors become reliant on one another, exposed to one another’s decisions, and perceptive of demands as a result of deepening links. Tajikistan has pursued a multifaceted foreign policy over the course of its post-independence history.

Even though Tajikistan’s economy is not very stable, the country’s geography makes it an important part of the region and has drawn the attention of both regional and global powers. Tajikistan must take advantage of its location by fostering trade relations with other nations. In particular, the Republic of Tajikistan’s relations with China, Russia, the United States, and other neighbors should be balanced and handled with caution.

It should sign an agreement on equally crafted conditions in which the interests of both sides are prioritized. Tajikistan shouldn’t choose to align itself with any of the big power blocs; rather, the country should be encouraged to advance its political and economic ties on a win-win basis without undue bias toward either of the great powers.


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