Country risk reference rating: Level 6 (6/9)
Country Risk Outlook: Stable
Economic and trade risks
Tajikistan has a large population, a small land area, especially little agricultural land, a weak economic base, a single structure, and an underdeveloped economy. It mainly relies on the export of aluminum and hydropower resources. It is rich in nonferrous metals and water resources, but there are mining and Development is difficult. Fuel, energy, light industrial products, daily consumer goods and some grain and food are all dependent on imports. Residents live in poverty and are easily affected by internal and external factors, and there are certain difficulties in economic development. In 2012, Tajikistan’s per capita GDP was US$1,030; the real economic growth rate was 7.5%; the inflation rate was 5.8%. The industrial structure of Tajikistan is agriculture (20.0%), industry (20.2%), and service industry (59.8%). Tajikistan’s economic development is relatively backward. The variety and quantity of domestically produced products are very small, and most of them rely on imports. Poor road traffic conditions and high transit fees when passing through the territories of neighboring countries have increased the cost of commodity transportation; Russia is very strict about exporting petroleum products. The imposition of high tariffs has resulted in high price levels in Tajikistan. Tajikistan’s market mechanism is weak and its job creation capacity is insufficient. The official unemployment rate is only 3%, but some organizations estimate that the actual unemployment rate is as high as 40%, and the unemployment rate in some areas may be as high as 60%.
Bilateral economy and trade
In 2012, the bilateral trade volume between China and Tajikistan was US$1.86 billion. China was Tajikistan’s third largest trading partner, second only to Russia and Kazakhstan. In the first half of 2013, the trade volume between China and Tajikistan was US$274 million, ranking fourth among all Tajikistan’s trading partners. In recent years, Tajikistan’s economic development has been in urgent need of capital and technology, and its reliance on China has increased. Currently, China has about 20 large-scale projects in Tajikistan. The Ministry of Foreign Affairs of Tajikistan, Somoni Square in the capital, and the National Library are all under construction and new projects built by Chinese companies. In addition, China Road and Bridge, Minmetals, Huawei, ZTE and other companies have undertaken the construction of highways, tunnels, communication base stations and other projects in Tajikistan. Although the political and economic cooperation between China and Tajikistan has developed rapidly, there are still some problems. First, the employment level in Tajikistan is not high, so there is a certain degree of xenophobia. In addition, there are differences in culture and other aspects. Expatriate workers often conflict with the Tajik people.
Business environment
Tajikistan has a poor business environment. It ranked 141st in the “2013 Doing Business Report” released by the World Bank. However, the overall ranking is still very low. Corruption and a poor business environment deter investors. , especially the pace of “privatization” of large and medium-sized enterprises is slow, and foreign investment is very small. In addition, problems such as soil salinization, industrial pollution, pesticide flooding, and overuse of water resources have seriously deteriorated the environment. There is a phenomenon of embezzlement and seizure of private property in Tajikistan. Corruption is prevalent, tax burden is heavy, and there are many administrative barriers. The greater arbitrariness in the enforcement process of government departments makes enterprises vulnerable to the manipulation of law enforcement officials. This not only increases operating costs, but also increases the business risks of enterprises.
Overall risk assessment
Tajikistan is the poorest country in the CIS after the collapse of the Soviet Union. The economy is still in a period of recovery, and the government is committed to economic reform and maintaining monetary policy stability. It regularly receives support from the International Monetary Fund, but there is not much improvement. The difficulties faced by Tajikistan’s economy are mainly concentrated in the following points: First, low wage income, with the current per capita monthly salary of 115 US dollars, is not attractive to talents and labor, and a large number of labor outflows; second, GDP growth still mainly relies on remittances, new creation jobs have low contribution to the economy; third, regional development differences are large, and the southern region’s economy depends largely on central financial support, which is about 70% to 80%; fourth, agriculture is subject to energy shortages and low hydropower coverage. Tajikistan’s legal system is very imperfect, the investment environment is poor, and bureaucracy is serious.
Based on the analysis and assessment of the current overall situation, Tajikistan’s national risk reference rating is 6 (6/9), with a high national risk level and a stable national risk outlook.
(Issuing agency: China Export and Credit Insurance Corporation)
