Republic of Tajikistan - Country Economic Memorandum : Tajikistan’s Quest for Growth: Stimulating Private Investment

Abstract

The Tajik government in its Poverty
 Reduction Strategy Paper for 2010-12 set an ambitious target
 of doubling Gross Domestic Product (GDP) in a decade.
 Tajikistan clearly has the potential to grow at more than
 seven percent a year as it has done in the recent past, but
 it is not going to be easy. The potential for
 'catch-up' growth from the depths of the recession
 of the 1990s is largely exhausted, the external environment
 is now less favorable than it was in the 2000s, and some
 drivers of past growth are unlikely to be sustained.
 Nevertheless, efforts by the government to create better
 conditions for higher private investment, exports, and
 employment, as well as strong support from the Tajik
 business community and development partners, could make this
 target a reality. In the 2000s, the Tajik economy recovered
 from the severe transition-related recession and civil
 conflict of the 1990s. Macroeconomic performance improved:
 inflation fell from 30-40 percent in the late 1990s to
 six-seven percent in the mid-2000s, fiscal deficits were
 lower, and the current account deficit and external debt
 moved to more manageable levels. Real GDP growth averaged
 nearly eight percent a year in 2000-08. The poverty
 headcount fell sharply, from 72 percent in 2003 to 54
 percent in 2007, with more than a million people moving out
 of poverty; during the same period, the share of the
 extremely poor population fell from 42 percent to 17
 percent. Key social indicators (for example, primary and
 secondary school enrollment rates, infant mortality,
 maternal mortality, and child malnutrition) also improved.