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Tajikistan
Transition to a Market Economy
In the last years of the Soviet system, Tajikistan followed
the rest of the union in beginning a transition from the conventional
Soviet centralized command system to a market economy. Early in
1991, the Dushanbe government legalized the leasing and privatization
of state enterprises (excluding industries deemed critical for
national security). However, the transition met firm resistance
from individuals who still held positions that gave them access
to economic power and technological know-how; political figures
with ideological objections to market reforms also voiced opposition.
Such influential people insisted that the previous system could
be made efficient if Tajikistanis were urged to work harder. This
view was made popular by the sharp price increases that followed
price decontrol in the initial reform stage. Citizens' hardships,
fear, and anger resulting from the initial economic shock greatly
slowed the transition to a market economy. For instance, in the
first year of independence, only four private farms were established.
The regime of Imomali Rahmonov, who came to power in December
1992, showed little interest in continuing the limited market
reforms of 1991 and 1992. At the same time, the new regime declared
its support for private enterprise on a small or moderate scale,
expressing the hope that foreign investment would help revive
the country's shattered economy. By the mid-1990s, about half
of all small businesses, especially those in the service sector,
were privately owned. In November 1995, the legislature approved
a reform plan for the period 1995-2000, but the plan included
no specific steps toward the general goals of privatization and
the fostering of foreign and domestic investment.
In 1992 Tajikistan acquired its first commercial bank, the Tajikbankbusiness.
Established primarily to invest in the republic's economy, the
state-owned bank assumed the functions of the former Soviet State
Bank (Gosbank); it also sought to develop links with the United
States, Iran, China, Pakistan, Saudi Arabia, and Britain, among
other countries. After the dissolution of the Soviet Union, Tajikistan
continued to use the old Soviet ruble until Russia replaced that
currency with the Russian ruble in 1994. At that time, Tajikistan
joined the Russian ruble zone (see Glossary), a move that worked
against Tajikistani interests. Russia did not send as many rubles
as promised, and many of the new rubles that were sent quickly
left Tajikistan as inhabitants bought commodities from other Soviet
successor states, especially Uzbekistan and Russia. Thus handicapped,
the cash economy often gave way to barter and promissory notes.
As a result, the Dushanbe government decided to leave the ruble
zone by introducing the Tajikistani ruble in 1995. At the time
of its introduction, the new currency had an exchange rate of
fifty per US$1, but its value slipped drastically through 1995,
reaching 284 per US$1 in January 1996.
Data as of March 1996
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