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Tajikistan
Foreign Economic Relations
As the economic reforms of the Gorbachev regime relaxed restrictions
on foreign business activity in the Soviet Union in the last years
of the 1980s, Tajikistan began to make economic arrangements with
foreign businesses. Despite some interest on the part of the Nabiyev
regime in arranging joint ventures with foreign firms, only four
such agreements were reached in 1991, and just six more were concluded
by 1992. One of the joint-venture agreements of that period brought
United States investment in the manufacture of fur and leather
products in Tajikistan. Israeli businesses began irrigation projects
in Tajikistan in 1992. A deal with two Austrian companies called
for construction of a factory to produce prefabricated housing
and other buildings to be financed by US$3.5 million raised from
cotton export funds. A similar construction agreement was signed
in 1992 with Czechoslovakia. In 1995 an Italian company began
construction of a textile factory in Tajikistan. One of the most
important foreign undertakings in the country was a joint venture
with a Canadian firm, the Zarafshon Mining Project, to mine and
process gold at three known sites in the Panjakent area of northwestern
Tajikistan and to prospect in an area of 3,000 square kilometers
for additional deposits. The agreement was concluded in 1994;
production began in January 1996.
The post-civil war government has emphasized cultivation of
economic relations with a variety of Western and Middle Eastern
countries, China, and the other former Soviet republics (see table
17, Appendix). In 1991 an Afghan company opened shops in Dushanbe
and the northern city of Uroteppa to sell clothing, textiles,
fruits, and nuts that the company shipped into Tajikistan from
Afghanistan and other countries. The company also planned to export
textiles woven in Tajikistan. In 1992 fourteen people were sent
from Tajikistan to Turkey to study banking procedures.
Iran and Pakistan
In the early 1990s, Iran pursued economic cooperation as a means
of expanding its regional influence by assuming part of the Soviet
Union's role as the major customer for Tajikistani exports. The
first foreign firm registered in Tajikistan was Iranian. In 1992
pacts were signed for cooperation in the spheres of banking and
commerce, transportation, and tourism; a joint company, Tajiran,
was established to handle bilateral trade. In October 1992, Iran
declared its intention to buy 1 million tons of cotton and 400,000
tons of aluminum (a figure that exceeded Tajikistan's entire aluminum
production for 1992).
The two countries continued to make economic cooperation agreements
into the mid-1990s. Iran loaned Tajikistan US$10 million to be
used to stimulate exports and imports while offering assistance
in dealing with the costs of imported energy. In 1994, the two
countries established a commission to promote bilateral economic
and technical relations. In 1995 Iran agreed to pay for Tajikistan's
importation of natural gas from Turkmenistan; Tajikistan then
was to reimburse Iran in cotton rather than currency.
Pakistan extended US$20 million in credits to Tajikistan in
1994 for the purchase of Pakistani goods. However, the most ambitious
parts of the cooperation plans between the two countries, the
completion of the Roghun hydroelectric dam and the highway between
the two countries, fell through; the reasons included Pakistan's
own economic problems, political opposition in Tajikistan to allocating
state funds on such a large scale to a foreign country, and the
continued turmoil in Afghanistan and Tajikistan.
The United States
In 1992 newly independent Tajikistan and the United States expressed
an interest in developing trade relations. President Nabiyev made
an urgent plea to a delegation from the United States Congress
for development assistance, especially in the area of natural
resource use. At about the same time, Tajikistan made a barter
trade agreement with a United States company to exchange dried
fruits from Tajikistan for bricks, greenhouse equipment, and consumer
goods from the United States. In 1992 the United States offered
Tajikistan credits to use for the purchase of food, and the United
States Overseas Private Investment Corporation made an agreement
to provide Tajikistan loans and other assistance to promote United
States investment. In 1994 the United States established the Central
Asian-American Enterprise Fund to provide loans and technical
expertise that would promote the growth of the private sector
in all the Central Asian states. Generally, however, the level
of United States involvement in Tajikistan has remained very low.
The first significant undertaking in Tajikistan by a United States
firm was a US$40 million textile mill established in 1995.
Russia and the CIS
After Tajikistan achieved independence, it maintained extensive
economic relations with other former Soviet republics individually
and with the CIS. Relations with the CIS and the Russian Federation
preserved some characteristics of Tajikistan's relationship with
the Soviet central authorities. Until 1995 Tajikistan remained
in the ruble zone rather than establishing its own national currency,
as the other four Central Asian republics had done.
In the meantime, Russia retained the dominant position in the
CIS and, hence, in commerce with Tajikistan that the Moscow government
had enjoyed in the Soviet period. Russia and Tajikistan undertook
to maintain their bilateral exchange of goods at existing levels
as the republics made the transition to a market economy. In 1992
some 36 percent of Tajikistan's imports came from Russia, and
21 percent of its exports went to Russia; about 60 percent of
total external trade was with CIS countries, and 45 percent of
exports went to those countries. In 1992 a bilateral agreement
called for Tajikistan to send Russia fruits and vegetables, vegetable
oil, silk fabrics, and paint in return for automobiles, televisions,
and other consumer and industrial goods.
Post-civil war Tajikistan was heavily dependent on Russia for
fuel and other necessities. In 1993 Russia made another barter
agreement, by which Tajikistan would send Russia agricultural
products, machinery, and other goods in return for Russian oil.
Despite the agreements, trade between the two countries encountered
serious difficulties. In the 1990s, a sharp drop in independent
Tajikistan's cotton production caused it to fall far short of
the deliveries promised to Russia. This development impeded Tajikistan's
ability to pay for vital fuel imports and disrupted Russia's textile
industry. Nevertheless, private bilateral commercial activity
expanded to some extent. By 1995 more than twenty Tajikistani
businesses had made joint-venture agreements with Russian enterprises.
Membership in the ruble zone required Tajikistan to cede control
over its money supply and interest rates to Russia and to comply
with the regulations of Russia's central bank. After the civil
war, Russia provided a majority of the funds for Tajikistan's
budget and had considerable influence over budgetary policy. Russia
also sent periodic infusions of cash to the Dushanbe government.
As the old interrepublic delivery system decayed at the end
of the Soviet era, Tajikistan, like other republics, reduced sales
of some commodities and consumer goods to other republics. At
the same time, direct agreements were made with several republics
to place commercial relations on a new footing. These pacts included
statements of principle on economic cooperation and general promises
to deliver products from one republic to the other and to set
up joint ventures. In 1992 such agreements were made with Georgia,
Armenia, and Belarus, and a separate trade agreement called for
Turkmenistan to send Tajikistan natural gas and various other
goods in exchange for aluminum, farm machinery, and consumer goods.
One of Tajikistan's most important trading partners among the
Soviet successor states is Uzbekistan, the source of most of its
natural gas since independence. In 1994 the two countries concluded
a barter agreement, which the International Monetary Fund (IMF--see
Glossary) subsequently criticized as disadvantageous to Tajikistan.
According to the agreement, Uzbekistan was to send Tajikistan
natural gas, fuel oil, and electricity. In return, Uzbekistan
was to have mining rights to various metals in Tajikistan, which
also would supply electricity to locations in southern Uzbekistan
lacking generating capacity, as well as cotton, construction materials,
various metals, and other goods. In 1995 Uzbekistan halted its
natural gas deliveries several times, citing nonpayment by Tajikistan.
In the mid-1990s, the uncertain condition of Tajikistan's economy
left the country in a weak position to conduct foreign trade.
The balance of trade was consistently unfavorable; in 1994 imports
exceeded exports by nearly US$116 million, and by 1995 Tajikistan's
foreign debt exceeded US$731 million. Imports consisted mostly
of food, energy, and medicines. The main exports were aluminum
and cotton, with a large share of the production of both commodities
earmarked for export. The income derived from cotton and aluminum
sales went largely to pay for Tajikistan's energy imports, to
repay foreign debts in general, and to cover government expenses.
Data as of March 1996
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