USAID country Profile: Property Rights and Resource Governance: Tajikistan
Tajikistan's economy is largely based on its substantial water resources, which are used for the irrigation of cotton, the country's primary agricultural crop, and the production of aluminum, its principal industrial export. Two great river systems (the Amu/Panj and Syr Darya) dominate Tajikistan's mountainous topography, giving it the world's eighth-largest hydropower capacity. Both river systems are fed by snow and glaciers and end in the basin of the Aral Sea in neighboring Uzbekistan. The relatively limited amounts of flat land in Tajikistan are in the valleys associated with these river systems. This agricultural land is intensively cultivated, with 70% or more irrigated, and cotton production is mandated for all but the smallest farms, even for privately owned commercial farms (dekhan) that were established after 1997 as a result of the reforms of the Soviet-era state and collective farms. Despite its bundant water resources, Tajikistan has the lowest ratio of irrigated land to population in Central Asia, and is considered food-insecure. Tajikistan's transition from a Soviet Republic to an independent nation was delayed by a violent civil war that raged from 1992 to 1997, with significant loss of life and property as well as internal displacement of populations. Since peace was negotiated in 1997, the country has experienced greater economic growth and, with the exception of cotton, the agricultural sector has regained pre-war levels of production. Tajikistan is still a poor country, with three-quarters of the population living on less than US $2.15 per day. Tajikistan has made some progress in privatization of rural land, especially in increasing the size of plots made available to households for food production. The agricultural productivity on these smallholder farms has driven the substantial rates of growth, with a lesser contribution from the privatized mid-size commercial farms (the dekhan, or ?peasant farms?). The contribution of the still-extant state and collective farms has declined. Indebtedness of the dekhan has emerged as a major issue, though a 2010 government decree forgave most farmers' cotton debt acquired prior to 2008. Recent moves to allow dekhan land certificates to be used as collateral for credit issued by state banks are introducing new uncertainties into the sector. Limited non-agricultural employment opportunities and low incomes in the agricultural sector in Tajikistan have contributed to a steady outflow of men to other countries (principally Russia) for work. Remittances are estimated to account for as much as 30% of Tajikistan's GDP since 2000, although the economic downturn in 2008 saw this number increase sharply to 50% before dropping to 34% in 2009. Women in Tajikistan have assumed a greater role in the agricultural workforce but have, as a result of legal and political changes, lost property rights and protections that they had during the Soviet era. The civil war disrupted the education system in Tajikistan and it is now believed that the country's youth are bringing fewer skills to the workplace. External interventions were critical to the negotiations that led to peace in Tajikistan, and external support has been important to the economic reform efforts that have been pursued since 1997. However, Tajikistan continues to have a record of high levels of corruption and illegal trade, involvement in trafficking of narcotics, and the persistence of rules appropriate to a state-led economy. Poor economic governance has slowed progress toward the development of an economy that is robust, diversified, and uses Tajikistan's unique natural resources profitably and sustainably.