Historical background

The Tajik people came under Russian rule in the 1860s and 1870s, but Russia's hold on Central Asia weakened following the Revolution of 1917. Bolshevik control of the area was fiercely contested and not fully reestablished until 1925. Much of present-day Sughd province was transferred from the Uzbek SSR to the newly formed Tajik SSR in 1929. Ethnic Uzbeks form a substantial minority in Sughd province. Tajikistan became independent in 1991 following the breakup of the Soviet Union, and experienced a civil war between regional factions from 1992-97. There have been no major security incidents in recent years, although the country remains the poorest in the former Soviet sphere. Attention by the international community since the beginning of the NATO intervention in Afghanistan has brought increased economic development and security assistance, which could create jobs and strengthen stability in the long term. Tajikistan is in the early stages of seeking World Trade Organization membership and has joined NATO's Partnership for Peace.

Economic overview

Tajikistan has one of the lowest per capita GDPs among the 15 former Soviet republics. Because of a lack of employment opportunities in Tajikistan, nearly half of the labor force works abroad, primarily in Russia, supporting families in Tajikistan through remittances. The exact number of labor migrants is unknown, but estimated at around 1 million. Less than 7% of the land area is arable. Cotton is the most important crop, but this sector is burdened with debt and obsolete infrastructure. Mineral resources include silver, gold, uranium, and tungsten. Industry consists only of a large aluminum plant, hydropower facilities, and small obsolete factories mostly in light industry and food processing. The civil war (1992-97) severely damaged the already weak economic infrastructure and caused a sharp decline in industrial and agricultural production. Tajikistan's economic situation remains fragile due to uneven implementation of structural reforms, corruption, weak governance, widespread unemployment, seasonal power shortages, and the external debt burden. A debt restructuring agreement was reached with Russia in December 2002 including a $250 million write-off of Tajikistan's $300 million debt. Completion of the Sangtuda I hydropower dam - built with Russian investment - and the Sangtuda II and Rogun dams will add substantially to electricity output. If finished according to Tajik plans, Rogun will be the world's tallest dam. Tajikistan has also received substantial infrastructure development loans from the Chinese government to improve roads and an electricity transmission network. To help increase north-south trade, the US funded a $36 million bridge which opened in August 2007 and links Tajikistan and Afghanistan. While, Tajikistan has experienced steady economic growth since 1997, nearly two-thirds of the population continues to live in poverty. Economic growth reached 10.6% in 2004, but dropped below 8% in 2005-08, as the effects of higher oil prices and then the international financial crisis began to register - mainly in the form of lower prices for key commodities and lower remittances from Tajiks working in Russia, due to the declining economic conditions in that country.