Tajikistan
In-depth country-focused analysis on Tajikistan's economic, political and operational risk environment, complemented by detailed sector insight

Our comprehensive assessment of Tajikistan's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Tajikistan, as well as the latest industry developments that could impact Tajikistan's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Tajikistan before your competitors.

Country Risk

Tajikistan Country Risk

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CORE VIEWS

  • We believe the deteriorating domestic demand outlook for Central Asia will make the region more susceptible to Islamist radicalisation. Out of the five Central Asian states - Kazakhstan, Turkmenistan, Uzbekistan, Kyrgyzstan and Tajikistan, we believe the latter two to be most exposed to the threat of radicalisation.

  • We expect the Kyrgyz som to remain on a more gradual depreciatory trajectory in 2015 than its Tajik counterpart. The Kyrgyzstani economy faces more limited depreciatory pressure from falling remittance inflows and smaller inflation costs, while the authorities face higher political pressure than Tajikistan, underpinning our view.

  • Tajikistan's social and political scene will become increasingly unstable in the coming quarters, as the country grapples with the shock stemming from Russia's economic...

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Tajikistan Operational Risk Coverage (9)

Tajikistan Operational Risk

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BMI View: There are major risks inherent in Tajikistan's labour market, which make the country a very unattractive location for most industries other than those requiring unskilled labour. The education system has suffered from war damage, underfunding and overcrowding since the break from the Soviet Union in 1991, stunting educational outcomes for students over the last two decades. In addition, vocational skills are severely lacking as the most common form of employment is in the low-skilled and largely informal agricultural sector. Consequently, training costs for Tajikistani employees in formal roles will be considerable, and this will add to already significant employment costs investors will face, such as social security contributions and worker benefits. Due to these considerations, Tajikistan scores 52.1 out of 100 for Labour Market Risk, placing it 21...

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Tajikistan Crime & Security

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BMI View: Businesses and foreign workers in Tajikistan are exposed to a multiplicity of security risks from crime, terrorist activity, and the potential for interstate conflict. The most common threat to foreigners stems from becoming a victim of petty crime, however the country's porous borders with Afghanistan mean that the risk of terrorist activity spilling over into Tajikistan is also high. Additionally, Dushanbe is involved in several regional disputes which have the potential to become major flashpoints for interstate conflict over the medium to long term, including a territorial quarrel and a potential for conflict over water resources. These considerable security threats result in Tajikistan's low score of 16.7 out of 100 in the...

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Tajikistan Labour Market

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The main labour market benefits to investors in Tajikistan are high literacy rates among the working population and a high employment rate for people of working age. However, Tajikistan suffers from an absence of skilled workers, as a large percentage of the country's GDP stems from the agriculture sector. A lack of quality tertiary education, no universities in the top 400, a low life expectancy and restrictive visa policies all pose potential risks to investors. Tajikistan's overall Labour Market Risk score is 49.8 out 100, placing the country 24 th out of 30 countries in the emerging Europe region, behind Serbia at 51.9 and just ahead of Macedonia at 48.5. Regional leader Cyprus scores 67.2, followed by the Czech Republic, which scores 66.8.

Tajikistan has a young and rapidly growing population, meaning the country's labour pool will be populated with relatively inexpensive workers. Along with a regionally competitive rate of...

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Tajikistan Logistics

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BMI View: There is a limited road and rail system in Tajikistan, no direct liner connections, and the few internationally functioning airports are ill equipped to handle large amounts of goods. This increases the burden on the already struggling road and rail networks, which are in desperate need of modernisation and repair following years of neglect. Along with stringent and time-consuming customs checks, this substantially increases the time, costs and risks in the logistics sector. Taking all these factors into account, we give Tajikistan a score of 30.5 out of 100 in our Logistics Risk Index, ranking the country 28th out of 29 states in Emerging Europe.

Tajikistan suffers some major issues with its energy sources. The main energy source is...

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Tajikistan Trade & Investment

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Tajikistan exhibits low levels of economic openness in relation to its business environment, with poor rates of foreign investment inhibiting the amount of capital available to investors. It is also at risk in terms of the level and type of imports and exports; regionally Tajikistan has the lowest level of exports as a percentage of GDP, primarily consisting of goods rather than services. In BMI's Trade and Investment Risk Index, Tajikistan ranks last of 30 countries in emerging Europe, with a score of 38.1. This places it 119 th globally out of 170 countries.

With limited access to international financial markets and only a small number of listed companies, Tajikistan is a very underdeveloped economy, although regionally its capital and financial accounts are among the highest. There is a general lack of confidence in the financial sector, and this has lead to a lack of banking activity in Tajikistan,...

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Tajikistan Industry Coverage (2)

Defence & Security

Tajikistan Defence & Security

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BMI View:  At present, Kazakhstan and the other four Central Asia countries, Turkmenistan, Tajikistan, Uzbekistan, and Kyrgyzstan have limited defence budgets, yet numerous requirements. While BMI expects these budgets to increase incrementally over the coming years, BMI also expects the budgetary and underdevelopment challenges to limit those increases considerably. These countries face numerous internal and external security challenges, including border disputes, criminality, and domestic and transnational terrorism.

BMI expects Kazakhstan's defence spending to have reached USD2.4bn by the end of 2014 and USD2.6bn by the end...

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Telecommunications

Tajikistan Telecommunications

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BMI View: The return of MTS to Uzbekistan is a strong indicator for the potentially high rewards that the Central Asian region offers. Uzbekistan's low penetration and high population size means it is the most attractive market from an organic growth outlook. Russian telecoms operator Multiregional Transit Telecom (MTT) has also entered the region as an mobile virtual network operator (MVNO); the first of its kind it will be able to tap into the large numbers of migrant workers living in Russia, Tajikistan, Uzbekistan and Kyrgyzstan. Demand will...

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