A small, landlocked, low-income country, Tajikistan is the poorest country in Central Asia, with a national poverty rate of more than 26 percent in 2019, and an extreme poverty rate of nearly 11 percent. The country remains highly susceptible to external economic shocks due to, among others, its dependence on labor remittances.
The COVID-19 pandemic has had a significant impact on the Tajik economy. Restrictions on labor mobility and economic activity at home and abroad resulted in fewer remittances, weaker consumer demand, and reduced investments. During the first six months of 2020, remittances decreased by nearly 15 percent ($195 million) compared to the first six months of 2019.
Agriculture constitutes the largest sector of Tajikistan’s economy and contributes to 22.6 percent of the country’s GDP and 45.7 percent of the Tajik labor force. However, continued reliance on a few major crops like cotton is an impediment to further developing the sector. To support agribusinesses, USAID provides demand-driven assistance to agricultural associations, cooperatives, market integrators, and small and medium enterprises to take advantage of domestic, regional, and international market opportunities.
USAID supports expanding the private sector within the agriculture, logistics, textile, food processing, tourism, and information technology sectors to improve regional and international competitiveness. Tajikistan’s economic development is greatly strengthened by regional trade and its cross-border linkages, which will also result in greater regional stability. USAID is building the capacity of the newly established Tajik Export Agency to connect Tajik agribusinesses with lucrative European markets. Despite the disruption in trade caused by the COVID-19 pandemic, USAID’s interventions resulted in the signing of contracts representing $182,770 worth of Tajik exports, and letters of intent valued at more than $1 million.
Tajikistan is rich in water resources and hydropower for export in the region. USAID’s Central Asia Regional Electricity Market (CAREM) activity provides technical assistance and capacity building to create an economically viable electricity market that will also improve the consistency of the energy supply and promote regional economic growth. USAID also supports the Government of Tajikistan in establishing a transparent competitive market to export electricity beyond Central Asia by playing a major role in the development of the CASA-1000 transmission line. When finished, the $1.8 billion, 750-mile line will allow the Kyrgyz Republic and Tajikistan to sell clean, low-cost hydropower to the energy-hungry markets of Afghanistan and Pakistan during the peak summer season. USAID’s energy programs, including the newly awarded Power Central Asia project, help Tajikistan use its energy resources in ways that reduce greenhouse gas emissions and create long-term energy security.
USAID provided technical assistance to 7,906 individuals and created 2,409 jobs in the dairy and horticulture sectors. This assistance led to the adoption of new technologies and production methods, resulting in 24 new export products and 13 enterprises obtaining food safety and standard certifications. Tajik exporters receiving USAID assistance have increased their sales revenue by approximately 40 percent.
USAID’s program Thrive facilitated Pamir Energy’s installation of a 220kW off-grid solar power plant in Murghab, the largest solar power plant in Tajikistan and the highest commercially viable solar power plant in the world, providing dependable electricity to over 6,000 people in a remote corner of Tajikistan.
USAID’s Thrive, together with Pamir Energy, officially commissioned the 450-kilowatt Khatfat hydropower plant (HPP), which brought energy, for the first time since the collapse of the Soviet Union, to 191 households in one of the most isolated villages in Tajikistan, the Roshorv village in Bartang Valley.
USAID co-financed a Tajik agro-processor in the Sughd region in northern Tajikistan to introduce innovative packaging, processing equipment, a testing laboratory for dried fruit, and a certification system, giving agro-firms the means to access European markets. This investment increased the firms’ processing volumes, bringing in an additional $320,000 in sales, and created about 30 permanent jobs.
USAID developed an online Directory of Central Asian Horticulture Producers to promote horticultural products from Central Asia. Additionally, USAID prepared an Export Guide for Horticulture Goods for Central Asian Countries, which serves as a one-stop-shop for how to obtain all the necessary export certifications.
USAID, in response to disrupted import/export transport caused by COVID-19, established a hotline to help traders and exporters locate the latest information about new import and transit procedures, and launched an online freight portal to bridge the communication gap between traders and exporters.