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

  • Kazakhstan will not face the Russian annexation of regions heavily populated by ethnic Russians as occurred in the Ukrainian region of Crimea in early 2014. While northern Kazakhstan does have a high proportion of ethnic Russians, any aggressive action by Russia would spark backlash from rising regional power China, and put on hold any expansion of the Eurasian Economic Union.

  • Kyrgyzstan's reliance on gold exports and workers' remittances from Russia will mean the economy remains vulnerable to external shocks in the years ahead. In 2014 and 2015 the drought in northern Kyrgyzstan combined with increased demand from Russia for Kyrgyz agricultural imports will see food price inflation rise, subduing private consumption growth.

  • Despite an increase in violence along Turkmenistan's Afghan border, and more...

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Tajikistan Operational Risk Coverage (9)

Tajikistan Operational Risk

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Investors considering operating in Tajikistan face considerable risks, including the extremely high risk of terrorism and petty criminal activity, the high cost and lengthy bureaucratic procedures involved in importing and exporting goods, the minimal levels of credit available to investors from the financial sector, high levels of corruption, and an over-reliance on unreliable hydroelectric energy to power the majority of the country. However, there are some potential upsides, and investors in Tajikistan may benefit from the low levels of profit tax and high levels of import and export growth in this developing market. Taking all these factors into account, Tajikistan receives a score of 34.9 out of 100 in the BMI Operational Risk Index, ranking in last place (30 th) in the emerging Europe region and 137 th globally out of 170 countries.

The biggest threat facing investors in Tajikistan is the...

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Tajikistan Crime & Security

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Tajikistan poses a high degree of risk to foreign business travellers, expatriates and tourists in terms of security and crime. For the most part, the greatest risks to these groups are petty crime such as pick-pocketing and theft, rather than violent crimes. Tajikistan's murder rate, at 1.6 per 100,000 of the population, is more in line with advanced Central and Eastern European states than its fellow Central Asian republics, where the rate is around 9 per 100,000. However, the persistent weakness of the Tajik state means that there are limits to the government's ability to maintain order and security. Corruption is also a major problem in Tajikistan. Cyber crime is less of a risk owing to the very low rate of internet usage (around 15% of the population), but this also means less awareness. The country receives a score of just 16.5 out of 100 in the Crime and Security Risk Index, ranking it second to last in emerging Europe, ahead of only Ukraine.

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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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Tajikistan's economy is highly reliant on labour remittances from the 2mn citizens that migrate per annum and a small agriculture sector that is hindered by lack of arable land. 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 35.1 out of 100 in our Logistics Risk Index, ranking the country 28th out of 30 in emerging Europe, ahead of Kyrgyzstan and Mongolia but behind Moldova.

Despite strong export growth, Tajikistan's economy is one of the least...

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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: Uzbekistan became the fifth and final Central Asian market to receive 4G LTE this quarter, as Beeline ( VimpelCom ) commercially launched the service in September 2014 . While it represents an important development for the region, we are largely bearish on the technology's short-term future , as the prohibitive cost will keep it out of reach of most subscribers, while 3G remains underdeveloped. Internet costs are some of the highest in the world, due to the landlocked nature of the region and government motivations to censor content. While t here is strong potential in the Central Asia telecoms industry, 4G will not see a significant uptake over our five...

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