TAJIKISTAN
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Country independence was achieved from the former Soviet Union in 1991 but chaos shortly arrived thereafter. The nationís civil war from 1992-97 has had serious consequences with upwards of 60 percent of the population living in poverty. Tajikistan has had a difficult time shifting the economy to market principles from the previous central planned model following Soviet Union Marxist economic theories. Today, Tajikistan remains an agricultural based economy (major world cotton exporter). Although the country is small in terms of population numbers at just over 7 million, Tajikistan is a very fragmented country made up of several cultures, ethnic groups and languages. The emergence of radical Islam is helping to fuel domestic and regional political instability.

Economic Statistics
GDP as measured by purchasing power parity stands at $8 billion USD (2004) with corresponding GDP/Capita at $1,100 USD. Real GDP growth is estimated at 8 percent for 2005 and at 7 percent for 2006. Other GDP growth figures include year 2004 at 10.5 percent, 2003 at 10.2 percent. Inflation is projected at 7.2 percent for 2005 and 5 percent for 2006. Other inflation numbers include year 2004 at 8 percent, 2001 at 40 percent, year 1999 at 31 percent and 1997 at 164 percent. Current account is in deficit at 4 percent of GDP. Unemployment rate is at 40 percent (2002). Year 2004 foreign exchange reserves including gold at $145 million USD. External debt is at 40 percent of GDP (2004).

CURRENCY: ISO Symbol ĎTJSí, Tajikistani somoni. At time of review on November 25, 2005, the exchange value for the somoni is at 3.195 TJS to the US-dollar (USD) and/or 3.76 TJS to the EUR, 1.11 TJS to the Russian rouble. The exchange rate regime follows that of float. The somoni has been quite stable over the last 2 years.

CURRENCY HISTORY: the 1998 Russian financial crisis, the loss of the Soviet subsidy impacted the economy negatively during the 1990ís. The Tajik ruble crashed in value since near the end of the civil war. Historical exchange valuations for the former national currency of the Tajik ruble include: January 1997, the exchange rate was at 350 TJR to the USD, February 2000 at 1550 TJR. Previous exchange valuations for the ruble quote an official rate with a corresponding market rate that was significantly higher in valuation (weaker valuation). The former Tajik ruble was replaced by the Tajikistani somoni on October 30, 2000 at a rate of one somoni equal to 1000 old Tajikistani rubles. Historical exchange valuations for the somoni are as follows: year 2004 at 2.97 TJS to the USD, 2003 at 3.06, 2002 at 2.76, 2001 at 2.37 and year 2000 at 2.07.

CURRENCY FORECAST: currency risk for the somoni is prevalent which includes Tajikistanís delicate political situation, domestic political violence, regional instability, infrastructure deficiencies and environmental damage. Improving macro-economic variables and political soundness in addition to the countryís membership application to the WTO bodes well for future currency stability. The surplus in the financial & capital account is greatly attributed to remittances from abroad which is helping to support the somoni exchange valuation and to sustain domestic GDP growth. Finally of importance, Tajikistan holds significant hydropower potential in a region of the world in great need for energy.

UPDATED: November 25, 2005




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