ECONOMY

Sobir KURBANOV

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Sobir Kurbanov, National Program Officer for Economic Affairs, Swiss Cooperation Office in Tajikistan (Dushanbe, Tajikistan)

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By the beginning of 2005, the republic had achieved significant positive results. These were due to the course taken by the government and society as a whole several years ago in order to stabilize the sociopolitical situation in the country, enhance business activity and improve the investment climate. As a result of these efforts, the average annual rate of economic growth in 2000-2004 was around 10%, and per capita GDP rose from $170 to $310. Another point to note is that from 1999 to 2004, according to the World Bank, the poverty rate fell from 80% to 64%.

In the economic sphere, the country has strictly followed the recommendations of international financial institutions, so that growth has been accompanied by macroeconomic stabilization achieved through measures to tighten monetary policy, reduce inflation (from 38.6% in 2001 to 5.7% in 2005), stabilize exchange rate policy (while maintaining a freely floating exchange rate without any sharp fluctuations in recent years), and improve fiscal performance (from 2001 to 2005, budget revenues increased from 15.2% to 17.9% of GDP). In the process, the government has managed to maintain a fiscal balance, with the absolute figure for budget revenues nearly doubling from $220 million to $400 million. This increase was achieved by broadening the tax base in the real sector, mostly in private business (including the service sector), and by improving tax compliance for sales tax.

But in 2005 (in contrast to earlier years), real GDP grew by only 6.7%, including 8.5% in industry and………………

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