THE PROBLEMS OF RESTRUCTURING INDUSTRY IN TAJIKISTAN
Mavzuna Karimova, Ph.D. (Econ.), Head of the Department of Integration and Foreign Economic Problems, Institute of Economics, Academy of Sciences of the Republic of Tajikistan (Dushanbe, Tajikistan)
In Lieu of an Introduction
In order to create a competitive economy, Tajikistan will have to eliminate the deep-seated existing structural deformations and create a new and improved system of productive forces. This restructuring based on the latest technology should be aimed at providing for society’s real needs and creating a qualitatively new mechanism capable of ensuring the efficient functioning of the national economy in market conditions and its integration into the world economy.
Level of Development of Tajikistan’s Industry
Industry is the most important production branch and the material foundation of industrialization. It also has a decisive impact on the level of society’s economic development. It was precisely an increase in the output of the industrial branches (over the past two centuries) that led to the dramatic changes in human life.
Despite the fact that, in terms of growth rates, the service sphere is the most advanced of the production branches, the role of industry in the economic structure is high. The efficient functioning of industrial enterprises is a key factor in ensuring sustainable economic growth.
Restructuring of Tajikistan’s industry is a rather arduous process, which is mainly related to the special features of the national economy.
First, the Tajik economy, which is predominantly developing in the raw material vector, is inflicted with “illnesses” of its own making. In addition, it has unrelated branches and enterprises which are poorly oriented toward the needs of the domestic market. Today, the available production potential is being used to manufacture intermediate products that are much lower in price than final goods.
Second, the products manufactured are not competitive; spontaneous market relations and the civil war have generated serious changes in the production structure which led to a reduction in its volume.
The economic reforms should primarily affect the real sector of the economy and its main branch, industry, which accounts for approximately 21.3% of the total volume of commodity production and services. Over the past 8 years, a stable increase in the volume of industrial production has been observed, whereby the highest rates of development are seen in the manufacturing industries; the share of heavy industries amounts to approximately 60%.
The country’s participation in the world division of labor, its high export potential, and the income it receives from foreign trade activity depend on the degree of development of the industrial sector of its economy. The export structure is the most important index of the country’s specialization in the world division of labor. In Tajikistan, it is predominated by the raw material vector, which predetermines the unequal exchange of………….