The industrial development dynamics in the Republic of Tajikistan

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State key laboratory of environment change in arid lands

Xinjiang Institute of Ecology and Geography

University of Chinese Academy of Sciences

Tajik Academy of Sciences

The industrial development dynamics in the Republic of Tajikistan

Odinaev M., Yang De Gang,

Aminov J., Okhonniyozov M.,

Ab. Bakhromshokh, Saidaliev I.

Dushanbe, Tajikistan

Abstract

This article analyzes the realization of the Radiological Industry of Tajikistan in the Republic of Tajikistan. For the purpose of the establishment of the enterprise, the International Labor and the International Trade Organizations of the Republic of Tajikistan have the opportunity to develop and expand the production of goods and services, as well as the export potential of the country. Thus, the elimination of non-materialization of the country and the transformation of Tajikistan into industrial-agrarian country is a viable and important strategic objective of the further development of the national economy. The experience of many developed countries shows that the state cannot provide its economic independence without the industry or industrial sectors. Therefore, the Government of the Republic of Tajikistan considers the industrialization of the country as a strategic goal and trying to transform the country from agrarian-industrial to industrial-agrarian country.

Key words: Enterprise establishment, production economics, transition, statistics.

Introduction

Tajikistanhas experienced steady economic growth andachieved rapid poverty reduction over the past two decades, mainly due to a favourable external environment. However, Tajikistan's economy is highly dependent on remittances, agriculture and a small exports base. Population, of which 83% are rural inhabitants. The irrigated river valleys of Khatlon around Kurgan-Tube and Kulob were among the most productive growing regions in the USSR. Part of the reason for this is the extensive irrigated infrastructure that supplies up to 320,000 ha of arable land in the region. Cotton is the main crop of the region, although there is a degree of diversification with other crops such as wheat, rice, potato's, vegetables, Lucerne and some sub-tropical fruits such as lemons and oranges. The GBAR, in the east of the country, accounts for 45% of the country's total area, but only 3% of the total population. Given that it is situated in the mountainous area of the country, it has very little scope for agricultural production, but has important areas of pastures.

Figure 1. Administrative map of Tajikistan

The Regions of Districts of republican subordination (situated close to Dushanbe) occupy about 20% of the country's total area, account for around 25% of the population, of whom around 90% are rural inhabitants. Cotton is also a dominant crop in this region, although there is a fair degree of crop diversification, the main concentration of which is on consumer products, mainly for the Dushanbe market [2-4].

Tajikistan's light industry is based on its agricultural production and includes cotton-cleaning mills and silk factories; the Dushanbe textile complex is the country is largest. Other branches of light industry include the manufacture of knitted goods and footwear, tanning, and sewing. There is a large carpet-making factory in Qayroqqum. Food-processing industries concentrate on local agricultural products, which include grapes and other fruits, various vegetable oils, tobacco, and geranium oil, which is used in perfume. The metalworking industry produces looms, power equipment, cables, and agricultural and household implements.

The transition to a market economy took place in Tajikistan in very difficult conditions. After the destruction of the single national economic complex, Tajikistan lost its traditional market, which resulted in the economic crisis. In the period from 1991 to 1997, the country's Gross Domestic Product (GDP) fell by about 70%. There was a sharp decline in the standard of living of the population: the average wage reached the equivalent of less than $10. About 85% of the population are below the poverty line. The situation has been aggregated by the civil war, which lasted about five years until 1997. There was a significant deterioration in general economic indicator in industry. The volume of production in the fuel, food, machine-building, chemical and other industries decreased at times [5]. This trend continued until 1997. After this period, there was an increase in the dynamics of industrial indicators. Nevertheless, the decline in the share of industry in the economy of the Republic continues, the process of deindustrialization of the country is taking place. The country's economy is gradually turning into an agrarian-industrial one, which does not contribute to the employment of growing labor resources and to ensuring a high level of development. Without a powerful and dynamically developing industry, there cannot be an effective economic system. Therefore, the main priority task is the development of an effective industrial policy that takes into account the conditions of the transition economy and provides for the restoration of industrial potential. The selection and support of the most viable enterprises and industries that can create a breakthrough in the economy, compensate for the decline in production in less viable spheres, will serve as a determining factor in the economic development of the country [6].

The republic is currently witnessing a process deindustrialization. Therefore, according to official sources, the number industrial enterprises in 1991 amounted to 2 308 units, in 2009 there the number was reduced to 1,331 units. The ratio of public and private enterprises in 2009 amounted to 60 to 40. Such a high trend cuts to industrial enterprises threatens to turn in the future a republic from an agro-industrial state to an agrarian country, where industry share will be minimal [7, 8].

With the proclamation of market principles of management, many countries the problem of assessing the degree of rationality and effectiveness of economic policy of regulation of both the economy as a whole and its foreign trade sector. The effectiveness of foreign trade policy can be determined by correlating the level and nature of export-import transactions to national interests of the state. In addition, effective foreign trade should reflect the degree of gain from international cooperation, participation in the international division of labor. In the long term, the international specialization of the economy should be directed primarily toward the achievement of strategic objectives, and not solve rather important, but current tasks [9].

As experience of functioning of economy of Tajikistan shows, for last two significant changes in the field of formation and implementation have been observed for decade's foreign economic policy. This process is largely related to the need for accounting globalization and integration factors of economic development, which along with positive results are associated with serious risks and negative consequences [10].

In turn, the aforementioned aspects allow to strengthen the country's economic potential and at the same time to expand the export of finished products, which will contribute to achieving sustainable economic growth. In this context, it can be noted that through a deep expansion of investment, growth in various structures of the national economy can be achieved. In particular, investments in light industry allow creating a wide net of spinning production, which can contribute to a double increase by 2020 of the share of cotton fiber processed in the country (currently it is processed only 10-12%). It will enable large-scale development of knitted, textile, sewing production expand the range of manufactured finished products, improve the structure of the export potential of the republic, increase the production of many new goods and move from their imports [11]. Resolving the industrialization of the country requires a comprehensive change in the structure of employment. According to NSDT (National Strategy Development of the Republic of Tajikistan) 2030% of the sector's services sector in the employment sector in 2016-2030 from 27.6 to 60%, the industry is growing from 3 to 15-20%, and in turn, employment in agriculture decreases, with 70% increase in rural employment industry sectors, social sector and education in vocational education institutions. During the implementation of the NSDT- 2030 in the industry of the country is expected to increase 3 times more job.

Thus, for the years 2006-2015, the country's industry grew rapidly, but it was not enough to prevent the excess production of the country. The downturn of the sector's share of GDP in the country's GDP continues to decline and in the beginning of the 21 century, Tajikistan plays an aggressive and industrial state: the share of agriculture and industry in the GDP structure of the country in 2016 is 23.3% and 12.5% "he said.

It should be noted that the fall of the share of the industrial sector in the country's GDP is due to the low level of processing of raw materials and negatively affects the effectiveness of industrial production. For this reason, the number of harmful firms increased year by year in the country. If in 1996, 311 units and their total damage amounted to 28.9 million. Therefore, in 2015, this figure was 730 in 1981.9 million rubles [14].

Data and Methods

In the stage of the analysis, the data of the republican and regional statistical reports from 1991 to 2015 were used. The lack of data for 2016 is due to the long collection and late publication of statistical data. The Agency for Statistics under the President of the Republic of Tajikistan [15].

To make further analysis and reach the aimed objectives of the study and making it possible for understanding the industrial development in the targeted study area, firstly, it was necessary to go to Tajikistan for a field study and data collection for a couple of months in late summer, early autumn time of 2018. The aims of the conducted field study were to collect data after Soviet Union for the period of 1991-2017 from Ministry of Industry and New Technologies of the Republic of Tajikistan, Agency for Statistics under the President of the Republic of Tajikistan and Ministry of Economic Development and Trade of the country. The framework of the study is a literature review for understanding of the current situation of the country in this field, gathering information about differences of development of industry.

Results and discussion

With the aim of preventing the excess production of the country, the Government of the Republic of Tajikistan in 2003 adopted Concepts of Development of the country. In this important document, the reasons for reduction of industrial production, factors, opportunities, and directions of development in the country were determined in terms of independence and new market economy. Conceptual concepts in the National Development Strategy of the Republic of Tajikistan for the period up to 2030 are being implemented. In attraction of domestic and foreign investments to the development of imported goods, the contribution of the Free Economic Zone (FEZ), which was established in 20082009, is very large.

Today, according to Ministry of Economic Development and Trade of the Republic of Tajikistan, there were 70 commercial entities registered in four FEZs, with 12 industrial enterprises operating in 2016, including Real, LLC(Limited liability company) "Ravzana Plastik", LLC CMB "Silkoat Boya", LLC "Star Plast", LLC "Tadjprof', LLC "Fortuna Co", LLC "Somon Energy", LLC "Y Servis", LLC "ROSSODJTORG", LLC "Grin Gold", LLC " Aufen, LLC "Egypt-2001", LLC "Taj-Asia". According to the statistics, within the first 9 months of 2016 the industrial products were produced in about 54.8 million Somoni. From four FEZ-s in 2008-2016, 1338.5 million. Dollar Direct foreign investments are attracted[16].

In the period of 2000-2017, the industry was developed with a significant high speed, with numerous J2 of industrial enterprises built and implemented with attraction of domestic and foreign investments. During this period, the number of industrial enterprises in the country increased by 2.1% and the volume of industrial products increased by 1.6 times. In all regions of the country, Districts of republican subordination appears to increase the volume of industrial output (Table 1). The decline in production volumes of industrial products in the Republic of Tajikistan is that in recent years, the largest aluminum producer TALCO has been experiencing a decline in aluminum production, due to its dependence on foreign raw materials. Today, the Tajik Aluminum Company "TALCO" will eliminate foreign raw materials after the introduction of the Talco-Chem- istry company in Yavan district.

Table 1

Industrial development in the Republic of Tajikistan and , its regions in 2000-2017 [13, 14]

Figure 2. The volume of industrial products (million somoni)

Figure 3. The volume of industrial products (million somoni)

export industrial radiological tajikistan

It is worth noting that in the period of state independence a number of quantitative changes has characterized the development of the country's industrial sector. Because of the construction of the new cotton gauze, rubber, textile and sewing enterprises, the country has been able to process the complete cotton raw materials. Over the past few years with a series of spatial firms, including seven companies in Sughd, seven in Khatlon, and in the city of Hisor district, a large cotton fiber plant has been built and commissioned with the capacity to process more than one year 100,000 tons of cotton fiber.

Providing eight cotton ginneries has been constructed and put into operation in the period of years 2000-2017 for the production of cotton fiber in Farkhor, Khuroson, Bokhtar, Danghara, Jayahun and Yovon regions of Khatlon province, each of which can be used in one year starting from 20 up to 50 thousand.

For 2006-2012 the joint ventures of Tajikistan and Great Britain "Khodjent-Corton TD", "Hodjent-Her- mes ComuneiTTT", "South-Western mobile networks", joint ventures of Tajikistan and Germany, "Makhmuronon", "Muller and Shell", "Gazpromneft", as well as joint ventures of Tajikistan and India, "Car- wel Oversized Limited", "Tajik Metals and Minerals", "Golf Tour", "Sky Network" and joint ventures of Tajikistan and Russia [17]. Since 2007, the establishment of joint ventures with the participation of Chinese companies in the mining industry, chemicals, and textile and construction materials, including the production of cement, it should be noted that the establishment of joint ventures to promote the growth of the export potential of the country, reducing the import of goods to the country, and thereby improving the balance of foreign trade balance.

This can be seen in the case of joint ventures for production of cement. In 2010-2015 in the Sughd province, Vahdat and Yovon districts have been constructed tons of raw cotton. In addition, weaving and sewing enterprises were put into operation in some cities and districts of the republic.

After completing the full text of the Joint-Stock Company "Huntai Danghara Sink - Water Text", whose capacity is more than 52,000 tons of cotton fiber, we can provide full cotton raw materials to the final product. With the establishment of national and inter-state enterprises and modernization of modern technologies, we have made significant achievements in the development of natural resources and the diversification of industrial production in the country during the state independence. Today, the number of enterprises in the mining industry has reached 214 units and 2071 in the processing industry, production of coal, oil and petroleum products, nonferrous metals and metallurgy. Annual production of coal in the years of independence has increased from 313 to 1041.9 thousand tons. Increased by 3.3 times and put into operation a series of joint Tajik-Chinese joint production of cement. As a result, the production of cement in the country was 198,000 thousand tons up to 1450 thousand tons and this would allow imports to be reduced by three times. We have saved $56 million from the reduction of three imports of cement in 2015. Therefore, we have to deal with other types of imports, which have the technical and technological capacities and the favorable natural environment for them to produce their products.

Meanwhile, the republic has quite large natural and agricultural resources to ensure accelerated development industrial capacity, cotton for the development of light industry, various mineral and ore deposits for the development of metallurgy and engineering, enormous hydropower resources for development of electric power industry, all these features today practically not used. As we have noted, industrial, the complex of the republic consists of several independent branches; which in the structure of industry is ranked depending on their feedback and importance.

Table 2

The structure of the industry in total million somoni [14]

Figure 4. The structure of the industry in total million somoni

As shown in the table, in 1991 the share of such industries as light and food industry, nonferrous metallurgy, energy was prevailing in the industrial structure of the republic. In total, the proportion of four industries in 1991 was 77.1% of total industrial output. If in the early 90 easy, industry dominated the structure the country's industry, then in subsequent years, this trend begins change: there is a decrease in the proportion of the industry in the structure industry. In 2009, the share of this industry was only 10.8%, the most declining compared with 1991, 38.4%. Industry growth non-ferrous metallurgy, from the end of the 90s to the present day, is bound above all with the work of the Tajik Aluminum Plant, which remains working industrial enterprise of the republic. In 2017, the share of non-ferrous metallurgy in the structure industry of the republic was 38.6%, which is lower than for example, 2008 by 0.7%. This is primarily due to higher prices for alumina ore, as well as lower prices in global stock markets on aluminum due to the financial and economic crisis.

It should be noted that for the analyzed period - 2017 to 1991-there is an increase in food, construction, and in energy industries. An analysis of the industrial structure of the republic shows us that 26 years of independence, the share of such industries has decreased quite sharply, industries like chemical and petrochemical, woodworking and pulp and paper, mechanical engineering and metalworking. Therefore, the state, along with other industries industry, more attention needs to be paid development of these industries. Otherwise, through a certain period of time the value and proportion of these industries will undergo further decline.

Conclusion

Industrialization of the country and achieving the forecasted indicators of the socio-economic development of the republic in SEZ-2030 are dependent on the national economy with highly skilled personnel that meet the demands of national and international labor market. The need for industrialization of the country was due to the decline in industrial production in the 90s of the 20th century and the decline in the majority of industrial enterprises that were unable to compete with market conditions. It should be reminded that in 2000, the number of industrial enterprises in the country increased from 2308 to 1179 units or 2.1 times, the volume of industrial output increased from 10246 million somoni to 4316 million somoni or 2.5 times lower and in the country, the excess production started.

References

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16. Source: Compiled by the author according to: Industry of the Republic of Tajikistan. Statistical Agency under the President of the Republic of Tajikistan / Real Sector. Industrial output in constant prices 1980-2009. Dushanbe, 2005-2018, 1980-2009.: p. 1214.

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