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EASTERN EUROPE AND
CENTRAL ASIA AGROINDUSTRY DEVELOPMENT
COUNTRY BRIEF
2014
TAJIKISTAN
Contents
Agro-industry national policy framework ........................................................................................................................ 2
Economic and social development and trends .............................................................................................................. 3
Agro-industry outlook and performance ......................................................................................................................... 5
Trade liberalization, WTO accession and trade performance.................................................................................... 8
Foreign direct investments ................................................................................................................................................. 11
Food safety, certification & quality control ................................................................................................................... 13
Business environment and competitiveness ............................................................................................................... 13
1
Key Economic Indicators1
2009
2011 2012
2013
Food&Beverages Indicators
2009
2011 2012 2013
GDP (PPP), current intl.$, billion
14.6
17.3
18.9
20.6
Value Added, % of manufactur.
n/a
n/a
Manufacturing VA, % of GDP
14.4
11.0
10.8
11.2
Enterprises, % of manufacturing
n/a
Agriculture VA, % of GDP
20.9
27.2
26.6
27.4
Employment, % of manufacturing
Employment in Agri., % of total
n/a
n/a
n/a
25.6
Gross Fixed Capital F.,% of GDP
14.3
15.5
15.4
0.3
1.0
Merch. trade., % of GDP
71.9
Merch. exports, curr. US$ billion
Merchandise imports, US$ bln
n/a
n/a
n/a
n/a
n/a
9.3
n/a
n/a
n/a
Investments, % of manufacturing
n/a
n/a
n/a
n/a
14.1
FDI inflow, % of total inflow
n/a
n/a
n/a
n/a
2.6
n/a
Net food trade, US$ billion
n/a
n/a
68.4
67.3
n/a
Food exp.,% of merch. exp.
n/a
n/a
n/a
1.01
1.26
1.36
n/a
Food imports, % of merch. imp.
n/a
n/a
n/a
2.57
3.21
3.78
n/a
Food exports, 2006-11 growth. %
4.7
Exports annual growth, %
7.1
6.2
5.9
5.5
Food imports, 2006-11 growth. %
11.6
Imports annual growth, %
7.7
6.7
6.2
5.9
Food prod. index (2004-06=100)
145
n/a
GNI per capita, PPP 1’000 c.intl.$
1.9
2.2
2.3
2.5
Agribusiness Indicators Value
FDI net inflows., % of GDP
Trade per capita, US$ 2010-2012
Doing Business Indicators Rank
Global Merch. Exports Rank 2012
Imports Rank 2012
141
700
FDI inflow rank
143
Global Competitiveness Index
-0.4
115
n/a
n/a
130
2.03
155
100
n/a
145
135
Agro-industry national policy framework
National development programmes: The key documents that set out the Government policies of Tajikistan
for overall economic development as well as for agriculture, rural and agro-industry development include: (i)
the National Development Strategy for the period until 2015; (ii) the Agrarian policy concept, food security and
agriculture investment plan for the comprehensive agrarian reform in the period 2010-2015 (with projected
investments at US$ 1.28 billion or US$ 200 million per year which is equivalent to 3-4 percent of GDP) were
prepared as a part of the NDS and PRS-3 (2009); (iii) the Programme of Economic Development for the period
until 2015 (2004); (iv) the National Disaster Risk Management Strategy (NDRMS) for 2010-2015; (v) the
Development Programme for Cotton Industry for 2010-2014; (vi) the Development Programme of Seed Industry
for 2010-2014; (vii) the State Investments, Grants and Capital Construction Program for 2012-2014; (viii) the
programme “200 Days of Reform” and “One‐stop Shop”, which simplified administrative and legal process.
The new Nutrition and Food Safety Strategy for Tajikistan (2012-2020) has been developed to establish nutrition
and food safety goals and provide a coherent set of integrated actions, spanning different government sectors
and involving public and private actors and to be considered in the national policies and health system
governance. The strategy is the result of a truly multi-sectoral effort at country governmental level coupled with
combined efforts namely of WHO, UNICEF, WFP, the WB, USAID and NGOs. The strategy was approved at the
highest government level in late 2012.2
Tajikistan is a recipient of significant international aid. In 2009 the Government of Tajikistan and 12
Development Partners from International Organizations signed a Joint Country Partnership Strategy for 20102014, then the Country Partnership Strategy 2015-2018. Donors hold Food Security cluster meetings as a focus
on coordinating emergency response in the field of food security, agriculture and nutrition in Tajikistan.
1
World Bank Indicators, ITC & UNIDO databases, accessed in August 2014. Author’s calculations
2 http://www.euro.who.int/en/what-we-do/health-topics/noncommunicable-diseases/diabetes/news/news/2012/9/tajikistandevelops-strategy-to-tackle-nutrition,-diet-and-related-noncommunicable-diseases
2
Moreover, the Donor Coordination Council was established with the purpose of improving multi-way flow of
relevant information among donors, government agencies and civil society institutions. Together with the UN
organizations Tajikistan elaborated the United Nations Development Assistance Framework (UNDAF) for 20102015. Tajikistan and the EU signed the Partnership and Coordination Agreement 2004 and it entered into force
2010 with a focus of the EC assistance on rural development and poverty reduction, agriculture and land reform,
promotion of good governance and economic reforms.
Legal framework: During the past decade, Tajikistan has adopted several government resolutions and
legislations to slowly reduce government intervention in land use and planning, as well as to encourage a
growth of agriculture and agro-industry and rural development, among those are: the Law on Privatization of
State-Owned Property, which encourages the participation of foreign investors in the privatization of the
national economy; the Law on Food Safety (2012); the Law on Poultry (2010); the Law on Innovation (2012), the
Law on Plant protection (2012); the Law on Food Security (2010); the Land Code (1996, latest amended in 2012);
the Decree of the GoT on Resolution of Cotton-Growing Farms’ Debts and Improvement of Financial Conditions
for Agricultural producers (2008); the Presidential Decree on Additional Measures to Support the Agricultural
Sector (2009), the Resolution on Reforming Agriculture (2009); the Law on Dehkan Farm (2009); the Law on the
State Protection and Support of Entrepreneurship (2002, amended 2007), the Law on Geographic Indications
(2007); the Law on Public Procurement of Goods, Works and Services (2006).
Supporting institutions: The main state bodies related to agriculture and agro-industry development in
Tajikistan are the Ministry of Agriculture, the Ministry of Water Resources and Land Reclamation and the Ministry
of Economic Development and Trade. To support reforms activities in the country the Working Group on
Agriculture Reform was created, which comprised six sub‐working groups for covering following issues: (i)
water and irrigation; (ii) land reform; (iii) new mechanisms of agricultural financing; (iv) rural social development;
(v) local government reform; and (vi) cotton debt write off. Other supporting institutions were established such
as: the Public Organization “Sugdagroserv Consulting” (2010) with Agricultural Information Marketing System
(AMIS) for providing services to the management of agricultural business; the State Committee on Investments
and State Property Management (2006) with a focus on the foreign aid coordination.
Economic and social development and trends
Economic and social development: Tajikistan is a landlocked and low income country with GNI per capita of
constant 2005 US$ 411 in 2010 and 470 US$ in 2013. The total population is 8.1 million inhabitants, of which 75
percent live in rural area, and the annual population growth is 1.9 percent. Tajikistan enjoyed strong economic
performance and macroeconomic stability with 15.2 percent of annual growth on average between 2000 and
2008. As a result of the global economic crisis, GDP declined by 8.1 percent in 2009. In 2011 GDP growth
accelerated to 7.4 percent and this rate stayed the same in 2012 and 2013 as well, driven to an important extent
by increasing aluminium prices in 2011, continued high remittance growth and the largest-ever cotton harvest.
The economy was highly agriculture-dependent in the last century and it still remains the main employer.
However, by 2013 only 25 percent of the total labour force was employed in agriculture. In value terms,
agriculture has increased by 7.8 percent on average annually between 2000 and 2011, boosted mostly by an
increase in non-cotton agricultural production.3 In 2009 – in accordance with the Cotton Debt Resolution of US$
580 million – the government of Tajikistan, with the help of donors, resolved a long-standing problem of
accumulated debt on cotton farms by writing debts off. This allowed new commercial financing to the
agricultural sector. In 2013, the agricultural sector contributed 27 percent of value added to GDP with annual
growth of 10 percent in 2011, 2012 and 2013, despite difficult climatic conditions. Cotton production shot up
by 34 percent, reflecting a 30 percent rise in the area devoted to cotton, as high international prices encouraged
additional planting. Other crops, particularly fruits and vegetables, also showed double-digit growth.
Manufacturing industry generated about 11 percent of GDP in 2012 and 2013, experiencing some stagnation
between 2009 and 2011 after 25 percent average growth between 2000 and 2008. From 2011 to 2013,
manufacturing industry grew by 8.6 percent annually on average.
3
http://www.stat.tj/ru/analytical-tables/real-sector/
3
Chart 1. Evolution of value added to GDP in Tajikistan (percent)
Source: WBDI, accessed in October 2012; UNIDO database; National Statistics; Author’s calculations
Growing demands and trends: The share of total household expenditure spent on food and beverages
declined to 59 percent in 2011 compared to 87 percent in 1999, and further declined to 56.7 percent by the first
quarter of 20134. Even though it has decreased over the past decade, expenditure on food increased from 56
percent in 2010 due to rising prices.5 In 2011, the share of expenditures spent on food in urban areas had
increased by 3.1 percent as compared to 2010, while in rural areas it had increased by 3.5 percent.6 In the total
structure of household spending on food, bread and bread products occupies the first place (36 percent), which
exceeded the approved medical norm by 22.8 percent in 2011. Other products in food consumption are meat
products, sugar & confectionery and vegetable oil. Expenditure on alcoholic products is very low due to cultural
traditions. Demand for beverages, dairy products and high quality meat and fish is growing in the capital due
to an increasing number of expatriates.
Tajikistan heavily depends on international trade to meet its domestic food demands and it has also been a
significant food aid recipient over the past decade. Tajikistan imports more than 50 percent of domestic
consumption of wheat and its products from international markets, especially Kazakhstan.7 Nearly threequarters of total vegetable oil consumption and almost all of sugar consumption are based on imports.
Moreover, nearly half of total meat consumption, including about 30 percent of beef and 80 percent of poultry
meat, also depends on imports. In 2012, the five top agricultural products in terms of values in Tajikistan were:
cotton lint (173 million Int$), potatoes (137 million Int$), sheep meat (123 million Int$) tomatoes (121 million
Int$)), , and cow milk (108 million Int$).8 Besides, the important commodities of domestic production are
almonds, cottonseed, apricots, goat milk and wheat.
Tajikistan has one of the lowest per capita GDP among CIS countries and it is very vulnerable in food price
changes. The most important sources of cash incomes of households in 2013 continued to remain labor
incomes (50.1 percent) and receipts from sales of agricultural products (8.1 percent). In 2011 non-employment,
4
TAJSTAT Food security and poverty 2013
http://www.stat.tj/ru/analytical-tables/real-sector/
6
Statistical Agency under President of the Republic of Tajikistan, 2012
7
IFPRI (2012) Economic Development, External Shocks, and Food Security in Tajikistan. Prepared by K.Akramov & G.Shreedhar
8
FAOSTAT, accessed in November 2014
5
4
i.e. unregistered jobless, is reported to be around 60 percent of the active population, comprising some 33
percent of workforce in overseas occupations and 27 percent working unofficially. Because of a lack of
employment opportunities in Tajikistan, as many as a million Tajik citizens work abroad, mainly in Russia and
Kazakhstan, supporting families in Tajikistan through remittances likely to be in excess of US$ 2.4 billion per
annum officially recorded by the National Bank of Tajikistan in 2010.9 The unreliability of available data can be
demonstrated with the official rate of unemployment, which was reported to be 2.5 percent in 2013.10
Despite 10 years of sustained economic growth and achievements in reducing poverty levels, the main
challenge for Tajikistan still remains poverty and the low standard of living of the majority of its people.11 In
2009, about 46.7 percent of Tajikistan’s population lived below the national poverty line, and nearly 80 percent
of the poor population resides in rural areas. According to the World Bank and the UNDP Tajikistan made a good
progress and the poverty rates have fallen between 1999 and 2009 from 83 percent to 47 percent. Increase of
food prices has negative implications on food security. 12
Agro-industry outlook and performance
Agro-industry background and challenges: The importance of agriculture to Tajikistan’s long-term food
security, as well as overall economic development and poverty reduction13, contrasts with the comparatively
small area of arable land (less than 7 percent of total area) as Tajikistan is a mountainous country. The collapse
of the Former Soviet Union and it is centralized system as well as the civil war (1992-97) severely damaged the
economic infrastructure and caused a sharp decline in manufacturing and agricultural production. Tajikistan
has taken significant steps towards deepening economic reforms, restructuring the national economy and
developing international relations. Foreign trade and currency transactions have been liberalized. All of the
country’s acting small enterprises and approximately 70 percent of the medium-sized and large enterprises
have been privatized. Progress with agricultural reform in recent years includes liberalization of cotton sector
prices and production under the “freedom to farm” decree, cotton debt resolution, and the drafting (but not
yet adoption) of a new land code that makes land tradable.14 However, according to EBRD Transition report
2012, progress with agricultural sector reform has been slow. Several initiatives are ongoing but little progress
has been made with none brought to completion. The sector remains heavily controlled by the state. The
development of the sector is being held back by limited access to finance, insufficient protection of property
rights and the lack of the necessary infrastructure for non-cotton agriculture. Productivity remains low and the
sector is still highly dependent on cotton production.
Agricultural production is fragmented, with very few large farms. Since 1999, nearly one-quarter of arable land
has been controlled by more than 740 000 traditional household plots that have an average size of 0.3 hectares
per holding. In recent years, the crop patterns have changed in favor of food and high-value crops. During the
transition period, the crop sector’s share in gross agricultural output increased from 67 percent in 1990 to 98
percent in 200815. This is a result of faster growth in the crop sector and stagnation in the livestock sector.
After independence in 1991, the output of the food processing sector sharply declined, reaching an all-time low
in 1999. The breakup of the centralized planning and sales system and the lack of financing to run operations,
coupled with political and economic instability, resulted in the sector’s critical state. Tajikistan was a large
producer of fruits and vegetables in the former Soviet Union, with annual exports outside of the republic
reaching 200 000 tonnes (100 000 tonnes of fruit, 60 000 tonnes of vegetables and 30 000-40 000 tonnes of
canned food) prior to 1990.16 Exports of processed vegetables, fruits and their preparations (mainly fruit
concentrates, fruit and vegetable juices) amounted US$ 1.8 million in 2012, which was five times less than in
9
The Impact of the Economic and Financial Crises on Agriculture and Food Security in Europe and Central Asia: a Compendium
TAJSTAT Food Security and Poverty 2013
11
EC (2011) DCI indicative Programme 2011-2013
12
IFPRI (2012) Economic Development, External Shocks, and Food Security in Tajikistan. Prepared by K.Akramov & G.Shreedhar
13
The Impact of the Economic and Financial Crises on Agriculture and Food Security in Europe and Central Asia: a Compendium
14
FAO/EBRD (2012) Innovative agricultural finance and risk management Strengthening food production and trade in the transition
region. Working Paper of Investments Centre. Prepared by L.Rutten
15
Tajikstat
16
http://globalimpactconsulting.com/47/3/2/hot_sectors/food_processing/tajikistan.html
10
5
2002.17 The majority of canning factories are located in the northern part of the country but the wheat and
cotton processing industries are mainly located in the central and southern parts of the country. Tajikistan’s
food-processing industry includes canning, meat and milk processing, flour-milling, baking, fruits drying and
brewing. Enterprises sell mainly to domestic market. Tajikistan has a great potential for growth in the food
processing industry in order to meet domestic demands of high quality food products as well as to increase and
improve export-oriented products.
Despite the fact that organic products have become more popular and expensive commodities in developed
countries, organic production in Tajikistan is at the initial stage with no existing regulations. The share of organic
land accounts for only 0.01 percent of total agricultural land with only 75 registered producers in 2010.18 The
country has all the terms and conditions for organic farming. Until now farmers in Tajikistan have successfully
grown organic cotton. But there is great potential for organic production of various fruits, berries, nuts, legumes
and vegetables. Tajikistan has one of the greatest wild collection area of 1.06 million hectares.19 The dried
apricots from Tajikistan have no great potential on the global market since Turkey and Iran produce cheap and
high quality organic dried apricots, but dried fruits, nuts and honey produced in Tajikistan, have potential on
the fast-growing and as yet unsaturated markets in CIS countries.20
Serious constraints for food-industry development are: extremely fragmented agricultural production, low
productivity of both agriculture commodities and labor; the lack of a well-organized extension service and
information networks; outdated equipment and technologies of food processing and packing; the deficit of
qualified workers and of good infrastructure for physical trade, including warehouses and grading laboratories;
a weak legal and regulatory regime, especially on food safety; and widespread corruption.
Food & beverage industry performance: The food and beverage industry forms a modest part of the
economy, but it is the second-largest contributor to gross industrial output. In 2009 Tajikistan’s food processing
industry together with the milling industry amounted to around US$ 82.4 million or 26.8 percent of the total
industrial output. The output has decreased by 6.3 percent compared to the 2007 level when it was the top
food industry output, experiencing a steady growth in both real terms and a contribution in GDP after social
crises in 1990s.
F-processing industry employs around 10 000 people (about 10 percent of the industrial labor force). Labor
productivity is low. There are over 600 companies in the F&B sector, which are largely private small or mediumscale enterprises, operating seasonally and selling products to local markets. In 2008 the F&B industry,
excluding milling industry, accounted 265 enterprises operating (or about 20 percent of total number of
manufacturing enterprises).
The food-processing sector in Tajikistan has 21 sub-sectors, including flour, macaroni, canned vegetables,
canned fruits, fresh and dry fruits, meat and dairy processing, feed and confectionary production, as well as
production of tobacco and alcohol. Dairy and meat sectors are underdeveloped. The F&B industry performance
is not stable over time in terms of output and employment share. The industry has a strong demand for capital
investments. Opportunities exist in fruits and vegetable processing, vegetable oil and food-organic production
and the development of fish and wine industry.
17
ITC database, accessed in October 2012
Research Institute of Organic Agriculture FiBL and International Federation of Organic Agriculture Movements IFOAM, 2012,
http://www.organic-world.net
19
www.fibl.org Organic Agriculture Worldwide 2014
20
http://www.agroinform.tj/index.php?option=com_content&view=article&id=449:gjnty&catid=45:analitika&Itemid=128&lang=en
18
6
Chart 2: Evolution of food production in Tajikistan over time
Source: WBDI 2014. Note: There is missing information on employment and number of enterprises in milling branch after 2003, which
is the largest part of the food manufacturing
Chart 3. Distribution of output in food & beverage sub-sectors of Tajikistan in 2007
Source: Author’s calculations are based on national statistics, analytical reports
7
Trade liberalization, WTO accession and trade
performance
Trade regulation and trade unions: Tajikistan has made progress in reforming its trade regime in order to be
fully compatible with WTO rules. As part of the accession process, Tajikistan has agreed to undertake a series of
important commitments to further open its trade regime and accelerate its integration in the world economy.
From the date of accession, Tajikistan has committed to fully apply all WTO provisions uniformly throughout its
entire territory, including in regions engaging in border trade, special economic zones and areas where special
regimes for tariffs, taxes and regulations were established. Tajikistan has agreed to accept “bound” rates, i.e.
maximum ceiling levels, for all its import tariffs. Tariffs will be “ordinary customs duties” only, within committed
levels, with no additional duties and charges. Tajikistan concluded six bilateral agreements on market access
for services and 13 on market access for goods.
Currently, the legal basis is with the Law on the State Regulation of Foreign Trade (1999), the Customs Code
(2004) among others. The rates of customs duties for the goods imported to the Republic are established by the
Resolution of the Government on Customs Tariff (2003) and ranges in accordance with a type of goods at rates
of 0 percent, 2.5 percent, 5 percent, 7 percent, 10 percent and 15 percent. Due to the regime of free trade the
zero rates are applied for imported customs duty for imported goods produced in Russia, Kazakhstan, Belarus
and Kyrgyzstan. Customs duties are low and the country does not have strict trade barriers. Simple average of
imports duties for agricultural goods applied in 2011 were 11.2 percent. The excise taxes apply to spirits,
alcoholic and non-alcoholic drinks, vinegar, tobacco and tobacco products.
Tajikistan signed nine FTA and continuing a negotiation with 15 WTO members, among them, the EU, Japan,
Honduras, Canada, the US, Korea, El Salvador and Dominican Republic. Tajikistan expressed its interest to join
the Customs Union, formed by Belarus, Kazakhstan and Russia and being fully introduced as a single economic
space from 1 January 2012.
WTO accession: Tajikistan became a member of the WTO on 2 March 2013, having been negotiating accession
to the WTO since May 2001.
In December 2012, the General Council of the WTO paved the way for Tajikistan’s membership of the WTO by
approving its accession package. Tajikistan was finally ratified in 2013 and became a WTO member in March
2013.21 The statements that follow in this compilation were made at the Ninth Meeting of the Working Party on
the Accession of the Republic of Tajikistan to the WTO in October 2012.
Trade performance: After a steady growth until 2007 merchandise exports have decreased by 5 percent in
2008 and by 28 percent in 2009, exports slowly grew up by 18 and 5 percent in 2010 and 2011, amounting to
US$ 1.26 billion. In contrary, imports showed a steady growth until 2008, amounting US$ .7 billion and sharply
declining by 27.5 percent in 2009 small increase in 2010 and a significant increase by 17 percent in 2011. This
resulted in a trade deficit of US$ 1.93 billion in 2011.
Tajikistan is import-dependent country in F&B products. The trade balance of processed F&B experienced a
negative food balance of US$ 330 million in 2011, higher than any previous year. Food and agricultural exports
and imports together made 8.6 percent and 12.4 percent of total merchandise exports and imports of Tajikistan
in 2011. Processed F&B products accounted for US$ 3.2 million or 0.35 percent of total merchandise exports and
US$ 333.4 million or 8.6 percent of total merchandise imports. In 2009 exports rose in three times compared to
the previous year and fall down to almost the same level in 2010, decreasing almost five times in 2011. Exports
per capita of F&B were US$ 46.5 in 2011.22
The main export commodities of Tajikistan, in general, are electricity, aluminum, cotton fibers and fruits (mainly
fresh and dried). The imports of F&B products are quite diversified and the highest share of imported products
is with milling products and starches products group (32 percent), sugars and sugar confectionery (17 percent),
vegetable oils (12 percent), cocoa preparations (11 percent), and cereal and flour (10 percent). The 56 percent
21
http://www.wto.org/english/thewto_e/countries_e/tajikistan_e.htm
This trade statistic on F&B products were extracted from the ITC database. Due to the fact that Tajikistan does not submit trade
reports to ITC, data is based on the Tajikistan’s partner reported data (Mirror data)
22
8
of exports is made by fruits, vegetables and nuts products, another large commodities group is sugars and sugar
confectionery (29 percent).23
Across partners, exports of Tajikistan’s F&B commodities was not diversified in 2011, where Algeria, Kazakhstan
and Russia shared 93 percent of total exports, compared to relatively diversified imports, where two countries
made 67 percent of total F&B imports.
Top destinations for F&B products: Algeria (60 percent), Kazakhstan (22 percent), Russia (11 percent) and
Kyrgyzstan (2 percent).
Top origins for F&B products: Kazakhstan (34 percent), Russia (33 percent), Ukraine (7 percent), Turkey (7
percent) and Belarus (5 percent).24
Chart 4. Food & beverage and agriculture trade performance over time
Source: ITC (UNCTAD/WTO): Trade Map online, accessed in October 2012
23
24
ITC (UNCDAT/WTO)
FAOSTAT 2014
9
Chart 5. Share of product groups in total exports and imports of food & beverages, top ten products
Share of product groups in total F&B
imports by Tajikistan in 2011
Share of product groups in total F&B
exports by Tajikistan in 2011
3%
2% 2%
1%
1%
2%
1%
5%
5%
3%
2%
1%
5%
32%
10%
29%
11%
56%
12%
17%
Milling products, malt, starches, inulin, wheat gluten
Sugars and sugar confectionery
Vegetable, fruit, nut, etc food preparations
Cocoa and cocoa preparations
Sugars and sugar confectionery
Animal,vegetable fats and oils, cleavage products
Beverages, spirits and vinegar
Cereal, flour, starch, milk preparations and products
Meat, fish and seafood food preparations
Miscellaneous edible preparations
Dairy products, eggs, honey, edible animal product
Beverages, spirits and vinegar
Cereal, flour, starch, milk preparations and products
Dairy products, eggs, honey, edible animal product
Animal,vegetable fats and oils, cleavage products
Meat, fish and seafood food preparations
Miscellaneous edible preparations
Vegetable, fruit, nut, etc food preparations
Milling products, malt, starches, inulin, wheat gluten
Residues, wastes of food industry, animal fodder
Chart 6. Evolution of the top five destinations of exported F&B products by Tajikistan over time
Source: ITC (UNCTAD/WTO). Data is based on the selected products’ groups. Trade Map online, accessed in October 2012
10
Chart 7. Growth of national supply and international demand for exports of F&B products by Tajikistan
in 2011
Source: ITC (UNCTAD/WTO). Data is based on the selected products’ groups. Trade Map online, accessed in October 2012
Foreign direct investments
Strategies, regulations and ranking: The Government is creating favorable conditions for foreign
investments, market structure support, and commercial finance, and banking system development. The Law on
Investment (2007), the Law on Foreign Economic Activities (1993), the Law on International Treaties (1999,
amended in 2005) and the Law on Free Economic Zones (2011) provide the legal basis for foreign investment
in Tajikistan. The State Committee on Investments and State Property Management of the Republic of Tajikistan
coordinate the foreign aid and investments. The established Consultative Council on improvement of
investment climate under the President of Tajikistan allows to the key Government bodies, business, foreign
investors and international organizations participate contribute to the successful of the programme “Improving
Business Environment – 200 Days of Reforms”.25
According to WIR 2012,26 Tajikistan was ranked only 178 (among 181 economies) by the FDI Inward Attraction
Index in 2011, which went down compared to 146 in 2000 (among 178 economies). In order to attract more
investments, Tajikistan lowered the corporate tax.
Tajikistan gives equal rights to domestic and foreign investors, investors are provided with legal protection and
non-interference of Government in business is guaranteed. Foreign companies in Tajikistan are free to open
and maintain bank accounts in foreign currencies and have full currency convertibility on current operations.
According to new laws, enterprises with foreign investments are exempt from income taxes from two to five
years depending on the amount of capital. Moreover, they are VAT and customs duties exempt for a number of
goods imported within the framework of priority projects approved by the Government of Tajikistan. Tajikistan
does not have any limitations on direct investments from abroad. Interest rates are fully liberalized.27
Foreign direct investments flow: In 2010 Tajikistan’s FDI inflows accounted only US$ 15.8 million or 0.28
25
http://www.investin.info/country/tajikistan/10-reasons-to-invest-in-tajikistan/
UNCTAD (2012) World Investment Report 2012: Towards a New Generation of Investment Policies, UN Conference on Trade and
Development NY and Geneva, Switzerland
27
http://www.investin.info/country/tajikistan/10-reasons-to-invest-in-tajikistan/
26
11
percent of GDP experiencing a sharp reduction by 96 percent to the 2008 level, when it was a peak of FDI inflows
to Tajikistan, generating US$ 375.8 million. In 2013 FDI inflows accounted for US$ 108 million28 after 8 million in
2010, 70 million in 2011 and 233 million in 2012.
The vast majority of FDI is directed to the hydroelectric central power plants and banking sector. F&B industry
continues to attract low levels of FDI, mainly supported by international aid. There are two joint-venture
companies in the tobacco industry. The major five investing countries are Russia, China, Uzbekistan, Kazakhstan
and Turkey. More than 210 joint ventures are established in Tajikistan with the main activities in textiles, agroprocessing, construction and construction materials, telecommunications, and mineral resources exploration.
Between 1991 and 2008 only two projects received major investment: (1) US$ 12.6 for million water bottling
plant Obi Zulol and (2) US$ 3.97 million for fruit and vegetable juice packaging line in Khujand.29
Donors’ contributions for development purposes in Tajikistan for the period of 2008-2010 accounted for US$
146 million. Since 1997 to 2010 Tajikistan had signed agreements with donors on grants amounting to a total
of US$ 505 million and has taken out loans of US$ 2.1 billion. Agriculture and irrigation are the sectors that
receive the second most support after the energy sector.
Chart 8. Foreign direct investments in Tajikistan over time
Source: WBDI 2014
28
29
World Investment Report 2014
http://www.investin.info/country/tajikistan/food-and-beverage/
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Food safety, certification & quality control
Food safety background and country’s membership: Tajikistan is not a member of the Codex Alimentarius
Commission and it has a status of correspondent member in the International Organization of Standardization
(ISO).
Issues of protection of human health in general and in particular from food-borne risks are dealt with by the
Law on Sanitary-Epidemiological Safety (2003) and the Law on Veterinary (2003). Food products are a subject
to the new Law on Food Safety (2012); the Law on Consumer Rights Protection (2004), the Decree of the
Government on the protection of the consumer market from the introduction of unsafe food (1999), the
Regulation of the Government on measures for the prohibition of processing of foodstuff, feedstuff (1994) and
the Law on Technical Regulations (2010). There are the Norms on Public Nutrition Services were adopted and
amended with the Governmental Decree in 2005 and 2007.
As part of the WTO accession Tajikistan had to fully implement the WTO Agreements on Technical Barriers to
Trade (product standards and labelling) and Sanitary and Phytosanitary Measures (food safety and animal and
plant health) from the date of accession in 2013.
Quality control and certification: The State Centre for Sanitary Epidemiological Control under the Ministry of
Health and the State supervision on veterinary under the Ministry of Agriculture and Land Reclamation are
responsible for sanitary-epidemiological, veterinary and phytosanitary control in Tajikistan in compliance with
the Law on Food Safety (2012).
The Agency for Standardization, Metrology, Certification and Trade Inspection (Tajikstandart), which is affiliated
with the Ministry of Economy and Trade with 30 accredited laboratories, ensures compliance with standards
and prevents prohibited and non-compliant food products from gaining access to market in compliance with
the Law on Certification of production and services (2002) and the Law on Standardization (2010).
The following normative documents on standardization of the following categories are in force in Tajikistan:
international (regional) standards; interstate standards – GOST (all-Union State Standard); national standards of
the RT – ST RT; branch standards – OST; enterprise standards – STP; technical terms and conditions of the RT –
TU RT. There are above 240 national and GOST standards used for agriculture and food industry in Tajikistan.
Harmonization of legislation with international standards on food safety and quality (i.e. Codex Alimentarius
standards) is still under way. There are still weak official controls over manufacturing of food ingredients and
food products have a negative impact on food safety and quality. HACCP system has not been fully introduced
yet.
Business environment and competitiveness
Retail and domestic market: Domestic retail market is underdeveloped across the country with no
hypermarkets. Retail trade of food products generated TJS 2.6 billion (US$ 600 million) in 2009, accounting for
47.5 percent of total retail turnover.
Business environment: According to the Doing Business Report,30 Tajikistan has made steady progress over
time and improved significantly since 2005 in starting a business by implementing a one-stop-shop and
simplifying business registration procedures; in strengthening investor protections by regulatory practice and
making it easier to sue directors in cases of prejudicial related-party transactions, and in dealing with
construction permits. The economy was ranked 143 (out of 185 economies) in 2014 (5 points up compared to
2010; 8 points down compared to 2006). Trading across the borders is ranked 188, paying taxes – 178,
protecting investors – 22, getting credit – 159, and starting business – 787. Tajikistan made starting a business
easier by allowing entrepreneurs to pay in their capital up to one year after the start of operations, thereby
eliminating the requirements related to opening a bank account. Access to credit using movable property in
30
WB/IFC (2014) Doing Business 2014
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Tajikistan became more complicated because the movable collateral registry stopped its operations in January
2011.
Tajikistan is ranked 8 out of the top 50 economies the most improved overall (by 17.6 percent of points) in
narrowing distance to frontier since 2005 until 2013, as well as by 55 percent in starting business and by 52
percent in protecting investors. Tajikistan has good practice around the world in protecting investors by
allowing access to all corporate documents before the trial. While still being among the most difficult countries
in dealing with construction permits, Tajikistan has narrowed the distance by 48 percent to frontier in 2013.
However, Tajikistan is still among the most difficult and the most costly countries in in terms of getting
electricity, paying taxes, trading across borders and getting credit.
Tajikistan has formed regulatory reform committee at the inter-ministerial level, reporting, that use the DBIs as
one input to inform their programs for improving the business environment.
Taxation relief: Tajikistan lowered its corporate income tax rate in 2011. According to a PwC report from 2011,
Tajikistan is one of the ten countries in the world with the highest total tax rates (86 percent of profit). The tax
burden on companies still needs to be reduced. Recently, only the corporate income tax was lowered.
Agriculture is VAT exempt. Farms are taxed through the Unified Tax for Agriculture Producers apart from social
taxes, personal income and property taxes, as well as road taxes. A sales tax of 3 percent is applied to state farms,
dehkan farms, and family farms, but not to household plots.
Research & Development, innovations: Required investments and activities in R&D of new technologies and
products in agro-industry are not provided. State-owned enterprises continue to be the primary beneficiaries
of government support for innovation and R&D. The Government has no strategy on development of research
and innovation services, but it has adopted the law on Innovations in 2012. In 2009, expenditures in R&D
accounted 0.09 percent of GDP, increased in share of 0.07 percent of GDP in 2008.
Competitiveness:. According to the Global Competitiveness Report 2014-2015 Tajikistan is at a 1st stage of
development (factor driven), it got 91 overall Global Competitiveness Index among 144 economies (116 in
2010-2011 among 139 countries). Tajikistan is ranked 80 for Innovation, 82 for Business sophistication factors,
and 43 (score 4.0) for agricultural policy costs31. The five most problematic factors for doing business in Tajikistan
are: access to financing, tax rates, tax regulations, corruption and foreign currency regulations.
31
Agricultural policy costs: How would you assess the agricultural policy in your country? [1 = excessively burdensome for the economy; 7 = balances
the interests of taxpayers, consumers, and producers] | 2011–12 weighted average
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The designations employed and the presentation of material in this information product do not imply the
expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United
Nations concerning the legal or development status of any country, territory, city or area or of its authorities, or
concerning the delimitation of its frontiers or boundaries. The mention of specific companies or products of
manufacturers, whether or not these have been patented, does not imply that these have been endorsed or
recommended by the Food and Agriculture Organization of the United Nations in preference to others of a
similar nature that are not mentioned. The views expressed in this publication are those of the author(s) and do
not necessarily reflect the views of the Food and Agriculture Organization of the United Nations.
For more information please contact:
Stjepan Tanic
Agri-food Economist
FAO Regional Office for Europe and Central Asia
Email: [email protected]
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