At the close of the Soviet phase of Tajikistan's history, the economy deteriorated rapidly, and the level of economic activity declined sharply in the early 1990s. In 1992 the gross domestic product (GDP--see Glossary) was approximately half of what it had been in 1990. In the first half of 1991, agricultural and industrial output dropped substantially, and construction, a chronic weak point of the economy, was especially sluggish. The state's revenues for the same period were half as large as its expenses. According to Soviet statistics, the generation of national income in Tajikistan had already declined 7.8 percent from 1988 to 1989 and 8.9 percent from 1989 to 1990. In 1990, the per capita generation of national income was the lowest by far among Soviet republics, and 17 percent below the 1985 level. These figures reflect not only Tajikistan's poverty but also the low prices that were assigned to agricultural products and raw materials, Tajikistan's main products, in the state-run economy. Although Tajikistan was primarily an agricultural republic, in 1989 it imported more agricultural products, including foodstuffs, than it exported.

Political turmoil and the civil war of 1992-93 did enormous damage to Tajikistan's economy. According to an official estimate, that damage extended to 80 percent of the republic's industries. The conflict spurred the departure of large numbers of Russians and Germans who had been key technical personnel in Tajikistan's industries (see Population, this ch.). After independence, the government was very slow to develop an institutional framework to promote movement toward a market economy. Through the mid-1990s, virtually no privatization of industry or agriculture occurred.

The scarcity of reliable statistics makes quantification of Tajikistan's economic situation difficult. In 1994 the total economic loss from the civil war was estimated at 15 trillion rubles (see Glossary for value of ruble)--about US$12 billion at the January 1, 1994, exchange rate. According to Western estimates, by 1994 production in industry had dropped 60 percent, in agriculture 33 percent, and in the transportation enterprises several hundred percent--all in comparison with 1990 levels. The GDP fell an estimated 28 percent in 1993, 12 percent in 1994, and 14 percent in 1995. Inflation soared at a rate of 1,157 percent in 1992; 2,195 percent in 1993; 341 percent in 1994; and 120 percent in 1995. The relatively lower rate in 1995 reflected the government's new anti-inflationary policies launched in the second half of the year.

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Source: U.S. Library of Congress