DUSHANBE, March 31, 2009, Asia-Plus — On Tuesday March 31, the Asian Development Bank’s (ADB) Tajikistan Resident Mission (TJRM) in Dushanbe presented ADB”s flagship annual economic publication, Asian Development Outlook 2009 (ADO 2009).
The report, in particular, notes that winter energy shortages failed to derail another year of strong growth, but structurally the country faces difficult economic and social conditions, including a high poverty rate, an unfavorable investment climate, and weak infrastructure. In the short term, growth will be affected by the global — and especially regional — slowdown. A continued, heavy fall in workers’ remittances, a major source of family income and foreign exchange, is a major risk. The country is facing the adverse impact of the global financial crisis and economic downturn, and the Government and donors are making efforts to mitigate economic losses.
The external environment – particularly in Russia – will be extremely demanding in 2009. Falling remittances and sluggish exports will weaken the external balance. Remittances are projected to go down by about 30% this year, possibly more, and were already down by about 22% in January, year on year, ADO 2009 said. The liquidity problems in the banking system may create disincentives for migrants to use it as a channel for making transfers, thus risking losses in an important source of foreign exchange and disruption in formal economic activity. Export earnings will decline due to both price and volume effects stemming from lower demand for aluminum and cotton. World prices, including oil and food, are expected to fall, easing import costs; natural gas import prices, though, will stay high.
Speaking to reporters, Zafarjon Hotamov of TJRM noted that remittances grew at an estimated 60% in 2008. “Under conditions of energy crisis, labor migrants increased remittances in order to help their relatives,” Hotamov said.
According to him, dependence on remittances has become stronger in recent years due to sluggish domestic production and weak export growth and one-third of the economically active population of the country currently work abroad. Although financial flows have supported economic and purchasing power, outflow of human resources has led to shortage of manpower in the country, Hotamov noted.
