It is to be noted that the Russian invasion of Ukraine has left Tajikistan, which depends on Russian troops and remittances for stability, in a bind. The invasion of Ukraine has also raised urgent questions for Tajikistan about how to meet Russian expectations of support from Dushanbe in the face of global outrage and condemnation.
Tajikistan has a particularly difficult balancing act to perform because it receives Russian security and economic assistance, among other forms of support. With Russia weakened by U.S. and allies’ sanctions, Tajikistan is suffering because of the country’s intertwined economic, political and security relations with Russia.
Tajik labor migrants working in Russia began to lose their jobs, began to transfer less money, began to return home, and those who wanted to go Russia did not go.
ADB’s Asian Development Outlook 2022 Update Entrepreneurship in the Digital Age says that over the first five months of this year, remittances from Russia to Tajikistan have declined 10 percent compared to the same period last year.
Declining remittances slowed retail growth rate in Tajikistan from 17.1 percent to 9.3 percent.
However, there were not only disadvantages, but also advantages — thus, Tajikistan and Russia in March agreed to switch trade relations from the US dollar (USD) to the Russian ruble (RR). This measure helped Tajikistan solve the dollar shortage problem. Besides, labor migrants’ remittances have begun to grow in recent months.
According to data from the National bank of Tajikistan, the share of trade between Tajikistan and Russia in rubles has amounted to 50 percent of the bilateral trade between the two countries over the first six months of this year, while according to data from the Ministry of Economic Development and Trade. it has amounted to 70 percent.
Decrease in demand for the US dollar has led to depreciation of its official exchange rate against the Tajik national currency, the somoni: from 1:13 in mid-March to 1:10.20 on December 29. Switching Tajik-Russian trade relations from USD to RR has actually eliminated the dollar shortage problem in Tajikistan’s internal market.
The bilateral trade between Tajikistan and Russia has also increased due to sanction pressure on Russia and dedollarization. The Agency for Statistics under the President of Tajikistan says the bilateral trade between Tajikistan and Russia over the first ten months of this year has valued at US$1.380 billion, which is 37.1 percent more than in the same period last year.
