Developing Tajikistan’s Foreign Trade as a Way to Improve Living Standards

Abstract

Tajikistan was considered one of the fastest growing developing economies in Europe and Central Asia in the previous decade, according to the World Bank. This growth was due to the strategic investments to reduce poverty and improve living standards. However, despite all efforts, Tajikistan remains one of the less developed post-Soviet countries. The article analyzes the external factors such as lack of access to the sea, underdevelopment of foreign trade, regional instability, dependence on the Russian economy, drug trafficking and the risk of terrorism, and internal factors including poor governance, low education levels, high population growth, environmental degradation, inadequate activities of institutions and high unemployment, which exacerbate the problem. The main challenges and threats to poverty reduction in Tajikistan are examined, including the dependence of the economy on remittances, the situation in neighboring Afghanistan and the Taliban’s rise to power, the global crisis caused by the coronavirus pandemic. The authors focus on the ways to address the challenges and threats to poverty reduction in Tajikistan and the role of foreign trade in this regard.