Tajikistan is a country of cotton and aluminum.
Tajikistan is a former Soviet Union Republic which became independent in 1991. It used to be the primary source of cotton for USSR textile industry. In fact it had been so essential for the socialist state, with its chronic deficit of consumer goods, that Tajikistan lands were overexploited and other crops were wipe out to clear areas for new cotton fields.
After the dissolution of the Soviet Union the cotton industry went into recession. It happened primarily because of collapsed USSR market, which provided most of demand for cotton. Remittances from people working abroad became, instead, the most important contributor to the Republic’s economy. Today remittances constitute 45% of country’s GDP ($2.5 billion) — the world’s absolute record. Aluminum production — second most important contributor to country’s dwindling national wealth — takes more than 50% of Tajikistan export.
For almost all of its history the territory of present day Tajikistan had been part of world’s mightiest Empires (including Achaemenid, Alexander the Great, Greco-Bactrian, Chinese, Persian, Mongol, Russian). Today Tajikistan is one of the youngest independent countries on Earth. with the democratic form of governance.
Tajikistan is the multi-party state, however, the President of Tajikistan — Emomali Rahmon — has stayed in power for more than 20 years in a row (since 1994) and his political party — People’s Democratic Party — dominates Republic’s bicameral Parliament for decades holding to 80% and more seats in it.
Tajikistan is the new country with weak economy and non-changing government.
This country’s high-tech entrepreneurs have to overcame multiple bureaucratic and economical obstacles just to survive. Under present conditions Tajikistan economy (although currently growing with healthy 5–6% yearly) is incapable to create a large market for high-tech companies. Additionally, state’s bureaucratic apparatus, inherited from the Soviet Union, and its outdated legal system both act as major deterrents for development of startup ecosystem in Tajikistan.
High inflation and interest rates are unfavorable for domestic and international investments into SME. Plus, angels and VCs are reluctant to invest into the market with such high degree of resistance to innovations. On top of that, country’s educational system is not up-to-date. In such situation, many promising young Tajik entrepreneurs are leaving the countries in a search for better opportunities abroad.
On a positive side, large diaspora, low costs and absence of competition make a market for variety of mobile applications serving Tajiks living and working abroad.
Business Notes for Startups Founders:
- political climate: not friendly;
- economic climate: not friendly;
- regions to focus: locally;
- industries to focus: mobile apps, FinTech (monetary transfers), e-Jobs;
- major limitations: low-income population, brain drainage, old educational system, outdated legislation and administrative apparatus, over-concentrated and largely agriculture based economy, high resistance to change on the local level, low Internet penetration rate (below 20%), high inflation (12%), very high interest rate (at 16%);
- stimulus: low competition, low costs, large young population;
- opportunities: creating mobile applications serving diaspora community.
