Poverty Tajikistan's Only Growth Area

As government figures confirm that the global economic downturn is having major effects on Tajikistan, experts warn that more and more households in Central Asia’s poorest country will be driven into poverty.

Aside from collapsing production and exports, the decline in money sent home by migrants working abroad will deprive families of a key income source.

Tajikistan’s statistical agency reports that the economy grew by 2.8 per cent year on year in the first six months of 2009, half the rate seen in the same period of 2008. Industrial production fell by 13 per cent, and export revenues were 48 per cent down, a reflection of low world prices and lack of demand for aluminium and cotton, Tajikistan’s key export commodities.

Nuriddin Kayumov, director of Tajikistan’s Institute of Economic Studies, said that as of June, one-third of all industrial plants and factories across the country were at a standstill.

“Many directors are complaining that they can’t sell their products and they are being forced to send their workers on unpaid leave,” he added.

The slump has slashed tax revenues, so that even the modest expenditure levels the government envisages after scaling down its budget earlier this year may not be achievable. (See Faint Praise for Tajik Crisis Plan, RCA No. 575, 01-May-09.)

Tajik president Imomali Rahmon warned as much on a visit to the southern Khatlon region last month, when he criticised the provincial government for its low tax collection rates and expressed concern that public-sector wages and pensions were not being paid on time.

Delays on wages and pensions are already occurring, and appear to be worse in rural areas.

“The state owes pensioners in our village two months in back-payments and when you get it, it’s only for one month,” said 75-year-old Zaynab from Bokhtar in southern Tajikistan.

Zaynab said that even when she got her pension, worth around 13 US dollars a month, it was not enough to buy a sack of flour, just “a bit of flour and some oil”.

Aside from conventional economic activities like agriculture and industry, one of Tajikistan’s main sources of income in recent years has been money remittances from the estimated 1.5 million migrants working abroad, mainly in Russia and also Kazakstan.

These funds keep families afloat and contribute to economic growth – between 30 and 50 per cent of Tajikistan’s gross domestic product, according to various estimates – by paying for goods and services on the domestic market.

Citing World Bank figures, the Tajik economy ministry reports that recorded remittances – that is, money transferred through the banks rather than being carried home in cash – stood at 525 million dollars in the period January-May, a 34 per cent drop on the same period of 2008.

Sangchagul Jononova from Bokhtar district described how the income of her 15-member family was slashed after two of her three sons returned from Russia after losing their jobs. She used to receive a total of 300 dollars from them, but the two now at home are earning much less – one gets 45 dollars a month working on a building site and the other far less than that as a farmhand.

“We don’t have enough money for food, let alone clothes and shoes,” she told IWPR. “The new school year starts soon, and I don’t know how I’m going to send the children to school…. The only things we can afford now are bread and tea, sometimes with sugar.”

Over the summer, Jononova has supplemented her family’s diet with fruit and vegetables from her garden, but this will end when winter comes.

Like many returning migrants and their families, Jononova can only hope the crisis in Russia will end soon so her sons can go back there. (For more on this issue, see our recent report Tajikistan: No Jobs for Returning Migrants, RCA No. 583, 12-Jul-09.)

Analysts warn that the multiple effects of the crisis – falling remittances, job losses at factories, and small business closures as consumers spend less – will inevitably force more and more people below the bread line, at a time when the government is struggling to pay wages and benefits.

Prior to the crisis, the World Bank calculated that 54 per cent of Tajikistan’s population were living on less than two dollars a day, its benchmark figure for assessing poverty.

Hojimahmad Umarov, a professor at the Institute for Economic Studies, says that figure has now risen to 60 per cent. Meanwhile, he says, 15 per cent of people in Tajikistan are living on less than one dollar a day.

“These are families that cannot rely on members working abroad as labour migrants. Most of them live in Khatlon and in Badakhshan,” he said.

Najiba Shirinbekova, who heads a non-government group called Law and Prosperity, notes that the north of Tajikistan, traditionally better off than other parts of the country, is also being hit.

“The latest information indicates a particularly high level of poverty in the ostensibly wealthy, industrially developed Soghd region. This is because factories are standing idle because of the financial crisis and the winter energy crisis,” she said.

Larisa, a 59-year-old resident of the capital Dushanbe, typifies the kind of people who still have jobs but have few other resources to prevent them sliding into poverty.

Living on her own, she earns about 30 dollars a month – placing her in Umarov’s bottom 15 per cent. Her wage has to cover food, household utilities and travel to and from work.

“I haven’t bought myself any clothes probably for three years. I’ve forgotten what meat, sausages, cheese and cream taste like. I buy small amounts on holidays, and sometimes neighbours invite me over for a meal,” she said.

Although the inflation rate is lower this year than last, prices in the shops are still rising enough to cut into Larisa’s purchasing power. At her age, not in the best of health, she cannot take on a second job to top up her income.

“If it gets very difficult, I will have to turn to my children for help and hope they won’t leave me to fend for myself,” said Larisa, whose children have emigrated to Russia.

People further up the income rung, for example shopkeepers and market traders, are also seeing their earnings eaten away.

Since most of their customers’ money was sent by relatives abroad rather than earned in Tajikistan, the decline in remittances has led to shops closing and a slowdown in trading at the traditional open-air bazaars.

“People are trying to buy only the most essential items,” said a Dushanbe businessman who gave his first name as Aknazar.

Selling foodstuffs wholesale to other parts in the country, Aknazar reckons he is turning over less than a third of what he would have been making before the crisis.

“Previously, I was supplying beer and chicken to the Pamirs [Badakhshan region], but now some of my regular customers come only once every three months. The prices of many goods have increased including sugar and cooking oil and the same thing is happening to flour.”

Mavzuna, who works in a women’s clothes store in Dushanbe’s Sadbarg shopping centre, said, “Trade has practically died out, we don’t know how to pay the rent, which the owners have increased.”

Shop assistants like Mavzuna find themselves under increasing pressure to make money.

“We are told to deliver 22 dollars’ worth of sales on a daily basis, but how can we achieve that? At the moment we aren’t reaching that sales target in the course of a week.”

Sayrahmon Nazriev and Aslibegim Manzarshoeva are IWPR-trained journalists in Tajikistan.