Tajikistan Trade Profile
Table of Contents
Overview
The Republic of Tajikistan is situated in the heart of Central Asia. Tajikistan is landlocked with Kyrgyzstan bordering it on the north, while China borders it on the east, Afghanistan on the south with Uzbekistan on the west and northwest.
64.2% of Tajikistan’s GDP comes from the services sector, while 20.7% comes from the agricultural sector, and 15.1% comes from the industrial sectors, according to data provided by The Pakistan Business Council. The main trading partners of Tajikistan are China, Kazakhstan and Russia.
The escalation of Tajikistan’s economy is said to occur after the war, with the GDP increasing 7% per year from 2000 to 2019, according to the World Bank Data. The income of Tajikistan is primarily due to its manufacturing of aluminium, remittances from migrant workers (with nearly 29% of Tajikistan’s GDP being deprived from them in 2019) and the growing of cotton. Tajik Aluminium Company represents the aluminium industry which accounts for the biggest aluminium plant in Central Asia and in the world. Cotton represents 60% of Tajikistan’s agricultural output.
Pakistan - Tajikistan Trade Profile
Pakistan’s Exports to Tajikistan
In 2016, potential imports from Pakistan amounted to $3.2 billion, which mainly included medicaments, wheat and medium oils. Furthermore, as provided by OEC, in 2019, the value of imports from Pakistan reached $7.81 million, with the main products being raw sugar constituting 72.7% of the imports and being valued at $5.67 million, packaged medicaments being 5.07% of imports, with $396k value and Fermented Milk Products amounting to 11.8% of imports, with its value amounting to $924 thousand. Furthermore, eggs amounted to 3.07% of imports as well, with a trade value of $240 thousand, and matches amounted to 1.23%, with a trade value of $95.8 thousand.
In 2020, the value of imports from Pakistan reached $2.05 million according to the United Nations COMTRADE database on international trade.
| Figure 2.1 | |
|---|---|
| Cereals | $146.51M |
| Edible fruits, nuts, peel of citric fruit, melons | $86.92M |
| Pharmaceutical products | $73.84M |
| Salt, sulphur, earth, stone, plaster, lime and cement | $73.80M |
| Animal, vegetable fats and oils, cleavage products | $43.13M |
| Edible vegetables and certain roots and tubers | $38.34M |
| Wood and articles of wood, wood charcoal | $32.85M |
| Plastics | $32.37M |
| Iron and steel | $28.51M |
| Sugars and sugar confectionery | $24.72M |
Pakistan’s Imports from Tajikistan
In the last 16 years, there has been an annual increase of 4.51% in regard to exports from Tajikistan to Pakistan. In 2016, the potential exports of Tajikistan to Pakistan reached $0.7 million, with products such as aluminum, cotton unwrought aluminum alloys, and gold constituting the main products. In 2019, as per the data provided by OEC, exports from Tajikistan to Pakistan amounted to $146 thousand. The primary items that were exported were non-retail pure cotton yarn ($113 thousand), non-retail synthetic filament yarn ($10.5 thousand), and Aircraft Parts ($16.4 thousand). Non-retail pure cotton yarn amounted to 77.3% of exports, non-retail synthetic filament yarn constituted 7.17% of exports, while aircraft parts formed 11.2% of exports. Also exported to Pakistan were metal molds, which formed 3.21% of exports, and held a value of $4.69 thousand as well as laboratory reagents, constituting 0.63% of exports, worth $918.
However, there was no export of services to Pakistan in 2019. In the same year, exports from Tajikistan to Pakistan were substantial, with Textiles amounting to $123 thousand, Transportation amounting to $16.4 and Machines being $5.41 thousand.
Trade Framework with Pakistan
Bilateral Agreements
| Sr. | Name of the Agreement and/or MoU | Date |
|---|---|---|
| 1 | Agreement on Trade and Economic Cooperation between the Government of the Islamic Republic of Pakistan and the Republic of Tajikistan | 1992 |
| 2 | Agreement between the Government of the Islamic Republic of Pakistan and the Government of the Republic of Tajikistan for Scientific and Technical Cooperation | 1992 |
| 3 | Framework of Cooperation between Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and Chamber of Commerce and Industry of the Republic of Tajikistan | 2009 |
| 4 | Memorandum of Understanding between Board of Investment (BOI) of Pakistan and State Committee on Investments and State Property Management of Tajikistan | 2013 |
| 5 | Agreement for the Establishment of Joint Business Council (JBC) between Chambers of Commerce and Industry of Tajikistan and Federation of Pakistan Chambers of Commerce and Industry | 2015 |
| 6 | Memorandum of Understanding between the Government of the Republic of Tajikistan and the Government of Islamic Republic of Pakistan, through Trade Development Authority of Pakistan | 2017 |
Regional Agreements
| Central Asia Regional Economic Cooperation (CAREC) Program (CAREC 2030) | This program is a partnership which is formed between 11 countries and development partners who cooperate together to aid in development, which helps in reducing poverty and increasing economic growth. As of December 2020, CAREC has mobilized investments worth $40billion which have assisted in the increase of energy trade and security, as well as the creation of multimodal transportation networks and have helped in the free movement of freight and people. |
| The Shanghai Cooperation (SCO) | This is also known as the Shanghai Pact and is the successor of Shanghai Five, and is a Eurasian, political, security and economic alliance. Tajikistan became a part of this agreement in 1996, while Pakistan joined in 2017. Activities under it include cooperation on security, cultural and economic cooperation as well as activities which are military in nature. |
| Economic Cooperation Organization (ECO) | Established in 1985 in Tehran, ECO is an Asian political and economic intergovernmental organization which arranges a platform where improvement in relation to development, investment and trade can be discussed. The objective of ECO is to create a single market for goods and services, as done in the European Union. |
Recent Developments and Strategic Commitments
In 2015, during a meeting held in Islamabad, the Prime Minister of Pakistan and the President of Tajikistan declared an intention of connecting the two countries via road networks such as Chitral-Ishkashim-Dushanbe. In 2021, both the countries signed memorandums of understanding (MOU) to cooperate in various sectors such as the sale of arms made by Pakistan to Tajikistan. In the same year, the Prime Minister of Pakistan made it known that Pakistan will upgrade the bilateral relations between the two countries. To this end, both the countries agreed to put their efforts into signing a Strategic Partnership Agreement, with a focus on strengthening inter-parliamentary ties, improving the security and defence relationship which existed between the two countries, as well as creating constructive and reliable high-level contacts.
Current Position of Trade between Tajikistan and Pakistan
In 2019, the Union of Private Sector Development of Tajikistan Chairman Radzhabov Fayzali Kurbonalievich communicated the desire of promoting trade with Pakistan. According to him, Pakistan and Uzbekistan both have immense potential in regard to enhancing trade between them. Furthermore, he expressed that Pakistan could export many products such as sugar, furniture, and textile to Tajikistan and urged the exporters of Pakistan to put in more effort, as investors from countries such as China were already taking part in the Tajikistan market. He urged Pakistani exporters to do so, as a way of gaining access to the vast Central Asian market.
Furthermore, in a meeting between the Foreign Minister of Pakistan, Shah Mahmood Qureshi, and the Foreign Minister of Tajikistan, Sirajuddin Mehruddin in 2021, Qureshi extended an invitation to Tajikistan to gain advantage from Gwadar port located in Pakistan as it is the shortest trade route to the Middle East, Southeast Asia, and Africa, as the trade potential between Tajikistan and Pakistan is vast.
Central Asia-South Asia (Casa-1000)
Casa-1000 was launched in 2016 and is a power project which is under construction. This project will empower the export of hydroelectricity surplus which is produced in Tajikistan to be exported to Afghanistan and then Pakistan. In 2021, Pakistan assured Tajikistan that it will put its highest efforts into aiding the early completion of Casa-1000.
According to the Foreign Minister of Pakistan, not only does he believe that Casa-1000 will be beneficial to the entire region, but it would boost access to electricity, as well as aid in expanding and integrating markets which would increase trade. The Foreign Minister of Tajikistan, Sirajuddin Mehruddin stated that the dedication of Pakistan towards Casa-1000 was “commendable”.
Key Institutions
The Institutions which are affiliated with Pakistan and Tajikistan are:
- World Trade Organisation (WTO)
The WTO is an organization for trade opening and serves as a platform which can be used by governments in order to negotiate trade agreements, and to settle trade disputes. The WTO can be seen as an organization where the members of the government solve the trade problems faced by them. The primary purpose of the WTO is open trade for everyone’s benefit. Pakistan became a member of WTO on the 1st of January 1995, while Tajikistan became a member on the 2nd of March 2013.
- Central Asia Regional Economic Cooperation (CAREC) Program
- International Monetary Fund (IMF)
As of April 2020, Pakistan has obtained a Rapid Financing Instrument (RFI) from the IMF, with the amount approved as $1,386 million, while Tajikistan has obtained emergency financing from the IMF too, which Is labeled as a Rapid Credit Facility (RCF), with the amount approved as $189.50 million.
- World Bank
- Islamic Development Bank (IsDB)
The capital subscription of Pakistan from IsDB amounts to $1.3 billion, while the subscription of Tajikistan amounts to $18 million.
- Asian Development Bank
- International Fund for Agricultural Development (IFAD)