Uzbekistan vs. Tajikistan

The Tajik people came under Russian imperial rule in the 1860s and 1870s, but Russia's hold on Central Asia weakened following the Revolution of 1917. At that time, bands of indigenous guerrillas (called "basmachi") fiercely contested Bolshevik control of the area, which was not fully reestablished until 1925. Tajikistan was first created as an autonomous republic within Uzbekistan in 1924, but in 1929 the USSR designated Tajikistan a separate republic and transferred to it much of present-day Sughd province. Ethnic Uzbeks form a substantial minority in Tajikistan, and ethnic Tajiks an even larger minority in Uzbekistan. Tajikistan became independent in 1991 following the breakup of the Soviet Union, and experienced a civil war between political, regional, and religious factions from 1992 to 1997.

Though the country holds general elections for both the presidency (once every seven years) and parliament (once every five years), observers note an electoral system rife with irregularities and abuse, with results that are neither free nor fair. President Emomali RAHMON, who came to power in 1994 during the civil war, used an attack planned by a disaffected deputy defense minister in 2015 to ban the last major opposition political party in Tajikistan. In December 2015, RAHMON further strengthened his position by having himself declared "Founder of Peace and National Unity, Leader of the Nation," with limitless terms and lifelong immunity through constitutional amendments ratified in a referendum. The referendum also lowered the minimum age required to run for president from 35 to 30, which would make RAHMON's son Rustam EMOMALI, the current mayor of the capital city of Dushanbe, eligible to run for president in 2020.

The country remains the poorest in the former Soviet sphere. Tajikistan became a member of the WTO in March 2013. However, its economy continues to face major challenges, including dependence on remittances from Tajikistani migrant laborers working in Russia and Kazakhstan, pervasive corruption, and the opiate trade and other destabilizing violence emanating from neighboring Afghanistan. Tajikistan has endured several domestic security incidents since 2010, including armed conflict between government forces and local strongmen in the Rasht Valley and between government forces and criminal groups in Gorno-Badakhshan Autonomous Oblast. Tajikistan suffered its first ISIS-claimed attack in 2018, when assailants attacked a group of Western bicyclists with vehicles and knives, killing four.

Uzbekistan is a doubly landlocked country in which 51% of the population lives in urban settlements; the agriculture-rich Fergana Valley, in which Uzbekistan's eastern borders are situated, has been counted among the most densely populated parts of Central Asia. Since its independence in September 1991, the government has largely maintained its Soviet-style command economy with subsidies and tight controls on production, prices, and access to foreign currency. Despite ongoing efforts to diversify crops, Uzbek agriculture remains largely centered on cotton; Uzbekistan is the world's fifth-largest cotton exporter and seventh-largest producer. Uzbekistan's growth has been driven primarily by state-led investments, and export of natural gas, gold, and cotton provides a significant share of foreign exchange earnings.

Recently, lower global commodity prices and economic slowdowns in neighboring Russia and China have hurt Uzbekistan's trade and investment and worsened its foreign currency shortage. Aware of the need to improve the investment climate, the government is taking incremental steps to reform the business sector and address impediments to foreign investment in the country. Since the death of first President Islam KARIMOV and election of President Shavkat MIRZIYOYEV, emphasis on such initiatives and government efforts to improve the private sector have increased. In the past, Uzbek authorities accused US and other foreign companies operating in Uzbekistan of violating Uzbek laws and have frozen and seized their assets.

As a part of its economic reform efforts, the Uzbek Government is looking to expand opportunities for small and medium enterprises and prioritizes increasing foreign direct investment. In September 2017, the government devalued the official currency rate by almost 50% and announced the loosening of currency restrictions to eliminate the currency black market, increase access to hard currency, and boost investment.

Tajikistan is a poor, mountainous country with an economy dominated by minerals extraction, metals processing, agriculture, and reliance on remittances from citizens working abroad. Mineral resources include silver, gold, uranium, antimony, tungsten, and coal. Industry consists mainly of small obsolete factories in food processing and light industry, substantial hydropower facilities, and a large aluminum plant - currently operating well below its capacity. The 1992-97 civil war severely damaged an already weak economic infrastructure and caused a sharp decline in industrial and agricultural production. Today, Tajikistan is the poorest among the former Soviet republics. Because less than 7% of the land area is arable and cotton is the predominant crop, Tajikistan imports approximately 70% of its food.

Since the end of the civil war, the country has pursued half-hearted reforms and privatizations in the economic sphere, but its poor business climate remains a hindrance to attracting foreign investment. Some experts estimate the value of narcotics transiting Tajikistan is equivalent to 30%-50% of GDP.

Because of a lack of employment opportunities in Tajikistan, more than one million Tajik citizens work abroad - roughly 90% in Russia - supporting families back home through remittances that in 2017 were equivalent to nearly 35% of GDP. Tajikistan's large remittances from migrant workers in Russia exposes it to monetary shocks. Tajikistan often delays devaluation of its currency for fear of inflationary pressures on food and other consumables. Recent slowdowns in the Russian and Chinese economies, low commodity prices, and currency fluctuations have hampered economic growth. The dollar value of remittances from Russia to Tajikistan dropped by almost 65% in 2015, and the government spent almost $500 million in 2016 to bail out the country's still troubled banking sector.

Tajikistan's growing public debt - currently about 50% of GDP - could result in financial difficulties. Remittances from Russia increased in 2017, however, bolstering the economy somewhat. China owns about 50% of Tajikistan's outstanding debt. Tajikistan has borrowed heavily to finance investment in the country's vast hydropower potential. In 2016, Tajikistan contracted with the Italian firm Salini Impregilo to build the Roghun dam over a 13-year period for $3.9 billion. A 2017 Eurobond has largely funded Roghun's first phase, after which sales from Roghun's output are expected to fund the rest of its construction. The government has not ruled out issuing another Eurobond to generate auxiliary funding for its second phase.

Tajikistan's telecom sector continues to struggle due to geographic isolation, lack of electricity, dysfunctional business climate, and impoverished citizenry; despite the launch of 4G/LTE services, one of the lowest fixed-line penetrations in Asia and one of the lowest broadband levels in the world; with help from foreign investment, mobile sector near saturation phase; Russian loans and Chinese investment in infrastructure through Economic Corridor initiatives; a few cities have 4G coverage; LTE-based smart city concept in Dushanbe; government restricts political rights and civil liberties, controlling information through media interruptions; government raised rates on Internet-based calls and Internet services in 2020, making price one of the highest in the world; importer of video displays and broadcasting equipment from China (2021)

prolonged drought and cotton monoculture in Uzbekistan and Turkmenistan created water-sharing difficulties for Amu Darya river states; field demarcation of the boundaries with Kazakhstan commenced in 2004; border delimitation of 130 km of border with Kyrgyzstan is hampered by serious disputes around enclaves and other areas

in 2006, China and Tajikistan pledged to commence demarcation of the revised boundary agreed to in the delimitation of 2002; talks continue with Uzbekistan to delimit border and remove minefields; disputes in Isfara Valley delay delimitation with Kyrgyzstan