Tajikistan’s authorities report yearly on economic growth, an increase in gross domestic product (GDP) and higher incomes for the population. However, people say they do not feel the improvements in living conditions, and the nominal increase in wages is being eroded by inflation.
Shakhlo Musaeva teaches Tajik language and literature at school No. 108 in Dushanbe. Her monthly salary is 1,850 somonis (about 170 USD).
“This amount is enough only to buy groceries for a month. But life is not just about buying food”, Musayeva told CABAR.asia.
On top of that, she has to pay the utilities, buy clothes, etc.
Shakhlo Musayeva has three children. Her daughter is a university student and her son is finishing school this year.
“If there is a student in the family, the expenses increase, and if she is studying on a contractual basis, it becomes even more difficult,” Musayeva said.
She understands that the family needs savings for the children’s education or certain contingencies, but this cannot be done with her income.
“To cover our needs, we sometimes have to take a loan from the bank,” she said.
At the same time, Musaeva confirmed that their salaries are gradually increasing by 10, 15 or 20 per cent, but this increase is “almost imperceptible” because of inflation.
GDP and salaries are rising, but the standard of people’s living?
Tajikistan’s GDP has grown more than 13-fold over the past 22 years, from $0.86 million in 2000 to $11.3 billion in 2022.
While in 2022 gross domestic product (GDP) reached 115 billion somonis (over 11.3 billion USD), in 2023 it is projected to reach 127.3 billion somonis (over 12.4 billion USD). Thus, the growth is more than 10.6%. The increase in wages is even more spectacular. While in 2000, according to official data, the average wage was about 16 somoni (about 7 USD), in February 2023 it was more than 1,874 somoni (about 172 USD).
In other words, during this period there was a nominal increase of wages by more than 100 times in Somoni and 24 times in US dollar terms, but at the same time, the purchasing power of both the national currency and the US dollardecreased significantly. Moreover, the exchange rate of the somoni has fallen steadily against the dollar over the past few years. While in 2001 one US dollar was equal to 2.2 somoni, in June 2023 it was 10.92 somoni.
Residents of Tajikistan earn the lowest wages in Central Asia. The average monthly wage in Kazakhstan in 2023 was 340,000 tenge (about $760). The average salary in Turkmenistan, according to official data, is $715; in Kyrgyzstan, it is about 30,000 soms ($341); and in Uzbekistan, 3.72 million soms ($335) by the end of 2022.
According to experts, annual GDP growth does not have a tangible impact on the level of income of Tajik citizens. They are growing due to other factors, above all remittances of labour migrants.
In accordance with the Law of the Republic of Tajikistan “On Minimum Subsistence Level“, every five years the government adopts “Guidelines for determining the consumer basket for the main socio-demographic groups of the population in the Republic of Tajikistan”.
The recommendations contain a list of 11 food items, including bakery products, meat, vegetables and fruits and others. The group of non-food items includes clothing and footwear, outerwear, school supplies, etc.
The recommendations also include utilities, including water, sewerage, electricity, etc.
However, many citizens, especially public employees, say that wages are insufficient to meet these requirements.
External and seasonal factors cause high prices
Tajik Minister of Economic Development and Trade Zavqi Zavqizoda said at a recent press conference that food and fuel prices are rising all over the world.
According to him, in 2022, “regardless of the influence of external factors that have led to unprecedented increases in food and fuel prices around the world”, Tajikistan has managed to keep inflation stable at 4.2%. The minister specified that that was due to a slight increase in food prices by 5.2%, in non-food goods by 4% and services by 1.9%.
Meanwhile, according to the World Bank and the International Monetary Fund, inflation in Tajikistan in 2022 reached 8.3%.
Zavqi Zavqizoda called 2022 a difficult year for the global economy and, according to him, “even in developed countries the inflation rate over the past 40 years was the highest ever.»
“So last year was really difficult for the global economy and not only us but also many countries faced unprecedented price increases. In some countries the inflation rate reached 65%, 52% and 25% in 2022,” he said but refrained from naming these countries.
Zavqizoda attributed the rise in prices of some products to seasonal factors.
“This is temporary and will come back to square one,” he said.
Citing UN statistics, Zavqizoda said cereal prices worldwide increased by 17.9% in 2022, including a 24.8% increase in wheat prices, a 15.6% increase in corn prices, a 13.9% increase in vegetable oil prices, a 10.4% increase in meat prices and a 15.5% increase in gasoline prices.
Living standards depend on various factors that go beyond GDP, said Nur Safarov, an economic expert.
“The first and main factor is that all people are different and all have different skills and abilities, mental, and physical, as well as certain moral and social values.
“The first and main factor is that all people are different and all have different skills and abilities, mental, and physical, as well as certain moral and social values. Annual GDP growth of 7-8% does not mean that everyone will benefit from this growth,” Safarov said.
Most of Tajikistan’s income is distributed to the 1-5% of citizens who have access to political power, financial resources and key decision-making.
In his view, the main role in GDP growth is now played by the industrial and agricultural sectors in the country. China’s investment in Tajikistan’s mining industry is also an important factor in GDP growth.
It is important to look at financial flows in certain sectors of the economy, Safarov said.
“In this context, we can assume that most of the income that Tajikistan receives is distributed among the 1-5% of the population, the so-called financial-industrial elite, who have access to political power, financial resources and key decision-making”, said the expert.
The remaining 95%, in his opinion, have to live off their backyards and small farms, running small businesses, retail trade and a very large flow of labour migration.
“Unfortunately, Tajikistan has seen a very strong stratification of society between poor and rich in the 30 years of independence, and the social tools in the state budget cover [only] extremely minimal needs, especially in the social sectors of education and healthcare,” Safarov said.