Tajiks to face another winter with power, heating and food shortages
After conferring with Tajik leaders on 7 November, Sudharshan Canagarajah, World Bank country economist for Tajikistan, urged the Tajik government to go into austerity mode, refrain from making any large-scale outlays on economic projects over the near term, and focus instead on essential health, education, and social protection services for the poorest households.
Even though the price of oil has dropped in the last few months (lowering the oil import bill as well as that for imported fertilisers and foodstuffs), the price of cotton and aluminium, the country’s two main export items, is also expected to decline.
However, for Canagarajah the most worrying news is the expected drop in remittances from abroad.
As many as 1.5 million out of the total of 6.8 million Tajiks currently live and work abroad, mostly in Russia and Kazakhstan.
According to 2008 World Bank data, Tajikistan received US$ 1.25 billion in remittances via bank transfers last year; almost twice as much as the government’s budget for 2007 (excluding international aid and loans).
For its part the International Monetary Fund estimates that US$ 1.8 billion of Tajikistan’s US$ 3.8 billion GDP is generated by migrant workers’ remittances.
And according to the Asian Development Bank, 98 per cent of remittances to Tajikistan come from Russia; however, the latter is also experiencing an economic slowdown, especially in the construction sector where many immigrants find work.
The World Bank expects that migrants might initially continue to send money home but in the medium term remittances will decrease and many unemployed migrants will have to go home.
With debt currently at 30 per cent of GDP, lower remittances and limited foreign currency reserves, the country might actually plunge in a food crisis.
In August of last year the price of bread and vegetable oil more than doubled whilst most other foodstuffs jumped by 50 per cent.
Now more than two million Tajiks face “food insecurity” this winter, and 800,000 may even face “famine” conditions, the World Food Programme said.