Lack of suitable business environment in Tajikistan leads to migration, says Tajik economist

“In Tajikistan, small and medium-sized businesses enjoy benefits/privileges during five years from the time of their registration. These are mainly tax benefits. From time to time, state funds are organized to assist small and medium-sized businesses,” Professor Umarov told Central Asian Bureau for Analytical Reporting (CABAR) in an interview.

However, such measures are inadequate because they have no sustainability and stability, the researcher noted.

Meanwhile, the small and medium sectors provide more than 50% of employment in industry and construction, and 85-90% in agriculture, Umarov said.

According to him, the share of small businesses in reducing unemployment is negligible.  “Only during intense field work, a certain part of the unemployed is involved in agricultural work.  As for the state budget, the share of small business in its filling has never exceeded 10%,” the expert said.

Concerning a statement by head of the State Committee on Investment and State-owned Property Management Farrukh Hamralizoda that the main reason for the cessation of 30,000 businesses in the country is the high competition in the market, Professor Umarov said that he does not agree with the statement of Hamralizoda, noting that the main reason for the cessation of those businesses is the administrative pressure and tax burden.  “As for competition, its influence is insignificant.  Entrepreneurs flee to other countries due to the lack of a satisfactory business environment,” the expert said.

Asked whether Tajik businesses have managed to reach any achievements in recent years, Umarov noted that the Tajik business has certain achievements in the field of housing and the cement industry.  According to him, both sectors develop within the framework of monopolies.  “Since, the banking system is in a state of deep crisis, people buy houses and apartments for their savings. In a word, the latter serve as savings books (deposit passbook),” he said.

He further noted there are also some achievements in the hotel and restaurant business.  “However, this business is still far from being highly profitable,” Umarov said.

 

Asked whether it is possible to compare Tajikistan’s indicators of development of small and medium-sized businesses with neighboring countries, the researcher said, “Small and medium-sized businesses in Tajikistan are noticeably behind the neighboring countries – China, Kyrgyzstan, Uzbekistan and Kazakhstan.  In these countries, the middle class appears to be from 20 to 40% and continues to increase its share.”   This is due to the fact that a favorable business environment has been created in neighboring countries and the state is caring for small and medium-sized businesses, Umarov added.