Tajikistan and the global financial crisis

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Bakhtiyor Davlat

2008-10-18

DUSHANBE, Oct. 15—The global financial crisis will not directly affect Tajikistan’s economy or banking sector, though there are still risks, local economic experts believe. Tajikistan may see a drop in activity by foreign investors, as well as a rise in food and energy prices.

Tajik Minister of Economics and Trade Gulom Bobozoda expressed this view on Oct. 14 at a meeting of economic experts on the influence of the situation in world financial markets on the Tajik economy. “Our financial system is not strongly tied to the global system, but globalisation, slowed economic growth and trade in developed countries and a drop in demand for our exports may affect the stability of the Tajik economy, since we are a very open country, and our volume of foreign trade exceeds GDP,” he said.

“What’s more, a drop in business activity in Russia may lead to a reduced flow of monetary transfers from Tajik migrant workers there. There is, however, reason for optimism thanks to the influence of the nearly $2 trillion dollars [USD] that the U.S. and other governments have injected into the world financial system,” Bobozoda said.

International financial relations director of the Tajik National Bank Zebo Fatkhiddinova noted that there is no basis for concern about the stability of the domestic banking system. “Domestic banks have no capital in foreign financial institutions, and the share of foreign capital in our banking system is insignificant,” she said. According to her figures, Foreign investment in the country was $196 million as of the start of 2008.

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