Friday, February 16, 2007

The Problem of Economic Growth in Tajikistan

One of the most pressing issues nowadays in Tajikistan is the lack of spending on education. The reason why I choose to call it that has to do mainly with the geographic location of the country and its long-term economic capacity.

If looked from a purely practical point of view, Tajikistan has little to offer to the world. Its natural resources are limited and its only promising sector (hydropower) still needs to prove its economic viability. With its virtually bankrupt and politically unstable neighbor (Afghanistan), the prospects of actually making money on generation of electricity seems remote.

Of course there are other active sectors such as agribusiness (export of cotton) and alluminium industry, but these to have their own problems. With cotton it is the cost of transportation to the potential buyers. With alluminum it is the unavailability of raw material within the country. With a limited choice of sectors to rely on, Tajikistans only way out (as I see it) is in focusing on the quality of its human capital.

Many enonomic studies have shown the increasingly positive effects of education on economic growth. In Tajikistan's case this could be one of the few ways to prosperity.

Due to its soviet heritage, Tajikistan enjoys high literacy rates (>99%) and it would be a gross negligence for the current government not to utilize this to its advantage. The latest data available education spending (2001) shows that only 2.5% of country's GDP is allocated for education. This ranks Tajikistan on 35th (out of total of 41) on education spending.


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