Tajikistan got the short end of the stick, period. When someone decided to draw lines on a map, many of the “stans’ were given oil, gas and other natural resources. Tajikistan was given mountains. With great mountains come great problems – it is difficult develop significant economic activity in mountainous terrain. As you may expect, unemployment is rampant here and most Tajik people rely on agriculture for a living.
Imagine if you can plant and harvest 100kg of carrots each season. Now, imagine your same 100kg of output fetching you less and less money each year because of the fiscal weakness in the currency. This is what the Tajik people have been dealing with all these years. In the past month that I have been living in Tajikistan, I think we have witnessed one of the worse devaluations of the Tajik Somoni of all times.
Take a look at this:
In 30 days, the value of the Somoni has weakened 15% against the Dollar. That is 180% annualized. It is pure fiscal madness. As many of the vegetables and goods get imported into the country, prices have been rising and the Tajik people are finding it increasingly difficult to afford basic necessities. Just today, a piece of Tajik bread that cost me 2.5somoni two weeks back cost me 3somoni today. Sure, it is less than a dime, but in percentage terms that is a 20% increase in the price! “tajik mumbles tajik mumbles DOLLAR! tajik mumbles tajik…”, the seller muttered. I nodded my head in concurrence and gladly gave her the 3somoni. At the other end of the market, tomatoes and other imported fruits sit and slowly rot away as the high prices have forced Tajik people to stick to local carrots and potatoes instead. On a side note, the implication on microfinance is also very significant. As some lenders take out loans in US dollars, they have to make repayments in US dollars. Since most of their income is derived in the local currency, in today’s climate they immediately become liable for a larger repayment sum than initially planned. Everyone is hurting.
In addition to the chronic problems of a staggering economy, soaring unemployment coupled with food and currency problems, Tajikistan is also plagued with a chronic energy crisis. According to the World Bank, 70% of Tajik people suffer from extensive power shortages during the winter. Despite having a few sizeable hydrolectric assets, they fail to produce sufficient energy during the winter when water flow is at its lowest. Consequently, electricity gets rationed in the big cities, and gets cut in the rural areas. Just when you thought the worse was over, throw “winter” into the equation and see what happens. I am experiencing this right now, in the northern city of Khujand. I have 4 layers on, and my nose feels frozen.
Ever since I moved to Khujand, I have become very good friends with Scarlett. In fact, she doesn’t know it but I consider her to be my very best friend at the moment. Meet Scarlett:
However, and this is no fault of Scarlet, sometimes she fails to be a good friend by producing heat because there is no electricity flowing to her! Electricity gets rationed all over Tajikistan, becoming especially more intense in the winter when the rivers freeze over, thus reducing the flow of hydroelectricity. I am sitting in my tiny Soviet-era apartment making critical decisions every 5 minutes; decisions that involve the lights, Scarlett, the refrigerator, the electric stove and charging of my appliances. There is only sufficient electricity at the moment for two of the above, and I went with Scarlett and the lights. The lights are important because they indicate how much electricity is flowing to the apartment. Right now it is about 50% brightness. At 75% I will get to charge my phone, and at 100% I can get the electric stove and refrigerator going. However, the 100% is not guaranteed to last. So every decision is a gamble. Oh! It just went down to 0% and I guess I will sit in darkness for awhile now. Welcome to the everyday life of people in Tajikistan.