The role of economic integration on the growth of the Tajik economy

Abstract

The dissolution of the Soviet Union in the beginning of the 1990 decade provoked that new nation states emerged when the Asian part of the Soviet Union disintegrated, which were later jointly considered as the Commonwealth of Independent States (CIS) countries. After several years of civil war and with a seriously weakened economy, Tajikistan begun a process of regional integration in the second half of the 1990 decade, by signing several economic integration agreements not only with ex-soviet countries but also with other neighbouring countries.However, although Tajikistan has been involved in numerous regional agreements, it is still a state depending upon Russian economy's health through growing migration remittances. Moreover, the volume of foreign aid inflows has grown throughout the last years in the country, what can be interpreted as another symptom of dependency.The first subsection of this thesis is aimed at analysing the main determinants of trade flows among CIS countries, after the attempts to build a closer commercial link through the signature of several free trade agreements. Furthermore, we test the extent to which CIS countries' trade growth has been linked to Russian economic performance. Our findings suggest that new free trade agreements have favoured the creation of trade amongst CIS countries. However, these agreements are far from being efficient and need improvement.The second subsection of the research is focused on the effect of remittances on economic growth and poverty reduction amongst post-Soviet states, compared with other external sources of capital, such as foreign aid and foreign direct investment. In this chapter we use a panel data set on economic growth and poverty estimates (poverty headcount, poverty gap and poverty severity) in 10 selected former post-Soviet republics i.e. among CIS countries over the period 1997-2016. Remittances' additional income appear to have exerted a positive influence in economic growth and poverty alleviation.The third subsection of the research is aimed at assessing the effect of official development assistance on economic growth and poverty reduction in Tajikistan. In this section we have also examined the recent role of South-South Cooperation using a panel data set on economic growth and poverty estimates in Tajikistan over the period 1997-2016, showing that aid has contributed to smooth consumption levels over the years and hence has succeeded in the reduction of poverty.