Structural Barriers Continue to Hamper Industrial Growth in Tajikistan

Despite recent gains in industrial output, Tajikistan’s full industrial potential remains largely unrealized. Analysts point to a combination of systemic issues that continue to constrain the sector's sustainable development. Growth Driven by Extractive Industries According to the Statistical Agency under the President of Tajikistan, industrial production totaled 18.9 billion somoni in January, April 2025, marking a 25.2% increase compared to the same period in 2024. However, this growth was overwhelmingly fueled by the extractive sector, which surged by 90%. In contrast, manufacturing expanded by just 3.5%. While 121 new enterprises were launched during the first four months of the year, disruptions in existing operations and the narrow structure of industrial growth highlight deeper systemic problems. Idle Enterprises and Obsolete Equipment Minister of Industry and New Technologies Sherali Kabir reported that 92 industrial enterprises remained non-operational as of August 2024. Over half have been idle since 2008-2018, with the rest inactive since 2019-2022. The reasons range from financial difficulties and pandemic-related business closures to outdated equipment and low competitiveness. Rising input costs and limited market access further compound the problem. Some sectors, such as textiles and garments, could potentially resume operations, but only with significant modernization. Although some light and food industry enterprises have diversified, others, such as the porcelain factory in Tursunzade, have failed to adapt to changing market conditions. Raw Material Shortages Insufficient raw material supply remains a major bottleneck for several subsectors. The vegetable oil industry, for instance, requires approximately 833,000 tons of oilseeds to produce 100,000 tons of oil. However, domestic output is under 100,000 tons, limiting production to just 25,000 tons, four times below the national requirement. The canning industry faces similar constraints due to an inconsistent supply of fruits and vegetables. Energy Shortages Power outages continue to disrupt industrial output, especially in winter. Cotton processing plants produced 980 tons less fiber in the first half of 2025 compared to the same period in 2024 due to energy shortages. At the Azot plant in Levakant, production losses translated to a 7.3 million somoni revenue shortfall. Agricultural infrastructure has also been affected: the Land Reclamation Agency reported 130 pump station failures in 2023 alone, caused by voltage surges and sudden power cuts. Declining Cement and Coal Exports Despite advances in cement production, Tajikistan’s export volumes have declined sharply. From January to April 2025, the country exported just 154,000 tons of cement, down from 655,000 tons during the same period in 2024. This marks a 30.4 percent decline compared to the same period in 2023. The decline stems largely from reduced demand in key markets. Uzbekistan’s new cement plants have fulfilled domestic needs and displaced Tajik exports to Afghanistan. Coal exports have also suffered due to increased transit fees. Afghanistan raised its transit tariff from $7 to as much as $50 per ton, leading to a 15,000-ton decline in exports to Afghanistan and a 65,000-ton drop to Pakistan. High Production Costs Undermine Competitiveness High production costs across all sectors continue to undermine Tajikistan’s industrial competitiveness. For example, the...

Kazakhstan’s Record Sugar Beet Harvest Exposes Processing Industry Failures

Kazakhstan’s sugar industry saw a record sugar beet harvest in 2024, but the processing sector was unprepared to handle the influx. The gap between agricultural production and industrial capacity has once again underscored systemic weaknesses in the sector. A detailed analysis by Energyprom.kz highlights these ongoing challenges. Record Harvest, Limited Processing According to the National Statistics Bureau, sugar beet cultivation reached an all-time high in 2024, with 25,000 hectares sown, a 34% increase from the previous year. Enhanced government support spurred the expansion: farmers received 25 tenge per kilogram of beets delivered for processing (up from 15 tenge), and transport subsidies were raised from 25 to 45 tenge per kilometer. These incentives encouraged investment in farm equipment and modern technologies, lifting average yields to 507 centners per hectare. This translated into a gross harvest of nearly 1.3 million tons of beets, 2.5 times more than in 2023. However, only slightly more than half of the crop was processed. Senators in Kazakhstan’s Parliament reported that just 58.3%, approximately 700,000 tons, was processed. The remainder was either left to rot or exported, primarily to Kyrgyzstan. The Ministry of Agriculture offered a slightly higher figure, reporting that 989,000 tons had been processed. Even so, this left hundreds of thousands of tons unutilized. Responding to parliamentary concerns, Prime Minister Olzhas Bektenov acknowledged the issue, citing “high credit burdens” on processing enterprises and “dumping” by neighboring countries as key obstacles. Aging Infrastructure and Unrealized Potential Kazakhstan currently has four operational sugar factories, but only three are equipped to process sugar beets. These facilities are in a state of significant disrepair: the Koksu plant is 93 years old, Merken is 91, and Taraz is 88. Although hopes had been pinned on modernizing the Taraz facility to process up to 600,000 tons annually, the planned upgrades did not materialize. As a result, sugar production dropped despite the record harvest. In 2024, Kazakhstan produced 164,400 tons of sugar, a 25% decrease from the previous year. Meanwhile, exports surged: 143,000 tons of sugar were exported, a 7.5-fold increase. Nonetheless, imports continue to dominate the domestic market, covering 74.1% of consumption. Crop Reductions and Financial Risks Facing processing bottlenecks, the Ministry of Agriculture has announced plans to scale back sugar beet cultivation. In 2025, the planted area will be reduced to 18,400 hectares, a 25% decrease. The Zhambyl region will see its sugar beet area halved, while Zhetysu will experience a 20% cut. The decision has drawn strong criticism from farmers and lawmakers. Many producers had invested heavily based on previous state projections, purchasing machinery and training personnel. “What will happen to farmers who took out loans, bought equipment, and are now faced with a revision of the state strategy? This could lead to mass bankruptcies and negate years of support for the industry,” senators warned in an appeal to the prime minister. Strategic Setback and Future Uncertainty Kazakhstan’s sugar industry development plan for 2022-2026 envisioned expanding cultivated areas to 38,000 hectares, boosting production to 1.8 million tons of beets...