Scenario Planning inTajikistan - Term Paper Example

Scenario Planning: Tajikistan Scenario Planning: Tajikistan Introduction Scenario planning is a structured planning technique utilized by companies to make design flexible long term economic plans based on an extensive analysis of future events. Traditional planning techniques were inadequate in predicting variations to the external environment. These methods overlooked significant opportunities and serious threats which was detrimental to the firm in the long run. Scenario planning was developed to overcome the deficiencies of traditional methods and add a more comprehensive planning aspect to the creation of business strategies. Scenario planning was first implemented in military intelligence and military strategy studies. Scenario planning involves identifying trends and analyzing their predicted ramifications. Scenario planning helps organizations in implementing strategic investment, regulating hiring strategies and conducting capital planning. Organizations are able to execute scenario-based approaches to planning thereby developing credible solutions to potential challenges (Friedman, 2014). Scenario planning also helps firms to assess potential outcomes before implementation. Scenario planning is also beneficial in categorizing plans according to their short-term or long term feasibility. The paper will examine the demographic and religious forecast of Tajikistan until the year 2030 and the implications on Asian Development Bank’s strategic plan for Central and West Asian developing member countries. Tajikistan Country Profile The Republic of Tajikistan is an autonomous country located in Central Asia. The country’s administrative, legislative and financial capital is Dushanbe. The country is bordered by Uzbekistan, Pakistan, Kyrgyzstan, Afghanistan, and China. Up until September 1991 when the country gained independence, Tajikistan was part of the Union of Socialist Soviet Republics. At 143,100 square kilometres, the country is the smallest nation in Central Asia (CIA, 2015). Tajikistan is landlocked and very mountainous. The country is divided into four provinces: one capital province, one autonomous province and two other provinces. The head of state is the president while the government is led by a prime minister. The Tajikistani legislature comprises of a national assembly and an assembly of representatives. The judiciary implements a civil law system (CIA, 2015). Tajikistan’s Economy Tajikistan is classified as the poorest country in Central Asia and among former Soviet states. The country’s slow economic growth is attributed to the high levels of corruption, poor governance, political unrest, economic malpractices, and the huge external tax debt (CIA, 2015). Tajikistan’s GDP per capita was estimated at around $2,700 in 2014. The country’s economy is largely reliant on agriculture, the services sector, and mining. The main agricultural products are sheep, cotton, vegetables, grapes, wheat, potatoes, and rice. The key natural resources are uranium, gold, zinc, antimony, silver, and coal. The country generates most of its electricity through hydropower electric plants. The significant industries are chemical processing plants, aluminium processing, fertilizer production, cement, food processing and the textiles industry. Insurance, banking and tourism dominate the services sector. According to recent estimates, over 36% of the country’s population lives below the poverty line. The country’s growth rate in 2014 was estimated at 6%, a 1.4% drop from the previous year (CIA, 2015). The Asian Development Bank (ADB) computes Tajikistan’s growth rate for 2015 at 4%, a further decline from 2014, and the inflation rate at 10% (ADB, 2015). Current Religious Situation The population of Tajikistan is estimated at around 8 million people (CIA, 2015). More than 90% of the population adheres to the Islamic faith. A majority of the Muslims follow the Hanafi school of Sunni Islam while around 5% adhere to Ismailia Shia. The Shias reside primarily in the Eastern parts of the country. The country has around 150,000 Christians. The main Christian groups are the Russian Orthodox, Baptists, Seventh Day Adventists, Jehovah Witness, Roman Catholics, and Lutherans. The country has a small population of Hare Krishna, Baha’is, Jews and Korean Protestants (USDS 2013, p.2). The country lacks an official state religion but the government has a strong influence over religious matters. The constitution grants religious freedom, but various government policies and legislations constrain religious freedom. The government prohibits all citizens below 18 years from partaking in any religious activity. The law grants the freedom of religion and self-determination including the right to adhere to one or no religion and to change religious beliefs. All religious groups are required by law to register with the government in order to operate (USDS 2013, p.3). The law restricts wearing of hijabs in educational institutions. The government has total control over the printing, importation, and circulation of religious literature (USDS 2013, p. 4). The powerful Committee on Religious Affairs controls most of the religious activities in the country. 2030 Religious Scenario in Tajikistan Religious extremism is expected to have an exponential increase within the country up until 2030. The scenario is realistic owing to the rise in volatility and religious extremism within Central Asia (Chausovsky, 2012). In the last decade, the number of terror attacks by religious extremist groups such as Hizb ut-Tahrir and the Islamic Movement of Uzbekistan have continued to increase. The extremist groups have embraced Islamic militancy and jihadism. The Islamic Movement of Uzbekistan operates all around Tajikistan and increases its following every year. By 2030 the group is expected to have recruited more members. Given that the Islamic Movement highly advocates for and perpetrates violence and terror attacks, the country will be in a volatile religious state in the next 15 years. The activities of Hizb ut-Tahrir are also expected to increase rapidly up to 2030. The Hizb ut-Tahrir is a religious extremist group that operates mostly in the northern parts of Tajikistan. The Hizb ut-Tahrir target government facilities and officials. Despite government efforts to eradicate the group, more followers are recruited every year. The government remains powerless against the growth of religious extremism and the situation is expected to be worse by 2030. The withdrawal of American forces from Afghanistan has led to a rapid increase in the number of people in religious extremist groups in the country. Religious extremists such as the Taliban in Afghanistan provide financial and ideological support to Islamist militants in other Central Asian countries including the Hizb ut-Tahrir and the Islamic Movement of Uzbekistan (Chausovsky, 2012). Afghanistan is Tajikistan’s neighbor and the effects of religious extremism are expected to spill over into the country. Few efforts are being made to curb the growth of religious extremism in Central Asis and the trend points to the projection that by 2030 Tajikistan will have an incondusive religious environment which will derail economic growth and reduce investment. The government’s control over religious institutions is expected to keep on increasing in the next 15 years. The government has tight control over all matters of religion in the country (USDS 2013, p.2). Each year, the government’s control increases through new policies and legislations that seek to monitor the practice of religion in Tajikistan. By 2030, the political influence over religion is expected to be at its peak. The government controls almost every aspect of religion in Tajikistan ranging from registration, religious clothing, religious literature, worship buildings, and participation of children and the youth in religion (USDS 2013, p.3). The government’s power over religion has increased rapidly every year since independence. The government’s control is expected to increase because of the improbability of implementation of new legislations and policies curbing political interference in religion. The government’s stranglehold on religion may also indirectly help in increasing the number of people joining religious militant groups aimed at opposing political oppression. The rise in religious extremism and the government’s interference in religious activities by 2030 are projected to have an adverse impact on the economic landscape of Tajikistan (McCleary & Barro 2006, p.58). Tourism which is one of the major financial contributors is expected to be the hardest hit. The increase in religious extremism is expected to significantly lessen the number of people visiting the country due to fears of insecurity. Based on the religious scenarios, there will be a notable reduction in foreign direct investments in Tajikistan (McCleary & Barro 2006, p.59). Lack of stability will cause a reduction in the investments in machinery and technology. Increased religious volatility will lead to an increase in the costs of production leading to a decrease in consumption and saving rates. Extremist attacks will result in a sense of insecurity among foreign traders that will increase transaction costs (McCleary & Barro 2006, p. 60). Religious instability will also cause a decrease in the volumes of exports and imports between Tajikistan and its trade partners. The unstable religious scenario in 2030 will slow the economic growth, undercut sustainable development and set up an unfavourable investment landscape. Demographic Statistics of Tajikistan As per 2014 estimates, the population of Tajikistan is over 8 million people (CIA, 2015). The population density is 48 persons per square kilometre. The ethnic majority of Tajikistanis are Tajiks who make up around 85% of the overall population. The minorities include the Uzbeks, Kyrgyz, Russians, Turkmens, Jews, and Arabs. Islam is the main religion while Christianity, Judaism, Baha’ism and Hare Krishna make up the minority. Sunni Muslims make up the majority with Shia Muslims being the minority. The population growth rate of Tajikistan was estimated at 1.75% in 2014 (CIA, 2015). The birth rate is evaluated at 25 births per 1000 while the death rate is 6.2 per 1000. The population of Russians, Jews and Arabs is on a steady decline due to emigration. Over half of the country’s population is below the age of 24 while around 6% are over the age of 60. The median age of the nation is 23.5 years. The country’s life expectancy was appraised at 67 years: 70 years for women and 63 years for men. The infant mortality rate is 35 deaths for every 1000 live births. The ratio of women to men is 1 to 1.05. The urban population is placed at around 27% while the rate of urbanization is over 2.5%. Tajikistan’s dependency ratio lies at 64.3%. The country’s most populous city is the capital, Dushanbe which has around 800,000 residents. The average age for mothers at first birth is 22 and the fertility rate is 2.7 children per woman. The unemployment rate in the country is 16.7% which is one of the highest among Central Asia countries (CIA, 2015). 2030 Demographic Scenario in Tajikistan According to World Bank estimates, the population of Tajikistan is expected to reach 11,407,000 in 2030 (WorldBank, 2015). This figure was computed using the country’s population growth of 1.75% annually. The life expectancy at birth for males will increase to 66.1 years while the figure for females will rise to 73.2 years. The adult mortality rate and the under-5 mortality rates are expected to decline gradually within the 15 years (WorldBank, 2015). The fertility rate is also expected to have a steady reduction owing to the trend in the past few years. In this scenario, the population is expected to increase by 3 million while the dependency ratio will decline. The median age will be anticipated to increase to around 27 years from the previous figure of 23.5. The percentage of the population that will live in urban areas is forecast to reach 29.1%, a 2.1% increase from 2015. In this scenario, the country’s population size will surpass the ideal size by approximately a million. Having adequate population will enable Tajikistan to satisfactorily exploit its resources to maximum capacity. This will enable the optimum exploitation of the country’s natural resources (Villegas 2009, p.2). The country’s work force is expected to increase. Tajikistan will have the necessary human capital to utilize the vast zinc, mercury, strontium, and uranium deposits the country possesses. The agriculture sector will be anticipated to have a growth due to the availability of people to work in the farms. The size of the consumer market will increase thereby enabling companies to utilize the economies of scale. The bigger domestic market will attract domestic investment and foreign direct investment leading to increased employment and higher economic growth (Villegas 2009, p.1). In this scenario, consumer spending and national savings will increase thereby driving economic growth through the manufacturing and services industry. A higher population will lead to increased demand for goods and services therefore spurring on innovation and introduction of new technology. A larger population will also produce more educated people hence energizing the presently stagnating economy (Villegas 2009, p.2). However, this forecast scenario may also have adverse effects. The country’s agricultural efficiency is low and if not fixed could lead to insufficient agricultural production. Low agricultural production will lead to increased importing thus impeding economic growth. A high population will put pressure on social capital, health care and housing. The large population could also result in high unemployment rates that will increase aggregate demand (Lee & Mason 2011, p.45). Lastly, the increased population will put pressure on natural resources leading to water shortages, destruction of the natural ecosystem and exhaustion of non-renewable resources. Another demographic scenario could involve the decrease in the population growth of Tajikistan. Unicef predicts that the population growth of Tajikistan will reduce gradually over the years to below 1% per annum in 2050 (Unicef 2009, p.2). The population growth could decline due to the high rates of emigration from Tajikistan. The country’s Russian, Arab and Jewish population have been on a slow decline due to emigration. Emigration will be necessitated by the religious unpredictability of the country coupled with political instability. The lack of tranquillity due to extremism could also lead to a reduction in the immigration rate. The population growth rate will decrease due to the food insecurity in Tajikistan. Due to the low levels of food production, the country will not be in a capacity to handle an increase in population (Unicef 2009, p.4). A drop in fertility rate and the country’s high rate of urbanization could fuel the drop in population (CIA, 2015). Such a scenario will install an aging population in Tajikistan and a subsequent decrease in the birth rate. Due to the declining development rate and the high rate of inflation, the cost of living will be expected to rise steeply. A rise in living costs will necessitate a shift towards smaller families hence a decline in population growth. An expected increase in the literacy levels among women could prompt a decline in population growth in the next 15 years. In such a scenario, the decline in population growth will have various consequences on the economic landscape of Tajikistan in 2030. A decrease in population growth will lead to result in a slump in consumption. A reduction in consumption will in turn lead to stagnation of Tajikistan’s economy which is already on a decline (Lee & Mason 2011, p.45). Reduced consumption will also lead to a reduction in domestic investment and foreign direct investments (Lee & Mason 2011, p.43). A decline in population growth will cause a reduction the number of young people and subsequently, a fall in the country’s work force. This scenario will lead to a decrease in the industrial growth of the country. Depopulation will cause a decrease in the tax base thereby causing a reduction in social security payments and less money for development activities (Lee & Mason 2011, p.44). The decrease in population will lead to a reduction in the industrial and agricultural production of the country leading to high costs of living. However, a decline in population growth could also have its benefits. The population decline will lead to a reduction in youth unemployment. The crime rate and environmental degradation will be expected to decline gradually. The government will have higher capacity to offer social services such as health care and education. A reducing population will also minimize the pressure on limited and non-renewable natural resources (Lee & Mason 2011, p.45). Conclusion Scenario planning is a structured planning technique utilized by companies to make design flexible long term economic plans based on an extensive analysis of future events. Scenario planning helps organizations in implementing strategic investment, regulating hiring strategies and conducting capital planning. The Republic of Tajikistan is a country located in Central Asia. The country’s slow economic growth is attributed to the high levels of corruption, poor governance, political unrest, economic malpractices, and the massive external tax debt. Religious extremist groups are expected to increase in number by 2030 and the effects of their activities will stunt economic growth. Increased government interference in religious matters will lead to instability hence reduced investment, increased production costs, and reduced tourism. The population of Tajikistan is forecast to increase to over 11 million in 2030. The increased population will enable the county to adequately exploit its resources, increase agricultural production, introduce new technologies, and increase investment. A high population could also lead to environmental degradation, high unemployment rates and exhaustion of natural resources. Another scenario involves a reduction in population growth by 2030. Depopulation will result in reduced investment, smaller labour force, declined industrial and agricultural production, and a smaller tax base. Population decline could also lower unemployment and increase the government’s capacity to offer social services. References ADB, 2015. Tajikistan: Economy. Asian Development Bank. [Online] Available at: [accessed 22 June 2015]. Chausovsky, E., 2012. Militancy in Asia: More Than Religious Extremism. Stratfor Global Intelligence. [Online] Available at: [accessed 22 June 2015]. CIA, 2015. The World Factbook. Central Intelligence Agency. [Online] Available at: [accessed 22 June 2015]. Friedman, F., 2014. Minimizing Uncertainty: Scenario Planning for CFOs. CFO Global HQ. [Online] Available at: [accessed 22 June 2015]. Lee, R. D., & Mason, A., 2011. Population Aging and the Generational Economy: Global Persepective. Cheltenham: Edward Elgar Publishing. 43-45. McCleary, R. M., & Barro, R. J., 2006. Religion and Economy. Journal of Economic Persepectives, 58-60. Unicef, 2009. Annex 1: The Case of Tajikistan. Unicef. [Online] Available at: [accessed 22 June 2015]. USDS, 2013. Tajikistan 2013 International Religious Report. Bureau of Democracy, Human Rights and Labor. Washington DC: United States Department of State. 3-4 Villegas, B. M., 2009. Benefits of Large and Young Population. BernadoVillegas.org. [Online] Available at: [accessed 22 June 2015]. WorldBank, 2015. Population Estimates and Projections. The World Bank. [Online] Available at: [accessed 22 June 2015]. Read More