GLOBALIZATION AND PRICE TRANSMISSION IN TAJIKISTAN AND UZBEKISTAN

This paper investigates the link between globalization and market integration between international and domestic markets in the case of two transition countries namely Tajikistan and Uzbekistan. Globalization may present an important challenge for transition countries. Uzbekistan and Tajikistan are at similar level of development and have adopted to similar economic reforms. Notable difference between the countries is in their openness to trade. Tajikistan has adopted more liberal agricultural trade regime than Uzbekistan. It is interesting and relevant from policy-making perspective to compare price transmission between Uzbekistan and Tajikistan as these neighbouring countries are on a similar level of development but they diverge significantly with respect to trade policies. While Uzbekistan relies on strong government involvement in managing international agricultural trade, Tajikistan has adopted more liberal agricultural trade policy. Apart from trade policies, two countries are at similar level with respect to the implementation of other economic reforms.