Start-ups in Tajikistan
Nothing ventured, nothing gained
Shahlo Burhanova has just 10 days to complete 9,000 school uniforms. If that makes her nervous, she doesn’t let it show. The 40-year-old entrepreneur walks calmly through her tailoring workshop in a long turquoise dress, bends down to talk to an employee, holds up a small checked waistcoat to inspect. Each school has a different uniform designed by Burhanova herself. The design process is her favourite part of her work. She started her own business in Shaartuz, in southwestern Tajikistan, just a few months ago. She actually wanted to make wedding dresses, but was then awarded this major contract for 25,000 uniforms for 56 schools. The wedding dresses will have to wait.
Being flexible, making the most of opportunities and being realistic about what you can deliver are lessons Burhanova has learned gradually from training courses on how to start your own business. These courses are offered by GIZ on behalf of the German Federal Ministry for Economic Cooperation and Development, with financial support from the United Kingdom’s Department for International Development. As a self-employed businesswomen, Burhanova is part of a small but growing group in Tajikistan with enormous promise. These start-ups could play a key role in the country’s economic development. Tajikistan is among the least developed of the former Soviet states. The civil war from 1992 to 1997 compounded the country’s economic decline, and its effects can be felt to this day. Consequently, many people look for work abroad, mainly in Russia. The money they send home accounts for almost half of the country’s gross domestic product. No other country in the world is as dependent on remittances.
Stimulate the private sector and create jobs
A comprehensive support programme has therefore been initiated in this area. It aims to stimulate the private sector and create jobs – not least because many migrant workers are returning home from Russia, owing to the economic situation there, to conditions which are no less uncertain. ‘Our main focus is on jobs and higher incomes, in as many parts of the country as possible,’ says programme manager Hagen Ettner. Supporting start-ups is an important component in this approach. Entrepreneurs receive training and ongoing support. They learn how to develop business plans and market their products. GIZ also advises microfinance organisations in the country. For the first time, they are offering microcredits for start-ups. Previously, financial support was only available to existing businesses.
Because capital is expensive and inflation high in Tajikistan, the interest on microcredit is considerable – as is the case in many developing countries. Burhanova borrowed the equivalent of around EUR 35,000 at an interest rate of 26 per cent. She is therefore keen to repay the loan long before the end of the two-year term. ‘If possible, after six months,’ she says, while the finishing touches are made to more uniforms on sewing machines around her. Most of her 40 plus employees previously worked for themselves from home. Here, they earn around EUR 400 per month, more than three times the average income. Burhanova wants to employ her seamstresses on a long-term basis. After all, she has big plans. On the walls hang photos of women in elaborate wedding dresses – the likes of which will soon be made here.
Full-service package for the cu
Oihon Tojieva’s business is already a wedding dream come true. Situated just a short car ride away in the centre of the small community of Shaartuz, it is in effect an extension of the tailoring business: Tojieva runs a wedding dress hire company. She has restored an empty department store for this purpose, using lots of red material and floral decorations. On the first floor, dozens of mannequins in white dresses are arranged in long, straight lines – like rows of débutantes at the Vienna Opera Ball. Since the workshop has not yet started producing dresses, Tojieva imports them from Uzbekistan or Ukraine. The 44-year-old wants to offer her customers a full-service package of dress, make-up and hair. Vanity tables are set up on the ground floor, with mirrors surrounded by illuminated frames, like in a theatre dressing room. Using a twisted thread, one of her seven employees plucks fine hairs from a customer’s cheek. ‘That makes the skin nice and smooth,’ says the boss.
Oihon Tojieva, a well built, quietly spoken women, is also fairly new to the world of self-employment. She took out a loan and invested her entire life savings. Until the business becomes profitable, her family is living on the income generated by her husband, who runs a gift shop. This is not made any easier by the fact that he also has to support his two sisters. Nonetheless, things are going well for Tojieva. Every day, she has an average of three customers, who each spend around EUR 250.
Weddings are big occasions in Tajikistan. So much so that the government has limited the number of guests to 150 because too many families were getting into debt as a result of organising celebrations they could not afford. Tojieva is aware of this. ‘I want to offer every woman a package which fits her needs.’ The most expensive dress – which costs almost EUR 450 to hire – therefore rarely leaves the shop. Very few people can afford to buy a dress in Tajikistan, especially since three outfits are required for a wedding: one for the pre-wedding celebration, one for the wedding itself and one for the first visit to the bride’s parents, which takes place one or two days after the wedding.
No tradition of starting your own business
There are still some issues that Tojieva wants to address. Her wedding wonderland is hot. It is 40 degrees Celsius outside, and the fans she has arranged in the spacious premises provide little relief from the heat. She needs an air conditioning system and a fridge with drinks for the soon-to-be husbands, but her finances don’t stretch to that at the moment. ‘We have great plans, but there are so many challenges,’ she says, wiping her forehead.
There is no tradition of starting your own business in Tajikistan, which for many years was defined by its centrally planned economy. When self-employed business owners approach authorities, they are often met by a furrowed brow. The general assumption is that, ‘you won’t make it anyway.’ There is also a lack of transparency with regard to taxation and other regulations. Time and again, small businesses have to pay incomprehensible amounts of tax or undergo repeated inspections. The financial support for start-ups therefore gives them the confidence they need to assert their position vis-à-vis authorities.
New ideas for Tajikistan
More than 3,000 businesses have been launched since 2011 with support from GIZ, around 40 per cent of these by women. Approximately 6,000 new jobs have been created. The programme is implemented by GIZ on behalf of the German Federal Ministry for Economic Cooperation and Development, with financial support from the United Kingdom’s Department for International Development. In addition to start-ups, the project promotes dialogue between businesses and administrations as well as economic relations with the neighbouring countries of Afghanistan and Kyrgyzstan. The programme also provides advice to ministries and institutions, and supports an agricultural extension service for farmers. Their yields have increased by a quarter.
On the outskirts of Khujand, Tajikistan’s second-largest city, situated in the far north of the country, the training courses were also a real eye-opener for entrepreneur Anzhela Sarkisyan. ‘I used to think that the only thing I could do was teach,’ says the 36-year-old. Today, she runs her own preschool.
This morning, a slow trickle of children make their way through the wooden door. They say goodbye to their parents, take off their shoes and enter the former residential building which Sarkisyan has converted into a school. Everything is brightly coloured, the shelves are full of books and toys. Sarkisyan has to peer over her baby bump to greet the children – she is expecting her fourth child. Mehri Yusupova, one of the teachers, ushers the older children into her classroom, where they sit at low tables for two. Time for English. ‘What is the capital of Great Britain?’ asks Yusupova, and a sea of children quickly raise their hands.
Support for winners of a start-up competition
Sarkisyan, a pair of sunglasses perched on top of her head, stands in the doorway and smiles. Before she opened her own preschool, she worked in a kindergarten for ten years. What she experienced there made her think. ‘State kindergartens are overcrowded. It’s impossible to prepare children for school there.’ Many parents paid for extra tuition, which can be expensive, just so that their children could meet the requirements.
When Sarkisyan heard about GIZ’s start-up competition in mid-2014, she wasted no time in applying. She took part in training activities and presented her concept to the panel of judges. In the end, she was one of five winners to receive financial support. ‘I want to showcase children’s talents,’ she says of her philosophy. In addition to the usual subjects, she and her four teachers therefore also offer chess and drama lessons for their 30 pupils.
Sarkisyan also discovered hidden talents of her own: ‘I didn’t realise the extent of my organisational skills. I now know that there’s much more I can achieve.’ The parents of her pupils often ask if she can also offer something for the younger siblings. A kindergarten as well as the preschool? Yes, that may well be her next venture.
> Contact: Hagen Ettner email@example.com
published in akzente 4/15