Since Tajikstan gained independence in 1992, its economic situation has been affected by unprecedented shocks: civil war, political instability, and major natural catastrophes. Additional shocks stem from the collapse of the trade and payment system, sharply higher prices for transport and energy imports, and the discontinuation of transfers from the former Soviet Union. A civil war in 1992-93 claimed 50,000 lives, displaced 850,000 people, and left behind many destroyed villages, looted homes, and an extensively damaged infrastructure. Massive flooding contributed simultaneously to the destruction of dikes, roads, bridges, villages, and cultivated land. This study describes the economic difficulties caused by this combination of shocks and impoverished initial conditions and makes recommendations for improving the situation. The volume reviews Tajikstan's macroeconomic framework and plots an agenda for reform. It also looks at transformation in several sectors, including agriculture, industry and mining, energy, infrastructure, investment in human capital, and the environment.