TAJIKISTAN

SEPTEMBER - OCTOBER 2009

Prof. Saodat Olimova*Bimonthly article

Highlights

The main event in the past two months was a routinediscussion of relations between Tajikistan andRussia, which resulted in the visit of PresidentRahmon to Moscow in October 2009. Discussions,consultations and talks preceding this visit focusedon the following issues: cooperation in the sphereof energy, disputes about the terms of presence ofthe Russian 201st military base in Tajikistan andthe problem of completing the construction of RogunHPP.

Tajik authorities are not happy with the presentstatus of Tajik-Russian cooperation in the field ofenergy. In particular, their discontent concerns theslow rate of realization of Russian projects inTajikistan such as the construction of three smallhydropower electric stations and a geological surveyof natural gas on Tajik territory. During PresidentRahmon’s visit to Moscow, these claims were settled.Along with other issues, the agreement reachedincluded the following: creation of a joint venturefor the geological survey and the establishment ofthe "Rosneft" retail chain for selling oil products.

Moscow, in turn, had its own claims to settle withDushanbe concerning the final estimation of thecost of Sangtuda HPP. The Russian authorities werealso concerned about Tajikistan's ownership shareof Sangtuda, which is 25% plus one stock. Duringthe talks, these problems were solved. The issue ofthe construction of Rogun HPP was waived fromthe list of discussion topics. The problem with Rogunis that the Russian authorities agreed to participatein construction of Rogun only under the followingcondition: Tajikistan has to remove the legal ban(passed in February 2009) on the privatization ofRogun HP, Nurek H and Tajik Aluminum Company.

During the talks, the disputes over the presence ofthe Russian 201st military base in Tajikistan werealso settled. Before Rahmon's visit to Russia, therewere rumours that Tajikistan planned to chargeRussia $300 million a year for the presence of itsmilitary base in Tajikistan. Currently, Russia doesnot pay anything.

Experts say that by raising the question about theRussian military base on its territory, Tajikistan wasdrawing on the experience of neighbouringKyrgyzstan. Kyrgyzstan made Russia pay for itsmilitary base by referring to the US, which pays rentfor its Manas military base located on Kyrgyz territory.Furthermore, by receiving money for Russian militarybase, Tajik authorities want to obtain guarantees ofmilitary assistance from Russia in the event of internalinstability in Tajikistan.

However, during Rahmon's visit to Moscow theparties agreed to postpone the issue of payment forthe Russian military base until 2014, when the currentagreement regulating the status of Russian militarybases expires. Currently, Russia is interested inmaintaining its military presence in Tajikistan.President Rahmon, in turn, is also interested inRussian military presence in Tajikistan because itensures the stability of the current political regimein the country.

Another result of the talks between presidentsRahmon and Medvedev was the promise from theTajik side to support Russian language in Tajikistanand reinstate broadcasting of Russian TV channels.This issue is especially relevant now because of thenew law "On the State Language," which was passedon 5 November, whereby all Tajik citizens must knowthe Tajik language. Courts and other state institutionswill have to switch to Tajik in the near future.

*Deputy Director, Research Center Sharq, Dushanbe.

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The Central Asia Observatory (CAO)was established in 2007 by threeinstitutions that are interested in thearea: Casa Asia, CIDOB Foundationand Royal Institute Elcano

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November 2009

Moreover, all commercial and public advertisementshave to be presented in Tajik only. Violators of thelaw face high fines.

Internal affairs

There are concerns about the growing presence ofreligious extremist groups in Tajikistan, mainly inconnection with the activities of Islamic militantsfrom the Islamic Movement of Uzbekistan whoarrived in Northern Afghanistan from the Afghan-Pakistani border region, later crossing the Afghan-Tajik border to station themselves on Tajik territory.On 15 October, special services of Tajikistan andKyrgyzstan conducted an operation to discover andapprehend militants entering Kyrgyzstan from Tajikterritory, during which four militants from theIslamic Movement of Uzbekistan were killed in thecity of Isfara and one of them arrested. Currently,some particular areas along the Tajik-Kyrgyz borderare being blocked. So far, 28 members of the IslamicMovement of Uzbekistan have already been arrested.In preparation for the possibility of armed conflictswith the militants, CSTO Collective Forcesimplemented operational tactical exercises.

Another notable event was the construction of theIsmaili Centre in Dushanbe for Tajik Ismailis, thefollowers of the Ismaili branch of Islam. Thisconstruction was financed by the Aga KhanFoundation and cost more than $20.5 million.Another notable and controversial event was theintroduction of a special uniform for teachers anduniversity professors.

Foreign and international policy

On 8 September, the president of India PratibhaPatil made an official visit to Dushanbe. Mrs. Patilheld a meeting with President Rahmon and tookpart in the Tajik-Indian business forum. At theopening of the forum, President Rahmon namedIndia as one of the strategic partners in the region.

Rahmon urged Indian businessmen to invest in theTajik energy sector. Indian businessmen, in turn,demonstrated readiness to cooperate with Tajikistanby implementing joint energy projects, expandingtrade, establishing small and medium-sizedbusinesses and cooperating in agriculture. Thefollowing impediments to cooperation were alsodiscussed: the lack of direct air and railwaycommunication between Tajikistan and India,differences between Tajik and Indian legislationregulating economic spheres, and difficulties andsafety issues concerning transportation throughPakistan and Afghanistan.

Relations between Tajikistan and China are relativelyintensive and stable. In the framework of the 18thInternational Trade Fair in Urumqi, China, talksconcerning the implementation of energy projectsin Tajikistan took place between the head of TajikChamber of Commerce Sharif Said and repre-sentatives of Chinese energy companies Gojan andXuannen. The Chinese corporation Tebian ElectricApparatus Stock Co (TBEA) is constructing a high-voltage south-north line with capacity of 500 kW.Also, TBEA is preparing to build a thermoelectricpower station with capacity of 270 MW.

The active search for investors and partners in thefield of energy in Tajikistan is explained by the needto achieve energy independence from other countries,particularly Uzbekistan which presently suppliesabout 600 million kilowatt-hours every autumn-winter season. In exchange, Tajikistan suppliesUzbekistan with 900 million kilowatt-hours insummer. Uzbekistan generally stops supplying energywhen disputes with Tajikistan arise. As a result, Tajikpeople do not have enough electricity in autumn andwinter. To avoid the shortage of electricity this year,President Rahmon visited Turkmenistan. During thetalks with Turkmen President GurbangulyBerdimuhamedov, agreements to purchase electricalenergy from Turkmenistan in winter were completed.So vital was this visit to Turkmenistan for President

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Rahmon that he did not attend the CIS summit inKishinev, which took place at the same time.

The operation of Sangtuda-1 HPP, the energyagreement with Turkmenistan and the agreementwith Uzbekistan to allow the transit of energy fromTurkmenistan allowed Tajik officials to announcethat Tajikistan no longer depends on Uzbek suppliesof electricity. However, most experts are scepticalabout this claim concerning energy independencefrom Uzbekistan, arguing that northern regions ofTajikistan are still connected to Uzbek energynetworks.

The deepening of cooperation with NATO in the fieldof security is another important issue in Tajikistan’scurrent international agenda. At the end of October,the commander-in-chief of American military forcesin Afghanistan, General David Petraeus, visitedDushanbe. General Petraeus, President Rahmon andTajik defence minister Sherali Hairulloev discussedanti-drug efforts, antiterrorism measures and bordersecurity arrangements in the context of the currentsituation in Pakistan and Afghanistan. GeneralPetraeus announced the arrival of American specialmilitary forces in Tajikistan next year. He alsothanked Tajikistan for its help in the anti-terroristcampaign in Afghanistan, which includes permissionfor air and land transportation of cargo from the U.S.military base in Kyrgyzstan to Afghanistan throughTajik territory and support for French and Spanishpartners. Transit through Tajikistan is part of thenorthern supply route, which passes through CentralAsian countries and helps diversify supply routes tonorthern Afghanistan.

About 100 French and Spanish troops left KyrgyzManas military base in October. Sixty Spanish troopswere relocated from Bishkek to the Afghan city ofHeart and 30 French troops with military equipmentwere relocated to Dushanbe International Airportwhere the French airborne unit is already stationed.Another notable event was the Tajik-German

symposium of law enforcement agencies from bothcountries. The goal of this symposium was to set upan information exchange system between EU andCentral Asian countries as well as Afghanistan andPakistan.

The visit of the Swiss Minister of International AffairsMichelin Calmi-Rey to Tajikistan was anothersignificant event. The Swiss authorities promised toresolve the disputes between Tajikistan, Kyrgyzstanand Uzbekistan concerning the issue of water supply.Switzerland is going to use its own experience insolving this problem. Switzerland will also broadenits activities in representing Tajikistan in suchinternational organizations as the World Bank, IMFand WTO.

The traditional European Culture Week was the maincultural event in October, during whichdemonstrations of European cinema, concerts andexhibitions took place.

Economy and business enterprises

Tajikistan is being affected by the global financialcrisis. In January–August 2009 Tajikistan’s GDPwas $2.7 billion, 1.8% less than in the previous year.Foreign trade turnover fell 30.6% in the last eightmonths to $2.2 billion, mainly on account of thedecrease of exports of main Tajik commodities suchas aluminium and cotton. In the period January-August 2009, the export of aluminium fromTajikistan decreased by 55.36% in comparison to theprevious year. According to data provided by theTajik Aluminium Company (TALCO), in January-August 2008, exports of Tajik aluminium reached$782.1 million, whereas in January-August 2009,the figure was $349.1 million. The share of aluminiumin total exports from Tajikistan decreased from 74.7%last year to 58.2% in January-September 2009.

The decrease in aluminium exports can be ascribedto lower demand for metals and the subsequent fall

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of metal prices on world markets. The status of cottonexports can be explained in similar terms. The mainconsequence of the financial crisis, however, hasbeen the decrease in remittances from Tajik labourmigrants, who have been significantly affected bythe global recession. Many workers lost jobs becauseof the slowdown in the manufacturing andconstruction sectors in Russia. Some migrant workersstayed in Russia and accepted lower wages andworsening working conditions while others returnedto Tajikistan, engendering a substantial reduction inthe amount of remittances. According to the dataprovided by the National Bank of Tajikistan, in theperiod January–September 2009, remittancesamounted to $1.36 billion, 35.3% less than in theprevious year.

To solve the problem of employment for returningmigrants, the Tajik government is attempting tocreate job opportunities within the country. In someregions, former migrants are given land foragricultural production. In Hovaling region, 500former migrants were employed at Shugnov goldminefield. However, unemployment continues toincrease despite government initiatives. To remedythe situation, the Migration Service of the Ministryof Interior of Tajikistan and officials of Saudi Arabiasigned a memorandum on the export of Tajik labourmigrants to Saudi Arabia.

The financial crisis -and especially the fall inremittances- is having an extremely negative impacton the wellbeing of the population in Tajikistan.According to FAO and WHO data, 400,000 peoplein rural areas of the country are in danger of starvationthis winter. The only positive factors that can helpTajik peasants this year are the relatively high wheatyield and the help of international organizations.According to the State Committee of Statistics ofTajikistan, 39 countries offered aid to Tajikistan inJanuary–September 2009. The biggest share of aidwas offered by USA (35.5%), Russia (16.6%), Latvia(11.3%), Kazakhstan (8.9%) and Germany (7.7%).

Despite the recession, joint infrastructure projectswith China have not been interrupted. In recentmonths, the construction of the 2.2 kilometre tunnelunder the Shar-Shar pass on the road connectingDushanbe, Nurek, Dangara and Kulab has beencompleted. This road connects Dushanbe withsouthern Tajikistan. The Chinese government offeredabout $40 million for the construction of this road.The Chinese Railroad Building Company is the generalcontractor for this project. Moreover, the ChineseExport-Import Bank issued a $49 million loan forimplementing the reconstruction of the roadconnecting Dushanbe, Nurek and Dangara. This is a20-year loan with a 2% interest rate. Construction issupposed to be completed in two years. The total costof the project is $51.6 million. Tajikistan’s share inthis project is $2.6 million. This is the first stage ofthe reconstruction of the road connecting Dushanbe,Dangara, Kulab, Kalaihumb, Horog, Kulma andKashgar (China). This road will connect eastern Chinawith western Tajikistan.

Economic ties with EU countriesRelations with Poland become more intensive.Tajikistan and Poland signed an agreement oneconomic cooperation, one of the goals of which isto increase turnover between the two countries.Tajikistan exports textiles, non-precious metals andother products to Poland, while Poland exports food,machinery, equipment and chemical products toTajikistan. At the beginning of October, ther e p r e s e n t a t i v e o f f i c e o f t h e L a t v i a nTrastakomercbanka (TKB) was opened in Tajikistan.

It is the first European bank in Tajikistan. TKB plansto help Latvian businessmen in exploring the newmarket for their products and services.

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