It has become something of a custom for authorities in Tajikistan to announce major investment deals which are unlikely to materialize. Apparently, the latest agreement with Iran announced this week by Tajikistan’s Ministry of Economic Development and Trade (MEDT) belongs to this category of deals.
On February 23, the Ministry told journalists that Iranian entrepreneurs have agreed to build the first specialized industrial town in Tajikistan. The industrial town will reportedly host about 50 industrial enterprises, including plants processing aluminium, cotton, and fruit. These enterprises will employ an estimated 20,000 people. The industrial town will occupy an area of 100 hectares (250 acres) in the Rudaki district, adjacent to Tajikistan’s capital city Dushanbe. According to the authorities, construction of the facilities will take about three years and will begin as soon as Iranian specialists complete all technical plans and feasibility assessments.
It is clear that a project involving the construction and equipment of so many enterprises, training thousands of people, and marketing of goods will require massive investment. It is equally clear that Iran whose economy is increasingly damaged by tougher international sanctions would not be able to provide this investment. What remains unclear, however, is what would happen to previous investment pledges made by Iran.
So far, Iran’s largest investment project in Tajikistan has been the construction of the Sangtuda-2 hydropower plant (HPP) on the Vakhsh River in central Tajikistan. The 220-megawatt power plant which was commissioned in late 2011 had cost about US$200 million to complete. The Iranian authorities have announced that they would also build a 170-megawatt Ayni HPP on the Zarafshon River in northern Tajikistan. In February 2011, a private Iranian company signed an agreement with the Tajik Ministry of Energy and Industry (MEI), pledging to build a large cement plant in Tajikistan’s southern Khatlon province. It was announced that the plant would produce two million metric tons of cement annually, costing some US$500 million to complete. Besides, Iranian private companies have announced plans to build three specialized health clinics in addition to an existing Iranian hospital in Dushanbe. The authorities have not indicated whether the investments that Iranian companies plan to channel into the industrial town project are expected to complement or replace the previous investment pledges.
Iran has steadily expanded its economic and cultural cooperation with Tajikistan. Trade between the two countries stood at US$215 million in 2011. Last week, the Tajik envoy to Iran, Davlatali Hatamov, announced that Tajikistan was ready to export crude oil from Iran. He also suggested that a pipeline needs to be built to enable uninterrupted deliveries of Iranian crude to the country. It is hard to say whether Hatamov himself believes that an Iranian pipeline which will have to go through Afghanistan might be a feasible project any time soon. Deliveries of Iranian oil by rail through Turkmenistan and Uzbekistan are unlikely, because the Uzbek authorities have effectively been blocking the transit of all rail cargo bound for Tajikistan through their territory since late 2010.
So, why do the Tajik and Iranian authorities speak publicly about economic and investment projects which most probably will not be implemented? Is it wishful thinking or something more than that?