Category Archives: Economy

“It Has Become Hard to Breathe”: Tajikistan’s Capital Gets a Coal Plant… and Hazardous Dust

dushanbecoalplant5-200x200As Dushanbe’s new coal-fired power plant begins to supply electricity, rising levels of coal dust set off alarm bells in the city.

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Filed under Energy, Environment, Health, Internet, Social media, Tajikistan

Russian ‘Migrant Guide’ Deemed Insulting in Tajikistan

Are brooms, paint brushes, trowels, and paint rollers the new national symbols of Central Asian countries?

A new ‘migrant worker’s guide’ to the city of St. Petersburg depicts foreign labor migrants as brooms, paint brushes, trowels, and paint rollers. The leaflet has provoked widespread anger in Tajikistan, with many internet users and officials describing the representation of migrant workers in the guide as ‘insulting’. Read >>

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Filed under Labor migration, Tajik-Russian relations, Tajikistan

Tajikistan Secures New Chinese Loans and Investment

On June 7, Tajikistani President Emomali Rahmon returned home from a week-long tour of China. The tour included a five-day state visit followed by Rahmon’s participation in the 12th summit of the Shanghai Cooperation Organization (SCO) in Beijing. Following the trip, the Tajik President’s office announced that ten new deals signed in Beijing would bring Tajikistan about $1 billion in new Chinese investment, loans and aid. Experts suggest that the new deals will increase China’s economic clout in Tajikistan, giving Rahmon more leverage in dealings with Moscow.

As part of the deals inked during the visit, Beijing has pledged to invest some $600 million to build a large cement plant in Tajikistan’s southern district of Shahritus, on the border with Uzbekistan. When completed, the plant is expected to produce three million metric tons of cement annually, using local limestone reserves. According to Rahmon’s press service, the plant will be a joint project between the Chinese government-run National Materials Group Corporation and the state-owned Tajik Aluminium Company (Talco) (president.tj, June 7). Eager to break its dependence on cement imports, Dushanbe previously negotiated similar deals with Tehran and Islamabad (news.tj, June 11, 2011; June 1). However, joint projects with Iran and Pakistan have taken too long to get off the ground, leading Tajikistan to seek Chinese investment instead.

Beijing has also pledged to build a coal-driven combined heat and power (CHP) plant in Tajikistan’s capital, Dushanbe. Although negotiated over a year ago, the $200 million project stalled because of disagreements over the plant’s technical specifications. Following Rahmon’s return from Beijing, it was announced that Chinese specialists will begin the construction of the plant “within the next several days” and will complete the project within a year. The CHP plant project is part of the Tajikistani government’s effort to use the country’s coal resources in tackling power shortages. China is also helping Tajikistan’s state-owned cement factory in Dushanbe and a number of other enterprises to switch from imported natural gas to local coal (president.tj, June 7; news.tj, April 28, 2011).
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Filed under Energy, Industry, Tajik-Chinese relations, Tajikistan

The Rogun Dam Controversy: Is Compromise Possible?

Heated disputes over the allocation of energy and water have been the defining feature of relations between Tajikistan and Uzbekistan over much of the last decade. Although the distrust between the two countries has deep historical roots, the present tensions revolve primarily around the Rogun Dam project. So far, both Tajikistan and Uzbekistan have been unwilling to discuss solutions that would be acceptable to both countries. Yet, without a compromise over Rogun, it is highly unlikely that the strained relations between the two neighboring states will go back to normal. Is compromise over the dam project possible?

BACKGROUND: The most contentious feature of the Rogun Dam that Tajikistan has been building since 2006 is its height. The 335-meter giant was designed by Soviet engineers in the 1970s to overtake Norak – also on the Vakhsh River in Tajikistan – as the world’s highest dam. In addition to reflecting the overall Soviet obsession with larger-than-needed engineering projects, the massive dam made sense from a purely utilitarian perspective. It was designed to create a huge reservoir that would irrigate over three million hectares of land in downstream countries, particularly in Uzbekistan, and enable multi-year water storage and regulation for regional irrigation purposes. It was also designed to increase hydroelectricity generation and enable the construction of major industrial enterprises in Tajikistan. Although the construction began in 1982, the break-up of the Soviet Union prevented the project from completion.

Emerging from a devastating civil war and facing recurrent power shortages in the 2000s, Tajikistan has sought to utilize its primary resource – an enormous potential for hydropower production – to develop into a prosperous state. The Rogun Dam scheme became the cornerstone of the Tajik government’s ambitious economic development program. The dam has been promoted as a shortcut to energy independence and economic growth. If the dam is completed, it will enable Tajikistan to generate about 13 billion kilowatt-hours of electricity annually. This will not only help the country meet all of its domestic needs but will also make Tajikistan a net exporter of electricity. What experts in Dushanbe prefer not to mention is that the generation of this amount of electricity does not require a 335-meter high dam. By building the dam based on the original Soviet blueprint, Tajikistan seeks to be able to control the flow of the Vakhsh River, including for political purposes.
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Filed under Authoritarianism, Energy, Nation Building, Tajik-Uzbek relations, Tajikistan

Iran’s Latest Investment Pledge Raises Questions in Tajikistan

On February 23, Tajikistan’s Ministry of Economic Development and Trade (MEDT) announced that a group of Iranian companies had agreed to build an industrial town in the country. According to the ministry, the massive project will entail the construction of about 50 industrial enterprises including aluminum, cotton, and fruit processing plants, in Rudaki district near the Tajik capital Dushanbe. Experts suggest that the remaining enterprises might include plants producing construction materials, solar panels, power transformers, electricity usage meters, and light bulbs. The authorities expect that Tajikistan’s first industrial town will increase the country’s exports, while also reducing imports and creating about 20,000 new jobs.

The announcement made during a three-day investment forum in Dushanbe was very short on details and, therefore, raised a number of questions. First, there is no indication of when the construction of the industrial town is expected to begin. According to the MEDT, Iranian experts still have to complete a feasibility assessment and the technical documentation. Once these are finalized, the construction phase is expected to take about three years.

Second, the authorities have not indicated where the resources required to implement the large-scale project will come from. Tajik experts estimate that the project will cost over US$ 2 billion. The government of Tajikistan which struggles to find resources to build the giant Rogun dam and has to rely on the international financial institutions (IFIs) in financing a large part of its social sector needs is unlikely to take on a major co-investor role. The government’s role will most probably be limited to enacting favorable legislation to improve the economic feasibility of the project and building part of the related infrastructure. Other major donors in the country, including Russia, China, and the IFIs, are also unlikely to co-sponsor an Iranian-led investment project. Therefore, if Iranian companies are serious about the project, they would effectively have to provide all of the funding.
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Filed under Industry, Tajik-Iranian relations, Tajikistan