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.
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.
Iran’s recent economic expansion in Tajikistan appears to be part of Tehran’s broader strategy to strengthen its influence in the country. In addition to pledging to invest more in the Tajik economy, Tehran has reiterated its calls for Dushanbe to foster closer cultural cooperation and announced plans to build universities and hospitals in the Tajik capital.
Iran has traditionally emphasized civilization and linguistic bonds as the foundation for a “special relationship” with Tajikistan. President Mahmoud Ahmadinejad famously referred to Iran and Tajikistan as “one spirit in two bodies,” and Tehran has long pushed for the expansion of cultural ties with Dushanbe. Tajik President Emomali Rahmon’s trip to Tehran on March 27-28, to celebrate Novruz with the Iranian leader for the second year running indicates the Tajik leadership’s willingness to embrace closer cultural links (www.president.tj, March 27).
Iran has steadily expanded its economic position in Tajikistan since the start of 2011. In February, 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. When completed, the coal-driven plant is expected to produce two million metric tons of cement annually, using local limestone reserves. The company will also build a coal power plant to supply energy to the cement producing facility. According to the MEI, Iranian investment in the project will total $500 million (www.avesta.tj, February 9, 18).
Iran’s hitherto largest investment project in the country aims to help Tajikistan meet its steadily growing demand for cement. Boosted by large-scale energy and infrastructure projects, the demand is presently estimated at 1 million to 1.5 million tons per year and continues to increase. With domestic production standing at only 290,000 tons in 2010, Dushanbe has heavily relied on cement imports from Pakistan and Iran to meet its needs (www.cacianalyst.org, February 2, 2011). The Iranian-built plant is expected to provide Tajikistan with surplus cement output that can be used in new infrastructure projects or exported.
An interesting article, which was originally published by EurasiaNet.org on March 7, 2011, looks at Tajikistan’s relations with Iran, particularly in the cultural field. I think it is worth to repost the article here.
Tajikistan and Iran: Is Dushanbe Distancing Itself from Cultural Cousin?
The casual visitor could not be blamed for believing Iran’s influence is ascendant in Tajikistan’s capital Dushanbe. Iranian pop music blasts from many of the city’s cafés. Iranian-made yellow taxis ferry a bevy of fashionable Iranian businessmen around downtown. Market stalls are stacked with Iranian cookies and cakes. And some government buildings are even adorned with signs in three languages: Tajik, Russian, and Persian.
Given the close cultural connection between Tajiks and Iranians, the strong Persian flavor in Dushanbe isn’t so surprising. But on the diplomatic front, there are abundant signs suggesting Tajikistan’s leaders are seeking to distance themselves from Tehran, long the country’s most ardent patron. Although the change can be attributed to Dushanbe’s fears of Islamic radicalism, it has long been clear that Iranian money is welcome in Dushanbe and the Islamic Republic’s politics are not.