Foreign Policy Blogs

Tajikistan: Economic weather report– variable winds, light rain

Though Foreign Minister Zafiri has stated that Tajikistan has an “open door policy” to foreign investment, barriers do remain:

Envoy FeigenbaumA. Two official comments from the United States:
On April 13, Deputy Assistant Secretary of State for South and Central Asian Affairs Evan Feigenbaum announced that Tajikistan's investment climate is hindered by its high level of corruption, and the continued lack of democracy, rule of law, and press freedoms.  He also announced a 53% increase in U.S. aid to Tajikistan, to USD 50 million, directed toward infrastructure and less to humanitarian relief.  Basic math: That would mean that previous annual Ambassador Jacobsenaid was below USD 33 million. 

Ten days later, US Ambassador to Tajikistan Jacobsen reiterated the problems of corruption in Tajikistan as a barrier to Western investment.  Twenty-two different organizations regulate and permit business in Tajikistan.  Entrepreneurial start-ups therefore take 60 days, as opposed to the U.S. average of about five.

B. In related news, sometimes contradictory to US official statements:
In a kind of triple dynamic between mining investment, hydropower utilities, and bilateral state-to-statediplomacy, Tajik investment appears to rely less on Russia and China.  Iran's investment in Tajikistan seems to be increasing, along with increased potential investment from other Middle Eastern states.

Tajik Power PlantTajikistan traded a northward neighbor as an investment partner in Tajikistan's aluminum to seek a more Westerly one‚ in Dubai.  On a visit to the United Arab Emirates, His Excellency President Rakhmon visited Dubai Aluminum (DUBAL) on April 12th; Tajikistan and Russian aluminum (RUSAL) decided not to continue their joint investment on the Rogun hydroelectric power plant on April 24th.  It remains to be seen if DUBAL picks up the deficit in hydropower or aluminum mining.  It could be that aluminum extraction infrastructure required Rogun plant upgrades.

But if not, power plants remain a focus for investment.  Iran's news agency IRNA reports that Iran might help develop Tajikistan's Sangtoudeh-2 power plant

The TajIran venture in tractor production, however, has hit some snags due to lack of investment and unfettered tariffication for imported parts.  IRNA reported no changes in tariffication, but new banking measures will be undertaken so that Tajikistan's farmers may purchase tractors.  Would this be at the high, tariff-added price?  If so, can Tajik agriculturists take the hit?

About that free trade: maybe Ambassador Jacobsen has a point. 

Photos: U.S. Department of State;