TAJIK FM NAZAROV'S MEETING WITH DAS EVAN FEIGENBAUM

C O N F I D E N T I A L SECTION 01 OF 03 DUSHANBE 001593 SIPDIS SIPDIS NSC FOR MERKEL E.O. 12958: DECL: 8/21/2016 TAGS: PREL PGOV ECON ENRG KDEM PHUM TI SUBJECT: TAJIK FM NAZAROV'S MEETING WITH DAS EVAN FEIGENBAUM REF: A) Dushanbe 1545 B) Dushanbe 1588 CLASSIFIED BY: Tom Hushek, Charge d'Affaires, U.S. Embassy, Dushanbe, State. REASON: 1.4 (b),(d) ¶1. (C) SUMMARY: Tan and relaxed from his trip to the EurAsEC meeting in Sochi, Tajikistan's Foreign Minister Talbak Nazarov told Deputy Assistant Secretary Evan Feigenbaum August 18 that U.S- Tajik bilateral relations were based on trust, and hoped the next phase would focus on economic assistance not political reform in isolation for economic development. He cautioned that further opening Tajikistan's political space could lead to instability disastrous for economic growth, and pointed to Kyrgyzstan and Ukraine as examples that Tajikistan did not want to follow. END SUMMARY SOCHI ¶2. (C) Characterizing the August 15-17 meeting of the Eurasian Economic Community (EurAsEC) as "consultative," Nazarov said the leaders signed no documents and mainly talked informally about issues. He noted Belarus, Kazakhstan and Russia were working to form a customs union, but because Tajikistan did not share a border with those countries, it would have to wait to join. Nazarov noted that Tajikistan implemented all the requirements associated with membership in EurAsEc, but because it had no common borders with the other members, except Uzbekistan, the customs arrangements had little bearing on Tajik trade. ¶3. (C) Asked how EurAsEC, the Shanghai Cooperation Organization (SCO) and other groups differed in focus, Nazarov acknowledged EurAsEC shared the same functional goals and responsibility as many other regional organizations, but was mainly a mechanism to promote freer trade. (NOTE: Nazarov mentioned nothing about the proposed Eurasian hydropower consortium reported in the Russian press. END NOTE.) SHANGHAI COOPERATION ORGANIZATION ¶4. (C) The SCO's primary tasks were border cooperation and security for countries bordering China. The first phase of the organization had allowed the original members to resolve their differences on border issues, including Tajikistan's 288,000 square kilometer territorial dispute with China. From the beginning, the SCO was "not a bloc, not a union. There is no military component, and it was not meant to exclude any countries." Now, the original "Shanghai Five" includes member Uzbekistan and observers Pakistan, Afghanistan, India, Mongolia and Iran. ¶5. (C) In its next stage, the SCO will focus on joint functional problems, such as terrorism, narcotics and economic development and trade. DAS Feigenbaum observed that on paper, some of the SCO's goals mirrored U.S. policy priorities in the region. But rhetoric from the recent SCO summit suggested that the United Stated would not be welcome to assist in the region or in SCO's efforts. This was hard to fathom in areas such as promoting growth and expanding trade. Nazarov commented only that SCO was an "open" organization, and hoped to bring Afghanistan closer to Central Asia. Nazarov reported that the SCO Prime Ministers would meet in in Dushanbe in September, with Afghanistan as an observer. DUSHANBE 00001593 002 OF 003 ECONOMIC DEVELOPMENT: TAJIKISTAN GETS A BAD RAP? ¶6. (C) Turning to economic issues, Nazarov complained that foreign businessmen and countries said the investment climate in Tajikistan was "bad, bad, bad" but they never took the time to read the laws that existed to protect foreign investors and their enterprises. The bad reputation is not deserved, he suggested. ¶7. (C) He repeated that regional economic integration must include Afghanistan. "We are at the beginning of a long journey, " toward regional economic growth. Afghanistan is the heart of Asia, he said, quoting Pakistani poet Iqbal. "Everyone always quotes Iqbal when talking about Afghanistan," he laughed. ENERGY ¶8. (C) Tajikistan's out-dated network of transmission lines makes it hard to export the 3 billion kilowatt hours of electricity in summer without going through Uzbekistan. Tajikistan cannot even send its excess power to its northern section, although the Chinese will soon start construction on South-North high voltage lines that will finally connect the entire country, and allow exports to Kyrgyzstan and Kazakhstan. "The Chinese credit allows us to avoid Uzbekistan," he commented. ¶9. (C) Referring to the increasingly public disagreements between the Tajik government and Russian Aluminum giant RusAl, Nazarov noted that Tajikistan was standing firm on its requirement that RusAl build the 3600 MW project, and not two smaller projects (Reftel A). He noted that Uzbekistan did not like the Rogun project, but dismissed the neighbors fears that water would be turned off. "The dam will allow us to better regulate water to Uzbekistan and Turkmenistan." U.S.-TAJIK RELATIONSHIP ¶10. (C) Nazarov noted that Tajikistan and the United States worked together from day one. "The fundamental issue is trust," he said. "When there is mutual trust, there are no problems." He thanked the United States for the years of humanitarian aid, but noted that it was time to shift assistance to economic development. "The ice is melting, " he said. "We now have a better investment climate." He anticipated that U.S. energy company AES would invest up to one billion dollars in Tajikistan's energy sector, and hoped other American companies would follow suit. DAS Feigenbaum noted that there was considerable excitement in Washington at the overall direction on the U.S.-Tajik relationship in recent years. The relationship had become multidimensional and focused in achieving functional results. The key, he said, is to continue building a track record of success on common problems. DUSHANBE 00001593 003 OF 003 Feigenbaum emphasized the importance of the private sector, including AES. While relations among governments were important, only a transparent investment climate could attract private companies. Nazarov nodded without comment. ¶11. (C) DAS Feigenbaum added that many in the United States would be watching the November presidential election with interest. He requested support for registering NDI. He added that access to the media for candidates was important. THE DANGERS OF POLITICAL EXPRESSION ¶12. (C) Nazarov replied by alluding to the Islamic Renaissance Party's recent protest meeting against Israeli actions in Lebanon (Reftel B) as a potential threat to Tajikistan's economic and political stability. The IRPT gathering followed a dangerous precedent, when opposing demonstrations sparked the Tajik civil war, he noted. "We've learned our lesson," he said, suggesting any form of political meeting was unhelpful and dangerous. "We have one enemy: the economy. Every party needs to support economic development." He gave Kyrgyzstan's March 2005 revolution as an example of political activity destroying economic progress. He noted Ukraine had the highest level of economic growth until 2004, but the past two years had seen a decline in their economy. "Other countries can handle political demonstrations, he said. Tajikistan cannot. COMMENT ¶13. (C) Relaxed and expansive, Nazarov hit the Tajik government's favorite themes-energy, economic growth, troublesome Uzbekistan-but also added a new theme on the direct threat political expression posed to economic growth. Tajikistan's leaders clearly believe that any political expression could erase the hard-won post war stability. The government appears determined to focus all energy, assistance and activity on the economic sector. Unfortunately, without a better understanding of how to attract foreign private investors, Tajikistan will continue to rely on Russia, and perhaps China, for its economic growth and assistance. END COMMENT. ¶14. (U) DAS Feigenbaum has cleared this cable. HUSHEK