CHINESE PRIME MINISTER BRINGS GOOD FORTUNE TO SCO TALKSIN

UNCLAS SECTION 01 OF 02 DUSHANBE 001718 SIPDIS STATE FOR SCA/CEN SIPDIS E.O. 12958: N/A TAGS: PGOV ECIN ECON EFIN ENRG PREL EAID TBIO TI SUBJECT: CHINESE PRIME MINISTER BRINGS GOOD FORTUNE TO SCO TALKSIN DUSHANBE DUSHANBE 00001718 001.2 OF 002 ¶1. (U) SUMMARY: The fifth session of the Shanghai Cooperation Organization heads of government began September 15 in Dushanbe to a flourish of publicity. High-level representatives from China, Russia, Kyrgyz Republic, Kazakhstan, and Uzbekistan, observers from India, Iran, Pakistan, and Mongolia, as well as Afghanistan as a non-status observer, will focus on regional economic and security cooperation. Chinese Premier Wen Jiabao's visit to Tajikistan, the first of its kind in 14 years, along with the first joint military cooperation between China and Tajikistan, serves to greatly boost the relationship between the two countries. END SUMMARY. ¶2. (U) Members of the Shanghai Cooperation Organization (SCO) meeting September 15-16 will seek to further the implementation of resolutions passed by the June SCO summit in Shanghai, as well as pass the organization's 2007 budget. According to press reports, the main issues of discussion include cooperation in the fields of economy, telecommunications, transportation, energy, environmental protection, and education. Leading the delegations are: Tajik Prime Minister Oqil Oqilov, Chairman of the Chinese State Council Wen Jiabao, Russian Prime Minister Mikhail Fradkov, Kazakh Prime Minister Daniyal Akhmetov, Kyrgyz Prime Minister Felix Kulov, and Uzbek Deputy Prime Minister Rustam Azimov. From SCO observing countries: Indian Minister of State in the Prime Minister's Office Prithviraj Chavan, Iranian Vice-President for Executive Affairs Ali Saidlu, Pakistan's Prime Minister Shaukat Aziz, and Mongolian Vice Prime Minister Mendsayhany Enhsayhan. First Vice President of Afghanistan Ahmad Zia Masud is attending as a guest. This SCO Prime Minister's meeting will provide the basis for the next SCO President's meeting. ¶3. (U) Zhang Deguang, Executive Secretary of the SCO, met with President Rahmonov to discuss the agenda of the summit. According to press, Zhang publicly praised the social and political situation in Tajikistan, particularly for its "stability, peace and national unity. . . . This as well as the economic development of the country is very important for security in the Central Asian region." Zhang and Rahmonov discussed issues of post-war reconstruction of Afghanistan's economy. "We are interested in reestablishment of stability in this country, because stability and security of the SCO states depend on security and stability in Afghanistan." The SCO and Afghanistan set up a contact group to consider measures to reconstruct Afghanistan's economy and deal jointly with international terrorism and drug trafficking. ¶4. (U) According to the Ministry of Economic Development of Russia, SCO representatives will approve two new highway projects during the SCO meeting. The two highways will be built through: Russia, China, Kazakhstan, Uzbekistan and Tajikistan. Despite Tajikistan's stated belief that energy projects are best discussed on a bilateral basis, rather than through the SCO, Russia and others will ensure that regional energy cooperation remains high on the agenda. According to government sources, SCO Observers Iran, India and Pakistan are actively seeking membership in the SCO, whereas Mongolia lacks such interest. ¶5. (SBU) According to news reports, during Chinese-Tajik discussions the sides will discuss the implementation of previously signed agreements on economic, military and technical cooperation, and discuss possibilities for new Chinese investments in Tajikistan, particularly in the hydropower sector. The two sides are also expected to discuss regional security, and strengthening cooperation in the fight against terrorism, extremism and separatism. Jiabao and Rahmonov are expected to take part in an official ceremony launching the construction of the electric transmission line (LEP) "North-South" in the Varzob Gorge. In addition, Chen Yuan, Chairman of China's Development Bank arrived in Dushanbe to sign an agreement with the Tajik National Bank under which the Chinese side will provide a USD 10 million loan to enhance the agriculture sector in Tajikistan. According to the Tajik State Statistical Committee, China exported nearly USD 70 million in goods to Tajikistan in the first six months of this year, up 40% from the same period last year. Tajik exports to China over the same period amount to USD 5.5 million. ¶6. (SBU) In a new development, Chinese special forces and Tajik troops are preparing for the first ever joint anti-terrorist exercises according to the Tajik defense ministry. The joint military exercises, are planned for DUSHANBE 00001718 002.2 OF 002 September 21-23 on the Tajik training ground Mumirak, 200 kilometers (124 miles) southeast of Dushanbe, the ministry's spokesman said. A total of about 500 soldiers will take part, including a company of Chinese special forces, the defense ministry said. The Tajiks will supply artillery, air power and paratroopers. The drill will be held as part of the Shanghai convention on the fight against terrorism, separatism and extremism, in line with this year's plan of military and military-technical cooperation of the two states' defense agencies. ¶7. (U) Centrasia.ru published a testy article describing U.S. intentions in Central Asia, entitled "To Decrease the Influence of the SCO and the Organization of Agreement for Collective Security - this is the priority task for U.S. State Department in Central Asia." The author attempts to discredit U.S. engagement, particularly Richard Boucher's statements and Ambassador Hoagland's statements in Central Asia as ineffective and "adding no value to Central Asia." The article urges the SCO to confront U.S. interests in the region rather than seek avenues of cooperation. ¶8. (SBU) COMMENT: Many observers here quietly feel the SCO serves Chinese interests in the region and nothing more. However, as China continues to lavish attention and money on the region, a small and poor country like Tajikistan has much to gain as well. Russia does not appear worried about the SCO eroding Moscow's position vis-a-vis China in Central Asia, and like China, appears to be championing the use of the SCO for economic purposes. END COMMENT. JACOBSON