SOUTHERN TAJIKISTAN: ECONOMIC ASSISTANCE HELPS DUST OFF

UNCLAS SECTION 01 OF 02 DUSHANBE 001845

SIPDIS

SIPDIS

STATE FOR SCA/CEN

E.O. 12958: N/A
TAGS: EAGR ECON EFIN EINV EIND ELAB EAID ETRD PGOV TI
SUBJECT: SOUTHERN TAJIKISTAN: ECONOMIC ASSISTANCE HELPS DUST OFF
ANCIENT KULOB


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1. (U) INTRODUCTION: Kulob recently celebrated the 2,700-year
anniversary of its founding. Unfortunately, the nearly three
millennia have not been kind to the city. Three hours southeast
of Dushanbe, Kulob (known as Kulyab in Russian) is a town of
30,000-50,000 people. All across Tajikistan, banners
congratulate Kulob on its anniversary. On September 10, the
President hosted foreign dignitaries, including the American
Ambassador, at a ceremony commemorating the city's founding. To
prepare for the occasion, President Rahmonov ordered workers
from across Tajikistan to converge and clean up Kulob. The city
paved its streets, built new buildings, planted flowers and
painted sidewalks. Despite spending up to $25 million on
superficial improvements, the government did not invest in
education, environment or the city's stagnant economy.
Meanwhile, U.S. assistance programs provide vital tools for
local development. END INTRODUCTION.


2. (U) On the surface, downtown Kulob looks shiny and
revitalized. For the jubilee celebration, the northern city of
Isfara donated a beautiful tea-house. The city installed new
gates on the Kulob railway station, where trains carry at least
1,500 people twice a week from Kulob to Moscow. However, the
city literally swept its garbage to the side: near the stadium
where Rahmonov spent much of September 10 watching dances and
shows sits a huge open garbage dump.


3. (U) In this environment, U.S. assistance programs provide
actual opportunities for educational and economic growth. At
4,300-student Kulob State University, a U.S.-funded American
Corner sits next to a U.S.-funded Internet site. Students
crowded into the American Corner for a discussion with EmbOffs
about national politics, U.S. foreign policy, and studying in
the United States on October 3. Many of the students spoke only
Tajik - no Russian - and withheld their true opinions due to the
university official present. Additionally, USAID supports basic
education initiatives, including training in teaching methods
that stress critical thinking and active learning; capacity
building for administrators; and education finance reform.


4. (U) The local economy relies on small-scale food processing
and agriculture to supplement funds from migrant workers. With
no major industry, international donors including the U.S.
Department of Agriculture and USAID (through Counterpart
International),Oxfam, United Nations Development Program, and
the World Food Program provide basic economic, humanitarian, and
sanitary services to the population. Counterpart International
covers three poor districts in Khatlon Oblast - Muminobod,
Hovaling and Baldjuvon, the motherland of President Rahmonov.
The assistance program provides farmers with different varieties
of seeds, fertilizers, and also diesel and supplies. Local
farmers in these districts mainly grow wheat, fruits and
vegetables for their own consumption. The land lacks irrigation
systems, and farmers are heavily dependent on rain or
transported containers of water.


5. (U) Counterpart International focuses on micro-development
projects. A small canning factory produces 50,000 units of
fruits and vegetables each year and exports its products to
Dushanbe. The factory is located across a creek which only
jeeps and heavy trucks can cross. In Muminobod, a farmer
created a 50-meter artificial pond to develop a fishery, a
clever idea in a land where some of the few natural resources
are rivers. Counterpart provided the seed fish and now the
farmers sell their unique products on the local market. A
farming cooperative built a warehouse with Counterpart funding
to store 100 tons of fruits and vegetables.


6. (U) The local entrepreneurs' association representative
Faizullo expressed a lack of enthusiasm about economic prospects
to EmbOffs. With interest rates of 24-30% at Tajik banks, small
businesses cannot access credit. The construction boom leading
up to the jubilee celebrations abruptly ended, putting his
construction company on indefinite vacation. Despite Kulob's
proximity to Afghanistan, he had not thought about local
companies exporting products there. EmbOffs suggested that the
nearby Vose District could export iodized salt to Afghanistan.
Faizullo believes that further investment in food processing
businesses will best develop the local economy.


7. (U) COMMENT: Forty kilometers from the Afghan border, Kulob
is vulnerable to narcotics trafficking. International

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assistance helps provide alternative livelihoods for potential
targets, but there seems little prospect of sustained economic
growth. Despite a once-in-a-lifetime influx of investment to
Kulob, the infrastructure remains distinctly Soviet. END
COMMENT.
HUSHEK