"PLEASE TRAIN OUR WORKERS" -- TAJIK BUSINESS ROUNDTABLE

UNCLAS DUSHANBE 002000

SIPDIS

SIPDIS
STATE FOR SCA/CEN
DOC FOR BISNIS

E.O. 12958: N/A
TAGS: ECON ECIN EIND EFIN EAID PREL TBIO ETRD PGOV TI
SUBJECT: "PLEASE TRAIN OUR WORKERS" -- TAJIK BUSINESS ROUNDTABLE



1. (U) Summary. While the upper echelons of the Tajik
government focus on immense energy projects, a frank and lively
discussion by local businesspeople offered fresh examples of
corruption and decay in the small and medium enterprise sector,
especially related to customs, standards, and the lack of
business associations. At an Embassy-hosted round-table, five
business representatives asked for U.S. assistance for
vocational training opportunities for Tajik workers, bemoaning
their lack of readiness for the modern, post-Soviet world. End
Summary.


2. (U) The Embassy hosted a roundtable October 25 with
representatives from small and medium-sized enterprises (SMEs)
to discuss difficulties in the Tajik business operating
environment. Tajik participants included Maruf Orifov and
Gulnora Mahmudova from the Orima supermarket chain; Matluba
Uljabaeva of the Association of Small and Medium Enterprises;
Khalilov Jalil, a customs broker; and Tamara Khalikova of the
Association of Construction Enterprises.


3. (U) Uljabaeva lamented the lack of effective business
associations in Tajikistan, laying blame squarely on the Tajiks
who are afraid of speaking out for themselves. She lambasted
the Special Commission on Business Promotion under the Ministry
of Economy and Trade as utterly ineffective and described how
ongoing complications with inspections and licensing,
standardization, and taxes all hinder small business growth.
She spoke in favor of a U.S.-Tajik Chamber of Commerce in
Tajikistan and endorsed the EBRD's plans for a Tajik business
council.


4. (U) Khalilov Jalil, a local customs broker, enumerated
concrete examples of problems with customs and standards.
Gosstandart, the State Agency for Industrial Standards, charges
a heavy 0.3 to 1.5% for standardization services on imported
goods to Tajikistan, and does not publish a specific list of
goods that need to be certified. They try to license all goods
that enter Tajikistan, with sometimes humorous results. For
example, when a Tajik company attempted to import a plane,
Gosstandart required the company to receive a government
license, but Gosstandart did not have the equipment to check the
plane. He described the difficulties Russian Hotels is having
with customs clearance to build the Hyatt in Dushanbe. The lack
of clear mechanisms for regulating customs allows massive fraud,
waste, and mismanagement to occur. In another example,
Gosstandart certifies food products for three months regardless
of whether they last three months or three years. For the Orima
Supermarket chain that imports 13,000 different goods, this
presents a serious obstacle for business. They noted that the
market reports produced by the U.S. Department of Commerce
BISNIS program provide some of the best information on Tajik
customs and regulatory processes not only for foreign investors,
but for domestic companies.


5. (U) Representatives marveled at certain government
peculiarities. For instance, the government places high
protective import tariffs on goods even when there is no
domestic production to protect. Business visas to Tajikistan
cost different amounts depending on the country of origin, and
remain onerous to obtain.


6. (U) Participants all complained about the Tajik workforce's
inexperience. Orima has opened up its own training center for
its employees to teach them basic accounting, management, and
customer service. U.S. exchanges and technical assistance could
provide needed support in this area.


7. (U) Comment: The small businesses' complaints about customs
and inspections are familiar, but their recognition of the
severe shortcomings in human capacity is new. The government
frequently touts its low-cost workforce as an incentive for
foreign investors to come to Tajikistan, but employers often get
what they pay for. A workforce short on education and
competency is not necessarily an advantage even at cut-rate
wages. Until human capital improves, foreign investors in
Tajikistan could end up being as frustrated as Tajik businessmen
themselves. End Comment.

JACOBSON