TAJIKISTAN'S STRATEGIC RESEARCH CENTER'S SURPRISINGLY

C O N F I D E N T I A L SECTION 01 OF 04 DUSHANBE 000616 SIPDIS SIPDIS STATE FOR E, P, S/P, SCA/CEN, EUR/ACE, INR, MCC NSC FOR MILLARD, MERKEL E.O. 12958: DECL: 4/7/2016 TAGS: PGOV ECON SOCI KCRM MCC TI SUBJECT: TAJIKISTAN'S STRATEGIC RESEARCH CENTER'S SURPRISINGLY ACCURATE LOOK AT CORRUPTION REF: A) DUSHANBE 0576 B) DUSHANBE 0583 CLASSIFIED BY: Richard E. Hoagland, Ambassador, EXEC, Embassy Dushanbe. REASON: 1.4 (b),(d) ¶1. (SBU) SUMMARY: In a March 23 posting on the "Asia-Plus" website, the director of President Rahmonov's Strategic Research Center think tank discussed his preliminary findings from an on-going study mandated by President Rahmonov about corruption in Tajikistan. His conclusions are surprisingly frank and, in our estimation, quite accurate, at least in describing the extent of the problem. A public discussion of corruption like this in a CIS country is unusually, maybe even uniquely, progressive, fundamentally refreshing, and potentially an important initial step toward transparency and good governance. If the final SRC report is not just words but leads to concerted action over time, we recommend that the Department seriously consider whether Tajikistan should become a candidate for MCC threshold status. This would strongly reinforce the Administration's policy of promoting a progressive eastern Central Asian corridor of reform and growth through Afghanistan and into South Asia. END SUMMARY. ¶2. (U) Especially since the 2004-2005 wave of "color revolutions" in the CIS, President Rahmonov has railed against corruption in his key public speeches and reported meetings with his cabinet, indicating top levels of the government clearly understand at least one of the causes of extreme public discontent. In addition to rhetorical gestures, Rahmonov commissioned his government's think tank, the Strategic Research Center (SRC),to report on corruption in Tajikistan. In the first phase of the study, focus groups involved 150 people. The second phase, still in progress, will involve 2,500 citizens from 24 towns and districts. On March 23, the "Asia-Plus" website published a long interview in which SRC Director Suhrob Sharipov discussed the unusually candid, and we believe quite accurate, findings from the preliminary study. Lightly edited excerpts of the translated interview follow. ¶3. (U) Begin excerpts: According to our research, corruption in its various forms has spread to virtually all sectors of society. However, it has been especially rife in state bodies such as tax and customs services, courts, prosecutor's offices, and organizations involved in distributing property, real estate, and natural resources. The research shows that corruption is most common among officials, since they control the management system and decision-making mechanisms. CORRUPTION IS THE "SECOND TAX" Corruption in state bodies has been spreading and has a tendency towards institutionalization and legalization. Very often, state bodies build their internal structures and procedures in a way that enables them to bring in additional incomes in the form of collections and fees and other forms of extortion. Respondents say that extortion has, in fact, become the second tax that is collected from corporate bodies and private individuals. EDUCATION AND HEALTH DUSHANBE 00000616 002 OF 004 Education and health are the most painful issues today. Just look at what is taking place in these fields! The whole generation of young people now thinks that you can't pass your exams or tests without giving money to teachers. What specialists will they make after graduating from a higher educational establishment? Doctors extort money from patients, but even then there is no guarantee that the patient will recover since the doctor buys his diploma with money! It is not accidental that the president pays great attention to exactly these spheres. CAUSES OF CORRUPTION The research shows that the most widespread method of corruption is giving and taking bribes. However, in our society the following forms [of corruption] are rife: clan relations, nepotism, and mechanations in distributing state property, extortion, bribing officials, and so on. Most of those polled think that the main reason for corruption is the low standard of living. But this is not the only reason. There are a great number of factors that give rise to corruption, including inadequate protection of property, unwarranted control of the market by the state with its weak management, inefficient judicial and taxation systems, the lack of transparency in financial issues, and the lack of personnel capacity. The civil war, which resulted in people with a poor knowledge of modern political and economic processes coming to power, should also be taken into account. All these factors are a favorable breeding ground for corruption in our country. WE GET BAMBOOZLED BY SOPHSTICATED MONOPOLISTIC INVESTORS The weak personnel capacity, for example, leads to the fact that foreign firms and transnational corporations in our country are also making use of the corruptness of officials to achieve their goals instead of following legal procedures and protecting citizens' interests. Such a tendency is developing in our country. Foreign companies operating in Tajikistan's energy and nonferrous metals sectors have experts and specialists of much higher level than that of most experts in the Tajik government. Foreign experts use the most up-to-date methods to manage the market and have professional skills to make use of international laws and modern economic technologies. As a result, a Tajik official sometimes can't make heads or tails of deals with foreign experts. That is why, I think, that the state is obliged to attract experts whose skills are not second to that of their foreign colleagues to investment projects, especially as in strategic fields such as energy, nonferrous metallurgy, and the cotton and gold industries. Only after that will it be possible, at least, to restrict corruption and protect national interests in an efficient way. The threat of monopolizing the investment space has emerged since major investors entered the country. I think that the government is doing right by attracting other companies, including from neighboring countries, to joint investment projects. This has been done to create competition between major companies in the investment field of the country. The tougher the competition, the more it will be to the country's benefit. The fewer the participants, the greater threat of monopolization of the market, corruption, and of someone's influence taking precedence over fairness to the general public. DUSHANBE 00000616 003 OF 004 Break excerpts. ¶4. (C) COMMENT: Sharipov's comments about the threat of monopolization by a foreign country coming in to flim-flam and bamboozle, especially in the energy and non-ferrous metals sectors, would seem to be a not-so-veiled reference to Russia. But in the other sectors mentioned, Swiss companies dominate cotton futures, and the UK dominates gold mining. In fact, in 2004, the British director of the UK gold mining operation in Tajikistan got caught with his hand in the till, allegedly to the tune of $30 million. Thus, it's understandable that Tajikistan is nervous and sometimes overly cautious about foreign investors - apart from the fact that the old-guard Ministry of Security still knee-jerk suspects that every potential investor is a spy. END COMMENT. ¶5. (U) Resume excerpts. WHY IS THERE A NEED FOR SUCH RESEARCH? The situation related to corruption is very serious, if not critical. This phenomenon is like a giant octopus with tentacles seizing almost all vital spheres of public life. This scourge is hindering political, economic, and social reforms in the country. The main signal that urged the authorities to start the research came from the fact that corruption has spread to the social spheres of education and health. This is the borderline after which, I think, a state loses control of the country. That is why the president raised the issue dramatically, especially, as he did at the latest government session. He said, "Either we will learn how to live and manage in keeping with the new requirements in politics, economy, and business, or we will find ourselves on the sidelines of civilized life." That is why we decided to make an attempt to objectively study the phenomenon of corruption and find out its underlying causes and answer the question as to what place it occupies in the public life, and, on the basis of this, to draw serious conclusions. Corruption cannot be curbed during a short period of time. It will take many years to eliminate the ramifications of corruption in Tajikistan. If we take a serious approach towards this problem and tackle it not theoretically but in practice, then we will manage to reduce corruption in the next few years. Corruption will be tangibly reduced in the law-enforcement agencies. Unfortunately, everything will remain the same in business, especially in the private sector. It is too early to talk about reducing corruption in this field unless free trade laws and international norms of conducting business will be given priority in our country, unless there is a healthy competition and middle class in Tajikistan. End excerpts. ¶6. (C) COMMENT: A public discussion of corruption like this is an important initial step toward transparency and good governance. At least it fairly accurately recognizes the problem. However, there are more fundamental issues involved in corruption in Tajikistan, not the least of which is the public perception - and perhaps reality - that Rahmonov and his family, through Orien Bank and its Somoni holding company, increasingly control and profit enormously from important sectors of the DUSHANBE 00000616 004 OF 004 economy. Further, Rahmonov's consolidation of power and achievement of stability have been based, to a certain extent, on rent-giving among geographic and economic clans and to former warlords on both sides of the 1992-97 civil war. As he famously told Afghanistan's President Karzai in 2005, "If you want stability, bring the warlords down from the hills and make them rich." Finally, what Sharipov has not said is that 70 years of Soviet domination established corruption as a cultural norm. Still, it is refreshing and encouraging to see a government body authorized by the president to create a report like this. If the final SRC report is not just words but leads to action, the Department should seriously consider whether Tajikistan should become a candidate for MCC threshold status. END COMMENT. ¶7. (U) BIO NOTE: Suhrob Sharipov was born in Dushanbe in 1963. He graduated from the philology faculty of M.V. Lomonosov Moscow State University in 1988. From 1990 to 1998 he was a post-graduate student and a researcher at the philosophy faculty of the Moscow State University. From 1998 to 2001, Sharipov worked as the head of the Strategic Research Centre's interior policy department. From 2001 to 2003, he held the post of deputy head of the presidential office's information and analytical department. He worked as the Tajik president's aide from 2003 to 2005. He has been the director of the Strategic Research Centre under the Tajik president since 2005. He is a candidate of philological sciences and a doctor of political sciences. Sharipov understands enough English that conversations can be conducted in both Russian and English. HOAGLAND