AFGHAN VIEWS FROM NORTH OF THE BORDER: PROSPECTS FOR

UNCLAS SECTION 01 OF 03 DUSHANBE 001031

SIPDIS

SIPDIS

STATE FOR SCA/CEN, DOC FOR ITA/MAC/EHOUSE

E.O. 12958: N/A
TAGS: ECON ETRD PGOV PREL TI
SUBJECT: AFGHAN VIEWS FROM NORTH OF THE BORDER: PROSPECTS FOR
TAJIK-AFGHAN TRADE

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1. Summary. Not far from the nearly-completed U.S.-funded
Nizhniy Pyanj bridge at the Tajik-Afghan border, Afghan traders
ferry goods from Pakistan, China, and Iran into southern
Tajikistan. The opening of the Nizhniy Pyanj bridge will open
the door for more trade while decreasing the opportunity for
corruption at the border. However, Afghan officials worry that
Tajik restrictions on Afghan businesspeople will limit potential
economic development. The United States can help facilitate
Tajik-Afghan dialogue to resolve some of these issues. End
Summary.

At the Ferry Crossing
--------------


2. Businessmen wait in the shade at the lazy ferry crossing on
a hot and dusty afternoon. Tajiks run the ferry, and charge
$110 per truck to cross the river from Afghanistan, while trucks
leaving Tajikistan pay only $60. The ferry runs three times a
day, carrying six trucks each way hauling food, construction
materials, and medical supplies. During the summer, as prices
of goods within Tajikistan rise, trucks often return to
Afghanistan empty.


3. One Tajik businessman, "Muhabbat," showed EconOffs ten
trucks packed high with Pakistani cement. He had been waiting
two days for a Tajik standards official to take a sample of the
cement 200 km to Dushanbe, certify its quality, and return with
a certificate so he could haul the load into Tajikistan. (Note:
TojikStandart is the government agency charged with regulating
standards for all products and services in Tajikistan. End
Note.) A major housing and office construction boom and several
major infrastructure projects have driven up the demand for
cement and the monopoly state-owned construction company
Tajikcement is failing miserably to keep up. This summer,
cement prices have tripled, and local customers have flocked to
the lower quality Pakistani cement to fill their needs.


4. Muhabbat, despite close family connections to President
Rahmon, has to negotiate with the border guards, customs, the
sanitary service, and state standards agency on each
transaction. Once, Muhabbat dumped ten tons of eggs into the
river after waiting for a week for the standards agency to
certify his goods. Customs officials charged another importer
$18,000 to import twenty tons of meat into Tajikistan, a 100%
customs duty. Without storage facilities on either side of the
border, transporting perishable goods is risky.


5. Still, some trade is fruitful. Tajik businesspeople pay $3
per 14 kilogram crate of mandarins in Afghanistan, and sell
these crates for $20 on the Tajik market. According to the
Tajik Customs Committee, over $6 million in goods crossed the
ferry at Nizhniy Pyanj in 2006 - $3.5 million imports to
Tajikistan, and $2.5 million in exports. Unofficial trade is
likely even higher.

Help for the Border Towns
--------------


6. The Tajik border region of Kumsangir has much to gain from
improved infrastructure and relaxed trade restrictions. Most
trucks skip over the region's 4,500 citizens on their way to
Dushanbe. Besides lemons and produce that local entrepreneurs
take up to Dushanbe, one sees little evidence of economic
activity. Kumsangir gets electricity five months of the year;
and the government closes the water channel from the Vakhsh
river, leaving residents without water from November to April as

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well. The government provided little assistance after an
earthquake last year rattled the mud-built walls of the city's
buildings. (Note: The U.S. Government provided emergency
supplies and $50,000 in housing assistance. End note.)


7. Further north in the small city of Kolkhozobad, home to
140,000 people, between Dushanbe and the Nizhniy Pyanj bridge,
business owners explained that they lack capital to start and
expand their businesses. Tajik and Afghan businessmen described
concern over a 2002 Tajik governmental decree which regulates
the types of goods allowed for export/import with Afghanistan,
limiting expansion of trade with Afghanistan. Businesspeople in
both districts told EconOffs that they receive many products
from Afghanistan, and they believe the Nizhniy Pyanj bridge will
provide new opportunities for trade.

Governor of Kunduz
--------------


8. In Kolkhozobad, EmbOffs happened upon Muhammad Omar
Sulaimoni, governor of Kunduz province of Afghanistan, and Abdul
Jafar Sadeed, head of the international department, at the
Afghan Ministry of Foreign Affairs branch in Kunduz. The
governor was having lunch at the house of Dilbar Nurmatova, the
head of the non-governmental organization Sapeda, which is
implementing a State Department Business Facilitation Incentive
Fund project on cross-border trade. Declining the vodka toasts
traditional in Tajikistan but not common in Afghanistan,
Sulaimoni explained the troubles Afghans are having with their
northern neighbor.


9. Sulaimoni complained about the unfair treatment Afghan
traders receive in Tajikistan. Tajiks see in every Afghan a
potential terrorist and drug dealer, he explained. The Afghan
governor pointed out that Afghanistan accepted Tajik civil war
refugees in the 1990s, allowing them to live in Kunduz, set up
businesses, buy land and property, and get married. According
to Sulaimoni, Tajiks distrust Afghans who come to Tajikistan
only to do business, treating them rudely at the border, and
delaying the visa process. Tajikistan and Afghanistan do not
have a transit agreement, and Tajikistan does not allow Afghan
vehicles to cross the Tajik border. Businesspeople therefore
use Tajik trucks for all cross-border trade.


10. Sulaimoni explained that last year Tajikistan offered to
open a consular office in Kunduz so Afghans would not have to
travel to Kabul to receive visas. He claims that the Afghan
side set up the office, provided security guarantees to the
Tajiks, and settled all administrative issues, while the Tajiks
have done nothing to move forward. According to Sulaimoni, the
Tajik consular office in Kabul is waiting for their superiors in
Dushanbe to act, and the Afghans have not had luck pushing the
Ministry of Foreign Affairs here.


11. In Dushanbe, Dr. Atta Ghaznawi, the Afghan trade
representative to Tajikistan (and U.S. green card holder),
supported Sulaimoni's points, noting that the Ministry of
Foreign Affairs has ignored his letters for months. Recently,
when the Afghan government requested visas for 15 Afghan
businesspeople to attend a trade show in Eastern Tajikistan, the
Tajik government flatly refused visas for the entire group.
After the Tajik Consul insulted these businesspeople and kicked
them out of the Tajik Embassy in Kabul, the group sent a letter
of complaint to the Afghan-American Chamber of Commerce urging
Afghan businesspeople to boycott trade with Tajikistan.


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Bringing Tajiks and Afghans Together
-------------- --------------


12. Non-governmental organizations help bridge the gap between
these two countries with historical and cultural ties by
supporting businesspeople who typically lack knowledge of their
rights and have no recourse against corrupt officials. With
U.S. support, non-governmental organization Sapeda will publish
a brochure explaining key laws and regulations on Tajik-Afghan
trade issues. Sapeda conducted training in Afghanistan in
cooperation with the International Labor Organization on how to
start up a small business. Sapeda would like to translate its
Tajik language training brochures into Dari/Farsi, even though
they estimate that over 95% of individuals in Kunduz cannot read
or write. Sapeda requested U.S. support for establishing an
information resource center at the border to assist traders at
the new bridge site. In September 2007, Sapeda will organize a
cross-border trade exhibition in Kunduz province.


13. The U.S. government can also play a useful role as direct
facilitator between Tajikistan and Afghanistan to improve
dialogue on economic relations. Ghaznawi requested U.S. support
for the Tajik-Afghan Chamber of Commerce, to showcase the
potential for trade between the two countries. He also noted
the difficulty he is having with the Tajik Ministry of Foreign
Affairs, and suggested that we could help engage the Tajik
government on what he sees as simple good business.


14. Securing the Tajik-Afghan border by training and equipping
customs and border officials will help alleviate Tajik concerns.
Ghaznawi feels that beyond security concerns, Tajiks choose to
limit trade in order to line their own pockets. Ghaznawi
recognizes the need for a strong border and the ability to keep
narcotics out of Tajikistan, but does not see why this should
interfere with trade that benefits both sides. The Tajiks need
to engage in constructive dialogue and move beyond general
statements of historical friendship if they are going to take
advantage of the $36 million Nizhniy Pyanj bridge.


15. Comment: Tajikistan and Afghanistan should be natural
trading partners, but it may take some confidence building steps
to erase the Tajiks' bias against the Afghans. Post is aware
from its own discussions with Tajik officials of the distrust of
Afghans -- including Foreign Minister Zarifi's June 20 assertion
to the Ambassador that "Afghans want to be in Tajikistan only
for drug trading." Post will act on Ghaznawi's request to
facilitate a more direct conversation between Afghan and Tajik
trade representatives, and the Tajik Ministry of Foreign
Affairs, perhaps starting with the incoming head of the Consular
Department of the Foreign Ministry. The opening of the bridge
will provide an excellent opportunity for post, and high-level
visitors to reinforce this message. End Comment.
JACOBSON