Identifier
Created
Classification
Origin
07DUSHANBE1163
2007-08-16 10:43:00
UNCLASSIFIED
Embassy Dushanbe
Cable title:  

TAJIKISTAN'S SUGHD REGION HAS HIGH POTENTIAL, BUT LIMITED BY

Tags:  PGOV ECON TI 
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VZCZCXRO1877
RR RUEHLN RUEHVK RUEHYG
DE RUEHDBU #1163/01 2281043
ZNR UUUUU ZZH
R 161043Z AUG 07
FM AMEMBASSY DUSHANBE
TO RUEHC/SECSTATE WASHDC 0780
INFO RUCNCIS/CIS COLLECTIVE
RUEAIIA/CIA WASHDC
RUCNDT/USMISSION USUN NEW YORK 1500
RUEHVEN/USMISSION USOSCE 2025
RUEHBS/USEU BRUSSELS 1254
RUEHBUL/AMEMBASSY KABUL 2224
RUEHNE/AMEMBASSY NEW DELHI 2191
RUEHIL/AMEMBASSY ISLAMABAD 2229
RUEHDBU/AMEMBASSY DUSHANBE 2613
UNCLAS SECTION 01 OF 02 DUSHANBE 001163 

SIPDIS

SIPDIS

STATE FOR SCA/CEN

E.O. 12958: N/A
TAGS: PGOV ECON TI
SUBJECT: TAJIKISTAN'S SUGHD REGION HAS HIGH POTENTIAL, BUT LIMITED BY
TRADE BARRIERS AND CORRUPTION


DUSHANBE 00001163 001.2 OF 002


UNCLAS SECTION 01 OF 02 DUSHANBE 001163

SIPDIS

SIPDIS

STATE FOR SCA/CEN

E.O. 12958: N/A
TAGS: PGOV ECON TI
SUBJECT: TAJIKISTAN'S SUGHD REGION HAS HIGH POTENTIAL, BUT LIMITED BY
TRADE BARRIERS AND CORRUPTION


DUSHANBE 00001163 001.2 OF 002



1. SUMMARY: The great potential of northern Tajikistan's Sughd
Region -- as well as the enormous challenges it faces -- were on
full display during PolOff's August 12-13 visit to Khujand,
Istaravshan and Konibodom. The region's reputation for economic
dynamism and entrepreneurship appeared justified by the high
level of commercial activity. In addition, PolOff met with an
impressive youth activist committed to promoting democracy and
justice in his country. However, it was also clear that several
serious roadblocks will continue to limit the region's economic
and political development. These include such common problems
as power shortages, poor relations with Uzbekistan, and
corruption, as well as uniquely local issues such as the threat
to agricultural production caused by water seepage from Sughd's
Kairokkum Lake. END SUMMARY.


2. Ten kilometers east of Khujand, PolOff met with Rafik
Sattorov, chairman of "Sharbati Kistakuz," a fruit processing
plant producing everything from tomato sauce to apricot juice.
The factory is reportedly Tajikistan's oldest, and employs 600
workers on a seasonal basis. Sattorov was proud of the success
he had achieved, and enthusiastic about his plans for the
future. He intends to substitute durable "tetrapacking" in
place of the glass bottles currently used, to facilitate export
to Russia and Kazakhstan. Moreover, he has signed a memorandum
of understanding with a Chinese company to buy equipment for an
entirely new facility that will produce high quality window
glass for the domestic market at a fraction of the current
price.


3. The same energy symbolized by Sattorov in the business
sector was evident during PolOff's meetings with local civil
society leaders. Abdusamad Sultonov, executive director of the
Social Institute Youth and Civilization (SIYC) -- a recipient of
U.S. Democracy Commission funding -- spoke fervently about a
number of projects his organization has run over the past year
with the goal of increasing youth participation in public life.
For example, SIYC ran an advocacy campaign prior to the November
2006 elections, publicizing the legal right of Tajikistan's
citizens to obtain demonstration permits. The group also runs a

resource center providing training in human rights defense to
lawyers, journalists, and aspiring politicians, and led a recent
campaign in support of a young local judge, who was removed from
his job and arrested -- apparently for purely political reasons.
This effort included five articles published in regional and
national newspapers which, while not resulting in the judge's
reinstatement, at least secured his freedom.


4. A discussion of economic issues with Istaravshan Deputy
Chairman Dilovar Azimov not only underscored the disastrous
economic impact of the Soviet Union's collapse and years of
civil war, but also highlighted the local government and
business community's ability to make the most of a bad
situation. Although Istaravshan's once thriving tourism
industry has all but collapsed and the city's four carpet
factories are closed, the news was not all bad: a food
processing facility is now exporting its products to Kazakhstan,
Russia, and Belarus; and two local wineries have benefited from
a significant rise in demand from Russia following that
country's ban on the import of Georgian wine. Azimov also noted
that favorable tax policies have attracted a large number of
businesses to the city. Thus, rather than merely seeking to
revive Soviet-era industry, Istaravshan is aggressively pursuing
new avenues of growth. At the same time, however, chronic power
shortages continue to limit economic development, as do
Tajikistan's poor relations with Uzbekistan. For example,
Istaravshan's wine and mineral water producers (including "Obi
Zulol," a recipient of significant U.S. and other foreign
investment) cannot access Uzbekistan's 30 million potential
customers due to trade restrictions.


5. Konibodom Deputy Chairman Rustam Qodirov described an even
more serious economic (and environmental) threat. Water seepage
from nearby Kairokkum Lake has dramatically raised the water
table and soil salinity levels, lowering crop yields. Without
corrective action, the outcome could be disastrous for the
area's predominantly agricultural economy. Yet Qodirov
estimated that repair of the Soviet-era water pumps designed to
protect lands surrounding Kairokkum from seepage could cost as
much as $8.4 million. The local government does not have the
resources to address a problem of this magnitude, and Qodirov
was not confident that he would be able to secure funding from
the central government.

DUSHANBE 00001163 002.2 OF 002




6. Ne'matulloh Mirsaidov and Bobojon Ikromov, director and
editor of Varorud Newspaper -- an organization with a reputation
for independence and a willingness to criticize the authorities
-- emphasized that corruption is another factor restricting
economic development in Sughd. The men spoke of the
difficulties of starting a business when there are 58 inspection
agencies demanding bribes. They also asserted that the central
government's ongoing anti-corruption drive is nothing more than
an excuse to target independent business and political interests
that might pose a threat to President Rahmon, including the 2006
dismissal of Sughd's powerful former governor Qasim Qasimov and
the ongoing criminal investigation of former Sughd legislator
Nizomkhon Juraev. In Sughd -- which is geographically separated
from southern Tajikistan by high mountains, and whose elites for
decades ruled the Soviet Republic of Tajikistan -- these actions
are causing unease among independent-minded businessmen, and
prompting them to protect their money by sending it overseas,
rather than investing it at home.


7. COMMENT: Even for a region with as much energy and human
capital as Sughd, the impediments to operating a business or
promoting civil society are daunting. Nevertheless, if
government interference is kept in check, there is strong reason
to hope that the population will make steady progress towards
economic development and political freedom. On the other hand,
if Dushanbe continues to tighten its grip over political and
economic life in the region, Sughd -- along with the rest of
Tajikistan -- is likely to suffer as a result. END COMMENT.
JACOBSON