BRIDGE OPENING SPURS DISCUSSION OF FURTHER COOPERATION

C O N F I D E N T I A L SECTION 01 OF 03 DUSHANBE 001253

SIPDIS

SIPDIS

DEPT FOR SCA

E.O. 12958: DECL: 8/31/2017
TAGS: PREL ECON EAID ECIN ELTN TI AF
SUBJECT: BRIDGE OPENING SPURS DISCUSSION OF FURTHER COOPERATION

CLASSIFIED BY: Tracey Ann Jacobson, Ambassador, U.S. Embassy
Dushanbe, STATE.
REASON: 1.4 (b),(d)




1. (SBU) Summary: "This new bridge is as important for us as
oxygen," Tajik President Emomali Rahmon told Commerce Secretary
Carlos Gutierrez, who led the U.S. presidential delegation to
the opening of the new U.S.-funded bridge linking Tajikistan and
Afghanistan across the Pyanj River. Rahmon used the remainder
of a ninety-minute U.S.-Tajik bilateral meeting to elicit U.S.
assistance and investment for additional infrastructure
projects, expound on Tajikistan's favorable foreign policy and
business climate, and rant about Uzbekistan. A separate
trilateral meeting with Afghan President Hamid Karzai was more
scripted and concluded the business portion of the festive
weekend (August 25-26). End summary.


2. (U) President Rahmon hosted an official bridge opening
ceremony August 26 to inaugurate the newly constructed
Tajik-Afghan bridge spanning the Pyanj River from Nizhniy Pyanj,
Tajikistan to Sher Khan Bander, Afghanistan. Afghan President
Karzai and U.S. Secretary of Commerce Gutierrez, as the head of
a presidential delegation, attended the ceremony, arriving on
August 25 for a round of bilateral and trilateral meetings. The
U.S. delegation also included Assistant Secretary Richard
Boucher, and U.S. Ambassadors Jacobson and Wood.

With Neighbors Like This...

=====================


3. (SBU) In his bilateral meeting with Secretary Gutierrez,
Assistant Secretary Boucher and Ambassador Jacobson, Rahmon
commented on the importance of the bridge, saying, "Real
sovereignty in Tajikistan requires real stabilization in
Afghanistan." In order for Tajikistan to thrive, he explained,
it needs export outlets for its goods, including
hydroelectricity, and import routes for construction materials.
Improved security conditions in Afghanistan, coupled with the
new bridge, will allow Tajikistan access to the south, including
to the Iranian port of Bander Abbas. "Some countries" he said
are not interested in stability coming to Afghanistan. Among
these, as Rahmon has told us before, is Uzbekistan. Citing an
old Tajik proverb, Rahmon said, "You can choose your friends,
but God chooses your neighbors."


4. (C) Rahmon boasted of having good relations with all
countries in the world except Uzbekistan, and used a good part
of the bilateral meeting to complain openly about the government
in Tashkent. He said Uzbek president Karimov made his
intentions clear at the recent Shanghai Cooperation Organization
summit in Bishkek, and predicted Karimov would get much worse
after his re-election. He recounted for Secretary Gutierrez how
Uzbekistan blocked sales of Turkmen gas to Tajikistan last
winter, leading to "five months without electricity," and
prevents export of Tajik hydropower during the summer months
when Tajikistan has a surplus. Rahmon said that Karimov blocks
every attempt at regional integration and reported that in
Bishkek Karimov proposed to close the former Soviet Central
Asian borders with Afghanistan and, in Karzai's presence, ranted
about Afghanistan being a land of extremists. Rahmon took
credit for intervening to smooth things out between Karimov and
Karzai. (Note: Tajik diplomats and security officials have
expressed similarly negative views about Afghan extremism. End
note.)

Rahmon's Wish List

===============


5. (SBU) In both the bilateral and the trilateral meeting,
which included Karzai's team, as well as in his speech at the
bridge opening itself, Rahmon recited a long wish list of
projects where he hoped for U.S. assistance. He appreciated the
"more than $1 billion in U.S. assistance" since Tajikistan's
independence, and considerably more aid to Afghanistan. ("This
is not a criticism; maybe some poor countries need more than
others."). Here's Rahmon's list, some of which seemed prepared
in advance, and other items added ad hoc:

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-- Another Bridge: Rahmon asked for assistance to move the
temporary construction bridge at Nizhniy Pyanj to a new location
on the Afghan border at Kokul/Farkhor. Ambassador Jacobson
noted that the temporary bridge materials were not of a
sufficiently high quality to justify the cost of relocating the
construction bridge to the new locale. Rahmon made sure Karzai
raised this same request at the trilateral.

-- Free Economic Zone: In order to take full advantage of the
new bridge at Nizhniy Pyanj, Rahmon envisions creating a Free
Economic Zone and asked for U.S. expertise to make that happen.

-- Hydropower: Noting that Tajikistan uses only 5% of its water
resources, Rahmon called for U.S. technology and investment in
the hydropower sector. Specifically, Tajikistan wants the U.S.
to build a major hydro-generating project on the Afghan border
at Dastijhum. The dam would produce electricity for export to
Afghanistan and South Asia and provide irrigation for
Afghanistan's northern plains.

-- Railways: To break the Uzbek monopoly on Tajikistan's export
trade, Rahmon proposed building a railroad to Afghanistan. His
vision includes extending the line north and east to Osh,
Kyrgyzstan and on to China, and south through Mazar-i Sharif and
Herat to Mashhad and Bander Abbas in Iran. Assistant Secretary
Boucher explained that the Afghan government has no plans for
big railroad projects at this time.

-- World Trade Organization: Rahmon asked for U.S. assistance to
join the organization.

-- Narcotics: Rahmon asked for construction of border
infrastructure and technology to fight narcotics trafficking.
(Note: already a major part of our assistance effort here. End
note.)

-- Debt: Rahmon asked the United States to forgive the $17
million official debt Tajikistan owes, dating to 1992-93 loans
from the U.S. Commodity Credit Corporation. Tajikistan accepted
these loans in the "difficult first days" after independence and
beginning of the civil war. Rahmon did not understand the
principle of keeping this $17 million debt on the books while
the United States has since provided $1 billion in other
assistance. It's not the money, Rahmon opined, explaining that
Tajikistan had already paid $300 million of debt to Russia and
will settle that account entirely next year. Gutierrez
explained that the United States has no debt relief mechanism in
place that would allow us to eliminate this $17 million.

Investment Climate Before Investment

=============================


6. (SBU) Secretary Gutierrez used the formal bilateral and
trilateral meetings as well as remarks at the bridge opening to
underscore the need for Tajiks and Afghans to work together to
properly secure the border and operate the new bridge
effectively. Gutierrez told Rahmon directly that if Tajikistan
wants to attract more investment for major infrastructure
projects, it must take the necessary steps to improve the
business climate and improve investor confidence. "The U.S.
Government doesn't do business, but we can help you create the
proper climate," he explained. We could talk to potential
investors in hydroelectric energy, but they will ask, "Will my
investment be safe?" Investors need to know the rules of the
game regarding taxes corruption. Assistant Secretary Boucher
addressed Rahmon's specific request for the United States to
invest in a hydroelectric generation project, encouraging the
Tajik Government to finalize a viable Power Purchase Agreement
with the Afghans.


7. (SBU) Responding to these points, Rahmon avoided getting
into too much detail. On business climate: "Tajikistan upholds
all international standards." On corruption: "I've already done
reform," and have reduced the number of government agencies from
28 to 17. On Tajik banks: The financial sector now handles
transfers of $2 billion, up from $9 million. On the Power
Purchase Agreement: We just signed an agreement with
Afghanistan. (Note: Rahmon was referring to the agreements
signed with Afghan Energy Minister Ismail Khan during his recent

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trip. Rahmon seemed to be briefed that those general agreements
were in fact sufficient to spur investment in Tajikistan's
hydroelectric sector. End note.) Our messages were persistent
enough, however, that after the bridge ceremony, Rahmon and
Assistant Secretary Boucher agreed that Foreign Minister Zarifi
would work with Ambassador Jacobson to "fix the investment
climate."


8. (C) Comment: Rahmon portrayed the bridge opening as a
historic event -- and his rhetoric matched that of the U.S. and
Afghan delegations in exploiting the rich symbolism of the
bridge. However, his conversations with us were more
superficial, and nothing Rahmon told us broke new ground. We
have heard these themes before: Uzbekistan/Karimov as the source
of Tajikistan's woes; hydropower as Tajikistan's economic
salvation. However, he offered no vision of a way forward for
Tajikistan, except to ask the United States for more assistance
-- to develop hydropower and other infrastructure in Tajikistan,
and to rein in Karimov in Uzbekistan. He glossed over Secretary
Gutierrez's suggestions that Tajikistan must first takes steps
to improve its investment climate before the private sector will
invest here. Rahmon would prefer to leave those details to his
various ministers, but it's unclear those ministers have the
capacity or the authority to take any real action. Rahmon
genuinely understands that stability and recovery in Afghanistan
are important to Tajikistan's own sovereignty; although he was
rather dismissive about the trade route through Afghanistan to
Pakistan and focused more on the route to Iran. End comment.
JACOBSON