DRYING OUT IN DUSHANBE

UNCLAS SECTION 01 OF 03 DUSHANBE 001717 SIPDIS SENSITIVE SIPDIS DEPARTMENT FOR SCA/CEN E.O. 12958: N/A TAGS: ETRD PGOV ECON ELTN TI SUBJECT: DRYING OUT IN DUSHANBE DUSHANBE 00001717 001.2 OF 003 ¶1. (SBU) Summary: An October decree by Uzbek President Karimov governing the transit of alcohol and tobacco products has created a beer shortage in Tajikistan. Tajikistan is highly reliant on Uzbek roads and rail lines to import products from Russia, and Uzbekistan has generally allowed goods to pass through unhindered. However, continuing discontent with Tajik plans to build dams and hydropower stations that would restrict the flow of water to Uzbekistan has precipitated new tactics. In order to loosen Uzbekistan's grip on transit in and out of Tajikistan, the Tajik government has prioritized major road construction projects to provide transport options north, south, and east. End Summary. Beer in Dushanbe -------------- ¶2. (SBU) Beer is not a major part of most Tajiks' palette. According to the Tajik State Statistics Committee, Tajiks consumed only $850,000 worth of beer in 2006. With the local average price for imported Russian beer at $1.00 - $1.30 per bottle, this is enough for one of every six Tajiks to drink a single bottle of beer the entire year. A representative of a local beer distributor believes these figures are roughly accurate, due to the fact that "30% of the population does not drink beer at all because of their fanatical religious beliefs." Also, Tajiks prefer vodka. ¶3. (SBU) Tajikistan has only two major importers and distributors of imported beer, Inter-Trade and Shohona. Inter-Trade Company is headed by Mansur Ostanaev, who picked up his father's business connections through the Soviet Intourist Hotel network. Inter-Trade was established in 2002 with exclusive rights to sell Russian Baltika beer in Tajikistan. Shohona Co. is the exclusive distributor of other Russian-made beers: Zolotaya Bochka, Holsten, Miller, Klinskoe, Tolstyak and Kozel. Shohona's General Director Navruz Kosim is rumored to have connections with the Mayor of Dushanbe and with President Rahmon's family. Most imported beer comes from Russia, where it takes on average 21 days to ship Baltika beer from the Samara distributor of Baltika Co. ¶4. (SBU) EmbOff met with Jamshed Ruziev, Deputy Director for Sales of Inter-Trade on November 28. Ruziev worked for Baltika Co. in Russia until 2002 as a distributor of Baltika in northeast Russia. He told EmbOffs that the biggest problem the company is facing is the new Uzbek customs regime on excise goods crossing Uzbekistan, including vodka, tobacco, wine and beer. Companies must pay up to $80,000 per rail car as a deposit to Uzbek customs to ensure that their cargo crosses Uzbek territory. Tajik traders then have a difficult time getting the money back from the Uzbek government once the funds have gone into the general budget account. Representatives from Inter-Trade and Shohona are currently in Tashkent to resolve this issue. Ruziev believes these new regulations are related to the tensions between Uzbekistan and Tajikistan on water and hydro issues. Foreign Policy Goal: Pulling Away From Uzbekistan -------------- -------------- -------------- ¶5. (U) After September 2001, Tajikistan began to break away from Russian influence by grasping opportunities from the West to participate in the Global War on Terror and supporting the war in Afghanistan. Tajikistan's foreign policy centered around finding new friends that could support its economic development in order to leverage its relationship with Russia. While still greatly dependent on Russia, Tajikistan became more of an equal partner with its giant neighbor. ¶6. (SBU) Tajikistan's new foreign policy goal is gaining independence from Uzbek influence. Towards this goal, Tajikistan has pursued major energy and infrastructure projects oriented away from its troublesome neighbor. Uzbekistan has reacted to Tajikistan's pulling away by restricting Tajik visas, and by limiting oil and gas exports to Tajikistan. More recently, Uzbekistan has dragged its feet in fulfilling its agreement to transmit electricity from Turkmenistan to Tajikistan. DUSHANBE 00001717 002.2 OF 003 ¶7. (SBU) While Uzbekistan has sparred with Tajikistan over electricity transmission and dam construction, it has generally allowed trains and trucks to pass relatively freely through its territory to Tajikistan. Due to the Soviet-era construction of rail and road links that criss-cross both countries, Tajikistan is highly dependent on Uzbekistan to connect to Russia and Europe. However, the import routes through Kyrgyzstan, China, and Afghanistan have begun to take on a larger share of Tajikistan's trade. Tajikistan has prioritized major road infrastructure projects whose major purpose is providing alternate routes in and out of the country avoiding Uzbekistan. All Roads Lead Away From Uzbekistan: The Southern Route to Afghanistan -------------- -------------- -------------- -------------- ¶8. (U) Tajik Foreign Minister Hamrokhon Zarifi November 22 met with Afghan Ambassador to Tajikistan Muhammad Khairkhoh to discuss issues related to handling cargo traffic via the U.S.-funded Nizhny Pyanj bridge. The bridge is now open for limited traffic after sitting idle for two months following its official opening in August, but the two governments have not fully engaged on border cooperation. The Japanese road connecting the bridge to Dusti is under construction, and local news agency Avesta reports that the Japanese International Cooperation Agency will announce a tender for the reconstruction of the road from Qurghon-Teppa to Dusti by the end of the year. This will complete the road from Dushanbe to the Nizhny Pyanj bridge, which connects to a good road to Kabul and further to Pakistan. ¶9. (U) The Times of Central Asia reported that the Iranian Minister of Energy Said Parviz Fattah discussed construction of a tunnel 50 kilometers south of Dushanbe with Tajik Minister of Transportation and Communications Abdurahim Ashur on November ¶10. Fattah voiced Tehran's readiness to start construction of the $140 million `Chormaghzak' tunnel project after feasibility studies are completed. The Northern Routes to Kyrgyzstan -------------- - ¶10. (U) The $110 million Iranian-built Anzob tunnel will be open for traffic while under construction this winter and connects Dushanbe to Khujand in the north. With the Anzob pass closed during the winter, the only other routes connecting Tajikistan's northern and southern regions pass through Uzbekistan, which relations have made onerous in recent years. ¶11. (U) On November 3, the Tajik government and the Asian Development Bank (ADB) signed a loan agreement on the Regional Road Corridor Improvement Project designed to facilitate the completion or improvement of key sections of the road from Dushanbe to the Tajik-Kyrgyz Border and further on to Osh, Kyrgyzstan. The total cost of the project is $76.4 million, with $12.4 million of the ADB's $53.4 million contribution provided in the form of grant. The Tajik government contribution amounts to $22.8 million. The project will improve a part of the regional corridor from Nimich to Karamyk (Tajikistan's component) and from Karamyk to Saritash (Kyrgyzstan's component) as well as enhance border infrastructures for strengthening regional trade and cooperation. The Eastern Route to China -------------- ¶12. (U) According to Avesta news reports, Al-Abdulahad, a Kuwaiti-Lebanese engineering & consulting company, will conduct a feasibility study for the Kulob-Khaillakum road construction project. The feasibility study is being funded by the Kuwaiti Fund which has allocated a $1 million grant to Tajikistan. The $140 million project envisages construction of three bridges on separate sections of the 98-kilometer road. The project has funding from the Islamic Development Bank, Kuwaiti Fund, Saudi Fund, the Organization of the Petroleum Exporting Countries DUSHANBE 00001717 003.2 OF 003 (OPEC),and the Tajik government. ¶13. (U) Additionally, Avesta reported that the second and third phases of the Shagon-Zigar road construction project will be launched this week. According to the Executive Director of the project Ismonqul Shoqulov, "Iranian Sober International, the contractor general of the project, has already delivered main equipment to the construction site." Under the Tajik-Iranian agreement, 60% of the workforce will be Tajiks. The road along the Tajik-Afghan border links eastern Khorog west with Khaillakum and further towards Dushanbe. The second and third phases cover a 28.5 kilometer stretch of road for $29.8 million. The Asian Development Bank is financing 87% of the total cost, with the Tajik government covering the remaining 13%. The two phases are expected to be implemented within four years. ¶14. (U) Between Dushanbe and Kulob, the Chinese contractor reports that the 2,200 meter Shar-Shar tunnel is half-way completed. The tunnel should reduce the travel time between Dushanbe and Kulob by 35-40 minutes. The tunnel is being funded through a $30 million Chinese concessional loan agreement, with Tajikistan contributing an additional $8 million. Comment -------------- ¶15. (SBU) Local press has not yet picked up on Uzbekistan limiting Tajikistan's alcohol intake. Popular sentiment already rails against Uzbekistan for limiting Tajikistan's energy supply and its harsh visa restrictions; earlier this fall, rumors spread around Dushanbe about a possible Tajik-Uzbek military confrontation, following border skirmishes between Tajik and Uzbek border guards and local citizens. While these rumors failed to materialize, Tajiks clearly view Uzbekistan's treatment of them as unfair, and favorably view any plans that will reduce their reliance on Uzbekistan. End Comment. HUSHEK