AFGHANS IN TAJIKISTAN -- READY FOR BUSINESS

UNCLAS SECTION 01 OF 02 DUSHANBE 000860 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: ECON ETRD PGOV EAID TI AF SUBJECT: AFGHANS IN TAJIKISTAN -- READY FOR BUSINESS DUSHANBE 00000860 001.2 OF 002 ¶1. (SBU) Summary: While a common perception amongst Tajik officials and academics is that the Afghans are all poor, coming from a war-torn country with little education and healthcare, Afghan businessmen are surprisingly successful and growing wealthy in Tajikistan, and they have an equally dim view of Tajiks. Indeed, according to Afghan businessmen in Dushanbe, all the Tajik government needs to do to promote cross-border trade is stop being corrupt, open the border, and get out of their way. End Summary. Afghans Dominate Wholesale Food -------------- ¶2. (SBU) According to Dr. Ata Mohammad Ghaznawi, Commercial Attache of the Afghanistan embassy (and successful businessman in his own right),the Tajiks, "would not be able to eat without the Afghans." According to Ghaznawi, besides the roughly 2000 small Afghan businesses (legal and illegal),there are about one hundred Afghan wholesalers that dominate approximately 75 percent of imported foodstuffs throughout Tajikistan. A brief tour of the Afghan warehouses in downtown Dushanbe, re-stocked daily from larger warehouses outside the city, showed vast supplies of vegetable oils, rice, and sugar from Dubai, wheat from Kazakhstan, and tea, cookies, candies, soaps, and detergents from Iran. Tajik middlemen buy their goods from the Afghan wholesalers around 4:00 AM, and then sell them to small retail traders in kiosks at local bazaars. ¶3. (SBU) Besides food and some dry goods, there is a robust trade in contraband cigarettes from Dubai, Pakistan via Afghanistan to Tajikistan, Uzbekistan, Kyrgyzstan and Kazakhstan. According to Dr. Ghaznawi, about 50,000 cartons of cigarettes a month pass through Tajikistan's contraband markets. Corruption and Diplomatic Fall-out -------------- ¶4. (SBU) Afghan success seems to be resented and exploited by various levels of the Dushanbe city government. The Afghan wholesalers settled in Tajikistan during the late Soviet Union and early 1990s and concentrated their businesses near a multi-story shopping complex called Sadbarq (now often called the "Afghan bazaar"). Sadbarq has often been a bone of contention with the Dushanbe city government. Afghan businessmen made a deal in the 1990s where they could use the market after they refurbished it. After it was remodeled, the city tried to take it back and it is still unclear who technically owns it. ¶5. (SBU) While Tajik women run the kiosks in Sadbarq, the kiosks and their goods belong to Afghans. A 2001 car bomb near the bazaar was believed to be connected to a commercial dispute with an Afghan, and the city government tried to evict many of the traders and move them to a remote outdoor bazaar on the outskirts of the city the same year. Since then, Afghan wholesalers have complained of regular shake-downs by the police. (Post will report septel on recent round-ups of Afghan refugees and asylum seekers, many of them picked up from the Afghan dominated markets.) ¶6. (SBU) These shake-downs almost threatened Tajik-Afghan relations two years ago. By the time Dr. Ghaznawi arrived as Commercial Attache in Dushanbe in 2005, extortions took place on a weekly basis. Ghaznawi recounted one particularly grizzly tale which involved a Dushanbe police officer holding a tazer-gun to an Afghan wholesaler's genitals until the Afghan paid out $8,000 to the policeman. Dr. Ghaznawi claims that he personally threatened the Tajik Minister of Interior that he would close the border between Afghanistan and Tajikistan and tell President Rahmon publicly how Afghan businessmen are abused if the Minister did not find a way to stop the weekly extortion. The next week, according to Ghaznawi, the policeman returned the money to the Afghan wholesaler, apologized, and such large-scale extortions with impunity have declined. Why Tajik Wholesale Traders Are Less Successful in Tajikistan -------------- -------------- -------------- ¶7. (SBU) In discussing the difference in Tajik and Afghan traders with Ghaznawi, his deputy trade attache at the Afghan embassy Rangebar Samay, and later with two Afghan traders, they seemed to regard the Tajiks' minimal role in the wholesale market almost as a moral failing. Despite the long civil war in Afghanistan, they claim the Afghans are still capable of trusting each other. The informal hawala banking system works DUSHANBE 00000860 002.2 OF 002 quickly and efficiently with little more than someone's good word and a phone call to a designated country to deliver the promised money, according to the Afghans. The Tajiks, according to Ghaznawi, lack trust and know that they are unreliable even to each other. "They are neither communist, nor Muslim, but something in between." Lack of trust and ambiguous moral values have made Tajik society unable to function properly and impede business, he said. The main difference between Afghans and Tajiks, according to Ghaznawi and Samay, is that Afghans understand risk and how to take care of themselves independently. "War is risk and business is risk - this is life." ¶8. (SBU) Moreover, according to Ghaznawi, Tajiks and Afghans differ in sales strategies as well. He explained that an Afghan will only mark up the price of a product by 20%, but hope to sell a lot of them. A Tajik, however, will take the same good and mark up the price by 80%, but only sell a few of them. It was generally agreed among the Afghans that Tajik businesses are greedy, do not know how to deal in large volumes, and lack management skills. (Comment: Post's observations support the lack of capacity and ability to handle supply chains or volume. End comment.) Outstanding Problems with Tajikistan Government -------------- -------------- -------------- ¶9. (SBU) The commercial attache and his deputy both bemoaned that Tajikistan was not more accommodating to Afghan investors and businessmen. Afghans were not included on the Ministry of Foreign Affairs' recently approved list of nations allowed to receive visas without invitations at the Dushanbe airport. It chagrined them that they were the most important traders in Tajikistan to meet the Tajik population's daily needs and yet they were not welcome. Moreover, getting a Tajik visa in Kunduz and Kabul not only takes a long time, it costs $200-$300 more than the $60 official rate, even after they show their official status as businessmen with business licenses, business passports, and proof they paid business taxes in Afghanistan. Once Afghan businessmen arrive in Dushanbe, registration costs $35 per month. More than twenty Afghan companies have been waiting over a year to register at the Ministry of Justice, and have received no explanation for the delay. They were not too concerned about Tajik regulations on imports by "Gosstandart" or the lack of a transit agreement between Tajikistan and Pakistan and its implications for transit in Afghanistan, since "a hundred dollars at the border will fix that." Brief Biography of Dr. Ata Mohammad Ghaznawi -------------- -------------- -------------- ¶10. (SBU) After high school in Afghanistan, Ghaznawi joined the Soviet-backed Afghan army and got a scholarship to obtain a Ph.D. in economics in Moscow. He met his future wife at the same university. He moved to Tajikistan in 1988, opened his first business in 1990 with $300 of jeans and goods from Thailand and Dubai. Over the next couple of years he traded jeans for aluminum ingots from TadAZ (now Talco),among other barter transactions, and made a fortune -- so much that he has an outstanding business dispute with a Tajik office supply company on Rudaki for $7 million dating back to 1991 that has yet to be resolved. (Comment: That's a lot of jeans and aluminum. End Comment.) ¶11. (SBU) By 1992, when the Tajik civil war started, he moved his family to Almaty, Kazakhstan. He gained refugee status in the Netherlands and lived there four years, while keeping his businesses running in Tajikistan and Kazakhstan, and then finally moved to the United States when his company had a contract with the Pentagon. He received a green card in 2001. He said he feels that he has two nationalities - Afghan and American - and what he likes most about America is having human rights, the freedom to have a business, and protection from the law. Still, as an Afghan from a war torn country, he claims that he fears nothing. He is also opening a 240-room hotel in Kabul called the Sultan Palace Hotel in a few months. HUSHEK