TAJIKISTAN SCENESETTER FOR A/S BOUCHER'S APRIL 20-21 VISIT

C O N F I D E N T I A L SECTION 01 OF 03 DUSHANBE 000429 SIPDIS STATE DEPARTMENT FOR SCA/CEN E.O. 12958: DECL: 4/10/2019 TAGS: EAID ECON EINV PREL PGOV PHUM TI SUBJECT: TAJIKISTAN SCENESETTER FOR A/S BOUCHER'S APRIL 20-21 VISIT CLASSIFIED BY: TRACY A. JACOBSON, AMBASSADOR, EXE, DOS. REASON: 1.4 (b),(d) ¶1. (SBU) Embassy Dushanbe welcomes the upcoming visit of A/S Boucher. Following is an overview of the key issues we face in Tajikistan. RECENT DEVELOPMENTS -------------- ¶2. (C) Tajikistan has been hit hard by the global recession. Remittances, which in 2008 were equivalent to half of the country's GDP, have fallen by 30%, primarily because of the downturn in Russia's economy. Tajikistan's GDP is also falling because of declining global prices for Tajikistan's main exports, aluminum and cotton. This winter was easier for Tajikistan than last year's, but only because of warmer weather. Dissatisfaction with the state of the country has affected President Rahmon's popularity, though he retains considerable support. It is unlikely that parliamentary elections in 2010 will produce any political change. The government has started implementing a new religion law, which has been heavily criticized locally and internationally. The only significant positive development has come in foreign policy: the last few months have seen steps toward rapprochement in Tajikistan's strained relations with Uzbekistan. MEETING WITH PRESIDENT RAHMON -------------- ¶3. (C) President Rahmon is likely to raise the following points: -- Afghanistan/Pakistan: President Rahmon will want an update on U.S. policy toward Afghanistan and Pakistan, and he will want the latest information on U.S. and allied efforts. The Government of Tajikistan continues to view Afghan-based narcotics trafficking and Islamic extremism as serious threats, and is reluctant to cooperate seriously with Afghanistan in any field. There have been a few bright spots, including a committment to joint training for Tajik and Afghan border guards at a U.S.-funded facility in Khorog and acceptance of 30 Afghan military at the Tajik Ministry of Defense academy last fall. -- Northern Distribution Network: Tajikistan answered our request for transit rights within a week, and Rahmon may ask for transit to begin immediately. He will press for U.S. funding to build another bridge to Afghanistan at Kokul, near Kulyab. However, the existing bridge is still used at only 15% to 20% of its capacity, in large part because the Tajik government has not devoted enough manpower to operating it around the clock and because of bureaucratic difficulties for Afghans in obtaining Tajik visas. Rahmon may repeat the request he made to General Petraeus for air transport of munitions purchased from Ukraine; USTRANSCOM says it cannot support this request due to the great expense, but has identified funds to answer a $200k Tajik request for computer equipment at the Nizhny Pyanj crossing. -- Investment: Rahmon probably will ask for USG financing for hydroelectric dams to reduce Tajikistan's chronic power shortages and to supply Afghanistan. You can expect him to repeat his request for U.S. support for a massive hydropower project at Dosti-jhum (on the Pyanj river, between Tajikistan and Afghanistan),which he will describe in terms of its potential benefits for Afghanistan. He may seek involvement in the construction of a power transmission line linking Afghanistan with Kyrgyzstan and Afghanistan that the Asian Development Bank had to pull out of because of a decline in available funds in the wake of the worldwide recession. Rahmon and his ministers continue to view foreign investment through the prism of their Soviet experience, and make such requests for direct state investment without addressing the need for reform DUSHANBE 00000429 002 OF 003 that might bring in private investors. -- Uzbekistan: Tajik-Uzbek relations continue to be marked by mutual suspicion and recrimination. However, there has recently been a slight thaw. In February a Tajik-Uzbek intergovernmental commission met for the first time in several years, reportedly making progress on resolving some border issues. There has been talk of renewing air service between Tashkent and Dushanbe, which has been suspended since Soviet times. KEY GOALS FOR YOUR VISIT -------------- ¶4. (C) You should raise the following subjects: -- Northern Distribution Network: Thank Tajikistan for its rapid agreement to transit of cargo to Afghanistan. You should encourage the rapprochement with Uzbekistan, which should make extending the Northern Distribution Network to Tajikistan less problematic. -- Afghanistan/Pakistan: Update President Rahmon on the Obama administration's strategy. -- Political Reform: Tajikistan is backsliding on democracy and civil society development. The Government has resisted reforming its electoral infrastructure, although this issue has been a matter of discussion for years. OSCE/ODIHR issued reports highlighting shortcomings in Tajikistan's electoral processes in 2005 and 2006; political parties, supported by USAID and IFES, made recommendations for changes to the electoral infrastructure in 2008. It is unclear, however, whether there will be new legislation in the near future, and whether a new law will have any substantial changes. A recent by-election in Dushanbe was a bad omen for the 2010 parliamentary elections, as it involved accusations of ballot stuffing and other problems. The lack of reforms continues to disenfranchise the Tajik public. -- Religion: The new religion law violates Tajikistan's international obligations and its own constitution, and has been heavily criticized locally and abroad. Rahmon may justify the law to prevent or control extremism; he may call criticism of the law "unwarranted interference" in his country's domestic affairs. Nevertheless, his government's restrictive religious policy and the new law furthers his government's isolation from the religious community. Full implementation of the law could have negative repercussions. -- Economic Development: The country's declining economic indicators have raised questions about its long term stability. Significant reforms in the agricultural sector are not in the offing; the business environment is poor, and the lack of reforms continues to deter investment. -- U.S. Investment: The recent establishment of the American Chamber of Commerce is a good start, but there is still only one U.S. company with significant investment interests. And even that company, Comsup, has been pressured by the government to sell its production to one local middleman at a low price rather than on the world market. This pressure hinders the company's ability to secure the financing it needs to expand its investment. DUSHANBE 00000429 003 OF 003 CONCLUSION -------------- ¶5. (C) Tajikistan is in a precarious position. The country's weak economy is becoming weaker and its unpopular government is becoming less popular. Policies aimed at strengthening the government's hand are actually weakening its position with the public. Tajiks remain disengaged from the political process because they know the outcome of elections is predetermined. Religious extremism is not a problem now, but harsh government restrictions may change this. The situation in Afghanistan requires a regional solution, but it remains unclear how committed President Rahmon is to substantially engaging. JACOBSON