Tajikistan: Most trends still negative in a sclerotic economy E-mail



Financial Times by Jon Boone

Shopping with her sister for vegetables and fruit in one of Dushanbe’s bazaars last week, Farida, a young Tajik woman, is extremely cautious about how she spends her money. The family budget is just $100 a month, a total dependent on whether her father, working on a construction site in far-off Moscow, is in work or not.


“We will spend hours trying to find the best deal and cheapest food, even if the vegetables are soft and mushy. We rarely eat meat.” If they run short one month they can turn to their two aunts, whose husbands also work in Russia, for financial help. It is estimated that, of a population of 7m, 1m Tajiks are doing the dirty jobs Russians do not want to do themselves and who cannot find jobs in their own country, whose sclerotic economy is crying out for reform.


About $1.8bn is sent back in remittances each year, making it vital for a country with a gross domestic product of just $3.6bn. The International Monetary Fund’s resident official describes the money as the “vital social safety net” that the government itself has singularly failed to provide.


Some foreign observers believe that, in a country where half the population lives in poverty, it is one of the few things keeping the troubled former Soviet colony from hurtling off the rails. “The real nightmare scenario will be what happens when the work dries up in Russia – construction is usually the first thing to go in a slowdown, and that is where most of the Tajiks are thought to be working,” says one western diplomat in Dushanbe, the capital.

But the turning off of the remittance tap is just one of the potential catastrophes facing Tajikistan, where a trickle of frustrated young people are beginning to turn to radical forms of religion and where some fear the ghosts of the five-year civil war that ended in 1997 are still to be laid to rest.


“We often say it is ‘on the tipping point’. It could become a bulwark against drug trafficking and extremism and terrorism, or it could become a breeding ground for those same evils,” says another diplomat. “Which way it goes depends on the government and western assistance.”


But the most immediate challenge in the next few months could be the weather. Last year’s winter was the coldest for, by some estimates, 40 years. The country ground to halt as the all-important hydro-electricity system stopped working and food supplies were damaged. Smelters in the country’s sprawling Soviet-era aluminium plant near Dushanbe had to be turned off, damaging equipment and leading to a decline in metal quality.


Water levels remain dangerously low in the Nurek dam and, even if the winter is milder, there is a likelihood of another round of electricity rationing.


One project that continued uninterrupted was the construction of a $300m government building in the centre of Dushanbe, which is officially called the People’s Palace but is actually the new office of President Imomali Rahmon. The outside is all cream columns, capped off by a golden dome, while those visitors who have been accorded the rare honour of going inside, report lavish arabesque interiors that make heavy use of imported Italian marble and Russian hardwoods.


It horrifies foreign observers, who believe such an impoverished country that relies on foreign aid should be spending money on propping up its creaking health and education programmes.


The government’s official spokesman says the funding comes from “sponsors”, by which he means the large state-owned enterprises, principally the Tajikistan Aluminium Company (Talco).


This year, the IMF demanded greater transparency from the government with regard to the alleged diversion of most of the profits from Talco into offshore companies. The government has also told foreign embassies that it needs opulent surroundings to entertain Russian and Chinese companies that they hope will invest in the country.


According to executives at Talco, money from the aluminium plant will also be invested in one of the five new five-star hotels being built in Dushanbe and a new national airline. The case for foreign investment has also been badly damaged by last year’s revelation that the country had been misreporting to the IMF for years and was ordered to pay back $47m of loans.


“Afghanistan is actually in a less bad position than Tajikistan,” according to Donald Bowser, a United Nations anti-corruption officer. “At least in Afghanistan you have a market economy where business is not actually stopped in its tracks. Here you have a Soviet-command system that tries to grab any economic activity for itself.”


Most productive parts of the economy are controlled by the president himself or members of his family. The president’s new office is not the only example of skin-deep opulence in Dushanbe, a city awash with drug money. There are a handful of shops selling staggeringly expensive designer clothes, and sports cars cruise up the city’s elegant tree-lined boulevards. Mr Bowser says Dushanbe is home to some of the “cheapest Mercedes in the world” as most of the luxury cars imported from Russia are bought in exchange for bags of heroin then sold for cash in Tajikstan. “It doesn’t work so well now, as there are only so many sports cars people are prepared to buy.”


In spite of all the problems, it is widely believed that the memories of the civil war are still too sore for the Tajiks to want to return to violence. However, in the past year there have been some public protests, including a rare demonstration in the mountainous eastern Gorny Badakshan province in June. But political parties, which have never been given the opportunity to fight in fair elections, remain utterly cowed.


As with the rest of the Islamic world, Tajikistan is seeing a greater interest in Islam, particularly after the suppression of religion under Soviet rule. President Rahmon has restricted the number of mosques and madrassas and has banned women and children from attending mosques for fear they will pick up dangerous ideas. Rahmatullo Valiev, deputy leader of the Democratic party of Tajikistan, echoes the fears of many foreign observers that the suppression of religious freedom will have dangerous consequences. “The people have no outlet ... Anybody wanting to radicalise Islam in Tajikistan can exploit the situation.”


Nonetheless a Salafist (conservative) movement has established a foothold, mainly made up of city-dwelling young men with thick beards. The pious young Sunnis have so far been given a high degree of freedom – partly because some are the children of government figures.


Whether or not Tajikistan suffers another harsh winter or men such as Farida’s father lose their jobs in Russia, the outlook is not good. “Most of the trends are negative,” a long-serving diplomat warns. “No way has been provided to channel the discontent among the youth and we may well see the resumption of non-peaceful ways of doing politics.”

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