Publication: Eurasia Daily Monitor Volume: 1 Issue: 109

Visiting Tajikistan on October 16-17 to mark the ratification and entry into force of a military basing agreement, Russian President Vladimir Putin observed that relations with Tajikistan exemplified Russia’s “comprehensive approach” to dealing with post-Soviet countries. That approach entails coordination of the military-security and economic tracks of the bilateral relationship.

Accompanied by top economic officials and businessmen, Putin announced plans by Russian state and private companies to invest more than $2 billion in Tajikistan within the next five years, creating more than 10,000 jobs. “No one has invested such money in Tajikistan,” he emphasized. Tajikistan President Imomali Rakhmonov added that the Russian military also employs thousands of locals. He omitted to say, however, that Russia will henceforth use Tajikistan’s land and resources gratis for the next 49 years for its military bases. Several major economic agreements were signed during Putin’s visit.

Oleg Deripaska’s Russian Aluminum (RusAl) is now positioned to take over the Tajik Aluminum Plant (TadAz), one of the largest aluminum plants in the former Soviet Union, and by far the largest productive asset in Tajikistan. Fully state-owned, TadAz is due to be privatized by 2007. Deripaska and Tajik officials signed agreements on adding two modern production lines, at a cost of $160 million, with an annual output capacity of 100,000 tons. TadAz output at present is over 200,000 tons annually; its 1980s-design capacity was more than 400,000 tons. RusAl will, moreover, invest $600 million in the construction of a new aluminum plant, to be completed within five years, with an output capacity of 200,000 tons annually.

To secure the electrical power supply for electrolysis-based aluminum production, RusAl will invest $560 million to complete the first stage of the Roghun hydropower plant and acquire the controlling stake there as well. Russia’s Industry and Energy Ministry is considering the possibility of providing loan guarantees for this project. Roghun, like the Sangtuda hydroelectric power project, is a Soviet-era construction site, idle since 1991.

Russia’s Industry and Energy Minister Viktor Khristenko, Finance Minister Alexei Kudrin, and Tajik officials signed agreements on the construction and financing of the Sangtuda hydropower plant. Russia will acquire the controlling stake here also. Unified Energy Systems of Russia will be the general contractor, and December 2008 its target date for completion. UES chief Anatoly Chubais recently inspected the site and attended the signing ceremony. The Russian government is redirecting $50 million worth of Tajik debt into this project. The Russian side is prepared to invest $200 million and is currently considering financing options: state budget funds or UES funds with some state co-financing and loan guarantees. The project’s total cost is estimated at $350 million for the first stage and $520 million for the second stage. The government of Iran has in the past and again recently evidenced interest in this project and may become a co-investor.

Tajikistan has at last succeeded in concluding the long-sought intergovernmental agreement with Russia on migrant labor and legal and social protection of either country’s citizens on the other’s territory. Remittances from hundreds of thousands of Tajik citizens working in Russia are critical to Tajikistan’s economy. Moscow had linked negotiations on this agreement with the negotiations on the military basing agreement, thus pressuring Tajikistan to yield on the latter’s terms.

Under the labor agreement, citizens of Tajikistan will be able to apply for legal residence and work permits in Russia. They are to receive the same wages and benefits as local workers, equal access to public health services and education, and the same rights to old-age pensions for the time worked in Russia. By the same token they will have to pay Russian taxes. The agreement covers only legal workers, a minority among Tajik guestworkers in Russia. This fact, along with the Russian authorities’ notoriously negative attitude toward Tajik workers, will probably ensure that a majority among them will continue working illegally, thus failing to qualify for legal protection and providing as before an easy target for extortion by police and other authorities.

(Interfax, RIA, Itar-Tass, Avesta, Asia-Plus, October 16, 17, 18; Voice of the Islamic Republic of Iran, Mashhad, October 17).