Tajikistan Pins National Sustainable Development Programme on Goods Transit

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A proposed China-Central Asian highway and rail links would revolutionize the Tajik economy.

The Tajikistan President, Emomali Rahmon has emphasized the importance of boosting measures to achieve national sustainable development goals, discussing these at the 78th session of the UN Economic and Social Commission for Asia and the Pacific (ESCAP).

Rahmon noted the importance of strengthening the country’s infrastructure development, the establishing regional logistics centers, the introducing digital technologies, and the intelligent transport system within ESCAP to completely break the communication deadlock and turn it into a transit country.

He stated that the growth of regional consumer demand, foreign investment, the revival of the post-Covid economic development process and world trade will be the main factors contributing to the rapid growth of the Tajik economy.

Tajikistan’s GDP is about US$8.3 billion. The country borders China, with whom it has a strong trade relationship, and the source of its largest foreign investment and trade. However, Tajikistan is both landlocked and mountainous, albeit strategically positioned as a gateway to Central Asia and the Middle East if supply chain routes can be established.

China has long entertained the dream of a viable highway and rail route through Tajikistan, however the extreme cost of doing so has thus far proved difficult to overcome. There is one border crossing at Karasu Port of Entry over the Kulma Pass, at an elevation of 4.36km above sea level. From here, the rugged AH66 route leads from connections from China’s Karakoram Highway and onto Kashgar and Urumqi, and over the Pamir mountains eventually to the Tajik capital, Dushanbe. It is only open for two weeks each month (16th to the 30th) from May to November as constant landslides require continual maintenance and the route requires constant repair and clearance.

There have been discussions about connecting Tajikistan with China via rail, although a direct route over the Pamir is almost impossible to build. Instead, a route into Tajikistan via the countries northern border with Kyrgyzstan is being considered. Tajikistan and Kyrgyzstan have recently been meeting to discuss a revival of this plan.

China’s national railway network extends as far as Kashgar (with additional talk of extending that south to Gilgit in Pakistan) with plans to link that line through to Kyrgyzstan, A 2012 plan was devised to build almost 50 tunnels and close to 100 bridges, with a total length of 500 km. The line would traverse mountainous terrain, some sections over 3,000 meters above sea-level, with new construction of approximately 280km of track in Kyrgyzstan and about 180 km in China. The proposed line would run to Osh, a major trading city in Kyrgyzstan, and west into Uzbekistan. From Osh a spur would head south across the Kyrgyz-Tajik border to Dushanbe. Tajikistan does have a small rail network, terminating in Dushanbe, with links to Uzbekistan and ultimately to Moscow. There has also been talk of a Turkmenistan-Afghanistan-Tajikistan (TAT) railway that would link through west to Iran and the International North South Transportation Corridor. These plans may one day come to fruition, if not for the huge expense, but in following both China and Russia’s desire to bring regional peace to this entire region through the promotion of trade.

Tajikistan, with its population of some 9.5 million, has however been enjoying strong economic growth for nearly 20 years, mainly based on the export of mineral deposits and a significant cotton industry. But sustaining growth in future will need substantially higher growth in private investment and exports. The national per capita income (GNI) is close to US$1,000 but this is concentrated in the capital Dushanbe. Nearly a third of its Muslim population, or about 6 million, live in relative poverty.

Tajikistan’s growth of 6-7 percent per year since 2000 was fueled by growth in consumption and public investment, the latter driven mainly by rising remittances and export receipts from aluminum and cotton. Private investment and growth of other exports remains weak. Accordingly, the Tajikistan National Development Strategy 2030 (NDS) seeks to address this, and is tied to China’s Belt & Road Initiative, which in Tajikistan is expected to achieve better transport connections and greater economic integration of participating countries, and especially in Central Asia.

The country needs it – in 2019, nearly 29% of Tajikistan’s GDP came from immigrant remittances, mostly from Tajiks working in Russia. The lack of migration due to Covid the past two years has hit Tajikistan’s economy hard, and it needs to diversify. That means getting other infrastructure into place, such as improvements in Tajikistan’s cross-border transport, electricity supply and ICT infrastructure up to date, while improving Tajik shipment time.

Belt and Road projects in Tajikistan therefore have been concentrating on this, ranging from roads and railways to pipelines and power plants, even traffic cameras. There has been some cost to Tajikistan, and some realignment of national assets on a barter basis, in 2018 the Tajik Government swapped a Gold Mine operation for a Chinese-built power plant, while a few years earlier it settled a long-standing border dispute with China by agreeing to sell 1,322 km2 of land in the Pamir Mountains to Beijing.

There are some bright spots, Tajikistan has plenty of sunshine and is an exporter of electricity. There is – depending on whether much needed road and rail connections can be built – also room to develop regional trade. Tajikistan exports more to Turkey and Switzerland than it does to neighboring Uzbekistan and China. That this position has occurred is a throwback to the regional disputes and fighting that happened in 1992 following the breakup of the Soviet Union, today a more trustworthy diplomatic engagement is in place, assisted by Tajikistan’s membership of the Shanghai Cooperation Organization, which it joined in 2001. That regional trade could also get a boost from Russian trade and investment in the wake of the situation in Ukraine and Russia’s need to turn east. Russian President Putin has been talking up the importance of Russia-Tajik trade which has increased by 77% since March as Russian exporters look for new markets.

Many other highway and tunnel construction projects are underway, or have been completed, including rehabilitation of the Dushanbe–Chanak Highway between Tajikistan and Uzbekistan, financed and constructed by the China Road and Bridge Corporation (CRBC).

The key to Rahmon’s dreams of an interconnected Tajikistan will take serious planning and infrastructure investment to get the required highway and rail systems in place. But with Russia now on board throwing its weight behind Central Asia, an arrangement between China, Russia and Tajikistan, possibly with the assistance of AIIB funding and regional assistance may yet see his vision eventually become reality. It would also make for a spectacular tourism rail journey.

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Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates. The firm assists British and Foreign Investment into Asia and has 28 offices throughout China, India, the ASEAN nations and Russia. For strategic and business intelligence concerning China’s Belt & Road Initiative please email silkroad@dezshira.com or visit us at www.dezshira.com