The walls seem to be closing in on Tajikistan. On top of electricity shortages, Dushanbe has been hit by a drastic rail transit rate hike imposed by Uzbekistan, and a potentially devastating increase in energy export tariffs levied by Russia.
The Russian tariff increase, which went into effect in early April, has had an immediate inflationary impact. The price of petrol in Tajikistan has shot up 6 percent already this month, causing the annual inflation rate to exceed 30 percent. Tajikistan had benefited from tariff-free energy exports from Russia for 15 years until the Kremlin implemented tariffs in mid-2010. The April tariff increase is pummeling Tajikistan’s beleaguered agricultural sector, driving up costs for farmers amid the spring planting season. The end result will be a substantial rise in the cost of food later this year in Central Asia’s poorest nation. According to official statistics, Tajikistanis already spend more than 60 percent of their income on food.
Compounding the trouble, on March 20, Uzbekistan increased railroad tariffs by 74 percent for goods transiting to Tajikistan in freight cars. Tashkent’s decision is widely seen as part of an effort to disrupt construction of the giant Rogun hydropower plant in Tajikistan. Uzbek officials have long complained that a completed Rogun Dam would have an adverse environmental impact in Central Asia, essentially a coded way of expressing fear that it would increase the Tajik government’s diplomatic influence, as well as harm Uzbekistan’s water-intensive cotton sector.
As Tajik officials try to cope with adverse external developments, the country has experienced uncharacteristic electricity shortages this spring. Officials have blamed problems at hydropower plants on drought-like conditions.
Together, the challenges look set to undo the slight economic gains made by Tajikistan since the worldwide financial crisis began to ebb. In an April 15 report, the World Bank singled out Tajikistan as one of the former Soviet republics most vulnerable to food and energy inflation. Already 47 percent of the Tajik population lives in poverty. The World Bank report expressed alarm that rising food prices, caused in part by higher energy costs, will cause a significant bump in the poverty rate. “Food and fuel price increases could increase the extreme poverty rate by 8.4 percentage points, as an additional 586,000 people fall below the extreme poverty line (US$2.50 per day),” the report warned.
Noting that Tajikistan obtains over 90 percent of all oil products from Russia, on April 14 Suhrob Sharipov, director of the Strategic Research Center, a pro-government think-tank, called Dushanbe’s dependence on Moscow a “threat to stability and security in Tajikistan.”
For most observers in Dushanbe, Moscow’s decision to increase the tariffs is punitive. It didn’t escape the attention of policy-makers in Dushanbe that as the Kremlin upped tariffs for Tajikistan, it lifted tariffs on deliveries to Kyrgyzstan after Bishkek promised Russia continued access to military facilities gratis. Tajikistan currently hosts thousands of Russian troops without receiving any fees for basing rights. Local media reports have speculated that Moscow is now seeking to expand its military presence in the country, either by taking over the newly refurbished Ayni air base, or returning Russian border guards to Tajikistan’s porous frontier with Afghanistan.
In unusually pointed comments, Sharipov, who is widely seen as being close to President Imomali Rahmon’s administration, lashed out at Moscow. The CA-news.org website quoted Sharipov as saying on April 14 that “Tajikistan does a lot for Russia, even at the expense of its own security.” Hinting that Dushanbe doesn’t like how it is treated in return, he then took the liberty of criticizing Russia’s “authoritarian tandem” – a clear reference to President Dmitry Medvedev and Prime Minister Vladimir Putin – for being unable to solve Russia’s domestic problems.
A Russian diplomat in Dushanbe, speaking on condition of anonymity according to protocol, said Sharipov and the local media are over-politicizing the fuel tariff issue. “There is no bargaining. Russia does not extort anything from Tajikistan. The oil prices and export tariffs keep growing elsewhere in the world. The case of Kyrgyzstan is sort of exceptional because the Kyrgyz authorities managed to kindle Russia’s interest, and the two countries made a mutually beneficial deal,” the diplomat told EurasiaNet.org.
Russia is open to working with Tajikistan, but Dushanbe must offer something that interests Moscow, the diplomat added. In Moscow, another Russian official accused Tajik officials of being the main impediment to a tariff agreement. The official said that each time the two countries have appeared close to a reaching a bargain on tariffs, Dushanbe tries to obtain last-minute concessions.
From the president’s office in Dushanbe, the rhetoric rarely wavers, however. In an April 20 address, Rakhmon highlighted the importance of Russia as his country’s top “strategic partner.”
Tajik analysts say the recent tariff hike should push officials to reassess the country’s energy strategy. But as political analyst Rashid Abdullo acknowledged, Dushanbe has little negotiating leverage with Russia. “Tajik authorities should have thought long ago about the possible developments and the diversification of fuel supply channels,” Abdullo told EurasiaNet.org. Though he did not specify whom Tajikistan should approach – certainly, in Tajikistan’s isolated neighborhood, options are slim – diversification “would allow Tajikistan to be more weighty in negotiations with Russia, which, one way or another, remains its key strategic partner.”
Tajikistan cannot rely on the benign attitude of Russia anymore, added Rustam Bobojanov, a professor of economics at the Russian-Tajik Slavonic University in Dushanbe. “A lot depends on diplomatic skills.”
In pondering its options, Dushanbe has little room for maneuver. By some counts, up to half of Tajikistan’s GDP comes in the form of remittances sent home by Tajik migrant laborers in Russia. In rethinking the country’s energy strategy, then, Tajik officials must take care not to provoke retaliatory measures that diminish the flow of labor migrant remittances. “The government needs to think about income opportunities for its citizens,” noted Bobojanov.
Konstantin Parshin is a freelance writer based in Tajikistan.