Tajikistan attracts more Chinese
funds By Alexander Sodiqov
On June 7, Tajikistani President Emomali
Rahmon returned home from a week-long tour of
China that included a five-day state visit
followed by his participation in the 12th summit
of the Shanghai Cooperation Organization (SCO) in
Beijing.
Following the trip, the Tajik
president's office announced that 10 new deals
signed in Beijing would bring Tajikistan about
US$1 billion in new Chinese investment, loans and
aid. Experts suggest that the new deals will
increase China’s economic clout in Tajikistan,
giving Rahmon more leverage in dealings with
Moscow. As part of the deals signed during the
visit, Beijing has pledged to invest some $600
million to build a large cement plant in
Tajikistan's southern district of Shahritus, on
the border with
Uzbekistan. When
completed, the plant is expected to produce three
million tonnes of cement annually, using local
limestone reserves.
According to Rahmon's
press service, the plant will be a joint project
between the Chinese government-run National
Materials Group Corp and the state-owned Tajik
Aluminium Co (Talco). Eager to break its
dependence on cement imports, Dushanbe previously
negotiated similar deals with Tehran and
Islamabad. However, joint projects with Iran and
Pakistan have taken too long to get off the
ground, leading Tajikistan to seek Chinese
investment instead.
Beijing has also
pledged to build a coal-driven combined heat and
power (CHP) plant in Tajikistan's capital,
Dushanbe. Although negotiated over a year ago, the
$200 million project stalled because of
disagreements over the plant's technical
specifications. Following Rahmon's return from
Beijing, it was announced that Chinese specialists
will begin the construction of the plant "within
the next several days" and will complete the
project within a year.
The CHP project is
part of the Tajikistani government's effort to use
the country's coal resources in tackling power
shortages. China is also helping Tajikistan's
state-owned cement factory in Dushanbe and a
number of other enterprises to switch from
imported natural gas to local coal.
The
deals signed during the visit will also increase
Chinese presence in Tajikistan's mining sector.
Rahmon's press service announced that Chinese
company Zijin Mining Group has agreed to develop a
copper deposit in northern Tajikistan and build a
copper plant and a gold-refining facility in
Panjakent district. The company has already
invested some $200 million in the Zarafshon joint
venture in the district.
Last year, the
gold-mining venture produced 1.45 tonnes of gold,
selling most of it to Tajikistan's National Bank.
Zijin Mining, which has a 75% stake in the joint
project, is planning to bring the venture's annual
gold output to five tonnes by 2016 by developing
new deposits.
President Rahmon has also
invited the state-owned China National Petroleum
Corp (CNPC) to explore for oil and gas in
Tajikistan. Heavily dependent on energy imports
from Russia and Uzbekistan, Tajikistan has long
sought to develop its own hydrocarbon resources.
At present, Russian gas giant Gazprom and
Toronto-listed Tethys Petroleum are drilling for
gas in the country. However, the Tajikistani
authorities have been unimpressed by the progress
made by the two companies.
By inviting
CNPC to explore for hydrocarbon deposits, Dushanbe
apparently aims to push Gazprom to commit more
resources toward exploration and drilling in the
country as well as to prevent the Russian company
from becoming a single dominant player in the
sector.
In addition, Rahmon has secured a
$50 million Chinese loan for reconstruction of a
road linking China with central Tajikistan, and
brought home almost $25 million in Chinese aid.
Finally, Rahmon has used the visit to offer a
number of major Chinese companies to invest in car
building, new roads, electricity grids and dam
construction in the mountainous Central Asian
republic.
While officials hail the
outcomes of Rahmon's visit to Beijing as "highly
successful," some Tajik and Russian analysts are
concerned about the longer-term implications of
Chinese investment. Economist Khakim Davronov
believes Dushanbe should be more cautious in
borrowing from Beijing. Tajikistan owes almost
$900 million - or more than 41% of its total
foreign debt - to China's Export-Import Bank
(EximBank), the country's largest creditor. The
new loans will bring EximBank's share in
Tajikistan's foreign debt to almost 70%.
Sergei Zhiltsov, the head of the CIS
Center at the Russian Foreign Ministry's
Diplomatic Academy, argues that Chinese loans push
Tajikistan into a "debt pit" According to
Zhiltsov, if cash-stripped Dushanbe continues to
borrow heavily from Beijing, it may eventually
have to repay the loans by ceding to China full
control over its mineral resources and "strategic"
roads and enterprises.
However,
independent Tajik analyst Jamshed Kadyrov suggests
that China's growing economic clout in Tajikistan
will counterbalance Russia's traditional dominance
in the country, giving President Rahmon an
additional trump card vis-a-vis the Kremlin.
In addition to being Tajikistan's largest
investor, China is also the country's
second-largest trading partner. Trade between the
two countries exceeded $2 billion in 2011. There
are more than 50 Chinese-Tajik joint ventures
operating in the country.
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