VZCZCXRO4317
PP RUEHLN RUEHVK RUEHYG
DE RUEHDBU #1726/01 2631216
ZNR UUUUU ZZH
P 201216Z SEP 06
FM AMEMBASSY DUSHANBE
TO RUEHC/SECSTATE WASHDC PRIORITY 8604
INFO RUEHBJ/AMEMBASSY BEIJING PRIORITY 1827
RUEHAK/AMEMBASSY ANKARA 1829
RHMFIUU/HQ USCENTCOM MACDILL AFB FL
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUEKJCS/SECDEF WASHDC
RUEHVEN/USMISSION USOSCE 1796
RUEHNO/USMISSION USNATO 1736
RUEHRL/AMEMBASSY BERLIN PRIORITY 1771
RUEHBS/USEU BRUSSELS PRIORITY 1096
RUEAIIA/CIA WASHDC
RUCNCIS/CIS COLLECTIVE
RHEFDIA/DIA WASHINGTON DC
RUEHDBU/AMEMBASSY DUSHANBE PRIORITY 0022
RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 1825
RUEHBUL/AMEMBASSY KABUL PRIORITY 1786
RUEHLO/AMEMBASSY LONDON PRIORITY 1713
RUEHML/AMEMBASSY MANILA PRIORITY 0096
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 1813
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEHFR/AMEMBASSY PARIS PRIORITY 1527
RUEHKO/AMEMBASSY TOKYO PRIORITY 1545
RUCNDT/USMISSION USUN NEW YORK PRIORITY 1339
RUCPDOC/USDOC WASHDC PRIORITY 0093

UNCLAS SECTION 01 OF 02 DUSHANBE 001726 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV ECIN ECON EFIN ENRG EAID TBIO TI
SUBJECT: DUSHANBE SCO CONFERENCE - MOVING BEYOND SECURITY INTO 
REGIONAL ENERGY AND ECONOMIC COOPERATION 
 
REF: DUSHANBE 1718 
 
DUSHANBE 00001726  001.2 OF 002 
 
 
¶1.  SUMMARY: The Shanghai Cooperation Organization (SCO) focused 
on economic and energy cooperation in its Dushanbe meetings 
September 15-16.  The six member countries issued a joint 
communique affirming their intention to further cooperate in 
economic, trade, scientific, technological, social, cultural, 
and other fields.  Pakistan and Tajikistan each concluded 
bilateral agreements with China.  While Tajikistan and China 
will engage in joint military exercises next week in the Tajik 
mountains, regional security played a minor role in the SCO 
meetings.  END SUMMARY. 
 
¶2.  As relayed in reftel, the prime ministers of China, Russia, 
Kazakhstan, Kyrgyzstan, and Tajikistan and the Uzbek deputy 
prime minister met in Dushanbe for the fifth prime minister's 
meeting of the SCO.  In addition, representatives from Iran, 
Pakistan, India, Mongolia, and Afghanistan participated as 
observers.  The communique signed by the SCO members stated that 
the SCO's priorities in the near future will be energy, 
transportation, and telecommunications.  The SCO prime ministers 
want to improve the road network connecting each country and 
develop new energy export routes that would serve the six 
states.  The countries will seek to establish an "SCO Energy 
Club," which Kazakh Prime Minister Danial Akhmetov told press 
sources could be the solution to the energy problems of the all 
the SCO members.  According to the communique, the energy club 
will coordinate regional energy policy and promote cooperation 
in the energy sector among SCO members.  Developing relations on 
energy issues and energy security will remain a priority in 
future meetings of the group, which will meet again some time 
next year in the Uzbek capital, Tashkent. 
 
¶3.  On September 15, China and Tajikistan affirmed the 
countries' cooperation on a wide range of issues.  Tajik 
President Emomali Rahmonov met with Chinese Prime Minister Wen 
Jiabao on the sidelines of the summit and reviewed plans for 
expanding bilateral trade and investment, as well as discussing 
details of the upcoming joint military exercises.  The countries 
promised to boost high-level exchanges, and to "deepen mutual 
political trust."  The two countries signed four agreements on 
cooperation in the fields of technology, anti-drug trafficking, 
health and medicine, and radio, film and television.  According 
to Embassy contacts, the Kyrgyz representative complained that 
Tajikistan has gained disproportionately from the $900 million 
concessional loan offer from China to all Central Asian 
countries, (from which Tajikistan borrowed $637 million). 
Officials in southern Tajikistan broke ground on September 19 on 
the Chinese-funded north-south energy transmission lines. 
 
¶4.  According to various media sources, Pakistan's Prime 
Minister Shaukat Aziz held talks with Chinese Premier Wen Jiabao 
on the sidelines in which they agreed to broaden and deepen the 
bilateral relationship.  Pakistan and China vowed to strengthen 
their strategic relationship, expanding it in areas including 
defense, security, energy and science and technology.  The two 
leaders also reviewed the agreements scheduled to be inked 
during the November visit of Chinese President Hu Jintao to 
Pakistan, which Prime Minister Aziz said would be another 
"milestone" in bilateral relations.  Both sides also agreed in 
principle to conclude an early signing of a Free Trade 
Agreement, with the Chinese premier adding that Beijing had also 
agreed in principle to establish a joint investment company, the 
details of which were currently being worked out. 
 
¶5.  COMMENT:  As China's avenue of entry into Central Asia, the 
SCO appears to be gaining strength as a substantive regional 
forum for economic as well as security issues.  How agreements 
on divisive energy issues actually derive from "strategic 
cooperation" remains to be seen.  The SCO took no public action, 
 
DUSHANBE 00001726  002.2 OF 002 
 
 
for example, to resolve trade and transport issues or broker 
water and energy tensions between Tajikistan and Uzbekistan. 
Presidential Advisor Rahmatulloev told Ambassador September 20 
that no one is sure what form the "energy club" would take: 
"It's only at the discussion stage."  Privately, local Tajik 
sources told EmbOffs they see the SCO as a conduit to serve 
China's geopolitical interests, but Tajikistan will benefit from 
the creation of alternative routes avoiding Uzbekistan.  Russia, 
Kazakhstan, and Pakistan seem to have bought in to the 
organization, which one local NGO representative called the 
"Commonwealth of Authoritarian States."  With China bankrolling 
infrastructure development in the region, Russia and others 
recognize their governments' need to back up their private 
investments in order to play the game in the region.  END 
COMMENT. 
JACOBSON