VZCZCXRO3733
RR RUEHLN RUEHVK RUEHYG
DE RUEHDBU #1845/01 2830554
ZNR UUUUU ZZH
R 100554Z OCT 06
FM AMEMBASSY DUSHANBE
TO RUEHC/SECSTATE WASHDC 8768
INFO RUCNCIS/CIS COLLECTIVE
RUEHNE/AMEMBASSY NEW DELHI 1863
RUEHBUL/AMEMBASSY KABUL 1813
RUEHIL/AMEMBASSY ISLAMABAD 1855
RHEFDIA/DIA WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHDBU/AMEMBASSY DUSHANBE 0209

UNCLAS SECTION 01 OF 02 DUSHANBE 001845 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR SCA/CEN 
 
E.O. 12958: N/A 
TAGS: EAGR ECON EFIN EINV EIND ELAB EAID ETRD PGOV TI
SUBJECT: SOUTHERN TAJIKISTAN: ECONOMIC ASSISTANCE HELPS DUST OFF 
ANCIENT KULOB 
 
 
DUSHANBE 00001845  001.2 OF 002 
 
 
¶1.  (U) INTRODUCTION:  Kulob recently celebrated the 2,700-year 
anniversary of its founding.  Unfortunately, the nearly three 
millennia have not been kind to the city.  Three hours southeast 
of Dushanbe, Kulob (known as Kulyab in Russian) is a town of 
30,000-50,000 people.  All across Tajikistan, banners 
congratulate Kulob on its anniversary.  On September 10, the 
President hosted foreign dignitaries, including the American 
Ambassador, at a ceremony commemorating the city's founding.  To 
prepare for the occasion, President Rahmonov ordered workers 
from across Tajikistan to converge and clean up Kulob.  The city 
paved its streets, built new buildings, planted flowers and 
painted sidewalks.  Despite spending up to $25 million on 
superficial improvements, the government did not invest in 
education, environment or the city's stagnant economy. 
Meanwhile, U.S. assistance programs provide vital tools for 
local development.   END INTRODUCTION. 
 
¶2.  (U) On the surface, downtown Kulob looks shiny and 
revitalized.  For the jubilee celebration, the northern city of 
Isfara donated a beautiful tea-house.  The city installed new 
gates on the Kulob railway station, where trains carry at least 
1,500 people twice a week from Kulob to Moscow.  However, the 
city literally swept its garbage to the side: near the stadium 
where Rahmonov spent much of September 10 watching dances and 
shows sits a huge open garbage dump. 
 
¶3.  (U) In this environment, U.S. assistance programs provide 
actual opportunities for educational and economic growth.  At 
4,300-student Kulob State University, a U.S.-funded American 
Corner sits next to a U.S.-funded Internet site. Students 
crowded into the American Corner for a discussion with EmbOffs 
about national politics, U.S. foreign policy, and studying in 
the United States on October 3.  Many of the students spoke only 
Tajik - no Russian - and withheld their true opinions due to the 
university official present.  Additionally, USAID supports basic 
education initiatives, including training in teaching methods 
that stress critical thinking and active learning; capacity 
building for administrators; and education finance reform. 
 
¶4.  (U) The local economy relies on small-scale food processing 
and agriculture to supplement funds from migrant workers.  With 
no major industry, international donors including the U.S. 
Department of Agriculture and USAID (through Counterpart 
International), Oxfam, United Nations Development Program, and 
the World Food Program provide basic economic, humanitarian, and 
sanitary services to the population.  Counterpart International 
covers three poor districts in Khatlon Oblast - Muminobod, 
Hovaling and Baldjuvon, the motherland of President Rahmonov. 
The assistance program provides farmers with different varieties 
of seeds, fertilizers, and also diesel and supplies.  Local 
farmers in these districts mainly grow wheat, fruits and 
vegetables for their own consumption.  The land lacks irrigation 
systems, and farmers are heavily dependent on rain or 
transported containers of water. 
 
¶5.  (U) Counterpart International focuses on micro-development 
projects.  A small canning factory produces 50,000 units of 
fruits and vegetables each year and exports its products to 
Dushanbe.  The factory is located across a creek which only 
jeeps and heavy trucks can cross.  In Muminobod, a farmer 
created a 50-meter artificial pond to develop a fishery, a 
clever idea in a land where some of the few natural resources 
are rivers.  Counterpart provided the seed fish and now the 
farmers sell their unique products on the local market.  A 
farming cooperative built a warehouse with Counterpart funding 
to store 100 tons of fruits and vegetables. 
 
¶6.  (U) The local entrepreneurs' association representative 
Faizullo expressed a lack of enthusiasm about economic prospects 
to EmbOffs.  With interest rates of 24-30% at Tajik banks, small 
businesses cannot access credit.  The construction boom leading 
up to the jubilee celebrations abruptly ended, putting his 
construction company on indefinite vacation.  Despite Kulob's 
proximity to Afghanistan, he had not thought about local 
companies exporting products there.  EmbOffs suggested that the 
nearby Vose District could export iodized salt to Afghanistan. 
Faizullo believes that further investment in food processing 
businesses will best develop the local economy. 
 
¶7.  (U) COMMENT:  Forty kilometers from the Afghan border, Kulob 
is vulnerable to narcotics trafficking.  International 
 
DUSHANBE 00001845  002.2 OF 002 
 
 
assistance helps provide alternative livelihoods for potential 
targets, but there seems little prospect of sustained economic 
growth.  Despite a once-in-a-lifetime influx of investment to 
Kulob, the infrastructure remains distinctly Soviet.  END 
COMMENT. 
HUSHEK