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RUCNDT/USMISSION USUN NEW YORK 1444

UNCLAS SECTION 01 OF 03 DUSHANBE 000723 
 
SIPDIS 
 
SIPDIS 
 
COMMERCE/ITA FOR RISD 
COMMERCE/ITA FOR DYCK 
STATE FOR SCA/CEN 
 
E.O. 12958: N/A 
TAGS: EINV ECON PGOV PREL TI
SUBJECT: COMMERCE DEPARTMENT TO TAJIKISTAN: KEEP WORKING ON IT 
 
 
DUSHANBE 00000723  001.2 OF 003 
 
 
¶1.  Summary:  In a series of high-level government meetings in 
Dushanbe May 6-9, Department of Commerce Deputy Assistant 
Secretary for Europe and Eurasia Paul Dyck drilled home the 
 
SIPDIS 
message about providing a stable and open business environment 
in order to attract foreign investment.  In return, Tajiks 
plugged the country's macroeconomic and political stability and 
opportunities for investment in Tajikistan's energy sector. 
 
¶2.  Dyck worked the Tajik-Afghan portion of the Silk Road, 
discussing cross-border trade and traveling to the U.S.-funded 
Nizhniy Pyanj bridge.  Meanwhile, private companies gathered for 
an ebullient founder's dinner for an American Chamber of 
Commerce in Tajikistan, which we hope will result in the 
establishment of a local AmCham.  We used all the events to 
emphasize that investment will come to Tajikistan only when the 
business climate improves.  Unfortunately, the final meeting at 
the State Committee for Investments demonstrated that Tajikistan 
is likely a long way from making meaningful changes. End Summary. 
 
¶3.  Pulod Mukiddinov, First Deputy Minister of Energy and 
Industry, fished for U.S. interest in Tajik energy projects. 
Mukiddinov mentioned that 16 companies have expressed interest 
in the May 27-29 coal and thermal energy investment conference 
in Dushanbe.  While hydropower remains the government's main 
focus, Tajikistan views its coal resources as a quick solution 
to some of its energy problems, particularly for year-round 
export and domestic consumption.  Mukiddinov told Dyck that the 
best investment opportunities in Tajikistan are in light 
industry, including cotton processing, the energy sector, and 
energy-intensive industries, such as aluminum and mining. When 
Dyck raised U.S. company CanArgo's proposal for cooperation in 
oil and gas, Mukiddinov noted that this area is headed by 
another deputy minister, but reported that a delegation had 
viewed CanArgo's operations in Georgia and had reached agreement 
with the company. The government is now considering the issue of 
licensing. 
 
¶4.  Namatjon Buriev, Advisor to the President on Economic 
Affairs, touted Tajikistan's stable political arena, close 
relationships with international institutions such as the World 
Bank, and stable macroeconomic environment as advantages for 
investment here.  He pointed to recently-passed laws and 
regulations and to the government's strategies for poverty 
reduction and development that will help ease the cost of doing 
business here.  However, while Buriev realizes that attracting 
attention from U.S. companies requires significant effort, he 
could not answer Dyck's basic question about how companies can 
receive information about Tajik market regulations. 
 
¶5.  Donors, non-governmental organizations and Afghan trade 
representatives gathered for lunch to discuss the ins and outs 
of Tajik-Afghan trade issues.  Aga Khan Development network 
representatives discussed their successful projects in the 
eastern Gorno-Badakhshan region building small bridges and 
stimulating trade.  The Eurasia Foundation talked about its 
cross-border project to improve market information, which will 
be assisted by a Business Facilitation Incentive Fund (BFIF) 
grant proposed by Embassies Dushanbe and Kabul.  The Afghan 
trade representative noted that trade is severely limited by the 
restrictions on Tajik visas for Afghan businesspeople due to 
security concerns.  The representatives had high hopes for the 
U.S.-funded Nizhniy Pyanj bridge, but suggested that we will 
need to push the "market forces" into action to stimulate 
cross-border trade. 
 
Am Cham Tajikistan 
 
DUSHANBE 00000723  002.2 OF 003 
 
 
------------------------- 
 
¶6.  Representatives of eight US-Tajik joint ventures toasted to 
the future of American business in Tajikistan by joining the 
Ambassador and Dyck at the Ambassador's residence for the 
founder's dinner of an American Chamber of Commerce in 
Tajikistan.  The chamber is currently being registered in 
Delaware, thanks to significant efforts by Eurasia Foundation 
and Embassy Dushanbe.  While an AmCham would no doubt serve as a 
welcome signal to the U.S. and international business 
communities that Tajikistan is open for business, the deal is 
not yet sealed: many of the U.S. companies have yet to receive 
approval from their parent offices to become founding members. 
 
"I've never heard that before!"  The State Committee on 
Investments 
--------------------------------------------- -------------- 
---------------------- 
 
¶7.  "All roads lead to this committee," Dyck told Deputy Chair 
Makhmadsharif Nozimov from the Tajik State Committee on 
Investments and State Property.   The government has made the 
much-touted investments committee the lead agency to attract 
foreign investment, provide information to domestic and foreign 
companies, and develop an open business climate.  After two days 
of meetings with Tajik officials who directed questions on 
foreign investment to this committee, Dyck walked in with high 
hopes that he would be able to discuss the specific concerns 
U.S. businesses have in Tajikistan.  Unfortunately, the 
committee chairman and chief deputy were out of the country and 
had the number three meet with the delegation. 
 
¶8.  It took Nozimov only minutes to demonstrate the vast 
problems businesses face in Tajikistan.  Nozimov flatly denied 
Dyck's comment that U.S. businesses interested in investing in 
Tajikistan cannot easily find the rules and regulations relevant 
to opening a business in their sector and repeatedly insisted 
that if Dyck knew of a company interested in investing in 
Tajikistan, he should just put the company in touch with the 
investments committee and they had a list of projects they 
wanted funded. 
 
¶9.  Dyck mentioned the difficulty that businesses have in 
getting in and out of Dushanbe due to the lack of flights, and 
the inability to purchase Tajik Air tickets online.  Nozimov 
uttered: "This is the first time I'm hearing this," and began to 
scribble down notes.  "We have the most democratic country in 
Central Asia," Nozimov exclaimed.  "We don't do retina scans at 
the airport."  Nozimov expressed disappointment (and amazement) 
that no one was exploiting the potential for tourism or 
extracting the gas, oil, coal, and mineral resources.   Dyck 
explained that U.S. companies operating in the region in these 
industries are willing to take on risk, but are not coming here 
because they do not see Tajikistan as a safe place to invest. 
"I've never heard that before," said Nozimov. 
 
¶10.  Comment:  Whether Nozimov was being purposely obtuse or 
actually didn't know about these issues, his refusal to engage 
in a serious conversation with an important conduit to U.S. 
business was a clear and unwelcome sign that Tajikistan is not 
truly open for business. 
 
¶11.  Dyck's meetings with government officials here provided a 
fresh face for many of the business climate issues we trumpet 
regularly.  As Tajik President Rahmon continues to seek out 
state-led investments, visitors like Dyck make a big difference 
 
DUSHANBE 00000723  003.2 OF 003 
 
 
in getting out the message that the way to attract U.S. 
investment is not just to ask for it, but to improve conditions 
for business here.  End comment. 
JACOBSON