VZCZCXRO3444
OO RUEHLN RUEHVK RUEHYG
DE RUEHDBU #0219/01 0391643
ZNR UUUUU ZZH
O 081643Z FEB 08
FM AMEMBASSY DUSHANBE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0196
INFO RUCNCIS/CIS COLLECTIVE
RUEHIL/AMEMBASSY ISLAMABAD 0049
RUEHBUL/AMEMBASSY KABUL 0065
RUEHLO/AMEMBASSY LONDON 0001
RUEHNE/AMEMBASSY NEW DELHI 0028
RUEHRL/AMEMBASSY BERLIN 0008
RUEHFR/AMEMBASSY PARIS 0001
RUEHBS/USEU BRUSSELS 0001
RUEHVEN/USMISSION USOSCE 0005

UNCLAS SECTION 01 OF 04 DUSHANBE 000219 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR SCA/CEN 
DEPT PASS USAID 
 
E.O. 12958: N/A 
TAGS: EAID PGOV ENRG EFIN EAGR TI
SUBJECT: COMPLEX AND CHRONIC -- TAJIKISTAN'S EMERGING 
EMERGENCY 
 
¶1.  Summary:  President Rahmon instructed his top foreign 
policy and economic officials the week of Feb 4 to rally 
donors and multilateral agencies to assist Tajikistan in 
dealing with the increasingly evident shortfalls in energy 
supplies.  As of February 8, the government has stopped short 
of issuing a clear disaster declaration or approving the 
World Bank's proposed "Action Plan" to deal with the energy 
situation.  The energy crunch is closely related to the 
growing humanitarian concerns regarding food insecurity for 
Tajikistan's most vulnerable communities and the cotton 
sector finance crisis.  By early next week, the Embassy 
expects to receive a disaster declaration by the Tajik 
Government, a "flash appeal" from the United Nations, and 
specific proposals for humanitarian interventions by our 
strongest non-governmental implementing partners (CARE, Save 
the Children, and Mercy Corps).  Embassy requests the 
Department and USAID stand ready to identify appropriate 
funding for these humanitarian interventions, and reconsider 
the discontinuation of the PL-480 Food For Peace program in 
Tajikistan. (Action request para 12.)  End summary. 
 
All the kings men ... 
--------------------- 
 
¶2.   Beginning February 4, donor country embassies and 
multilateral missions began receiving invitations from top 
Tajik officials to participate in a series of urgent meetings 
to discuss critical energy shortages and related humanitarian 
concerns facing Dushanbe and the rest of Tajikistan.  The 
Ministry of Health, Presidential Advisor for Economic 
Affairs, and Foreign Minister called joint meetings to 
present the case for foreign assistance to help Tajikistan 
out of its current bind.  In each case, the government 
officials glossed over the government's own responsibility 
for helping create the current state of affairs and stopped 
short of issuing an official written disaster declaration 
which is necessary for most donors to initiate emergency 
assistance programs. 
 
¶3.  Presidential Advisor on Economic Affairs Davlatov 
convened donors on February 4 and again on February 7.  He 
told donors "not to panic" while he asked for donor 
assistance to purchase emergency fuel supplies.  He blamed 
the energy emergency on the cold winter and said it was "not 
the government's fault."  Davlatov asserted without 
explanation that the government was "providing for the 
population."  Nor would it close the Tajik Aluminum Company 
(TALCO) which is the largest electricity consumer in the 
country, he said. 
 
¶4.  Foreign Minister Zarifi convened donor ambassadors 
February 7 to discuss the energy emergency but seemed not to 
have all the facts or even a clear request.  He either did 
not know about or decided not to represent the elements of 
the action plan then under discussion with the World Bank. 
Zarifi avoided answering a direct question, "What is the 
Government doing?"  He dismissed donor concerns voiced by 
Ambassador about government priorities, saying the expensive 
new presidential palace was being paid by "sponsors," not 
from the government's budget.  And despite his seven years as 
Tajik Ambassador to Vienna and Washington, he failed to 
anticipate the donor ambassadors' reaction to his explanation 
that the palace and other show projects were important to 
Qthat the palace and other show projects were important to 
Tajikistan's international prestige: More important that 
providing basic services to its population? 
 
¶5.  In each of the government meetings, multiple donors 
stressed the need for a Tajik disaster declaration.  Many 
donors (including the United States) require such a 
declaration in order to access emergency funding.  In 
addition, a disaster declaration would be an important 
indicator that the Tajik government understands the genesis 
of the current situation and has the political will to 
address the longer term structural reforms necessary to dig 
itself out of the energy, humanitarian, and financial hole it 
has dug for itself.  Instead of a disaster declaration, a 
rambling letter from Prime Minister Akilov was handed to 
donors at the February 4 meeting.  The letter claimed success 
for Tajik efforts to transform and stabilize the economy; 
 
DUSHANBE 00000219  002 OF 004 
 
 
noted the "critical occurrences caused by unusual frosts;" 
estimated the impact on the economy at a whopping $850 
million ("a more precise assessment of damages will be 
possible after the warming"); and expressed appreciation for 
our continued support.  The donors unanimously and 
immediately told Davlatov that this letter did not constitute 
a disaster declaration.  The chairs of the Principals' Group 
of ambassadors and Donor Coordinating Committee sent a joint 
letter to President Rahmon February 8 asking for a public 
declaration.  By the day's end we had seen an unsubstantiated 
news article referring to a presidential "state of 
emergency," but had received no declaration from the 
government. 
 
 
Putting Humpty together again ... 
--------------------- 
 
¶6.  In light of the government's fumbling over how to 
proceed, the international donor community is taking action 
to help Tajikistan help itself.  The UN agencies have taken 
the lead on the humanitarian aspects of the current 
situation, while the World Bank has tackled the energy 
shortages.  The donor community has consistently insisted 
that the government look at the energy shortages in light of 
the humanitarian consequences for the population.  We and 
other donors have voiced growing concern over food 
insecurity, including the impact on farm income of the cotton 
sector financial crisis triggered by the government's 
foot-dragging on agriculture reform and misrepresentations to 
the International Monetary Fund. 
 
¶7.  Embassy expects the United Nations to release a "flash 
appeal" by early next week.  The preliminary drafts of the 
appeal draw heavily on rapid assessments conducted by 
non-governmental organizations such as Save the Children, 
which has been active in some of the most impoverished and 
therefore most affected parts of Tajikistan, funded through 
the USAID Food For Peace Development Assistance Program. 
Save's rapid assessment and corroborating findings from 
others depict some disturbing early warning indicators. 
Families are spending more on food but eating less.  Coping 
strategies are being stretched, with more remittances from 
abroad spent on basic necessities, families selling off 
livestock, depleting savings, and borrowing from 
non-relatives.  Local food markets are carrying poorer 
quality food at higher prices.  Illnesses are on the rise. 
Fuel shortages have led to cutting of trees, which will have 
long term consequences for recovery. 
 
¶8.  The World Bank has coached the Ministry of Energy and 
state-owned electricity utility, Barki Tojik, to develop an 
"action plan" which will better manage remaining energy 
resources to get through the next critical week and help 
correct the structural flaws which would lead to a repeat of 
this situation next year.  At the World Bank's insistence, 
the energy action plan will include a humanitarian element, 
tying the response to the energy shortfall explicitly to the 
humanitarian situation.  Although the World Bank had prepared 
the draft action plan on Wednesday, as of Friday February 8, 
the Tajik Government had not yet approved the plan or issued 
it to the donors as a basis for assistance.  Speculation for 
the delay includes a continued reluctance to admit to the 
government's role in creating the emergency, and the 
Qgovernment's role in creating the emergency, and the 
government trying to game the system to get even more cash 
assistance from the donors than the World Bank plan 
prescribed.  Despite the delay however, some elements of the 
action plan are already being put into place, including 
scheduled load-shedding in Dushanbe. 
 
¶9.  The "action plan" developed by the World Bank with Tajik 
Government energy officials includes the following elements: 
-- Tajikistan should pay off arrears and conclude diplomatic 
efforts with neighboring countries to secure energy imports; 
imports of gas from Uzbekistan, for example, should become 
easier after the weather warms up as expected after February 
¶13. 
-- Tajikistan should immediately implement a scheduled 
load-shedding plan for Dushanbe (5 hours on/7 hours off) to 
 
DUSHANBE 00000219  003 OF 004 
 
 
conserve the remaining water resources at Nurek hydroelectric 
station; this aspect of the plan was announced and partially 
implemented the night of 7-8 February. 
-- Tajikistan should procure transformers and other equipment 
required to repair the deteriorating electricity grid. 
-- Tajikistan should procure and import 30,000 tons of fuel 
oil. 
-- In order to avoid a repeat of this situation next year, 
Tajikistan should begin rationing electricity to Dushanbe by 
October 1, build reserves of fuel oil, rehabilitate Nurek 
hydroelectric station, and reform management of Barki Tojik. 
 
¶10.  The price tag for this package is $20 million according 
to World Bank, which has proposed the following breakdown for 
contributions: $5 million from Barki Tojik accounts; $5 
million from the state budget (Davlatov told us this would be 
in the form of a loan from the Finance Ministry to Barki 
Tojik); $5 million from the World Bank (Davlatov told us this 
would come from Tajikistan's current year IDA funds which had 
been slated for agricultural reforms related to the "cotton 
sector roadmap"); and $5 million from donors.  The Tajik 
authorities, smelling a potential donor bail-out from the 
immediate crisis pushed the World Bank to raise the fuel oil 
imports by another $6 million.  Embassy does not recommend we 
use funds to help purchase these short-term fuel oil 
supplies, believing the government's pockets -- should it put 
aside spending on show projects -- are deeper than the $5 
million share proposed in the World Bank plan. 
 
A Complex and Chronic Emergency 
------------------------- 
 
¶11.  The critical energy shortages now facing Tajikistan are 
only the latest in a series of emerging problems.  Food 
insecurity caused by high inflation and reduced income for 
the poorest Tajiks is compounded by an ongoing cotton sector 
financing crisis, which threatens to collapse farm incomes 
further by the next harvest season.  The fuel shortages 
contribute to this general trend.  These are all chronic 
problems reflecting long-standing structural shortcomings. 
In each case, the international community has worked with the 
Tajik Government to address the underlying structural 
problems, and action plans or roadmaps have been agreed.  But 
despite some steps forward, the government generally remains 
reluctant to admit responsibility and enact the necessary 
action plans.  U.S. assistance programs should remain mostly 
focused on these longer term reform efforts.  USAID programs 
dealing with land tenure and agricultural reform, for 
example, will provide an important impetus for the rural 
Tajik economy to shift from cotton to alternate crops which 
promise more sustainable incomes for Tajik farmers.  One of 
our most effective programs to address the very humanitarian 
problems highlighted by the emerging complex crisis is 
USAID's Food For Peace program which provides targeted rural 
development assistance through a consortium of U.S. 
non-governmental partners -- Save the Children, CARE, and 
Mercy Corps.  Unfortunately, this program is slated to end 
after fiscal year 2008 -- just as its successes are gaining 
real traction, and just when Tajikistan's rural poor need it 
the most. 
 
¶12.  Action Requests:  (A) Embassy requests the Department 
Q12.  Action Requests:  (A) Embassy requests the Department 
and USAID reconsider the decision to discontinue the Food For 
Peace Development Assistance Program for Tajikistan after 
¶2008.  This program's successes are well documented in Food 
For Peace reports and it is an important element in our 
strategy to address the chronic humanitarian needs reflected 
in the current crisis.  (B) Embassy requests Department and 
USAID stand ready to review the project proposals we expect 
to receive by the beginning of next week to provide 
humanitarian assistance to the most affected communities in 
Tajikistan.  We also expect to receive at about the same time 
the long expected disaster declaration from the Tajik 
Government and a UN flash appeal.  Once these are received, 
Embassy will forward them to the Department and USAID for 
review and determination on the best course for funding. 
Post greatly appreciates Washington's close attention to the 
situation in Tajikistan over the past several months. 
 
 
DUSHANBE 00000219  004 OF 004 
 
 
JACOBSON