BRI and Tajikistan: An Expert Opinion | By Dr Mehmood Ul Hassan Khan

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BRI and Tajikistan: An Expert Opinion

In the regional political instability and global economic gloom and doom, the Chinese BRI has become hope for socio-economic prosperity, greater regional connectivity and eradication of poverty through its numerous mega projects of infrastructure development, railways, social development, massive industrialization, green energy and last but not the least, ICT in the member countries and Tajikistan is not any exception.

The BRI has offered new opportunities for stability and growth in Tajikistan. Through the BRI Tajikistan has obtained new investment, technology and markets and improved its level of infrastructure, especially transportation and logistics. The BRI has promoted its exports, balanced the growth of its industries and offered opportunities for its industrial upgrading and the development of a green and digital economy in Tajikistan.

The Silk Road Economic Belt, which led up to the BRI, was first proposed by President Xi Jinping during a visit to Kazakhstan in 2013, and Tajikistan immediately joined it. Interestingly, 2022 marks the 30th anniversary of the establishment of diplomatic relations between China and the five Central Asian nations during which trade between the two sides have increased from $460 million in 1992 to $50 billion 2021 which is good omen for both sides.

China’s economic and trade ties with Tajikistan have seen significant development after years of concerted efforts to press ahead with the BRI. The BRI projects in Tajikistan are significant due to Tajikistan’s geostrategic importance in the region. Tajikistan has channeled its geo-strategic values and established diplomatic and economic relations with regional and extra-regional states. China and Tajikistan’s diplomatic relations were started in 1997.

In this regard, since China introduced BRI, its existing diplomatic relations with Tajikistan have changed to close economic ties. The BRI uplifted the pace of existing economic projects between China and Tajikistan, with the introduction of new projects, some branded as BRI projects, and others are complementing it. Interestingly, the BRI provides an opportunity for Pakistan and Tajikistan to enhance and strengthen their economic and diplomatic ties. In this regard, both Pakistan and Tajikistan need a great deal of cooperation for further progress of both states under the flagship mega projects of the BRI & CPEC.

It is important that both countries should identify the ongoing socio-economic, geopolitical and geo-strategic trends in the region to pinpoint their future policy options for further development. In this connection, time and again, the government of Tajikistan has shown keen interest to join the CPEC, a flagship project of the BRI.

China now serves as Tajikistan’s biggest source of investment and third largest trading partner, with bilateral trade reaching up to around 1.51 billion U.S. dollars in 2018 and China’s direct investment in Tajikistan totaling 95.01 million U.S. dollars in 2017. Two-way trade is even projected to exceed three billion U.S. dollars over the next few years.

Some 300 Chinese-funded enterprises are engaging in investment activities in Tajikistan, becoming Tajikistan’s largest taxpayer. Furthermore, the Dushanbe-2 thermal power station was completed in 2016, which offered 60 percent of the power needed by the Tajik capital Dushanbe, and restarted central heating for over 700,000 local residents after a 15-year interval.

The Vahdat-Yavan railway has been completed along with bridges and tunnels, connecting the previously-separated railways in southern and northern Tajikistan. Trade between China and Tajikistan has been increasing, with the new main inland Port at Karasu, on the Chinese side of the Tajik border at Taxkorgan, seeing a marked increase in trade. It seems that Tajikistan’s relations with China have been growing dynamically during the last decade, overlapping Russia’s investment which was the major financial partner of the country.

Meanwhile, Tajiks were among the first, who received funding from the AIIB within the BRI to rehabilitate Dushanbe-Uzbekistan border road, in addition to other BRI projects including the Central Asia Road Links Program that aims to increase transport connectivity between Tajikistan and neighbors.

In other spheres within the BRI are implementing various projects, such as the cotton processing plant in Dangara district, agreements on the establishment of the industrial zone of Tajikistan and China in the mining field, heat and power plants, whereas major Chinese investment is attracted to the development of non-ferrous metal deposits

The Most recent visit of the Chinese President Xi, both sides signed an agreement on the construction of the parliamentary and governmental complex, on which China agreed to grant $US350 million. Besides, both countries also inked 18 agreements that also expected not only to develop bilateral ties, but also will be a significant output to the development of Tajik economy.

Critical analysis of Tajik macro-economy reveals that its growth of 6-7 percent per year since 2000 was supported by growth in consumption and public investment, the latter driven mainly by rising remittances and export receipts from aluminum and cotton. Private investment and growth of other exports are gaining momentum.  To conclude, the Tajikistan National Development Strategy 2030 (NDS) seeks to achieve desired goals of socio-economic prosperity through the BRI projects.

Most recent visit of Tajikistan president to Pakistan Emamoli Rahmon has now further widened the scope of bilateral relations under the flagship projects of the BRI and CPEC.  During this visit both sides vowed to enhance bilateral cooperation in the fields of energy, rail and road connectivity, trade, investment, agriculture and culture. The two sides also pledged to complete the much-awaited Central Asia-South Asia (CASA-1000) power project to meet energy needs which may be accelerated under the flagship project of the BRI. Both countries emphasized to work closely for the completion of the CASA-1000 power project as early as possible as well as for establishing rail, road and energy connectivity with Central Asian countries.

Prime Minister Shehbaz Sharif hoped that the Tajik President’s visit would usher in a “new era of cooperation and development” between the two countries. The Premier further said Pakistan attached immense importance to its bilateral ties with Tajikistan as it was a gateway to the CARs.

President Tajikistan Emomali Rahmon, reciprocating the warm feelings for the government and people of Pakistan, said that his country attached high priority to its ties with Pakistan. He said both countries had been making joint efforts to further promote the friendly ties and expressed the optimism that the MoUs would give new impetus to these relations. He said during their delegation-level deliberations, they had discussed government-to-government level contacts, security, economic situation, global economic decay, energy and connectivity activities and linking the port city of Karachi.

The Tajik President said they also had useful exchange of views on cooperation in agriculture, energy connectivity, joint ventures in food technology, trade, science and technology and cooperation between the business communities of the two countries.

These MoUs and agreements included MoU for establishment of Sister Cities Relations between Dushanbe and Islamabad, Agreement over cooperation in industries and technology, Agreement over Transit Trade, Agreement between Tajik Drug Control Agency and Anti-Narcotics Force Pakistan to control illicit trade of narcotics drugs, and psychotropic material etc. agreement for cooperation between Tajikistan Agency of Standardization, Meteorology, Certification and Trade Inspection and Pakistan’s Standards and Quality Control Authority, MoU between Customs Service of Tajikistan and Federal Board of Revenue (FBR).