The Ambassador of the Republic of Tajikistan to the USA, HE Farhod Salim, discusses economic growth, business opportunities and the development of bilateral ties.
Your country is a young star of Central Asia, one that has demonstrated stability and maintained strong consistent growth in recent years. What events have led to the establishment of such a respected position?
Tajikistan declared independence on September 9th, 1991, which paved the road for creating a democratic, secular, constitutional and unitary state. The president has played a large role in the strengthening and maintaining of the country’s unity, and played a pivotal role in ending the civil war in 1997. In the past 7 years alone, the GDP of Tajikistan has increased 1.5 times and capita income has increased by 1.7 times.
Upon achieving independence, the Government of Tajikistan set out three strategic objectives: achieving energy independence, food security and releasing the country from a communication deadlock. The efforts of the Government, the rapid construction of hydroelectric plants, power transmission lines, energy efficient mechanisms, roads, bridges and other elements of national infrastructure are aimed at meeting these strategic goals. Thirty five billion Somoni has been allocated by the Government to further reaching these goals.
The guidance of the President, as well as the focus on local development, have both lead to Tajikistan’s stabilization and the road to prosperity.
Your President has been very successful indeed in making the economy grow, demonstrating a 7.4% GDP growth. What have been some of the key success factors to your country’s economic performance?
Unfortunately, the civil war in Tajikistan prevented serious economic progress until 1997, when, under the leadership of the President and wisdom of our nation, we were able to ratify a peace agreement. It was in the period immediately after that the economy started to grow.
For the last 10 years, our GDP has grown at a yearly average of 7.5%. Much of this growth has been due to the development of Tajikistan’s hydroelectric resources and infrastructure. It is estimated that if all of Tajikistan’s hydroelectric resources were to be utilized, the country would be capable of producing 527.06 billion kWh a year. Currently, we use less than 7% of that. That is a huge amount of unutilized resources available for exploitation.
In the early years of our country’s independence, disruptions in various regions of Tajikistan, in addition to fighting terrorism, made it difficult to improve our infrastructure.
The expansion of our transport infrastructure has unlocked potential in regions of Tajikistan that were otherwise difficult to access. New and improved roads, tunnels and bridges have greatly contributed to Tajikistan’s increasingly interconnected internal economy. Over the past decade, we have built five 5 bridges towards Afghanistan. The largest of them was built by the US, who committed around $40 million USD to the project. This has boosted our bilateral trade with Afghanistan as well as with Pakistan. Many of these regional projects for energy and communications also involve the Chinese investments.
Of course, we still face a number of challenges. We have not been spared by the recent recession in the world economy. Tajikistan still experiences energy shortages during the winter period (from December to February). During the summer, however, we have a surplus of energy. Afghanistan is currently one of the largest consumers of our electrical output, but we need more power transmission lines in order to supply energy to Afghanistan and Pakistan. As a result, much of the potential energy in our hydroelectric stations remains untapped. The power transmission line project- CASA-1000 is a good example of such opportunity.
What role have government programs played in strengthening the economy?
A number of key legislative acts can be cited to outline the main priorities and socio-economic policies of the republic. Among them are the Poverty Reduction Strategy for 2007 - 2009 and for 2010 – 2012, legislation concerned with improving the population’s living standards, a National Development Strategy for the period up until 2015 as well as State Investment Programs of grants and capital construction. The main focus of the government has been on sustainable economic development, diversification of production and support for entrepreneurship.
Has the government of Tajikistan been equally active in supporting and improving the country’s social sectors, such as education and health?
Certainly. In 2012, the wages of employees of social institutions, including the salaries of teachers, were increased by more than 60% in the health sector, by more than 40% in science and in the sector of culture by more than 50%. From 2006 to 2013, the size of pension funding was increased by 4.5 times. This policy will be supported in the future. As a result of such measure, the level of poverty in the country has decreased from 81% in 1999 to less than 38%. The reduction in poverty is mainly a result of economic development and macroeconomic and social stability. The World Bank has a positive view on the efforts of the Government in this direction.
You spoke of Tajikistan’s role as a regional player, given its shared borders with several countries. What are some of the expectations for the upcoming Summit of the Shanghai Cooperation Organization?
Since independence, the Government of Tajikistan has favored regional ties with all its neighbors in order to encourage trade. The Summit of the Shanghai Cooperation Organization (SCO), planned for mid-September, will be attended by all presidents of the member states, as well as the presidents of countries with observer and partner dialogue status, such as Afghanistan, India, Pakistan, Mongolia and Iran.
As a member of multiple international organizations –– the CIS, OIC, ECO, CSTO, the UN –– such events are nothing new for us, but in this period of international economic and political difficulty, the summit is particularly important. Of chief importance this year will be the issue of regional security––especially in Afghanistan. As you know, the SCO was initially formed with the intent of fostering confidence in the newly independent states of Central Asia in regards to their shared border with China. The organization has since come along way, and is now refocusing on economic cooperation.
Ministry of Foreign Affairs of the Republic of Tajikistan under the leadership of Minister H.E. Mr. Sirodjidin Aslov is working diligently on preparing and fruitfully conducting this very important event.
We are looking forward to hosting this event in this important period. During our chairmanship of the SCO, our intention was to boost economic ties among all countries. Opening borders and eliminating trading barriers will help not just us, but every country in the region.
What are some of the key outcomes you are hoping to achieve?
First, we are going to wrap up our chairmanship, which we have held for the last year. During our chairmanship, we developed a number of initiatives, from anti-terror committees to development programs concerning the economy, education and culture. Throughout this year, we focused on developing closer ties between member states, which will hopefully lead to the opening of our markets and borders.
There are some challenges in the region, however, economic issues have taken precedence in matters of inter-state cooperation. There are also regional challenges to deal with, like drug trafficking from Afghanistan. We have been successful in addressing these issues. I believe the summit will be very fruitful, and the fact that many Head of States will be there is a signal that the organization is becoming more respected in the region.
You have been here as an Ambassador since May, however, you have been in the US for three years. Where do you see the key priorities when you look at developing Tajikistan’s relations with the US?
The US is a very reliable and respected partner of Tajikistan. It was one of the first countries to recognize our proclamation of independence. After the unfortunate tragedy of 9/11, the efforts of the US in the region were supported by Tajikistan, as demonstrated by Tajikistan’s transit agreement with NATO to help ISAF in the fight against terrorism. This tragic event brought us closer, and we started to see opportunities for cooperation. The US is doing a lot of work in different areas in the country, such as aiding us in the fight against terrorism, assisting and training border patrol as well as local law enforcement and fighting against drug and human trafficking. The US is also developing local NGOs to reform the agricultural sector.
Americans are typically very entrepreneurial in nature. Do you think American and other foreign investors can find business opportunities in your country?
There are already a handful of large companies working in Tajikistan. For example, there is a respected American company from New Jersey that is working in the mining sector in Tajikistan. They have recently begun developing a mining site in the north of the country. This company used to take materials from the mining site and bring them to China. Now, they have built a plant on site and process mercury there.
There are numerous opportunities for investment in the transportation, agricultural and energy sectors of Tajikistan. During the 10 years of the war on terror in Afghanistan, US troops received bottled water from Tajikistan. There is a company that produces excellent quality drinking water, and it delivered water to the troops. That is another field of investment. There is another company from Pennsylvania which imports dried fruit from Tajikistan.
Given that 93% of the country’s terrain is mountainous, there is a large supply of water in the country –– this is also a sector open to foreign investment and participation. Indeed, Coca Cola is currently building a company in Tajikistan.
Also, an important point to note is Tajikistan’s strategic position in the heart of Central Asia; this could be an advantage for the US business sector.
Since 2002, many reforms aimed at creating a favorable investment environment in top priority areas of the economy have been instituted. The “open doors” foreign policy of Tajikistan expresses a willingness to develop and improve commercial and political relations with the countries of both the East and the West. Much legislation has been introduced by the parliament of Tajikistan that allows for direct foreign trade and investment. Everybody has equal rights to do business in Tajikistan –– there are no obstacles for foreigners.
In 2013, we joined the World Trade Organization. Now that is a huge opportunity for trade. I will be happy when there is substantive participation of US companies in the region. There is still a lot of untapped potential.
Let’s talk about that untapped potential. What can you tell our readers about the latest developments in the energy, mineral and agricultural sectors of Tajikistan?
It is estimated that over 113 million tons of oil as well as 863 billion cubic meters of gas are deposited in Tajikistan. The majority of these deposits are found in the south-west of the country. Currently, Tajikistan enjoys a very lucrative partnership with Russian company “Gazprom” and British company ‘Tethys Petroleum Limited”.
The Roghun Dam project could also be a key player in Tajikistan’s energy sector. Despite the complexities and expenses of building such project, the Government of Tajikistan believes that its completion is important not only for domestic energy consumption, but for the supply of cheap and clean energy to the region of Central and South Asia.
Increased gold and silver production in 2013 has proved that mining in Tajikistan is a very lucrative business. In 2013, 2 tons 674.4 kg of gold and 1.8 tons of silver were extracted. The Government is currently working on implementing a program for researching and exploring rare metal deposits for the period of 2015 - 2025.
As concerns agriculture, 46% of the population is engaged in agricultural production and contributes to 21% of the GDP. During the next seven years, the government plans to allocate more than 3 billion TJS for the development of this sector. Domestic and foreign investment in the development and irrigation is heavily sought after.
Another element people enjoy is tourism. What is Tajikistan known for? Why should people visit Tajikistan?
Forbes recently ranked Tajikistan as one of the fifteen most unique and interesting places of the former Soviet Union and truly, Tajikistan is a land of immense diversity. Many foreigners visit Tajikistan as eco-tourists.
One of the largest mountain ranges in the world, the Pamir Mountains, is located in the east of Tajikistan. Tourists are attracted by the spectacular views and hiking opportunities available in that region. Over 93% of the country is covered by mountains. Consequently, we have thousands of small and medium sized rivers that are great for white water rafting.
There are also great hunting opportunities. Beyond the beautiful nature of Tajikistan, I would encourage tourists to immerse themselves in our ancient cultural heritage, which spans several thousand years.
In order to simplify travel for foreigners to our country, we have implemented a visa-on-arrival program at Dushanbe International Airport, whereby foreigners can receive their entry visas after landing. If you prefer to get your visa at home, we have also simplified the visa application process in our embassies across the world.
Do you have a key message for our readers?
Tajikistan’s location is excellent. It has beautiful mountains. Just go, enjoy yourselves, take your kids, have fun hunting, hiking, and skiing. At the same time, learn about our ancient history.
Tajikistan is the only Persian-speaking country in Central Asia, and it has many historical sites to visit. For those interested in investing and business opportunities, the door is open. Tajikistan welcomes foreign investment and know–how with open arms.