President of Tajikistan Imamali Rahman visited neighboring Uzbekistan between 2-3 June 2022. During this visit, Rahman was accompanied by the First Deputy Prime Minister, Minister of Foreign Affairs, Vice President for International Relations, Ministers of Energy and Water Resources, Economic Development and Trade, Education and Science, Finance, Agriculture and Culture. In addition, the Chairman of the State Investments and State Property Management Committee and the Chairman of the National Bank also took part in the delegation.
Rahman met with his counterpart, Shevket Mirziyoyev, and the parties confirmed their commitment to further deepening the strategic partnership between the countries. In addition, it was emphasized that special attention should be paid to the promotion of joint cooperation projects in the fields of trade, industry, agriculture, transport and logistics, and energy. After the meeting, Rahman and Mirziyoyev signed the “Declaration on the strengthening of eternal friendship and unity between Tajikistan and Uzbekistan”. In addition, agreements were signed between Uzbekistan and Tajikistan, mainly in 7 new cooperation areas, a total of 15. A significant part of these agreements have been related to the fields of trade, economy and industry. Later, Rahman and Mirziyoyev announced that they started the construction of the Yavan hydroelectric power plant with a capacity of 140 megawatts on the Zarafshan River.
One day before Rahman’s visit to Tashkent, the “Tajik-Uzbek Entrepreneurs Business Forum” was held in Tashkent on June 1, 2022 with the participation of 400 representatives from Uzbekistan and approximately 150 representatives from Tajikistan. As a result of the forum, 75 commercial and economic agreements worth 1 billion dollars were signed. It has been stated that the main objective of Tajikistan and Uzbekistan in the economic and commercial field is to further develop and strengthen trade and economic relations, and to create suitable conditions for this.
As can be seen, the expansion of commercial and economic relations was on the agenda of Rahman’s visit to Uzbekistan and the talks between Tajik-Uzbek high-level officials and delegations. Tajikistan needs foreign investments. Uzbekistan, on the other hand, needs the consumption market and transportation lines for the export of Uzbek goods.
The two-year period of Covid-19 had dealt a crushing blow to Tajik business and economy. Tajikistan, along with other countries, needs the investments of Uzbekistan. Dushanbe proposes Tashkent to Tajikistan, which is still a consumption market for Uzbek goods. In this context, although Tajikistan does not want to express the commercial-economic situation in the country clearly, the problems in the country are known. For example, the slow progress of reforms aimed at creating a favorable environment for entrepreneurship compared to regional economies, especially Uzbekistan, negatively affects the business/entrepreneurship environment in Tajikistan. Although Tajikistan has easily overcome the fight against Covid-19, the epidemic has seriously damaged the country’s economy.
As a result of the government’s lack of support for the private sector during the epidemic period, many businesses were closed. People have lost their income. In addition, due to the economic problems caused by the epidemic, the money transfers of Tajik workers abroad from Russia to their countries have decreased. However, according to official statistics, in 2021, the economy of Tajikistan, that is, its gross domestic product (GDP), grew by 9%.
In January 2022, Tajik authorities estimated that the country’s GDP in 2021 was 98 billion 900 million somoni, or about 8 billion 730 million dollars at the exchange rate. However, there have been objections to the positive picture drawn by the Tajik government. It has been argued that the government only takes into account the newly opened businesses, and no data is disclosed on the businesses that were closed. It was also stated that inflation in Tajikistan in 2021 was around 8%, which greatly negatively affects its real GDP growth. Therefore, as in other countries of Central Asia, there has been a sharp increase in food and other goods prices in Tajikistan.
Rahman, in his annual statement at the Tajikistan Parliament, declared the period 2022-2026 as the years of industrial development and stated that it should target the development of metallurgy as well as light and heavy industry in this 5-year period. In order to achieve these goals, the aim of establishing small and medium-sized industrial enterprises was determined thanks to foreign investments.
However, some problems within the country, a corrupt bureaucratic system, power cuts in winter, lack of natural gas, limited access to the internet and its complete absence in some regions, and more importantly, deficiencies in the rule of law, especially in property rights, prevent foreign investors from coming to the country. However, during Rahman’s visit to Tashkent, a special offer was made to Uzbekistan: Uzbek entrepreneurs were guaranteed the support of the President and the Government. According to Manzura Rustamova, Vice President of the Tajikistan Chamber of Commerce and Industry, positive results have already been achieved in the active cooperation between the entrepreneurs of the two countries. Especially in the last 6 years, the trade turnover has increased 37 times. Compared to the first quarter of 2022, it increased by 30% compared to the same period of the previous year and reached approximately 174 million dollars.
As also seen from Rahman’s visit, it is aimed to increase the Uzbek-Tajik trade volume, which was 435 million dollars in 2021, to over 1 million dollars as soon as possible. In this context, Tashkent and Dushanbe are in the process of developing new forms of economic cooperation. As of 2021, projects that may seriously interest the two countries, such as the construction of hydroelectric power plants on the Zeravshan River in Tajikistan, are being discussed. It is envisaged that Tashkent will finance these projects and the electricity to be produced in this hydroelectric power plant will meet the needs of Uzbekistan, which needs electrical energy. The water problem and the establishment of hydroelectric power plants on transboundary rivers were one of the most important security problems between the two countries. The decision to build the Yavan hydroelectric power plant is also of great importance for the Uzbek-Tajik peace.
In addition, Tajikistan may open to Uzbekistan the operation of about 200 deposits for their joint operation, including silver and gold. Uzbekistan is a more comfortable and less costly partner for Tajikistan compared to China, whose economic activity in Tajikistan raises many questions both inside and outside the country. China is Tajikistan’s largest foreign investor, and Tajikistan’s growing dependence on China is troubling the Tajik side. In addition, the influence of China on the Tajik economy also causes reactions from the Tajik society.
It can be seen as a remarkable success that it has managed to solve these problems between Uzbekistan and Tajikistan, which have not been resolved for years, in the last 5 years. With the development of relations in recent years, there are at least six routes where citizens of Tajikistan and Uzbekistan can freely travel to each other by land transport. It has also been announced that the Tashkent-Dushanbe train services will start on 20 June 2022.
The development of economic and commercial relations between Uzbekistan and Tajikistan, the increase in mutual travels of the citizens of the two countries further strengthen the cooperation between the two countries. While Tajikistan is trying to solve the economic problems it has faced with the support of its neighbor Uzbekistan, it is also seen that a very important point has been reached in terms of cooperation and solidarity between the states of the region. The region, which was tried to be brought to the fore with crises until yesterday, now takes its place on the agenda with cooperation and solidarity.