A surprisingly bad gift to my brother and Tajikistan
Business and Economics, Politics and Society, Tajikistan, Uzbekistan4 Comments
Editor’s note: neweurasia’s Dushanbe offers his brother an interesting birthday gift, only to find himself thrust in the middle of the Roghun dam controversy. It seems that the government’s enormous fundraising campaign has worked too well, and may not only be monetarily crippling Tajikistan, but even slowly undermining its very raison d’être, as well.
It’s always hard to find a good birthday gift, but it’s all the more difficult for my spoiled brother. After two days of searching, I was about to exclaim, “OMG!”, when suddenly I saw a Roghun t-shirt in one of the city boutiques. The seller informed me that the newly designed shirt had arrived on the market just the previous day.
My brother happens to be a fan of the Roghun hydropower project; he even bought 3,500 somoni worth of shares. I thought this would be the perfect gift for him — so I was very surprised when he responded in a very subdued way. It turned out that he had dug into the family budget to make his donation to the Roghun project, and his wife was bitter about it because she’d rather save money for her children’s education. Suddenly the political and macroeconomic had become very personal and microeconomic.
For those of you just tuning in, my colleagues at neweurasia have been reporting about the funny money that’s been going into the project; this blogger has a particularly good anecdote about the “iron-fisted marketing” campaign to raise shares from the already impoverished public; and even my neweurasia boss Schwartz is devoting a significant part of the Tajikistan chapter in the upcoming CyberChaikhana book to the dam. Well, check this out:
The Tajik Finance Ministry has now confessed that it could not find an investment niche for $186 millions pooled during the winter’s Roghun shares mass-campaign. It declared a tender among the local banks to find a use for the free money, but no one showed any interest in using the money under the proposed conditions. Newspapers and experts are predicting that no one will pick bother with the 8% interest rate and an expected second tender will also fail.
In other words, the campaign may have been too successful, and money once proclaimed by the president as absolutely vital to the future of the country is now a massive burden on the government. Were that not enough, but the removal of tens of millions of currency from circulation has disrupted the economy by diminishing daily business activities!
The currency itself has been undermined by 2-3% inflation, as the IMF warned would happen during the start of the campaign. Experts say the best thing the government can do with all the extra currency is to trade it. However, due to an ongoing railroad blockade by Uzbekistan, trade activity is down by 35%. A 100 somoni share bought in January is now worth 94 somoni, so now even the financing of the Roghun project itself, the very reason for the mass-campaign, is being hurt. It looks like the Rahmon team should start believing in karma: the very money they compelled and extorted from their people is now a curse.
Nevertheless, the government is pressing forward with the project. They’ve ordered the Electrotyazhmash plant in Ukraine to construct two hydropower generators for use in the Roghun dam. These generators will be transported to Tajikistan by air, which will be tricky since 29 June Tashkent has also annulled its air navigation agreement with Dushanbe. Like a lot Tajiks, I’m sympathetic to our nation’s need for more hydropower, but the strategy behind this project — if you can call it a “strategy” — is upside down. It looks like Roghun’s been a bad gift for everyone involved.