Wednesday, 23 August 2006

CONSTRUCTION BOOMING IN DUSHANBE DESPITE BUSINESS THREATS

Published in Field Reports

By Zoya Pylenko (8/23/2006 issue of the CACI Analyst)

In a way, Tajikistan has benefited from its location north of Afghanistan. With international attention to Afghanistan increasing after the fall of the Taliban in November 2001, Tajikistan also came into the spotlight. International organizations, NGOs, foreign embassies and some investors started flocking to Dushanbe.
In a way, Tajikistan has benefited from its location north of Afghanistan. With international attention to Afghanistan increasing after the fall of the Taliban in November 2001, Tajikistan also came into the spotlight. International organizations, NGOs, foreign embassies and some investors started flocking to Dushanbe. However, the city’s development is not only due to this kind of attention. After the fall of the Taliban, opium poppy cultivation again began to boom in northern Afghanistan – and many of the drugs grown there are being transited through Tajikistan. According to various estimates, 20-30 percent of Afghanistan’s opium crop is smuggled through Central Asia, in particular Tajikistan that shares a 1,344 km-long border with Afghanistan. Narco-trafficking has increased the amount of illegal money in the country, much of which, experts allege, is being invested in construction.

New buildings are indeed popping up everywhere in Dushanbe. Among them is a new presidential residence – a big, white-columned building on a hill in the centre of town. Many conference buildings have also appeared in the last couple of years. One of them lies on another hill overlooking the centre and the nearby mountains; just beneath it, construction of an aqua park started several years ago but has now been abandoned because the Turkish contractor allegedly ran off before finishing the project – after having received his money.

Locals are not always happy about the construction of such palaces and conference buildings, because they are of little use to them. Madina Turolieva, a salesperson at one of the city’s markets, says she is extremely disappointed in the government because no public buildings have been constructed since the collapse of the Soviet Union. At a time when largely empty office buildings and new conference halls for very occasional conferences are being built, only a few cinemas and theatres are still active.

But the government seems to be interested in making the city look modern and prosperous. Therefore, it destroys old buildings and constructs fashionable dark-glassed high-storied ones instead. The few remaining Jews in Dushanbe for a long time feared their 100-year-old synagogue – the last remaining one in the country – would also be destroyed because of the new development plans. A park was to be built in the synagogue’s place. After an international lobbying effort in support of the synagogue, however, earlier this year the building was finally allowed to remain.

Most of the city’s young, meanwhile, welcome the transformation of old-fashioned Dushanbe into a modern-looking city. Because apart from big, prestigious new buildings, also cafés, restaurants, bars and other entertainment businesses, started by private entrepreneurs, are appearing in the city, which they are happy to see. Although the great majority of people cannot afford to visit such places, many still think this is a positive sign, showing the country is beginning to prosper. But most elderly people don’t approve the changes. School teacher Tatiana Kovalchuk says it is a pity to watch how the city’s historical heritage is being destroyed.

The government wants to add to the luxury and modern image of the capital by constructing five-star hotels. One is nearly finished and Turkish companies are currently building two more. But according to the owner of a small Tajik construction firm, while building such huge luxury hotels, the city lacks cheap accommodation. The roads in Dushanbe also need much investment. Only the two main roads in the centre are in good shape.

Construction could probably develop faster if there were no obstacles to investors. Foreign and local businessmen are hindered from doing their job by long and opaque bureaucratic procedures and the necessity to pay bribes to hordes of officials. Rumor has it that mainly Turkish and Russian construction companies are active in Tajikistan because they are more willing to pay bribes when necessary than their European or American competitors.

Another important obstacle for investors is that the land in the city (as in the whole of the country) belongs to the state and can only be rented for private use and not bought. Even if someone has built and occupies a building, he can be forced out if the authorities want to use the territory for another purpose. This has happened in the past and remains one of the gravest potential dangers for investors in the country.

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The Central Asia-Caucasus Analyst is a biweekly publication of the Central Asia-Caucasus Institute & Silk Road Studies Program, a Joint Transatlantic Research and Policy Center affiliated with the American Foreign Policy Council, Washington DC., and the Institute for Security and Development Policy, Stockholm. For 15 years, the Analyst has brought cutting edge analysis of the region geared toward a practitioner audience.

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