Russian crisis rocks Central Asia

At a bazaar in Tajikistan's capital Dushanbe, once a far-flung outpost of the Soviet Union, cheap goods from neighbouring China are helping offset the pain caused by Russia's economic meltdown.

As low world prices for Russian energy exports and Western sanctions over Ukraine stir economic trouble in Russia, Tajikistan has seen its national somoni currency weaken and thousands of migrants drift back home to a mostly jobless environment.

Last month the impoverished Central Asian country's national bank announced remittances -- mostly transfers from Russia where close to half of Tajikistan's working age males are believed to work -- had fallen by over 40 percent comparing the first quarters of 2014 and 2015.

Yet the economic bonds tying the nation of eight million people to gargantuan China are growing stronger every day.

"The trade is good here," says a Chinese salesmen at the Korvon bazaar in Dushanbe, who gives his name as Wan and hawks affordable synthetic versions of the Tajik national dress worn by conservative families.

"There is always some kind of opportunity," he told AFP.

- Silk Road Economic Belt -

Formally China unveiled its Silk Road Economic Belt -- a vision of massive investments in infrastructure to power overland trade and economic integration across Eurasia -- during a speech President Xi Jinping gave in energy-rich Kazakhstan in 2013.

Beijing's economic transformation of the lands west of its restive Xinjiang province has gathered pace in the last decade, overhauling Russia as the main trade partner of four of the five Central Asian countries that gained independence from Moscow in 1991 as it splurges billions of dollars on roads and pipelines to link up the disjointed region.

"China is certainly the most visible player economically, and the loudest one," says Raffaello Pantucci, director of International Security Studies at the Royal United Services Institute (RUSI) in London.

"The amounts of money that you see being allocated or discussed when Russian leaders or individuals visit the region are always eclipsed by those that follow Chinese visits," he told AFP.

Publicly Russia has not complained at growing Chinese economic dominance in its onetime backyard while the pair share membership of the Shanghai Cooperation Organisation (SCO), which includes all five Central Asian states and will mark its 14th annual summit in the Russian city of Ufa next week.  

Moscow is also hopeful it will be a core beneficiary of China's Silk Road vision, but has tellingly resisted the creation of a development bank within the SCO, reportedly fearful it would expose China's seniority in their regional partnership.

- Excitement and fear -

For Tajikistan, lacking the resources of other Central Asian states -- Kazakhstan, Turkmenistan and Uzbekistan -- China's belt is a lifeline. Beijing has pledged to invest at least $6 billion or the equivalent of 70 percent of the country's annual GDP over three years last September.

"China has realised a range of projects in Tajikistan, from strategic highways to electricity transmission lines, cement factories and gold mining projects," says Farrukh Soliev, head of the department of external economic relations at Tajikistan's development and trade ministry.

"Every year our partnership grows," Soliev told AFP.  

Tajikistan will also reap significant transit fees from Line D, a branch of a gas pipeline that should carry 65 billion cubic metres of gas from Turkmenistan into China by 2020.

Meanwhile a connector road Beijing is building in neighbouring Kyrgyzstan will enable Tajik traders to take goods to Russia without crossing into Uzbekistan, a country with whom Dushanbe has sticky relations.

But with China now owning close to half of the country's external debt of over $2 billion there is apprehension that a traditional dependency on Russia is being traded for one on China.

Beijing's role in Tajikistan has "become even more noticeable" in the last year amid economic blowback from the Russian crisis, says Muzaffar Olimov, director of the Sharq analytical centre in Dushanbe.

Citing a request on Wednesday by the country's beleaguered national bank for $500 million in stabilising credits from the state-directed China Development Bank, Olimov calls China's economic largesse a "dilemma".

"Of course, this support is extremely timely but is it all just out of good neighbourliness? Before taking these credits we should ensure we know how to use them, because one day China will want that money back," he told AFP.
Source: AFP