Tajikistan attracts interests and investments from the Arab-Muslim world: might Qatar become an important regional asset?
Geopolitical Report ISSN 2785-2598 Volume 28 Issue 3
Author: Silvia Boltuc
The meetings between Tajik representatives and officials from Qatar and the Islamic Development Bank highlighted Tajikistan’s strategy to attract foreign investments from the Arab-Muslim world and Doha’s desire to play a significant role in the local and regional market.
- In its attempt to diversify its economy and trade partners, Tajikistan has opened the country to the Arab-Muslim world.
- Qatar has become more active in promoting business cooperation and investing in Central Asia in the last few years.
- Qatari investments and the Islamic Development Bank’s financial support might help Tajikistan to implement its national economic strategy and decrease its dependence on Russia and China.
Background
On February 7th, 2023, the Prime Minister of the Republic of Tajikistan, Qohir Rasulzoda, met with the Minister of Labour of Qatar, Dr Ali bin Samikh Al Marri. The parties discussed bilateral and multilateral intergovernmental cooperation issues, including industry, investment, the private sector, the economy, trade and tourism.[1]
Rasulzoda and Al Marri emphasised that the full use of the existing opportunities for developing intergovernmental relations, especially in the economic, investment and trade spheres, can contribute to strengthening and expanding bilateral and multilateral relations between states.
At the end of the meeting, the parties expressed interest in implementing specific plans for developing and expanding intergovernmental relations.
The day before, on February 6th, 2023, the President of Tajikistan, Emomali Rahmon, received the Vice President of the Islamic Development Bank, Dr Mansur Mukhtar. The parties discussed implementing investment projects in education, healthcare, energy, transport, irrigation and other priority socioeconomic sectors of Tajikistan.[2]
Since the independence of Tajikistan, the Islamic Development Bank has implemented several significant projects in our country, the total amount of which is more than 620 million dollars.
Why does it matter?
Struggled between Russia and China, Tajikistan needs to diversify its commercial partners and attract foreign investments to support national infrastructural projects and increase its socioeconomic standards.
Indeed, China plays a significant role in the Tajik economy by supporting local infrastructural projects linked with Beijing’s Belt and Road Initiative. Consequently, Tajikistan significantly relies on Chinese investments, which have become Beijing’s leverage on the Central Asian republic to increase its presence and influence and promote its foreign policy at the local level.[3]
As part of the Kremlin’s blizhnee zarubezhe (near abroad) and lebensraum (vital space), Tajikistan has signed several cooperation agreements with Russia in different fields (defence, trade, culture). The Russian 201° military base near the capital confirms the Kremlins’ influence in the country and Dushanbe’s necessity to cooperate with Moscow in the field of defence and security to counter the terrorist threat coming from neighbouring Afghanistan.[4]
In this geopolitical scenario, the Tajik Government must implement fiscal and economic strategies to increase living standards and avoid the spread of disappointment, which might erupt into internal protests. As the World Bank reported, “Over the past decade, Tajikistan has made steady progress reducing poverty and growing its economy. Between 2000 and 2021, the poverty rate, measured by national poverty line, fell from 83% of the population to an estimated 26.5% while the economy grew at an average rate of 7% per year”.[5]
On the other hand, the Government has not yet created enough job positions to cope with the rising population. Therefore, many Tajik families rely on remittance abroad, especially from Tajik migrants/workers in Russia.
Since August 2022, Tajikistan has started a deflationary process in the consumer sector to reduce the prices of goods and tariffs and stimulate the national economy. Deflation means a decrease in prices for goods and services and a parallel rise in the value of money, a process opposite to inflation. Although the Tajik population happily welcome lower prices, deflation might become an extremely negative phenomenon for the national economy.[6]
Opening the country to foreign investments from the Arab-Muslim world might be one of the solutions that Dushanbe is pursuing to cope with economic problems coming from the pandemic and Western sanctions against the Russian Federation due to the Ukraine conflict, which have also impacted Central Asia.
On the other side, Qatar’s interest in Tajikistan confirmed Doha’s strategy to expand its commercial and financial presence in Central Asia by investing in regional projects and supporting local governments.
Apart from Tajikistan, Qatar has promoted cooperation with other Central Asian republics such as Uzbekistan, Turkmenistan, and Kazakhstan by elaborating a different approach for each regional actor balancing military and political agreements with foreign direct investments (FDIs), humanitarian aid, and Islamic cultural projects.[7]
Considering the current Central Asian geopolitical scenario characterised by the confrontation between international powers such as China, Russia, and the United States and regional actors such as Iran, Turkey, Pakistan, and India, the Arab Gulf monarchies’ noteworthy involvement in local dynamics might seriously impact the area. Undeniably, Central Asia still plays a pivotal role in the Eurasian geopolitical chessboard and can attract the interests of different international and regional players during a period marked by the West-Russia clashes and the United States–China confrontation.[8]
In this scenario, we should also consider the possible ‘race for Central Asia’ between the Arab Gulf monarchies like Qatar, United Arab Emirates and Saudi Arabia since these countries have developed a foreign policy based on humanitarian aid, investments, trade partnerships and cultural projects.[9]
Regarding the Middle Eastern countries, at the equation, it should be added the Islamic Republic of Iran, especially in Tajikistan, since Tehran has consolidated its relations with the countries of Central Asia, exploiting either the Persian common ethnic-cultural element or proposing itself as a logistic hub for the energy sector and trade corridors.[10]
Sources
[1] NIAT HOVAR (2023) Prem’er-ministr Respubliki Tadzhikistan Kohir Rasulzoda vstretilsja s Ministrom truda Gosudarstva Katar doktorom Ali ibn Samihom al’-Mari. Link: https://khovar.tj/rus/2023/02/premer-ministr-respubliki-tadzhikistan-kohir-rasulzoda-vstretilsya-s-ministrom-truda-gosudarstva-katar-doktorom-ali-ibn-samihom-al-mari/.
[2] PRESS SLUZHBA PREZIDENTA TADZHIKISTANA (2023) Vstrecha s Vice-prezidentom Gruppy Islamskogo banka razvitija po operacijam doktorom Mansurom Muhtarom. Link: http://www.president.tj/ru/node/30051.
[3] SPECIALEURASIA (2022) Central Asian republics’ economic dependence on China. Link: https://www.specialeurasia.com/2022/02/04/central-asia-china-economy/.
[4]GIULIANO BIFOLCHI (2022) Tehrik-e Taliban Tajikistan and terrorist threat in Tajikistan and Central Asia, SpecialEurasia. Link: https://www.specialeurasia.com/2022/07/25/tehrik-e-taliban-tajikistan/; GIULIANO BIFOLCHI (2021) Tajikistan: the Kremlin’s frontier against the Taliban, Geopolitical Report ISSN 2785-2598 Volume 9 Issue 1. Link: https://www.specialeurasia.com/2021/07/08/tajikistan-russia-taliban/.
[5] THE WORLD BANK (n.d) Tajikistan. Link: https://www.worldbank.org/en/country/tajikistan/overview.
[6] SPECIALEURASIA (2022) Lower prices in Tajikistan: will Dushanbe face a “spiral deflation”?. Link: https://www.specialeurasia.com/2022/10/20/tajikistan-deflation-economy/.
[7]SPECIALEURASIA (2021) Cooperation among Qatar and Uzbekistan. Link: https://www.specialeurasia.com/2021/06/14/cooperation-among-qatar-and-uzbekistan/; GIULIANO BIFOLCHI (2020) Qatari interests in Turkmenistan underline Central Asia’s geopolitical role, SpecialEurasia. Link: https://www.specialeurasia.com/2020/05/25/qatar-turkmenistan-central-asia/.
[8] GIULIANO BIFOLCHI (2023) Geopolitical risk in Central Asia and AfPak: what to watch in 2023, Geopolitical Report ISSN 2785-2598 Volume 27 Issue 1. Link: https://www.specialeurasia.com/2023/01/02/geopolitical-risk-asia/.
[9]GIULIANO BIFOLCHI (2023) Kyrgyzstan and the Middle East: Zhaparov discussed joint projects with UAE, SpecialEurasia. Link: https://www.specialeurasia.com/2022/12/13/zhaparov-uae-kyrgyzstan/; GIULIANO BIFOLCHI (2021) Geopolitics of UAE investments in Central Asia, Geopolitical Report 2785-2598 Volume 12 Issue 8. Link: https://www.specialeurasia.com/2021/10/18/geopolitics-uae-centralasia/.
[10] SILVIA BOLTUC (2022) Iran’s interests and strategy in Central Asia, Geopolitical Report ISSN 2785-2598 Volume 23 Issue 1. Link: https://www.specialeurasia.com/2022/09/07/iran-interests-central-asia/.