Chinese leader Xi Jinping will arrive in Dushanbe on a state visit this week.
To-date, Tajikistan’s debt to China has amounted to some 1.3 billion U.S. dollars, which is more than 40 percent of Tajikistan’s external debt. Meanwhile, the first China’s loans were provided to Tajikistan only twelve years ago. In 2007, Chine provided little more than 216 million U.S. dollars in loans to Tajikistan.
Despite unsettled debts, Tajikistan expects to receive additional loans from China for development of its economy.
Tajik Minister of Industry and New Technologies, Zarobiddin Faizullozoda, told reporters in Dushanbe in late February that “today, we can rely only on Chinese investors.”
“Only Chinese company can invest in our economy today,” said the Tajik minister.
China remains Tajikistan’s largest creditor. According to data from the State Committee on Investment and State-owned Property Management (GosKomInvest), foreign direct investment made in Tajikistan’ economy last year amounted to some 330 million U.S. dollars and China accounted for more than two-thirds of this amount.
Dozens of Tajik-Chinese joint ventures now operate in Tajikistan, mostly in the mining sector.
Chinese President Xi Jinping will arrive in Dushanbe this week and his visit is expected to result in signing of a number of cooperation documents between Tajikistan and China in the fields of commerce, finance, security, culture and education. The issue of attraction of Chinese investment and technologies in construction of the Roghun hydropower plant is expected to be discussed during the talks of the leaders of the two countries.
Meanwhile, some Western experts consider that there are several reasons to believe that Chinese investments will not contribute to the economic development of Tajikistani society at large.
The first is that Chinese companies in Tajikistan hire mostly Chinese workers. Unlike other countries in the region, Tajikistan has no local content requirements that would mandate foreign firms to hire domestic labor.
A second indicator is that instead of paying loans back gradually, Tajikistan is signing away land and mining rights.
Thus, in return for building a combined heat and power plant in Dushanbe, Tajik authorities granted the contracting company, China’s Tebian Electric Apparatus (TBEA), exclusive rights to operate two gold mines. The TBEA will operate the two mines until it can recoup its $332 million investment.
Essentially, China is relying primarily on its own companies and labor to build projects then extract resources, which minimizes long-term economic benefits for Tajikistan, such as local capacity building and labor force participation.
The third hindrance to Tajikistan's economic development is implementation of ambitious building projects. In 2018, when President Rahmon reportedly returned from Beijing with $310 million in loans and grants, he announced that 230 million USD would go towards building a new parliament complex.
