Dams, electricity, climate change and Chinese money form toxic mix in Central Asia

By bne IntelliNews November 19, 2014

Olim Abdullayev in Dushanbe -

 

Relations between Tajikistan and Uzbekistan have been less than congenial since the collapse of the Soviet Union. Rising tensions over water, exacerbated by climate change, have recently shown the potential to degenerate into armed conflict. Transforming the situation is billions of dollars of Chinese investment pouring into both states, which is changing the balance of power in favour of Tajikistan while also creating an incentive for both sides to step down.  

At the heart of the diplomatic wrangle is the government of Tajikistan’s desire to build a colossal hydroelectric power dam that would massively reduce water flows to Uzbekistan. This has huge economic consequences, as the downstream country depends on vast amounts of this water for its thirsty cotton crops. If Dushanbe goes ahead with the project – a pillar of the government’s national development strategy – there is potential for an armed response from Uzbekistan. In parallel to this Chinese investment in Tajikistan’s transport infrastructure is slowly but surely undermining Tashkent’s one effective tool of non-military leverage over the Tajik government: its economic blockade.

Row over Rogun

According to Tajikistan’s Ministry of Energy and Water Resources, the country has approximately 46 cubic kilometres (km3) of water spread over 1,300 lakes. This water wealth is generated by flows from the mountainous terrain of the republic, fed by vast, high altitude glaciers containing some 845km3 of ice. Water originating here contributes over half of the drainage collecting in the Aral Sea in neighbouring Uzbekistan and Kazakhstan. According to the Tajik Ministry of Foreign Affairs of Tajikistan, the country generates 60% of Central Asia’s water.    

It is the threat of limiting this flow to Uzbekistan’s numerous cotton fields that has notably contributed to tensions between the two republics. The planned establishment of new dams to meet Tajikistan’s electricity deficit led to a blockade in rail, power and road connections from Uzbekistan beginning in 2009. At the centre of this dispute is the Rogun Dam project, which the World Bank gave the green light to in feasibility studies published in June this year.

Earlier plans to develop Rogun, which would be the tallest dam in the world if completed, led to a rapid decline in relations between Tashkent and Dushanbe. The Soviet-era train, road and energy infrastructure connecting Tajikistan to the rest of the world all runs through the territory of Uzbekistan. With the Uzbek border closed, Tajikistan suddenly found itself not just doubly landlocked, but cut off from the vast majority of its overland transport infrastructure. The subsequent disconnection of gas lines originating in Uzbekistan rendered Dushanbe’s thermal gas plants inert.

Ironically, it seems that this move has made Tajikistan’s government even more focused on achieving energy independence and thus pursuing the Rogun Dam project. Already, during the last decade, an increase of 1,000 megawatts (MW) of installed capacity has been achieved to meet the country’s dire energy shortage, primarily through the rehabilitation of existing assets.

Regardless of the additional capacity that this rehabilitation has provided, the Rogun Dam would be a magic bullet capable of not just meeting Tajikistan's domestic power needs during winter, but also providing €120m in export revenues from clients in Afghanistan and Pakistan during the summer months, through the CASA-1000 power line. But the subsequent decrease in water flow that Rogun’s construction would create, especially as it fills, would be disastrous for Uzbekistan’s cotton industry. 

Water falls

Given the role that water plays in its relations with its neighbours, it is not surprising the substance sits at the centre of Tajikistan’s foreign policy. Through the UN, the country has led a number of international initiatives aimed at supporting the resolution of water disputes. These platforms have enabled Tajikistan to voice its concerns on the issue and seek international support for a favourable resolution to its dispute with Uzbekistan. 

This is especially necessary, because in addition to the construction of dams there is the melting of Tajikistan’s glaciers as a result of climate change, which further threatens to reduce water flow to downstream countries. Tajikistan’s glaciers have reportedly declined by 70% over the last 70 years, and snowfalls have decreased in turn, leading to even less downstream flow.  During Tajikistan’s address to the 69th session of the UN General Assembly in September this year, Tajik Prime Minister Kokhir Rasulzoda used Tajikistan’s timeslot to draw attention to this issue.

However, the disastrous Tashkent-Dushanbe relations and the subsequent Uzbek economic blockade of Tajikistan is slowly being undone by big Chinese investment into the region. In the last three years alone, China has built infrastructure to link Tajikistan to its neighbours. These include the Pamir Highway to Western China, bridges to Afghanistan, and a proposed rail link that would connect Tajikistan to Turkmenistan and the Indian Ocean via Iran. This cutoff country is slowly but surely developing alternate overland trade routes.

Given that the blockade by Uzbekistan has not resulted in preventing upstream dam development, and that Tajikistan’s economy is witnessing 7% annual growth including massive energy infrastructure investment, it seems likely that Tashkent will have to make a bold policy decision soon. A show of force might cause Tajikistan to amend its plans, but rapprochement between the two neighbours is also a possible scenario, though it will leave Tashkent high and dry come harvest time. But does it have a choice? As a senior development official and Central Asia water expert in Dushanbe told bne recently, “the inevitable effect of climate change on water supplies could cause Uzbekistan and Tajikistan to work together.”       

The need to find an end to this dispute is further reinforced by the breaking of ground of a new $3.2bn Chinese gas pipeline crossing through Uzbekistan to Tajikistan. This project promises to be a huge money-spinner for both governments, but will require extensive cooperation.  

 

Related Articles

COMMMENT: Great challenges for Eurasia call for decisive solutions

Juha Kähkönen of the IMF - The Caucasus and Central Asia (CCA) region continues to navigate a wave of external shocks – the slump in global prices of oil and other key commodities, the slowdown ... more

IMF calls for Central Asia to tighten monetary policy

Naubet Bisenov in Almaty -   Caucasus and Central Asian (CCA) countries need to tighten their monetary policy to anchor inflation expectations, but excess tightening may weaken financial ... more

COMMENT: Once I lived the life of a millionaire…

Peter Szopo of Erste Asset Management -   No, the title of this column is not the first line of the autobiography of an erstwhile emerging markets investor – although it could be. Somebody who ... more

Dismiss