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Cablegate: Dam If You Do, Damned If You Don't: Roghun Pressure Mounts

VZCZCXRO6566
PP RUEHLN RUEHSK RUEHVK RUEHYG
DE RUEHDBU #0052/01 0130902
ZNR UUUUU ZZH
P 130902Z JAN 10
FM AMEMBASSY DUSHANBE
TO RUEHC/SECSTATE WASHDC PRIORITY 1128
INFO RUCNCIS/CIS COLLECTIVE
RUEHBUL/AMEMBASSY KABUL PRIORITY 0381
RUEHBJ/AMEMBASSY BEIJING PRIORITY 0135
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAIIA/CIA WASHDC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEHDBU/AMEMBASSY DUSHANBE 2462

UNCLAS SECTION 01 OF 04 DUSHANBE 000052

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EFIN PHUM ENRG EINV TI
SUBJECT: DAM IF YOU DO, DAMNED IF YOU DON'T: ROGHUN PRESSURE MOUNTS

REF: DUSHANBE 1443

DUSHANBE 00000052 001.2 OF 004


1. (SBU) SUMMARY: On January 6, the Tajik government
inaugurated nationwide sales of shares in the Roghun
hydroelectric dam project, using extortion and intimidation to
pressure individuals and organizations to buy stock. As part of
an unprecedented multi-media campaign, all four state television
stations and nearly all Tajik print media reported mass
purchases of Roghun stock as voluntary acts of patriotism. In
fact, however, the government has issued fundraising targets to
public and private employers; to meet these quotas, employers
ordered their staff to make purchases that often far exceed
their monthly salaries or risk being fired. The government has
leaned hardest on state employees, including doctors and
teachers, further corrupting the education system as professors
sell grades to students in exchange for Roghun stock purchases.
But no one is exempt: businesses, farmers, pensioners,
hospitals, and even orphanages are being shaken down.
International donors are concerned not only that the Roghun
campaign violates ethical rules, but that it endangers
Tajikistan's macroeconomic stability. So far, most people
appear to be toeing the line, in part because they agree that it
is important to build Roghun. But in private many Tajiks are
furious that Tajikistan's billionaire president is wringing
every last penny out of his dirt-poor citizens. END SUMMARY

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IT'S NOT A WONDERFUL LIFE...

2. (SBU) On January 6, shares in the Roghun hydroelectric dam
went on sale across Tajikistan at special "Amonotbonk" counters.
In a bizarre reversal of the bank run scene from "It's a
Wonderful Life," national television larded the airwaves with
footage of Tajik citizens clambering over each other to give
their money TO the bank. Happy stock owners recited poems about
Roghun to the cameras as they proudly grasped their stock
certificates. State media followed up with music video paeans
to the dam, heroic images of Roghun builders, and aerial footage
of a column of trucks en route to the construction site as if
off to war. Images were straight out of Soviet central casting,
including footage of President Rahmon in deep conversation with
Roghun craftsmen, apparently discussing details about the
masonry. One could almost hear him exhorting, "Comrades, this
grout must be thicker!" The media reported many firsts: the
first shares bought in Khatlon Province (by the regional
chairman), the first purchase made in Dushanbe (by the Mayor),
and the first child named after Roghun -- Roghunshoh Bobokhonov,
born January 6 in the village of Gulkhona in Sughd Province; the
first girl born in Yovon District was named Sahmiya, or "Share,"
i.e., of stock.

3. (SBU) Government sources triumphantly announced that, in
Dushanbe alone, citizens bought $92 million in Roghun shares on
the first day of sale. In the second-largest city, Khujand, the
government announced that $4.7 million in shares were sold. If
the government's figures are correct, on average every man,
woman, and child in Dushanbe contributed more than $100 on the
first day of sales alone. Comment: While the government was
able to wring a significant amount of money from the population
on January 6, it is unfathomable that Dushanbe residents ponied
up $92 million out of thin air. In all likelihood the
government leaned on Tajikistan's few truly wealthy individuals
to repatriate some of their offshore funds. The government
itself may have engaged in some creative bank transfers to pad
the Roghun pot. End comment.

SHAKEDOWN: STUDENTS BUY GRADES, PROFESSORS BUY JOB SECURITY

4. (SBU) To impel further Roghun stock sales, officials put the
screws to those most reliant on state institutions (and thus
most vulnerable to state pressure): government employees,
teachers, doctors, and students. The media spun contributions
from these institutions as acts of patriotism. Asia-Plus
reported that staff at the Tajik State University of Commerce
bought 200,000 somoni in shares on January 6. In interviews the
new stockholders dutifully hit on the government's key talking
points: they are not only contributing to Roghun, they are
proud owners of valuable shares. Tajik National University
(TNU) is encouraging its staff to contribute directly through
the university rather than buying shares individually so that
TNU receives credit for the totals.

5. (SBU) These sales are nowhere near voluntary, according to
numerous sources. A contact at TNU said university management
"kindly asked" every professor to buy at least 500 somoni in
shares. Staff had already "volunteered" to surrender a day's
salary, which netted a 20,000 somoni contribution in December.
Another contact told us that after donating 500 somoni in

DUSHANBE 00000052 002.2 OF 004


December, his dean asked him to contribute another 500 somoni in
January. When he said he did not have the money, the dean said
it was no problem; the university could simply deduct it from
the professor's next paycheck. The rector of the university,
Mumindzhon Sharifov, announced his own 10,000 somoni purchase of
Roghun shares to set a positive example for his staff.
Management of Tajikistan's State Medical University directed
employees to make even higher contributions -- 2,000 somoni for
professors and 3,000 for heads of department. Many teachers
were told that a refusal to volunteer would result in their
firing.

6. (SBU) Throughout the country, the fundraising scheme followed
a top-down approach. The government allegedly set targets for
major institutions, such as ministries, universities, and large
companies. University rectors set targets for deans, who set
targets for teachers, who set targets for students. A Tajik
working for a foreign assistance mission here said the whole
exercise felt like it came out of the Soviet playbook, where
institutions competed with one another to pick the most cotton,
or, in this case, to buy the most Roghun shares. At the bottom
were the students, forced to "volunteer" to buy at least 100
somoni each in shares. Professors warned students at TNU and
Russian Tajik Slavonic University that if they failed to present
a share certificate bearing their full name, they would not be
allowed to take their course exams. Students from other
Universities, including Dushanbe Medical University, shared
similar accounts. As an added incentive, students could present
their stock certificate for better grades. A certificate for
300 somoni in shares reportedly buys a "3" (a passing grade
roughly equivalent to a "C" in the American system), while 400
somoni yields a "4," or "B." A student told us her professor
told her not even to bother showing up at the exam; her 500
somoni contribution had already won her a "5."

PRESSURE SUBTLE AND NOT SO SUBTLE

7. (SBU) While many Tajiks report they have been openly told
they will be fired if they do not contribute, for some the
pressure has been more subtle. A student who was warned he
would not be allowed to take his exams without contributing 100
somoni showed up for his tests without paying. His professor
allowed him to sit for the exam, but the dean dropped by to
remind him that the head of the university had ordered all
students to purchase shares. When the student directly asked if
the purchase was compulsory, the dean said "no." The student
nevertheless expected to hear frequent and unsubtle reminders
that he is required to buy shares. A professor said she refused
to browbeat her students into paying, but she anticipated
difficulties with her administration. Another professor at TNU
told us he was more comfortable giving money to Roghun after the
rector signed a memorandum from the university's academic senate
agreeing to buy back shares if employees needed money for a
wedding, an operation, or other urgent expense. For every such
story, however, there is another one in which people were
unequivocally forced to pay.

DOCTORS AND NURSES ASKED TO TURN AND COUGH UP

8. (SBU) Officials continue to pressure medical professionals
from across the country, already dismally paid, into
contributing to Roghun. In December, the Dushanbe City Medical
Center deducted three days' salary from its staff without their
consent. In January, officials told doctors at the same
institution they must contribute 1,000-1,500 somoni per person
to Roghun within the next year. The first installment of 500
somoni was due immediately. Several days later, hospital
management doubled that amount. The mother of an embassy staff
member, a doctor who earns 220 somoni per month, said unless she
shows her boss a stock certificate in her name for 1,000 somoni,
she has been told she will be fired. The orders apparently come
directly from the Ministry of Health. Her sister, an
administrator at the hospital, has been ordered to buy 5,000
somoni in shares. Doctors in Khujand were told they needed to
purchase 5,000 somoni in shares, and nurses were asked to
contribute 100 somoni.

9. (SBU) On January 8, the Ministry of Health requested that
Tajiks working for NGOs and international partners, including
USAID and UNDP, attend a meeting about Roghun. At the meeting,
officials said the government assigned the Ministry an overall
fundraising target; while it had raised a percentage of this
total from its own workers, it needed funds from medical
contacts outside the Ministry to achieve its goal. Officials
did not order anyone to contribute to the cause, but urged
attendees to help fund the dam in the Ministry's name.

DUSHANBE 00000052 003.2 OF 004


According to numerous reports from contacts working with
government agencies, this general pattern has been the same
across ministries: unable to reach their assigned targets by
pressuring their own staff, they are widening their net to
include individuals who work with the ministry. The dragnet has
included staff at foreign embassies, including that of the
United States, who work with colleagues at various ministries.
Our American Corner coordinators have also been repeatedly hit
up by their host institutions and government officials who just
happen to come by the Corner to check out books.

TAJIK DIPLOMATS AND STATE ENTERPRISES ASKED TO GIVE IT UP

10. (U) Tajiks outside of Tajikistan are not exempt. Ministry
of Foreign Affairs employees, including foreign diplomats
abroad, reportedly bought shares worth 589,110 somoni on the
first day of sales. These purchases came on top of earlier
donations made directly to Roghun's bank accounts (reftel). The
Tajik Embassy in Beijing spent 47,000 somoni, with the
Ambassador proudly declaring, "The acquisition of Roghun shares
and contribution to the acceleration of its construction is the
duty of every patriotic citizen of our country, no matter where
he lives at the present time."

11. (U) State-owned enterprises have leapt over themselves to
report contributions to Roghun. The fact that many of these
companies have only recently been complaining about a shortage
of cash has raised some eyebrows. The Talco aluminum plant,
Tajikistan's largest exporter and the alleged source of much of
the President's personal wealth, says it does not have the money
to repay debts to state electricity provider Barqi Tojik
totaling $30 million. As a result, Barqi Tojik has fallen
behind on its payments to the Sangtuda-1 hydropower station,
which has cut production, leaving Tajik homes that much darker.
Yet Talco was apparently solvent enough to purchase $5 million
in Roghun shares last week and commit to increasing the total to
$25 million. Talco employees have so far bought shares worth an
additional $4 million.

PRIVATE SECTOR ALSO PRESSURED

12. (SBU) Private firms and their employees scrambled to
demonstrate their loyalty to the cause. Many had already made
"pre-emptive" contributions to Roghun before shares went on
sale. An Embassy employee recounted how his son, who runs a
small private company, contributed 500 somoni directly to the
state bank account, while his employees sent 300 somoni each.
The son and his employees were worried that if they did not make
these contributions the company would run into difficulties with
state officials. Banks across the country have made
particularly large and public contributions. Chairman of the
Tojiksodirot Bank's Supervisory Board, Todzhiddin Pirov, bought
shares worth 260,000 somoni out of his personal budget. He said
the bank's employees would buy shares worth an additional $1
million, and the bank itself would purchase $5 million in funds.
Employees at Agroinvestbonk reportedly bought shares worth over
2.5 million somoni on January 6. The bank itself is said to be
preparing a separate contribution. Other banks were making
similar plans. At markets administrators reportedly are
collecting set amounts from all suppliers and stallholders.

MEDIA MOSTLY JOINS IN THE BUY ROGHUN REFRAIN

13. (SBU) State and independent media have echoed the
government's calls to buy Roghun shares, editorializing the need
to make stock purchases and lionizing individuals who made
notable contributions. Only one publication, the on-line
avesta.tj, criticized the compulsory sales in an article
entitled "There almost wasn't any rape," which disputed the
notion that students, teachers, and doctors purchased stocks
voluntarily. The compulsory purchases, it said, violated the
President's intentions. The article did not, however, criticize
the Roghun drive itself. The same website announced it would
raise money for the Roghun project through its advertising
space. Other journalists have privately expressed concerns
about the Roghun campaign and post will monitor future coverage
to report any emerging criticism.

INTERNATIONAL REPERCUSSIONS

14. (SBU) International donors are expressing concern that the
Roghun campaign may violate the terms of some of their
assistance. In the wake of the global financial crisis, donors
have required the government to meet certain minimum
expenditures in the social sector. They expressed concern that
the Roghun "contributions" taken from teachers, doctors, and

DUSHANBE 00000052 004.2 OF 004


other state employees effectively decrease the state's
allocation to these sectors -- the government is essentially
giving to the social sector with one hand while taking with the
other. There are concerns as well about the macroeconomic
implications of removing such a large amount of cash from the
population, in particular increasing their vulnerability to
future shocks, including a further drop in remittances from
Russia.

15. (SBU) COMMENT: There is undeniable public support for
Roghun, especially since Uzbekistan cut energy exports to
Tajikistan, and many Tajiks believe the government's promise
that building the dam will herald a new age of energy security
and prosperity. But the government risks killing this goodwill
with its intimidation and extortion of already impoverished
Tajiks. The Roghun campaign demonstrates yet again that Rahmon
rules Tajikistan as he did the collective farm in Kulob where he
got his start, driving his employees to meet ever higher targets
while pocketing many of the proceeds. The campaign underlines
the miserable state of the country's education and medical
systems: doctors and teachers may be deployed to pick cotton or
directed to extract money from their students, depending on the
government's needs of the day.

16. (SBU) COMMENT CONTINUED: Though many Tajiks are coughing up
their last somoni with a sigh and shrug, some are seething with
anger at the government shakedown. Even supporters of the
campaign wonder whose pockets the money will ultimately line.
The bank in which the proceeds are deposited is controlled by
presidential brother-in-law Hassan Asadullozoda, and the
government has not announced any measures for overseeing how the
funds are used. Rahmon, whom everyone knows to be a
multi-billionaire through his stake in state-owned enterprises
such as Talco, has not publicly announced any contribution.
Making such an announcement might actually be hazardous for him:
it would be an admission that he is far richer than he should
be. Similarly, the Mayor of Dushanbe has trumpeted his share
purchase but refused to say how much he bought. For now, no
political leaders have challenged the government on the Roghun
campaign, and if recent history is any guide -- for instance the
response to the brutal winter of 2007-08 never coalesced into
political grievances -- none are likely to do so. But as the
government continues to turn Tajiks upside down and shake them
for loose change, the question remains: How much can Tajiks
take? END COMMENT.
GROSS

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