Plan for Free Economic Zones Moves Forward

NBCentralAsia observers say plans to set up free economic zones to boost manufacturing and attract investors will be good for the economy provided Tajikistan can head off the competition in neighbouring states.



On May 25, participants at a roundtable meeting organised by the aviation company Nurafshon proposed creating a free economic zone at Khujand airport in northern Tajikistan, according to the Asia-Plus news agency.



In a speech at an investment forum in Dubai in early April, President Imomali Rahmon said he planned to establish three free trade zones in Tajikistan.



The idea has been around since the mid-Nineties but no concrete proposals were put forward until December 2006, when the Russian company Norilsk Nickel offered over a billion US dollars in investment to develop a silver mine in northern Tajikistan, provided the area was designated a free economic zone.



Representatives from the ministry for economic development and trade have told NBCentralAsia that plans are currently being drafted for zones in the north, south and east of the country.



Ministry spokesman Gafurjon Rasulov said Tajikistan is ready to offer tax breaks, but the loss in revenue would have to be compensated for by a rise in exports and foreign currency inflows.



Economist Firuz Saidov agrees, saying that the country will not lose out from free economic zones even they benefit from significant concessions like the reduction or abolition of many taxes and other levies, provided they do not operate in industrially developed parts of northern Tajikistan or around the Tursunzade aluminium plant, the country’s industrial powerhouse.



NBCentralAsia economic observer Hojimuhammad Umarov says such zones could play a “huge role” in developing the Tajik economy, providing people with jobs and better pay.



However, Umarov warns that other Central Asian states also attach great importance to their own zones, so Tajikistan must ensure that it beats the competition by offering more attractive terms to potential investors.



Neighbouring Kyrgyzstan has four long-established free economic zones, and in mid-May, the Turkmen president gave the go ahead for a large zone in the Caspian port city of Turkmenbashi.



Tax breaks alone will not attract foreign investment to Tajikistan, Umarov said. The right business infrastructure must also be in place, including convenient transport routes and simplified visa procedures.



(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)