Tit-for-Tat: The Evolution of Non-Cooperation over the Rogun Dam

 By Stephen Weil

Resource conflicts have become important flashpoints across the globe, including in Central Asia, where Tajikistan and Uzbekistan have been embroiled in a major dispute over life's most precious resource: water. Uzbekistan contends that the proposed Rogun Dam would destroy their agricultural system; Tajikistan counters that increased hydroelectric energy production is essential to its economic growth. How can these neighbors arrive at a mutually beneficial arrangement?

The former Soviet states of Central Asia have undergone a dramatic transformation over the course of the past two decades as they have grappled with the complexities of independence. One major consequence of their new arrangement has been a rise in competition and conflict between states that were formerly part of a single union. One major locus of these conflicts has been water; a natural resource that often receives less attention than the flashier hydrocarbons and metals. During Soviet times, these disputes were managed by the central government in Moscow, which created a regime to allocate and manage the limited water resources. Without this central management, these distributive schemes have fallen apart. Of the many water-related disputes that have emerged in the past twenty years, perhaps the most notable has been over the proposed Tajik mega-dam, Rogun. 

The project was originally conceived of by the Soviet authorities, with construction beginning in 1976, but construction progressed slowly and was finally brought to a halt by a major flood in 1993. With the collapse of the centralized Soviet management system and with Tajikistan descending into civil war, the government lacked the impulse or funding to re-start the project at that time. Since 2007, President Rahmon has made Rogun a central piece of his agenda and has consequently pursued foreign funding to complete the dam.  The World Bank and other financial institutions have thus become mediators in the dispute between Tajikistan and Uzbekistan, which objects to the dam as an environmental disaster that would also divert essential flows of water away from Uzbek agriculture. These financial institutions, along with other international actors, have been thus far unable to broker a compromise. Understanding this failure requires a deeper look at both the historical and contemporary context of this dispute. 

The Soviet-era water sharing agreements provide a model for understanding how Tajikistan and Uzbekistan could come to a mutually beneficial arrangement. During that time, the region, while eventually divided into five republics, was nevertheless managed as one constituent part of the Soviet Union. This meant in practice that officials in Moscow coordinated with regional officials in order to determine the distribution and scale of economic activities in the area. The Soviets created a system of dams on the two main regional rivers, Amu Darya and Syr Darya, designed to allow the upstream states to accumulate water and then release their reservoirs during the irrigation season. This system required the Tajik and Kyrgyz republics to store water during the winter, thus restricting the two states’ power generation during the most energy-intensive months of the year. In exchange for limiting their production of hydropower, these two republics received other energy resources, in the form of oil, gas, coal, or electricity, from their neighbors (and from other parts of the Union) during that difficult season.

In the wake of the Soviet Union’s collapse, many analysts speculated that these arrangements would fall apart. Defying these predictions, the five Central Asian republics signed an agreement in February, 1992 to continue Soviet water sharing practices, thus creating the Interstate Commission for Water Coordination (ICWC).  Notably, however, the agreement only allowed the ICWC to set water allocations, but not to require provisions of energy supplies to the upstream states.  The Central Asian states proceeded to reach a separate agreement in 1998, in which Kazakhstan and Uzbekistan paid for electricity and irrigation, while Tajikistan and Kyrgyzstan used those revenues to pay for energy during the winter. This arrangement broke down in 2002, as Kyrgyzstan demanded higher electricity prices to compensate for rising oil and gas costs. 

It is in this context that the dispute over the Rogun dam has emerged. The massive dam would be built on the Vakhsh River, a critical tributary of Amu Darya. Rogun would provide critical support for the Tajik economy, not only by providing more jobs through construction, but also by allowing the country to overcome its current electricity deficit (of around 2 billion kWh annually) and export surplus energy throughout the region. If completed, Rogun would be the world’s tallest dam, producing an estimated 13.3 billion kWh of electricity annually.  To put that figure in perspective, Tajikistan produced a total output of 16.1 billion kWh of electricity in 2009.  In the old Soviet system, Rogun could have been a win-win project by producing electricity for Tajikistan while maximizing water flows for Uzbek irrigation system. Unfortunately, given the zero-sum framework that has emerged in the governance of Central Asian water resources, Dushanbe is likely to maximize electricity production from the dam without concern for Uzbek agriculture.  Two Russian analysts reached a similar conclusion in a 2007 report,  lauding the potential for Rogun to benefit regional development while expressing concern that an exclusive focus on hydro-electric output could make the project detrimental for regional agriculture. Unfortunately, Tashkent has not reacted by attempting to salvage a positive-sum framework for water-gas exchanges; instead, the government has started to surreptitiously restrict gas deliveries to Tajikistan as a form of pressure.  

In order to assuage Tashkent’s concerns, and to secure foreign financing for a project estimated to cost $3.6 billion, Tajikistan appealed to the World Bank to conduct an impact assessment for the dam. The World Bank has asked Dushanbe to halt any construction work while the assessment, which is scheduled to be released this February, is being conducted.  The organization has provided limited funds in the interim for repair work and feasibility studies, but even these limited measures have drawn sharp criticism from Tashkent.  This context has increased the politicization of the debate over Rogun, as the two sides are competing to secure either international support or opposition. It thus becomes necessary to separate the legitimate arguments for and against Rogun from those that are steeped in political rhetoric. Tashkent, for example, has raised a number of environmental objections to the project, but these warnings have rung about as hollow as Moscow’s “environmental” objections to a trans-Caspian pipeline. While there are certainly some environmental concerns that must be managed, it is apparent that Tashkent’s more immediate concern is that an energy-independent Tajikistan could more aggressively challenge Uzbekistan’s regional interests.  On the other hand, Dushanbe has made a number of similarly political appeals to secure international backing. One recent strategy has been to pitch the Rogun dam as a central element of the CASA-1000 project, an effort to expand electricity exports throughout Central Asia, and particularly Afghanistan, in order to promote regional development. Because of the centrality of projects like CASA-1000 to Washington’s “New Silk Road” strategy, Tajikistan hopes to win over a powerful ally to their side of the struggle. Countries such as Russia and Kazakhstan have also started to re-consider their positions on financing the dam, opening up a range of possible investors for Dushanbe. These recent shifts in momentum have prompted Uzbekistan to ratchet up their material punishment of Tajikistan; many analysts have speculated, for example, that a mysterious railway blast in Uzbekistan was actually staged by the government in order to block important supplies from reaching southern Tajikistan. 

Given the potential for a mutually beneficial arrangement over Rogun, it is puzzling that both sides have taken such intractable positions. The underlying source of this tension is that each country has come to view its resource base in zero-sum rather than positive-sum terms, sparking a self-fulfilling downward spiral of regional cooperation. These countries now see each other as competitors, rather than allies, and consequently the leaders view the dispute through the lens of concepts such as “leverage,” seeking an arrangement that gives them the most relative gain, rather than one that produces the largest absolute gain for each party. The culmination of these tactics has been the emergence of a deficit of trust between the two nations.  What then can be done to reverse this trend? Effective international involvement and mediation would certainly be helpful, but will also undoubtedly be insufficient.  As long as the parties to the conflict continue to view their natural resources in zero-sum terms, they will be unable to reach mutually beneficial agreements. Perhaps it would be valuable for policymakers in Tashkent and Dushanbe to reconsider the advice laid out by political scientist Robert Axelrod more than two decades ago in his ground-breaking work, The Evolution of Cooperation. Axelrod demonstrated convincingly that two rational, egoistic actors benefit more in the long-term from cooperation than from defection, even in a traditional “Prisoner’s Dilemma.” By acting purely in their own self-interest, the parties to the Rogun dispute might accrue short-term gains at the expense of long-term sustainable development. For example, by charging exorbitant energy prices, Tashkent ensures that Dushanbe will ramp up hydro-electric production at the expense of Uzbek agriculture. By instead negotiating a framework for “water-for-energy” swaps, both countries can facilitate the development of a viable regional partner while preventing an escalatory spiral of retaliation that would ultimately be detrimental to both countries. As divisive as the rivalry between Tashkent and Dushanbe may appear, there is at least some hope that Tajikistan and Uzbekistan could construct a more positive relationship.  

In the absence of such an ideological evolution, outside powers might still have a role to play in pushing the parties closer to a resolution of their dispute. One strategy lies in providing aid to improve the efficiency of both Uzbek irrigated agriculture and the energy grid connected to Tajik hydro-power dams. A recent Senate Foreign Relations Committee report  documented how the United States could help reduce water demand by providing benchmark data and strategies to improve irrigation efficiency. On the other side of the equation, the UNDP put out a report  focusing on energy efficiency concerns in Tajikistan, noting that energy costs accounted for nearly sixty percent of the country’s GDP. The document outlines a number of possible avenues to improve the efficiency of the Tajik grid and distribution system. By reducing water demand from both parties, this type of development assistance may be able to reduce the size of the pie that each side feels it requires, allowing an acceptable division of resources to emerge where it was otherwise impossible. 

Resolving disputes over shared resources will be essential for the development of the Central Asian region. Some of these countries have been more successful than others in the aftermath of the Soviet collapse, but none has truly emerged as a sustainable economic power, save perhaps for Kazakhstan. By focusing on shared development, and seeking mutually beneficial solutions rather than purely self-interested ones, these republics would stand a much stronger chance of emerging as productive economies. Unfortunately, politics is never quite so simple. Decision makers in each capital are faced with an array of tough decisions, and the mistrust that has developed between Tashkent and Dushanbe makes it difficult to reach any agreement. Nevertheless, while outside powers can continue to push these countries in the direction of compromise, the turning point will come only when the leaders in both Tashkent and Dushanbe come to realize that their attempts to secure leverage and regional influence are coming at the expense of their countries’ own economic development.