TOPIC OF THE WEEK: Tajikistan—The Last MohiKhan and His Successor
Rustam Rahmon, Chairman of the Upper House of the Tajikistan Parliament (Majlisi Milli) and son of the President of Tajikistan, Emomali Rahmon, paid his first official visit to China in his formal capacity on Aug 21-23. While there were deals signed for a good US$400mn, the focus of Tajikistan watchers was finely attuned to reading the tea leaves of the Beijing visit with regard to Rustam’s prospects to take over from his father as the leader of the country. The announced purpose of the trip was to strengthen cooperation between the two strategic and friendly partner countries, but we would be remiss not to look for deeper meaning and interpret the main goal of this visit as the desire to introduce Rustam Rahmon as the potential successor to the President. With the introduction to the other strategic ally Russia already happening in 2020, one may conclude that this critical part of the external protocol has now been successfully accomplished.
Since the 2016 Referendum, which changed the Constitution to open the door for Rustam to become the next President of Tajikistan, there have been constant attempts to guess the exact timing when the longest-serving leader in Central Asia and the Last MohiKhan of Presidents in the region will decide to follow the example of fellow Central Asian peers and engineer a power transition in the country. This has proven to be an unenviable task as the succession has still not happened, which has in turn invited unceasing speculation about why Emomali Rahmon has not yet stepped down and whether there could be any dark horses for the coveted prize of the Presidency. We take a more pragmatic approach and argue that, while indeed there have been important geopolitical and internal events that may have prompted a delay in passing the baton, the plan to have Rustam take over from his father has never really changed.
We nevertheless entertain the logic of alternatives, including some very recent allusions to a surprising dark horse in the race, but conclude that Rustam Rahmon remains the unquestionable favorite to succeed his father. At the same time, we think that Emomali Rahmon is not too old to continue at the helm of Tajikistan until the next presidential elections in 2027 despite recurrent speculation about the state of his health. Even if a decision is made to engineer a formal transition before that date, it is likely that it will take the form of the Turkmenistan dynastic change at the helm of the country, whereby the son formally assumes the position of President, but the father retains the key levers of power in the country by Heading the People's Council, which was re-formed as Turkmenistan’s top leadership body.
Going through the analysis is certainly entertaining from an analytical perspective, but the considerations are, of course, not purely academic. While Tajikistan has been enjoying high growth rates, subdued inflation, CA surpluses, a relatively well-behaved exchange rate and low debt levels recently, it remains the only Central Asian country where the issue of power transfer is still unresolved, thus creating uncertainty about the immediate future and risks for investment managers. The examples of neighboring Kyrgyzstan and Kazakhstan indeed demonstrate the dangers of a more volatile political transition. The experience of the rest of the Central Asian economies also shows an intriguing correlation between The Economist Democracy Index and the nature of political transitions in that the more authoritarian countries of Uzbekistan and Turkmenistan have tended to experience a peaceful power transfer while the less authoritarian countries of Kyrgyzstan and Kazakhstan have seen bouts of turbulence in the process. This rule-of-thumb suggests that Tajikistan, which ranks as one of the most authoritarian countries in the world (157th among the 167 ranked countries; lower is better), is more likely than not to see a relatively orderly change of power from father to son. This conclusion should in no way be misconstrued as expressing a preference for, and/or extolling the virtues of, authoritarian regimes, but it should nevertheless be welcomed as positive news for the holders of Tajikistani bonds.
A final point to make is that it may be safe to assume as a baseline scenario that, should Rustam Rahmon become the next President, not a lot will change in terms of Tajikistan's closed economic model, non-transparent and rigidly applied political model and its foreign policy centered on maintaining strategic ties with Russia and China. Nevertheless, there is a palpable upside risk that the shaping influence of the two leading reformers in the space, Kazakhstan and Uzbekistan, may have fruitful influence on Rustam in prodding him to open up the economy and loosen the stringent restrictions on political life in the country.
Now read on...
Register to sample a report