Traditional Yurt (Asian nomadic tent) in Tajikistan.jpg

The Tajik people came under Russian rule in the 1860s and 1870s, but Russia's hold on Central Asia weakened following the Revolution of 1917. Bolshevik control of the area was fiercely contested and not fully reestablished until 1925. Much of present-day Sughd province was transferred from the Uzbekistan SSR to newly formed Tajikistan SSR in 1929. Ethnic Uzbeks form a substantial minority in Sughd province. Tajikistan became independent in 1991 following the breakup of the Soviet Union, and it is now in the process of strengthening its democracy and transitioning to a free market economy after its 1992-97 civil war. There have been no major security incidents in recent years, although the country remains the poorest in the former Soviet sphere. Attention by the international community in the wake of the war in Afghanistan has brought increased economic development and security assistance, which could create jobs and increase stability in the long term. Tajikistan is in the early stages of seeking World Trade Organization membership and has joined NATO's Partnership for Peace.

Tajikistan is the source of more than 40 percent of Central Asia's water.. Water is one of the few resources the country possesses in great abundance.

For this reason, President Emomali Rakhmon has pinned Tajikistan's economic hopes - and perhaps even its continued political existence - on developing its hydropower potential.

Three projects are either under construction or being considered, including Rogun dam, a gargantuan structure farther up the Vakhsh River. Tajik officials say they have hopes of building more than 20 hydroelectric plants and dams.

Officials are expected to conduct environmental impact studies to determine whether any flora or fauna will be threatened. Also the Tajik government is heavily in debt and must find heavy foreign investment to build the dams. This year, China agreed to build a $300 million hydroelectric power plant, Nurobad-2, with a capacity of 160 to 220 megawatts. But Tajik officials say Rogun alone will cost up to $3.2 billion.

Further afield, the region's complicated water politics, where upstream and downstream countries have diametrically opposed needs and aims, threaten to intensify.

Though for the moment it seems to be managing, Tajikistan threatens to become a failed state, say Western experts and diplomats, speaking on condition of anonymity because of the delicacy of the issue. The country still has not fully recovered from a devastating civil war a decade ago. State coffers are virtually empty, while the government is viewed as unable to meet basic needs.

The situation was laid bare last winter when prolonged subzero temperatures overloaded the Soviet-era electrical grid, plunging the entire country into cold and darkness. For Western officials working in Tajikistan, the emergency was a disturbing revelation of the government's dysfunction.

But outside investors are leery. While individual investors who are more accepting of risk may materialize, international donor organizations and banks have become more circumspect with Tajikistan. In addition to the dysfunction and corruption revealed by the winter crisis, the International Monetary Fund (IMF)recently announced that Tajikistan had misreported its finances six times over the last decade which is an IMF record. President Rakhmon has asked Tajiks to voluntarily forfeit a month's wages, or about $10 million, to finance the initial building stage.

Water issues must also be resolved. Central Asia's disagreements over how to allocate water resources resemble the Middle East's in their complexity and potential for conflict. Downstream countries, most prominently Uzbekistan, have steadfastly opposed Tajikistan's hydroelectric plans. The two countries are engaged in an undeclared cold war, Western diplomatic analysts say.

"The thing is, the more dams, the more control the Tajiks will have over the water, and that's what the Uzbeks are afraid of," said one Western diplomat in the capital, Dushanbe