Crossroads Asia

Tajikistan’s Aluminum Company Lives on Subsidies and Debt Write-Offs

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Crossroads Asia

Tajikistan’s Aluminum Company Lives on Subsidies and Debt Write-Offs

Tajikistan, hoping to score a bailout from the IMF, is making unbelievable promises to lower electricity subsidies.

Tajikistan’s Aluminum Company Lives on Subsidies and Debt Write-Offs
Credit: Pixabay

Tajikistan has been in discussions with the International Monetary Fund (IMF) for months on a bailout said to amount to more than $500 million. The latest news on that front, reported by Reuters, cites the deputy director of the IMF’s Middle East and Central Asia department, Juha Kahkonen as saying that progress has been made and an agreement can be expected in the coming months. Kahkonen’s comments came a few weeks after the department’s director Masood Ahmed, responded to a question on whether a program would be settled this year in similar fashion: “We are working to come to closure on an IMF-supported program in Tajikistan, as soon as the policy framework can be defined that would help to address the challenges that Tajikistan faces. And I’m hopeful that we’ll be able to do that during the course of this year.”

The Reuters report notes that Tajikistan has sought $100 million in loans from the European bank for Reconstruction and Development, loans that will only be offered once an IMF program is established. The report goes on to note recent efforts on the part of the Tajik government to convince the IMF it’s serious about reform. Dushanbe reportedly agreed to raise the price of electricity by 16 percent starting in November. It also said it would phase out subsidies.

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