Dushanbe, January 27, Asia-Plus – Press release issued by the World Bank on January 26 says, “Some news services have incorrectly reported on
the 24th of January 2006
that the World Bank plans to write off
Tajikistan
”s debt to the World Bank.”
The issue of debt relief was raised by the Government of the
Republic
of
Tajikistan
during the visit of the Bank”s Senior Vice-President and Chief Economist, Mr. Francois Bourguignon, but no commitments were made. In his comments to the press, Mr. Bourguignon noted that the International Monetary Fund had cancelled Tajikistan”s debt to the IMF in the amount of about US$99 million through the Multilateral Debt Relief Initiative (MDRI), based on the IMF”s determination that it should extend relief beyond the HIPC target group in order to ensure equal treatment as required under IMF rules.
Although the MDRI is an initiative common to three international financial institutions (the IMF, the World Bank and the African Development Bank), the decision to grant debt relief is ultimately the separate responsibility of each institution, and the approach to coverage and implementation may vary. Because World Bank relief under the MDRI is fully-financed by donor countries, who have restricted coverage to HIPC countries, reduction or cancellation of
Tajikistan
”s debt by the Bank is not possible under current procedures. However, Mr. Bourguignon added that the MDRI initiative could lead to additional resources for
Tajikistan
, since resources made available through the MDRI will be allocated according to standard IDA allocation rules, which emphasize sound economic management and good governance.
Finally, to support the Government”s PRSP and the achievement of MDGs, and in line with the Country Partnership Strategy endorsed by the Bank and the Government, IDA projects in
Tajikistan
are now financed on a 100 percent grant basis. Since July 2005, IDA has provided US$38 million in grants for various development projects and IDA grants could reach US$54 million by the end of June 2006.
