DUSHANBE, November 18, 2008 Asia-Plus — The Government of Tajikistan has begun issuing certificates of debt remission to cotton-growing farms. Under this document, all their debts that arose before January 1, 2008 are written off.
Cotton farmers in Khatlon’s districts of Bokhatr, Vakhsh and Jomi districts were the first to receive the certificates of debt remissions. They received them yesterday.
According to Nematjon Bouriyev, Senior Adviser to the President for Economic Matters who heads the commission to control the cotton subsector debt repayment, all farming units having arrears that arose before January 1, 2008 will receive such certificates before the end of this year.
“In all, 548 million U.S. dollars will be written off,” said Bouriyev, “The government will write off 435 million U.S. dollars given to cotton farmers through the investment company Credit Invest under guarantees from the National Bank of Tajikistan (NBT) and a 113 million U.S. dollars debt to commercial banks and direct investors not connected with Credit Invest.” He noted that those debts to commercial banks and investors would be cleared through providing long-term state securities to them.
Besides, it is also planned to extend the term of repayment of investors’ debts to Credit Invest (US$154 million) that arose in connection with financing of production of non-cotton crops, Bouriyev said. “In other words, these funds are those that were originally intended for financing of the cotton sector but then did not reach the necessary target for one or another reason. Investors should give them back to the government, the NBT to be exact, because central bank has repaid all debts of Credit Invest,” he noted.
In all, the government intends to write off, discount and restructure debts in an amount of 702 million U.S. dollars until 2010.
We will recall that President Emomali Rahmon on May 30, 2009 signed a decree on additional measures to support the country’s agrarian sector. By president’s decree debts that had arisen in the cotton subsector before January 1, 2008 should be settled by means of writing off debts, discounting, extending debt repayments and allowing repayment of debts by instalments, as well as issuing state securities. Under the decree, the government jointly with the NBT is to ensure repayment of residual debt to investors and set up an appropriate structure within a month period to ensure an order of restructuring the cotton subsector debt, monitoring and controlling timely repayment of debts to investors as well as the process of writing off the farms’ debts.
In early July, the government passed a resolution on implementation of this decree and the commission to control the cotton subsector debt repayment was set up in late July.
