DUSHANBE, June 22, 2016, Asia-Plus — The Eurasian Fund for Stabilization and Development (EFSD) has approved a US$40 million loan to support economic development of Tajikistan.
This loan is an important argument for the process of integration of Tajikistan into the Eurasian Economic Union (EAEU), Dmitry Pankin, Chairman of Eurasian Development Bank (EDB)’s Management Board, told
Izvestiya
on the sidelines of the St. Petersburg International Economic Forum.
Experts believe that this loan is an important argument for the integration process against the backcloth of the strengthening of China’s influence on Tajikistan.
Izvestiya
reports the loan will be provided in two tranches 20 million U.S. dollars each. Tajikistan reportedly can receive the first tranche in the near future.
“We are currently considering conditions for implementation of requirements by the country to which the loan is provided,” Pankin said, noting that Tajikistan has to remove many budgeting problems and problems existing in the banking system.
“We are most concerned over the large number of ungrounded tax exemptions, which are lobbied by local entrepreneurs and do not bring any real benefit to the country’s economy,” Pankin said.
Deputy Director of the Center for Strategic Studies under the President of Tajikistan, Sayfullo Safarov, considers that the provision of the loan is an initiative of the Russian Federation “in the framework of the integration process.”
“Moscow wants Tajikistan to become member of the Eurasian Economic Union as soon as possible. Anyway, the provision of the US$40 million loan is a positive gesture. Tajik authorities appreciate this and Tajikistan thinks positively about the idea of joining the Eurasian Economic Union,” deputy head of Tajik think tank said.
The Eurasian Fund for Stabilization and Development (EFSD, before known as the EURASEC Anti-Crisis Fund) is a regional financial arrangement in the amount of US$ 8.5 billion. It was established by Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan in 2009.
EFSD mission is to help member countries ensure their long-run economic stability and foster economic integration between them.
EFSD is guided by members` finance ministries. Supreme decision-making body is EFSD Council consisting of members` Finance Ministers.
Eurasian Development Bank manages the resources of EFSD.
EFSD financial instruments are: financial credits (FCs), which are extended only to central governments to support stabilization programs aimed at making their economies more resilient to external and domestic shocks (FCs support national budgets and/or the balance of payments); investment loans (ILs), which are available to governments and/or to companies implementing large investment projects that contribute long-term economic and financial stability and spur integration between member states; and grants, which are available from the share of EFSD net profit for financing government programs in social sphere.
EFSD credits and loans are repayable, have finite maturity, carry interest and are extended in US Dollars or Euros. While lending to low income countries, EFSD is guided by International Monetary Fund recommendations on loan concessionality. The prospective borrower should have no debt arrears to the Fund itself, to any of its member countries, or to other international financial institutions.
