Despite a considerable amount of debts accumulated, the Tajik government is not going to discontinue the practice of foreign borrowing, and is planning to borrow 562 million U.S. dollars this year.
According to Radio Liberty’s Tajik Service, known locally as Radio Ozodi, Finance Minister Fayziddin Qahhorzoda noted in November that most of that money will go toward financing completion of the Roghun hydroelectric power plant.
The Ministry of Finance (MoF) stated that it had earmarked 2.3 billion somonis (equivalent to 202 million U.S. dollars) for servicing foreign debt in 2021. Of that total, 1.5 billion somonia is reportedly reserved for repayment of principal, with the rest going toward covering interest.
China owns nearly half of Tajikistan’s US$3.2 billion foreign debt pile – more than US$1.2 billion to be exact.
Other major creditors include the World Bank, the Asian Development Bank and the International Monetary Fund.
Tajikistan has latterly crossed a troubling psychological threshold by having its external public debt reach 43 percent of gross domestic product (GDP), thereby surpassing the 40 percent many international economists deem sustainable for developing economies.
According to Eurasianet, COVID-19 has only compounded the problem. In May, the IMF approved extending urgent credit to Tajikistan worth US$189.5 million to help meet the country’s balance of payments and fiscal financing needs. The Eurasian Development Bank, set up jointly by Russia and Kazakhstan, lent another $50 million in November.
Tajikistan has received free money too. Last month, the Asian Development Bank said it had approved a US$105 million grant to “accelerate the implementation of ongoing reforms and improve the financial sustainability of the power sector in Tajikistan.”
The World Bank’s forecast is for the economy to possibly bounce back by this year already. As it happens, the bank notes that Tajikistan’s economy grew by 4.2 percent in the first nine months of 2020, which is strikingly robust, albeit down from 7.2 percent over the same period in 2019. It is far from certain, however, that official data are a useful metric for measuring real-world conditions.
