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Tajikistan: IMF Demands Dushanbe Repay Nearly $48 Million

Tajikistan is struggling with the effects of a harsh winter (RFE/RL) The International Monetary Fund (IMF) is demanding that Tajikistan give back more than $47 million in loans, saying the Tajik central bank did not provide accurate information about the country’s financial state.

For Tajikistan, the timing couldn’t be worse.

The country, coming out of one of the worst winters in memory, is dealing with some $1 billion in damages caused by snow and freezing temperatures. Last month, Dushanbe made an urgent appeal for international aid to help the country respond to the catastrophe.

But now, the International Monetary Fund (IMF) is asking Dushanbe to repay more than $47 million in IMF loans as a penalty for having provided the global lender with false data about the country’s financial situation. The IMF says Tajikistan had listed its international reserves at $450 million when in fact they totaled no more than $115 million. The IMF believes Tajik authorities hoped to boost the country’s chances of receiving further loans and grants.

IMF spokesman Masood Ahmed says the IMF board found it difficult to agree on how to react to the Tajik violation, given the Central Asian nation's dire economic situation.

"On Tajikistan, it was indeed a difficult decision for the board, because on the one hand there has been a serious instance of misreporting of relevant economic data by the Tajik authorities," Ahmed said. "At the same time, the board was very conscious of the fact that the country is going through very difficult economic circumstances."

The harsh winter in Tajikistan has caused huge electricity shortages and ruined crops. Heavy snowfalls, just now starting to melt, are likely to bring floods and landslides that will destroy more crops this spring, besides damaging roads, bridges, and homes.

Favorable Terms

Ahmed says the IMF understands these problems, and is therefore giving Tajikistan what it considers easy terms for repayment of the loan.

"The board decided that while the resources that have been provided to Tajikistan from the IMF needed to be repaid, it would use its discretion and extend the repayment period beyond the normal 30-day repayment expectation to one where these resources would be repaid over a six-month period beginning in September 2008," he said.

Tajik authorities, who also agreed to allow an independent audit of the central bank, were quick to promise compliance with the IMF’s new repayment terms.

Abdulghafor Qorbonov, an official at the Central Bank of Tajikistan, said the bank "has the capability of fulfilling completely the decision adopted by the IMF executive board."

But others question Qorbonov's certainty that Tajikistan, grappling with $1.2 billion in foreign debt, can pay back nearly $50 million between September 2008 and the start of February 2009.

Abdulgani Mukhamadazimov, an independent political and economic analyst in Tajikistan, tells RFE/RL's Tajik Service that the scandal with the IMF will hurt Tajikistan's chances of receiving more desperately needed loans in the future.

"In international relations, accusing someone of lying is a very serious event," he said. "If there is a loss of faith between the two sides, then that will change [the IMF's] relationship toward Tajikistan. There is a list, a black list, and if Tajikistan falls on this list the international community will have less faith [in the country], and this will have a negative impact and political, social, and financial consequences."

It’s not the first time the IMF has had problems with Tajikistan. In 2002, the IMF said Tajikistan had misreported its external arrears, which violated the terms of the country's Poverty Reduction and Growth Facility arrangements.

Tohir Safarov and Salimjon Aioubov of RFE/RL's Tajik Service contributed to this report

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