Identifier
Created
Classification
Origin
06DUSHANBE1948
2006-10-26 05:41:00
UNCLASSIFIED
Embassy Dushanbe
Cable title:
TAJIK FINANCE MINISTER ASKS U.S. FOR DEBT RELIEF (CORRECTED
how-toVZCZCXRO0342 PP RUEHLN RUEHVK RUEHYG DE RUEHDBU #1948 2990541 ZNR UUUUU ZZH P 260541Z OCT 06 FM AMEMBASSY DUSHANBE TO RUEHC/SECSTATE WASHDC PRIORITY 8901 INFO RUEHBJ/AMEMBASSY BEIJING PRIORITY 1845 RUEHBS/USEU BRUSSELS PRIORITY 1111 RUCNCIS/CIS COLLECTIVE RUEHDBU/AMEMBASSY DUSHANBE PRIORITY 0366 RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 1875 RUEHBUL/AMEMBASSY KABUL PRIORITY 1836 RUEHLO/AMEMBASSY LONDON PRIORITY 1729 RUEHML/AMEMBASSY MANILA PRIORITY 0105 RUEHNE/AMEMBASSY NEW DELHI PRIORITY 1882 RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC RUEHFR/AMEMBASSY PARIS PRIORITY 1545 RUCPDOC/USDOC WASHDC PRIORITY 0103
UNCLAS DUSHANBE 001948
SIPDIS
SIPDIS
STATE FOR SCA/CEN
E.O. 12958: N/A
TAGS: ECON EFIN ETRD PGOV PREL TI
SUBJECT: TAJIK FINANCE MINISTER ASKS U.S. FOR DEBT RELIEF (CORRECTED
COPY - SIGNATURE LINE)
REF: DUSHANBE 1943
UNCLAS DUSHANBE 001948
SIPDIS
SIPDIS
STATE FOR SCA/CEN
E.O. 12958: N/A
TAGS: ECON EFIN ETRD PGOV PREL TI
SUBJECT: TAJIK FINANCE MINISTER ASKS U.S. FOR DEBT RELIEF (CORRECTED
COPY - SIGNATURE LINE)
REF: DUSHANBE 1943
1. (U) In her introductory meeting with Minister of Finance
Safarali Najmuddinov October 19, Ambassador Jacobson discussed
Tajikistan's evolving economic progress, debt-taking, and state
budget priorities. The Minister raised the issue of
Tajikistan's $17 million debt to the United States, and also
requested U.S technical assistance for the Ministry.
2. (U) Priorities for the 2007 government budget include
education, the energy sector, and income subsidies. The
unapproved budget includes 506 million Somoni (146.6 million
USD) for the education sector; 120 million Somoni more than last
year. Other budget priorities include subsidies for low-income
citizens for water and energy services, subsidies for children
from low-income families, increased salaries for government
employees, and for reforms of administrative/government bodies.
Energy spending through loans and credits will account for 6% of
GDP - 540 million Somoni (156.5 million USD),including the
energy transmission line projects "North-South" and "Lolazor."
The government will reduce its spending on vehicle purchases and
new building projects.
3. (U) The government also plans to attract investment in the
transportation and construction sectors. According to
Najmuddinov, the World Bank and Asian Development Bank are
negotiating an infrastructure loan with the government with a
1.5 - 2% annual interest rate, 40 year repayment period and ten
year grace period.
4. (U) Najmuddinov noted that Tajikistan will be able to pay
back the recently granted $637 million Chinese loans, and that
they will continue to pursue secured credits through
international financial institutions on a favorable basis. The
Tajik government conducted negotiations with China for three
years over the credits. The Tajik side managed to soften the
proposed conditions of the loan to its final form: 20-year
repayment period, with a five-year grace period, and effective
2% annual interest rate.
5. (U) The Minister asked for the Ambassador's help in
relieving Tajikistan's $17 million debt to the United States.
According to the Minister, since 2000, Tajikistan has not
violated the terms or conditions of repayments on the debt, and
has already paid back $9 million. The Minister pointed out his
two meetings this year with Nancy Lee from U.S. Department of
Treasury, and set out the following as possible avenues forward.
First, he would like to address the issue multilaterally
through the Paris Club, although he noted the United States is
the only Paris Club member with which Tajikistan has debt.
Second, he would like to engage in bilateral negotiations with
the United States. Lastly, he proposed a sort of
debt-for-education swap, in which the United States would
forgive the debt, while the government reinvested this credit
into the educational or social sectors in Tajikistan.
6. (U) The Minister also sought U.S. technical assistance to
the Ministry through Department of Treasury technical advisors.
He previously agreed to work with Nancy Lee on development of a
medium-term program for state expenditures, and he will send a
letter to the Treasury Department requesting technical support.
The Minister also expressed interest in receiving U.S. support
to introduce international bookkeeping and accounting standards,
reporting and methodology, and provide training for some of the
180 Ministry of Finance employees.
7. (U) Najmuddinov recounted how far Tajikistan has come since
2000 in stabilizing the economy. However, spending in key
sectors such as education and health still falls short of needed
levels. In 2000, education was 1.2% of GDP, while spending on
health represented 0.8%. The 2007 budget proposes spending 5.6%
of official GDP on education, and 2% on health. These levels
leave Tajikistan out of reach of MCC requirements in the lowest
strata of poor countries.
JACOBSON
SIPDIS
SIPDIS
STATE FOR SCA/CEN
E.O. 12958: N/A
TAGS: ECON EFIN ETRD PGOV PREL TI
SUBJECT: TAJIK FINANCE MINISTER ASKS U.S. FOR DEBT RELIEF (CORRECTED
COPY - SIGNATURE LINE)
REF: DUSHANBE 1943
1. (U) In her introductory meeting with Minister of Finance
Safarali Najmuddinov October 19, Ambassador Jacobson discussed
Tajikistan's evolving economic progress, debt-taking, and state
budget priorities. The Minister raised the issue of
Tajikistan's $17 million debt to the United States, and also
requested U.S technical assistance for the Ministry.
2. (U) Priorities for the 2007 government budget include
education, the energy sector, and income subsidies. The
unapproved budget includes 506 million Somoni (146.6 million
USD) for the education sector; 120 million Somoni more than last
year. Other budget priorities include subsidies for low-income
citizens for water and energy services, subsidies for children
from low-income families, increased salaries for government
employees, and for reforms of administrative/government bodies.
Energy spending through loans and credits will account for 6% of
GDP - 540 million Somoni (156.5 million USD),including the
energy transmission line projects "North-South" and "Lolazor."
The government will reduce its spending on vehicle purchases and
new building projects.
3. (U) The government also plans to attract investment in the
transportation and construction sectors. According to
Najmuddinov, the World Bank and Asian Development Bank are
negotiating an infrastructure loan with the government with a
1.5 - 2% annual interest rate, 40 year repayment period and ten
year grace period.
4. (U) Najmuddinov noted that Tajikistan will be able to pay
back the recently granted $637 million Chinese loans, and that
they will continue to pursue secured credits through
international financial institutions on a favorable basis. The
Tajik government conducted negotiations with China for three
years over the credits. The Tajik side managed to soften the
proposed conditions of the loan to its final form: 20-year
repayment period, with a five-year grace period, and effective
2% annual interest rate.
5. (U) The Minister asked for the Ambassador's help in
relieving Tajikistan's $17 million debt to the United States.
According to the Minister, since 2000, Tajikistan has not
violated the terms or conditions of repayments on the debt, and
has already paid back $9 million. The Minister pointed out his
two meetings this year with Nancy Lee from U.S. Department of
Treasury, and set out the following as possible avenues forward.
First, he would like to address the issue multilaterally
through the Paris Club, although he noted the United States is
the only Paris Club member with which Tajikistan has debt.
Second, he would like to engage in bilateral negotiations with
the United States. Lastly, he proposed a sort of
debt-for-education swap, in which the United States would
forgive the debt, while the government reinvested this credit
into the educational or social sectors in Tajikistan.
6. (U) The Minister also sought U.S. technical assistance to
the Ministry through Department of Treasury technical advisors.
He previously agreed to work with Nancy Lee on development of a
medium-term program for state expenditures, and he will send a
letter to the Treasury Department requesting technical support.
The Minister also expressed interest in receiving U.S. support
to introduce international bookkeeping and accounting standards,
reporting and methodology, and provide training for some of the
180 Ministry of Finance employees.
7. (U) Najmuddinov recounted how far Tajikistan has come since
2000 in stabilizing the economy. However, spending in key
sectors such as education and health still falls short of needed
levels. In 2000, education was 1.2% of GDP, while spending on
health represented 0.8%. The 2007 budget proposes spending 5.6%
of official GDP on education, and 2% on health. These levels
leave Tajikistan out of reach of MCC requirements in the lowest
strata of poor countries.
JACOBSON