The prospect that Tajikistan will receive assistance from the International Monetary Fund (IMF) is poor, but some experts believe that we could receive money from the Fund and personality of Jamoliddin Nouraliyev, “who is considered to be one of lads in the IMF, could play a role in that.” 

The first deputy head of the National Bank of Tajikistan (NBT), Jamoliddin Nouraliyev, has reportedly proposed the International Monetary Fund (IMF) to boost cooperation to a new level.  Tajik central bank, in particular, asks the Fund to provide assistance to Tajikistan in enhancing its banking sector.  

These issues were discussed at a meeting of Nouraliyev with Dr. Jihad Al-Wazir, Assistant Director of the IMF Monetary and Capital Markets Department, which took place in Washington on April 17 on the sidelines of the Spring Meetings of the Boards of Governors of the International Monetary Fund (IMF) and the World Bank Group (WBG), according to the National Bank of Tajikistan (NBT).

Nouraliyev reportedly called the attention of the IMF representatives to the implementation of the joint projects and providing technical assistance for carrying our reforms in the field of monetary policy.  

Dr. Jihad Al-Wazir noted that the IMF is ready to provide technical assistance to the NBT in the future, but it is necessary to point out specific sectors of the banking system that need assistance, the NBT press center said.  

Recall, negotiations on providing the next loan to Tajikistan within the framework of a new IMF program are being protracted. 

The previous three-year Extended Credit Facility (ECF) program ended in Tajikistan in July 2012.

The ECF provides financial assistance to countries with protracted balance of payments problems.  The ECF was created under the Poverty Reduction and Growth Trust (PRGT) as part of a broader reform to make the Fund’s financial support more flexible and better tailored to the diverse needs of low-income countries (LICs), including in times of crisis. The ECF is the Fund’s main tool for providing medium-term support to LICs.  The ECF may also help catalyze additional foreign aid.

The ECF supports countries’ economic programs aimed at moving toward a stable and sustainable macroeconomic position consistent with strong and durable poverty reduction and growth.

In autumn 2012, the Tajik authorities have applied to the IMF for a new three-year arrangement under the extended credit facility.

The IMF representatives that time reportedly raised hopes of coordinating the next three-year program.  However, the negotiations on this subject are still continuing and now specific agreements have been reached so far.     

Within the framework of the new program Tajikistan intended to attract a $500 million preferential loan from the IMF for supporting the country's economy.

Consultations between the Tajik authorities and the IMF were held in Dushanbe in November last year.

“Approval of a new program with the IMF is a long-term process practically in all countries because all conditions and preliminary measures of the program should be coordinated in view of possible risks and factors that prevent a quick achievement of consensus,” NBT specialists noted. 

According to them, Tajikistan to date has achieved substantial progress “in implementing the preliminary measures of policy offered by the IMF.” 

“The new IMF program is aimed at supporting Tajikistan in carrying out its economic strategy, achieving macroeconomic and financial stability as well as sustainability along with economic growth and alleviation of poverty,” they said, noting that the new IMF program will also be aimed at supporting payment balance and sustainability of the country’s international reserves. 

Meanwhile, experts consider that the Fund is unlikely to give money to Tajikistan, “though personality of the first deputy head of the NBT, Jamoliddin Nouraliyev, could play a role in this issue.”

“I believe that they will give a certain amount,” said an expert, who wanted to remain unnamed.  “Firstly, they know that it is impossible to pull Tajikistan’s banking sphere out of the swamp without $500 million assistance.  Besides, they are not interested in collapse of the country’s banking system.  Indeed, they did not like anti-crisis solutions of the National bank of Tajikistan as a result of which control over Tojiksodirotbonk and Agroinvestbonk was transferred to inefficient governance.  They also did not like that top managers in both banks have remained the same (Pirov and Alimardon).”

“Secondly, they consider the first deputy head of the NBT Jamoliddin Nouraliyev “one of lads.”  This is very important for Western financial institutions,” noted the source.  “Thirdly, Nouraliyev is a good negotiator.  He will remind them that the National Bank last September issued $500 million worth of eurobonds on the international market (although at high annual interest rate – more than 7.0 percent).  He can say that China’s Eximbank is always ready to support Tajikistan’s government in the same volumes, what they do not want.  Therefore, they will provide loans but less than necessary for saving Tajikistan’s banking system.”

Another expert, who also spoke on the basis of anonymity, noted the IMF would probably provide insignificant technical assistance to Tajikistan.  “The Fund will hardly provide loans to Tajikistan in the coming years.” 

“The fact is that Tajikistan’s public debt has practically reached a red line and international financial institutions will refrained from providing loans to the country.  Moreover, the International Monetary Fund last year reclassified Tajikistan’s poverty to a higher level because of violation of indicative limits of the country’s public debt.  Thereby the Fund recommends that other international financial institutions think hundred times before providing loans to our country,” the expert added.