With the World Bank and Asian Development Bank soon to decide on Tajikistan’s request for $40 million more in budget support, they may wish to consider how past donations have benefited people close to the autocratic president while doing little to solve the long-term problems they were aiming to fix.
The two banks have spent over $140 million since 2009 topping up Tajikistan’s budget. But where does the money go? In 2012 alone the government spent $145 million recapitalizing a private bank that had handed out dozens of astronomically risky loans, many of them benefitting companies owned by relatives of the then-deputy prime minister, Muradali Alimardon (a man who had been promoted after admitting he’d lied to the IMF about the country’s reserves).
As I wrote for The Economist last week, the loans then disappeared but the directed lending continued. The bank is now deep in the red and Tajikistan’s whole banking sector looks on the edge of collapse.
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