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Tajikistan: How Donors Enable Massive Government Corruption

David Trilling Jun 22, 2015

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.

Donors concede they struggle to piece together what is really going on. Their documents repeatedly describe Tajik bank statements as if they are purposely misleading. Internal memos say the banking sector’s structural problems stem from government resistance to reform, the lack of an independent central bank, ineffective internal controls, and ongoing fraud.
 
As Tajikistan’s banking crisis has snowballed over the last two or three years, donors have repeatedly seen their calls for reform ignored. So will they reward President Emomali Rahmon and his cronies for their persistent unwillingness to change the system?
 
Western diplomats admit that Tajikistan’s proximity to war-torn Afghanistan buys it forgiveness. But the West is tiring of Afghanistan. And with Tajik migrants losing jobs in recession-hit Russia, tens of thousands are returning home, empty-handed and angered by the ostentation of Rahmon and his buddies. Hordes of impatient, jobless young men do not augur the stability the West thinks it is buying.

David Trilling is Eurasianet’s managing editor.

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