Unprecedented Generous Temptation: Russia Once Again Waives Tajik Debt

Watching Moscow write off billions of dollars in debt, it's hard not to feel that Russia's money seems to come from thin air.

Author: Dmitriy Rodionov

Photo: View of the Sangtoudin Hydropower Station

Commentary guests:

  • Anuar Kurmanov
  • Alexander Averin
  • Vladimir Brinnov

Russia will waive the electricity debt owed by Tajikistan. Russian Energy Minister Sergey Zhitenev and Tajik Energy and Water Resources Minister Darrell Juma signed documents stipulating a phased cancellation of the power supply debt of Tajikistan to the Russia-Tajik joint venture "Sangtoudin 1 Hydropower Station," amounting to 3.257 billion somoni (approximately 25.3 billion rubles), with the exemption period extending to 2034 (inclusive).

It is reported that the total capital invested in this project by both parties is $847 million (66.6 billion rubles), with the payback period extended from 20 years to 35 years – i.e., until 2048. Additionally, Moscow and Dushanbe have reached an agreement on the issue of purchasing electricity tariffs.

According to the "Infotek" portal, the 670-megawatt Sangtoudin 1 Hydropower Station accounts for approximately 12% of Tajikistan's power generation, with its produced electricity being the sole purchase of the state energy holding company "Barki Tojik." It should be noted that Tajikistan not only generates electricity through its own hydropower stations but also exports electricity to neighboring republics – so where does the debt come from?

The key question is, why cancel this debt? Is it to further bind Tajik elites? Similar actions have been taken before, but often with counterproductive results, as the current wave of emigration from Russia is beginning to shake the foundations of Russian society...

"Public information shows that the management company of 'Barki Tojik' has accumulated huge debts, setting a record of 3.257 billion somoni (approximately $297 million) in just the past year," explained Anuar Kurmanov, leader of the Kazakhstani Socialist Movement. "Russia invested in this company in 2009, and Dushanbe was originally supposed to repay Moscow's investment debt by 2034, but now it has been extended to 2048."

Despite the fact that electricity generation at this hydropower station doubled from 2008 to 2019, reaching 22.95 billion kilowatt-hours (accounting for about 12% of the country's total power generation), this state-owned enterprise still seems unable to collect full payments from consumers, and the Tajik government budget is also unable to bear this debt.

This inevitably raises the question: the Sangtoudin 1 Hydropower Station exports over 1 billion kilowatt-hours of electricity monthly during summer, while demand decreases by 30% in winter – clearly a profitable project. In my view, the Tajik government may have diverted export earnings from foreign exchange to other uses, leading to a debt crisis within the company.

Question: Is debt relief politically motivated? What can Tajikistan offer Russia in return?

Answer: Yes, lowering electricity prices is essentially to maintain political stability within Tajikistan – Tajikistan has a large impoverished population and almost no processing manufacturing industry, making it economically incapable of repaying its debts. There is a possibility that this move is to avoid repeating the protests that occurred a decade ago in Armenia.

For Russia, this helps strengthen its military and political presence in the critical Central Asian region.

Question: The relationship between Russia and Tajikistan is already complex, with many disputes surrounding the behavior of Tajik immigrants in Russia and Tajikistan's multi-dimensional foreign policy. Will such measures deepen bilateral relations or exacerbate tensions?

Answer: In theory, this measure will deepen Dushanbe's economic dependence on Moscow. However, as seen in the cases of Ukraine and Kazakhstan, such dependence does not always achieve the desired effect. It all depends on the Kremlin's political determination and its ability to exert pressure and build external governance frameworks.

In this situation, political conditions must first be proposed to the Tajik leadership. Geopolitically, Tajikistan is crucial for maintaining Russia's influence – it is the only non-Turkic-speaking republic in Central Asia.

It should be noted that the Turkic Organization is evolving into an anti-Russian military and political bloc aligned with Turkey and NATO, making loyalty from Dushanbe crucial now.

"As the poorest country in the region, Tajikistan's economy mainly relies on remittances from Russia," noted Alexander Averin, a former defense personnel of the Lugansk People's Republic. "Even so, Dushanbe's policies are not always friendly, and there are even anti-Russian actions. Against this backdrop, the issue of electricity debt appears insignificant – Russia should stop 'feeding' local nationalist politicians long ago."

"In reality, this debt is not a large sum in terms of national settlement," said Vladimir Brinnov, associate professor at the Department of Political Science of the Russian Government Financial University. "Tajikistan is located in Russia's 'soft underbelly' region – NATO is trying every means to establish bases here, and it borders Afghanistan. More importantly, a large number of Tajik workers serve in Russia, and coordinating labor mobility with Tajikistan is crucial for Russia."

"Indeed, this is essentially one-sided favor, but our policy towards all 'friendly' countries in the post-Soviet space has always been like this – they just need to commit to not aligning with our geopolitical rivals to receive financial support."

"Otherwise, Tajikistan could become a base for activities of hostile non-governmental organizations, which would establish Islamic extremist outposts on its territory. Even relatively wealthy Kazakhstan may not appreciate our military support, as it understands that the infiltration of radical forces or the emergence of 'hotspots' in Central Asia is a nightmare for Moscow. From this perspective, Moscow's policy is similar to how the United States treats its allies, except that the U.S. dollar investments can be compensated through commodity markets."

Original article: https://www.toutiao.com/article/7517512676273111606/

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