The International Monetary Fund (IMF), United States, Germany and Russia have agreed on an initiative to reduce the debt burden of seven poorest countries from the Commonwealth of Independent States (CIS), including Moldova. The decision was taken at the annual meeting of the creditors and donors in Washington D.C. on April 20-21 to discuss global economic issues and poverty reduction.
The largest creditors have agreed to restructure and erase a part of debts owed by Armania, Azerbaijan, Georgia, Moldova, Kyrgyzstan, Tajikistan and Uzbekistan. These former Soviet states will also enjoy free trade with industrialised countries and credits from the lenders, as well as larger grants.
Under this initiative, the Paris Club of Creditors will proceed to the standard debt restructuring but will not write off any debts. In case the beneficiary countries successfully fulfills the IMF programs and reforms that ensure a financial stability, a part of the debts may be cancelled.
Moldova's foreign debts amount to 1.91 billion dollars, or 154 percent compared to the gross domestic product, including over 374 million dollars in Transnistria debts. The year 2002 is crucial for the ex-Soviet republic in terms of the foreign debt service. Chisinau has to repay this year 250 million dollars, which is 75 percent of the public revenue.
The government spent 10.6 million dollars for the foreign debt service in the first quarter of this year. This amount is equal to 20 percent of the public revenue over that period.
The government in Chisinau hopes to obtain the restructuring of 27-30 percent of Moldova's debts through the Paris Club of Creditors. CHISINAU, APRIL 22, BASA