Country Report Tajikistan March 2011

Economic policy: The government opens up a market in Roghun shares

In November the Roghun joint-stock company requested that the stockmarket allow Roghun shares to be publicly traded. According to the Ministry of Finance, Amonatbonk has been designated to co-ordinate the market for Roghun shares, and four other banks (Orienbank, Tojprombank, Bonki Rushdi Tojikiston and Agroinvestbank) will also be allowed to run trading platforms in the shares. Some commentators have suggested that the public have lost faith in the project and, given households' low level of income, many would be willing to sell their shares even if they only generate a small proportion of the original outlay.

As no international partner has yet been found to invest in the Roghun hydroelectric plant project, in early 2010 the government offered shares of the Roghun project totalling S6bn for sale to the general public. Initially the authorities attempted to encourage the population to purchase the shares voluntarily, but soon various government organs used informal coercion tactics to sell shares. Among the coercion methods used were preventing university students from sitting their final exams until they provided proof of Roghun share purchases. Furthermore, most government agencies automatically deducted funds from the monthly salaries of employees in order to purchase shares. International financial institutions such as the IMF were critical of the measures, claiming that the diversion of a relatively large portion of the limited savings of the population could lead to economic stagnation. Most of the purchases took place in the first quarter of 2010, at which point the government's campaign ended in the face of domestic and international criticism. The shares, which were formally only made available to Tajik citizens (although the banks offering the shares did not check the citizenship of purchasers), generated a reported S850m, or less than 10% of the total estimated funds required to build Roghun.

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