Russia Writes Off Nearly $10 Billion In Afghan Debt

August 8, 2007
Radio Free Europe / Radio Liberty

Daily Afghan Report

Russia and Afghanistan on August 6 signed an agreement relieving Afghanistan of 90 percent of its $11 billion debt to the Kremlin, with the potential to write off the remaining balance, AP reported. The debt write-off is expected to help boost the Afghan economy. Russian Finance Minister Aleksei Kudrin and his Afghan counterpart, Anwar al-Haq Ahadi, signed an agreement stating that the remaining debt is to be restructured and paid over 23 years. However, it states that if Kabul successfully implements reforms under the Heavily Indebted Poor Countries Initiative (HIPC) of the International Monetary Fund, the remaining $1 billion could also be forgiven. Afghanistan met the qualifications to participate in the HIPC in July. Russia is by far the largest creditor nation for Afghanistan and is owed nearly 95 percent of Kabul's total foreign debt, due to massive weapon sales during the Soviet era.