Afghanistan And Russia Credit Truce

By Stewart Douglas

Russia has today announced the cancellation of the majority of Afghanistan’s outstanding debt, in an elaborate ceremony in Moscow which saw both nations cooperate on a diplomatic level after decades of hostility.

Russia and Afghanistan have agreed to a deal that will see the equivalent of 90% of the nations total outstanding debt cleared, to allow stability and growth within the fledgling Afghan democracy.

The bilateral debt amounting to over $10 billion, or £4.9 billion, is derived from Soviet occupation in Afghanistan in the early 1980s, in which an estimated million Afghans were killed.

Political and economic analysts around the world have the received the news in a positive light, reflecting an ongoing commitment to stability and harmony within Eastern Europe and the former Soviet region.

With national security problems, and a comparatively crippling debt burden, the Afghan economy has been pinned down over recent years, only adding to the fragility of the region.

Russian and Afghan ministers have heralded the outcome of truce talks as an ‘historic day’ for the two nations, following the decision made by the Paris Club last year, in which other international creditors cancelled outstanding Afghan obligations to pave the way for an economically strong future, and a clean slate for developing industry and international competitiveness.

The move has not only been seen as economically important, but also as a political and diplomatic manoeuvre, in which relations between the nations were undoubtedly improved.

With the potential for new trade links between the two nations, today marks a new era for the Afghan economy, despite continuing political and military unrest in the nation. 

The outstanding debt is to be cancelled over the course of a three year period, to be totally wiped out by 2010 according to the agreement signed today.