Being enigma for the pragmatic Western world, Russia again has puzzled everyone with another act of generosity. Russia is faithful to its tradition to “forgive” multi-billion debts to its “friends”. Wealthy advanced countries are obviously confused with such political decisions. The ailing Russian economy is deeply stricken with plummeting oil prices, turbulence with the national currency, dismal performance of all economic sectors, and protracted economic sanctions. The economy is going through recession for the second year. International rating agencies and reputable think tanks make bleak forecasts for the medium term. Recently, Russia wrote off 90% of Cuba’s and North Korea’s enormous debts and forgave Mongolia’s debt nearly in full. Besides, Russia wrote off 95% of the Soviet-era debt owed by ex-Soviet republic Uzbekistan.
The Kremlin reached an accord with the Uzbek president at the end of 2014 as part of the broad agreement to reinforce economic relations between the former Soviet nations. The most important issue for Uzbekistan is the debt at $889.3 million which was allocated by Russia in 1992-1993. Over half a billion dollars account for the borrowed amount, the rest of the money is the interest on the loan. Interestingly, Uzbekistan’s government used to claim a few billion dollars from the Diamond Fund, which was possessed by the Soviet Union.
