Key developments and challenges

The Roghun campaign, aimed at achieving energy independence, has had adverse social and macroeconomic consequences. The decision to suspend the campaign is positive, but close attention needs to be given to the project’s social, environmental and macroeconomic impact, including debt sustainability.

Progress has been made recently in improving the transparency of state-owned enterprises (SOEs). The challenge is to improve the performance of these companies, establish accountability and prepare them for future privatisation.

The portfolio quality of commercial banks has worsened, partly because the government has not fully compensated them for losses incurred in connection with the write-off of cotton debt owed by farmers. For banks to continue lending to agriculture, it is important to provide full compensation as well as establish the transferability of land-user rights that could be used as collateral.