Russian Reformers To Debut At Imf

The spring meeting of the World Bank and International Monetary Fund will give Russias new reformist team a chance to tell investors this week about their plans, but ministers have both good and bad news to bring to Washington.

On the one hand the reformers, led by one-me privatisation chief Anatoly Chubais, can point to determined efforts to drive spending down and bring economic policy back on to the IMF track.

But they have yet to persuade the IMF to hand over tranches (instalments) of a loan which have been delayed because Russian tax revenues are far below plan.

Industrial output is stubbornly low, and high wage and pension arrears mean millions of Russians have reaped no benefits from five years of market reforms.

 

The Washington meeting is scheduled for April 23-29.

Some Russian officials, aware that money from Eurobonds is reducing the immediate need for IMF cash, are showing signs of irritation. I think Mr Chubais feels that the IMF should start playing a little more according to its constitution, supporting the current account of a country in distress and stop trying to make up new rules all the time, said an official close to IMF talks.

I am not sure that postponed tranches are an issue. They are not needed because of the Eurobonds. Chubais, brought back into the government as one of two first deputy prime ministers in a reshuffle last month, has been quoted as saying that this years loan could be the last time Russia turns to the IMF for funds.

Western analysts said the meeting, with most events concentrated around the weekend, would give the new team a chance to persuade would-be investors that they are serious about solving Russias economic problems.

This will be the international debut for the n ew reformist team, their opportunity to present their credentials to the world, said one Western economist.

The main point is symbolic, and the meeting could be really important if the international finance community comes away with a favourable impression of the new team.

The IMF is already backing Russian economic reforms with a $10 billion three-year loan and both sides say they are close to agreement on an economic programme for 1997.

Managing Director Michel Camdessus, promising to approve the plan, said during a visit to Moscow that Russia could become an economic superpower, provided reformist policies were right.

But he said the IMF would hand over more money only after a new tax code, needed to underpin future spending plans, was submitted to parliament. The IMF is monitoring the Russian economy each month to decide whether to recommend paying tranches of the loan.