IMF team gets to work on Russia's debt problem
A team of IMF experts embarked on Wednesday, January 31, on two weeks of meetings with Russian officials aimed at helping to break the stalemate in Russia's dispute with the West over Soviet-era debt. The experts from the International Monetary Fund held their first meeting at the finance ministry, where talks were due to begin with a review of Russia's 2000 economic results and the balance of payments outlook for the coming year, a ministry spokesman said.
A meeting was planned later with the directorate of the Russian central bank, the RIA Novosti news agency said. Russian experts would present three scenarios for economic development trends according to differing price levels for major exports, ITAR-TASS quoted Finance Minister Alexei Kudrin as saying. Financial analysts predicted that the outcome of the IMF mission would set the short-term agenda for Russia's talks with the Paris Club of international creditors about a possible rescheduling of mostly Soviet-era debts of $48.3 billion.
"It is a key mission because the Paris Club creditors never offer any debt relief, even the most short-term rescheduling, except on the basis of an IMF program. So this has been the Russians' aim," Christopher Granville of the United Financial Group told AFP.
On January 1, Russia's debt to the creditor nations stood at $48.3 billion, of which $38.7 billion were Soviet-era obligations. Russia owes $21.1 billion of the Paris Club debt to Germany, which earlier this week threatened to bar Russia from economic membership in the Group of Eight world leading powers should Moscow default on its commitments. Russia is due to repay some $3.5 billion in Soviet-era debt this year. However, the current 2001 budget provides for only $300 million in interest payments, with Moscow banking on a debt rescheduling deal to cover the remaining payments.
President Vladimir Putin has sought to face down Western anger over Russia's tardy repayments by ordering his government to amend the budget to allow for the debt servicing. "The Russians will make the payment this year by drawing on the reserves of the central bank," which have risen to about $28 billion, Granville said. A previous IMF mission to Moscow last November ended in failure, leaving experts gloomy about the chances of getting a workable accord.
"Russia has much to do if it is to receive a positive recommendation from the current mission," the Renaissance Capital financial group said in a note —(AFP)
© Agence France Presse 2000
© 2001 Mena Report (www.menareport.com)