Russia Urges IMF to Back Its Homegrown Solution to Economic Woe
December 1, 1998 - 0:0
MOSCOW Beleagured Russian Finance Minister Mikhail Zadornov said Sunday that he hoped the International Monetary Fund would back Russia's own plan to resolve its acute economic crisis. Russia is braced for a climax this week to the row over the crisis, as the cabinet inks in budget numbers just in time for an inspection of the books by IMF Managing Director Michel Camdessus on Tuesday and Wednesday. With the International Monetary Fund urging rigour and the Kremlin calling for rapid action, the broke government will finally rubber-stamp on Monday a crucial, controversial spending plan for 1999 and hope Camdessus is sufficiently impressed to help foot the bill.
Zadornov said Russia needed not just money from the IMF, but also total understanding for the country's own economic rescue plan to reduce Russia's foreign debt of $17.5 billion. Without the IMF's support, our creditors will not accept to re-schedule repayments or even partially write off Russia's foreign debt, Zadornov told Russian television. Russia has called on its creditors to write off half of the debt, due for repayment next year.
The range of options is fairly narrow. Either we hold onto the situation and prevent hyperinflation through realistic, tough budget and monetary policies and structural measures (or) ... our prospects are not overly joyous. If we cannot agree with creditors to lighten our debt burden by way of additional external financing we will have to go for a very difficult decision, said Zadornov. Camdessus is expected on Tuesday (today) to make a last-ditch effort to convince the left-leaning government of the merits of a tight budget complete with ample tax receipts and conservative spending.
But other top cabinet ministers warned him on Sunday that the IMF and other creditors must come through with billions of dollars of new funding and debt relief, or the budget would have to be patched up by inflationary money printing. Deputy Premier Vadim Gustov said Russia needed to borrow money to repay part of the debt and pay off huge wage and pension arrears.
Otherwise the government will have to print money despite the fact that we know it's an objectionable measure and can lead to hyperinflation, the deputy premier said. (AFP)
Zadornov said Russia needed not just money from the IMF, but also total understanding for the country's own economic rescue plan to reduce Russia's foreign debt of $17.5 billion. Without the IMF's support, our creditors will not accept to re-schedule repayments or even partially write off Russia's foreign debt, Zadornov told Russian television. Russia has called on its creditors to write off half of the debt, due for repayment next year.
The range of options is fairly narrow. Either we hold onto the situation and prevent hyperinflation through realistic, tough budget and monetary policies and structural measures (or) ... our prospects are not overly joyous. If we cannot agree with creditors to lighten our debt burden by way of additional external financing we will have to go for a very difficult decision, said Zadornov. Camdessus is expected on Tuesday (today) to make a last-ditch effort to convince the left-leaning government of the merits of a tight budget complete with ample tax receipts and conservative spending.
But other top cabinet ministers warned him on Sunday that the IMF and other creditors must come through with billions of dollars of new funding and debt relief, or the budget would have to be patched up by inflationary money printing. Deputy Premier Vadim Gustov said Russia needed to borrow money to repay part of the debt and pay off huge wage and pension arrears.
Otherwise the government will have to print money despite the fact that we know it's an objectionable measure and can lead to hyperinflation, the deputy premier said. (AFP)