Accessibility links

Russia: IMF Team Finishing Review Of Economy

  • Robert Lyle

Washington, 9 December 1996 (RFE/RL) - The International Monetary Fund (IMF) team which conducted the last monthly review of Russia's economic situation is putting the finishing touches on its report today and plans to submit it to the IMF Board of Executive Directors either Friday or early next week.

The team's review is required for the board to act on releasing monthly drawings on the $10 billion three-year extended program approved for Russia last spring. The October tranche of about $340 million was delayed because concerns over tax collections prevented completion of the review and the November drawing may also be pushed back.

The team wrapped up several weeks of work in Moscow on November 26 and plans to return to the Russian capital early next week to start the November-December review.

Sources at IMF headquarters in Washington says there is no advance word on whether the team's report will recommend release of the October drawing or deal with the November tranche. The fund originally approved the loan on the condition that Russia meet agreed upon monthly targets for economic activity.

Russian officials have been expressing confidence that at least the October tranche will be released by the board and that the monthly flow should be back on track by the end of the year.

Tax collections remain a major stumbling block, although the Russian tax service last week reported that collections were improving each month and that November's totals were up to 90 percent of budgeted amounts. That's a major improvement from the situation in late summer when revenues had fallen into the 60 percent range, posing a serious threat to the already squeezed state budget.

Economics Minister Yevgeny Hasin said recently that tax revenues, which totaled 10 trillion rubles in September, rose to 14.7 trillion rubles in October and nearly 18 trillion rubles in November.

But as old problems are worked on and solved, new ones arise, and Russian Central Bank Chairman Sergei Dubinin has cautioned that it is important for the Duma to get through the draft budget for 1997 as quickly as possible. "It is desirable that the 1997 draft budget be passed in the first reading" before the IMF team returns next week.

Yet last Friday, the Duma postponed a vote on the draft budget after a heated debate in which communists and other opposition factions strongly criticized the draft, which is a revised version of a previous draft already rejected by the Duma in October.

The vote on the draft has been pushed back to December 15, coinciding with the return of the IMF review team.

The draft budget projects revenues at 399 trillion rubles ($73 billion) -- five percent lower than in the first rejected draft. Expenditures were also set nearly five percent lower, at 495 trillion rubles (over $90 billion).

Finance Minister Aleksandr Livshits told the Interfax News agency last week that measures are being taken against persistent non-payers of taxes.

Livshits reviewed the budget picture with President Boris Yeltsin at the Barvikha sanatorium outside Moscow last Monday and said Yeltsin had expressed concern over the delayed payment of wages and pensions because of the revenue shortfall.

Livshits said he would transfer three trillion rubles into the pension fund so that pension payments in arrears could be brought up to date.

Prime Minister Viktor Chernomyrdin, who officially presented the budget last week, discussed the situation briefly with IMF Managing Director Michael Camdessus in Paris two weeks ago. Chernomyrdin expressed confidence that the loan tranches would be released by the IMF board at its next meeting.