Washington, 25 June 1998 (RFE/RL) -- One of the U.S. government's top officials dealing with international financial issues, Deputy Treasury Secretary Larry Summers, says Russian leaders are articulating "exactly the right kinds of measures that are necessary."
However, Summers quickly added in congressional testimony Wednesday, what is more important is that their actions match the rhetoric.
Summers was telling the subcommittees of the Senate Foreign Relations Committee which deal with financial issues about his work with Japan last week-end. He helped orchestrate joint intervention in currency markets to protect the Yen and worked on a number of serious economic reforms Japan has agreed to implement quickly.
"This is a pivotal moment for Asia and the global economy, Summers said. "The weakness in Japan is now having a clear impact" in many other troubled parts of the world, including Russia, he said.
He said that while concentrating on Asia, the U.S. Treasury, like the finance ministries of the other western industrial nations, is paying "very close attention" to the situation in Russia.
Summers said the U.S. and the other G-7 group of major industrial democracies have indicated their willingness to support additional financing from the International Monetary Fund (IMF), but only if it is needed and is conditioned on "strong reforms."
"The key will be Russia's ability to establish strong and credible policies, especially in the fiscal and banking areas, in the coming weeks," Summers said.
The Russian government's new budget and anti-crisis program was unveiled in Moscow Wednesday. The U.S. State Department welcomed the new program, but Summers said it will take more than words to turn Russia's situation around. "What will be very important in coming weeks in Russia is whether they're able to start to take the necessary actions to address each of the problems beyond the statements of intention," he said.
Summers said Russian officials say they understand the need to increase tax collections, improve the efficacy of the financial system, be hospitable to foreign investment, and reform relations between the federal government and the oblasts.
But the Deputy Treasury Secretary said, as in many countries, while the government can outline specific programs, enacting them requires parliamentary action. And while the government sees its economic policies as overwhelmingly in the interests of the Russian people, there are "very real concerns" that must be discussed in the Duma. The judgments the Duma makes, he added, will be "very important" in what actually is implemented.
Meantime, IMF First Deputy Managing Director Stanley Fischer is returning to Washington to report to the fund's board on his discussions in Moscow. Fischer told reporters that he would urge the board to proceed with releasing the next drawing of nearly $700 million from Russia's current long-term loan.
But he said that while he had talked with Russia leaders about the possibility of a new short-term loan to support the central bank's efforts to stabilize the ruble, the questions involved are difficult and will depend very much on the government's implementing fiscal and other reforms.
The IMF board may take up release of the next drawing today or tomorrow, but an exact timetable has not been established.