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Russia: IMF Positive About Economic Future

Hong Kong, 25 September 1997 (RFE/RL) - Top officials of the International Monetary Fund (IMF) say they are still waiting for Ukraine to make its economic breakthrough, that they do not see much hope for Belarus, but that they are very optimistic about Russia.

These observations were gleaned by our economics correspondent in private conversations with leaders and officials of the IMF, during the annual meetings of the IMF and World Bank, which concluded today in Hong Kong.

Top officials say Russia continues to have some serious problems - the worst of which continues to be the decrepit, unfair and inefficient tax system. Until that is fixed, said one official, the ambitious program of reforms cannot fully work. There is still the need too, say officials, for international-standard laws on property ownership, enforcement of contracts and an array of the basic rules of financial markets. But officials say they believe Russia is on the right road to prosperity, and that the investment opportunities there - for Russians, as well as foreigners - remain very attractive.

In fact, Central Bank Chairman Sergei Dubinin and First Deputy Prime Minister and Finance Minister Anatoly Chubais both say they are carefully preparing for the time - perhaps in coming months - when Russia will see a real surge in foreign direct investment.

Chubais told reporters in Hong Kong that he especially enjoyed the annual meetings this year, because, for the first time, Russia did not come looking for assistance, but came to participate fully as a major world economy.

Dubinin said Russian reserves are now nearly $24 billion, equal to three months of the country's imports, a ratio that is considered sound in global financial terms. But, when asked what Russia would do now, Dubinin answered simply: "keep saving."

Chubais pointed out what an achievement this is, considering that Moscow had reserves at the end of 1995 of only $800 million.

Chubais told IMF officials that Russia is now looking toward a "friendly divorce" from the Fund - keeping its consulting and technical assistance role, but no longer needing to borrow large sums of money.

Once it finishes the last drawing of the three-year loan next year, Chubais said Russia intends to keep working under an IMF reform program, but will probably stop borrowing money.

At the conference's closing news conference, IMF Managing Director Michel Camdessus smiled at the idea of a friendly divorce from Russia.

"I like very much this idea," Camdessus said. "One, because it will mean success - a success of which I have never doubted." But, secondly, said Camdessus, "it means we will continue, in one way or another, living together, but I will no long pay the expenses of the household."

To the roaring laughter of reporters, Camdessus added, "Our love will continue to be exuberant and lady Russia will be even more charming."

Russia left the IMF/World Bank meeting feeling very good. Obviously, the feeling was mutual at the IMF.

As Chubais said: "Perhaps we're going to change from a bear to a tiger," a reference in financial circles to a fast-growing economy, leaping ahead of the pack.