#9
Kommersant
No. 222
[translation from RIA Novosti for personal use only]
DOES RUSSIA LOAN MONEY TO THE IMF?
By Konstantin SMIRNOV
On December 3 Gerard Belanger, who serves as deputy chief of the IMF's second European department, and who heads the IMF's Russian mission, arrived in Moscow. Belanger was received by Alexei Kudrin that same evening. Both men discussed loans that could be received by the IMF from Russia, and not the other way round.
Russia hasn't received any IMF loans ever since July 1999. The IMF stopped loaning money to Russia because the Government and the Central Bank of Russia didn't comply with specific loan-disbursement terms. Any subsequent IMF loans became impossible because of a sharply improved balance of payments, which, in its turn, was caused by skyrocketing global oil prices.
For its own part, the Government of Russia said 18 months ago that it didn't need any IMF loans even for refunding its substantial IMF debts.
Financial flows have thus been reversed, with Russia virtually loaning money to the IMF at this stage. The statistics tell the story. Russia had owed more than $20 billion to the IMF in September 1998, that is, right after the August 1998 economic- and-financial melt-down. In July 1999 the government of Sergei Stepashin had received the last IMF tranche to the tune of $640 million, with national debts thus totalling $21 billion. However, Yevgeny Primakov's government began to repay such debts in line with a rather unusual timeframe since January 1999, that is, after it didn't get any IMF refunds. More than $3 billion were repaid over the 1999 period alone. In May 2000 the new IMF managing director Horst Koehler noted with satisfaction in his inauguration speech that Russia owed just $12 billion to his organization. As of November 1, 2001, this country owed a mere $8.374 billion to the IMF. Such debts will total less than $8 billion by January 1, 2002. According to Kudrin, state-debt volumes had accounted for 138-140 percent of the entire Russian GDP only three years ago just because this country preferred to borrow substantial monies over the 1992-1999 period, and this was one of the causes for the August 1998 melt-down. Russia's foreign debts now make up for not more than 55-60 percent of its GDP; consequently, all the main economic indicators will become much more predictable. Moreover, the Russian economy's dependence on debt-servicing payments will be reduced. By the way, Russia will pay $13.75 billion to its foreign creditors this year.
Russia can no longer be called the IMF's largest debtor at a time when Argentina and Turkey have surged ahead. Total Russian debts are now less than Moscow's entire IMF quota. Consequently, the Russian side can now borrow money, without conducting any difficult and lengthy talks with the IMF's mission and board of directors. However, such debts can't exceed our national quota.
Small wonder, Vladimir Putin promised this past October to pay $1 billion being owed by the IMF to the Central Bank ahead of schedule. The Central Bank now has enough petro-dollars of its own. The additional sterilization of excessive money supply seemed distinctly possible only a few months ago. Russia would have to find $1-2 billion for repaying its foreign debts some 12 months from now, that is, if oil prices continue to plunge. Well, that sum of money could be borrowed from Russia's national quota without any trouble whatsoever.
Frankly speaking, this is seen as a long-term issue. Right now, Gerard Belanger will be told for the umpteenth time in Moscow that Russia will keep repaying its IMF debts ahead of schedule. At any rate, Kudrin noted, before meeting Belanger, that Russia won't need IMF loans over the 2002 period.
Such statements make the IMF's top executives quite happy. Horst Koehler's first deputy Anne Krueger had insisted, before joining the IMF, that the policy of loaning additional monies to crisis-ridden countries was absolutely ineffective. The latest Argentinian situation serves as convincing evidence of this.
So, what does the IMF intend to do? As far as Russia is concerned, the IMF mission will continue to monitor the national macro-economic situation, as well as the actions of this country's Government and Central Bank. Quite possibly, the IMF's reports dealing with possible risks (in case of an aggravated foreign economic situation) will enable Moscow to prepare for the worst, e.g. lack of money for implementing the federal budget.
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