Debt Moratorium Tops Yeltsin Wish List
Although he already has promises of $24 billion in aid from the West this year, Russian President Boris N. Yeltsin is compiling a list of what further assistance he wants when he meets leaders of the major industrial nations this summer.
At the top is a five-year moratorium on Russia’s repayment of the estimated $80 billion of debts the country inherited from the Soviet Union.
Yeltsin also wants an end to the West’s strategic restrictions on the transfer of high technology to Russia. And he would like Western training for Russian managers on how to work in a free-market economy.
Yeltsin and other top Russian officials outlined the country’s needs Saturday to Jacques Delors, president of the European Community, who was assessing the country’s economic situation before the meeting of the Group of Seven leading industrial democracies in Munich, Germany, in early July.
But Delors was cool to the requested debt moratorium, saying that the proposal would take much study and probably could not be decided at Munich--despite warnings from Yeltsin that people’s patience with the economic transformation encouraged by the West is now wearing thin.
“Today, people still support the reforms and the president,” Yeltsin told a government meeting Saturday, according to the independent Interfax news agency, “but if we go beyond a critical point we will set off a general disaster.”
Yegor T. Gaidar, the first deputy prime minister and the country’s economic strategist, told Delors that most of the aid Russia receives from the West is effectively going straight back, repaying old Soviet debts rather than redeveloping the Russian economy.
Because of its economic problems, Russia has come close to defaulting on the debts, not even paying interest on them, although this could prevent it from receiving other loans.
But Western banks and governments have so far rejected proposals for the debt to be rescheduled under easier terms, believing the crisis will recede with the large aid package and strict observance of an economic management program being worked out with the International Monetary Fund.
Yeltsin told a meeting of energy industry executives and government officials that he would resist Western demands that Russia move faster in freeing energy prices from state controls and ending the massive and longstanding subsidies. Price increases planned for June would not go into effect for at least another month, he said.
“Despite the demands of the International Monetary Fund for the immediate freeing of energy prices, there is no way we can do that now,” Yeltsin said, according to Interfax.
The IMF and other Western advisers have urged Russia to eliminate the last of its big subsidies as part of its free-market reforms. Western assistance depends on the satisfactory implementation of the reform program.
But conservative politicians have accused Yeltsin of selling the country out to Western bankers.
Meanwhile, Yeltsin on Saturday fired Energy Minister Vladimir Lopukhin, replacing him with the former minister of the Soviet gas industry, Viktor Chernomyrdin, who will be a deputy prime minister. Poor performance in the vital oil industry was seen as the likely reason for the change.