Russia Wants Up to $15 Billion in New Aid

Anatoly B. Chubais, the Kremlin’s new special envoy to international financial agencies, said Thursday that Russia needs as much as $15 billion in new foreign aid--a larger amount than any Russian official has previously suggested.

Pointing to the severity of this nation’s continuing financial crisis, Chubais said he will seek a loan of $10 billion to $15 billion from the International Monetary Fund and other potential lenders to help stabilize Russia’s economy. A loan of even $10 billion would be larger than any single loan the IMF has granted Russia since the collapse of the Soviet Union.

“This is about the economy of the country, which got caught in a serious world financial crisis,” Chubais said in an interview on RTR television. “We are not isolated. We don’t live on the moon, and we must protect ourselves.”

In a similar vein, President Boris N. Yeltsin told reporters earlier in the day that Russia needs “support and investment” from the West and said he had discussed this with President Clinton, Italian Prime Minister Romano Prodi, French President Jacques Chirac, German Chancellor Helmut Kohl and British Prime Minister Tony Blair. “Of course, we will count above all on our own efforts,” he said.

Russia’s economy, which has grown increasingly dependent on foreign capital, has suffered significantly since the Asian financial crisis, with many investors choosing to pull their money out before it collapses. In Moscow, the stock market has fallen to some of its lowest levels in nearly two years, and the Central Bank has depleted its dollar reserves buying up rubles to prevent devaluation.

Russia was able to raise $2.5 billion Thursday with the sale of Eurobonds. But in a setback, the IMF decided to delay--for at least a week--the payment of a $659-million installment of an earlier $9.2-billion loan. The agency wants to put more pressure on Russia to resolve its fiscal problems by cutting its bloated bureaucracy and collecting more tax revenue.

A high-level IMF delegation will arrive in Moscow next week and meet with Chubais and other Russian officials to discuss release of the loan installment as well as the new request for a loan and further conditions Russia would have to meet.

Discussion of the new bailout came as hundreds of Russian scientists joined coal miners--who have been camping outside government offices here for the past week--to protest the government’s failure to pay their wages for months. Wage arrears in Russia now total $1 billion, officials say.

Chubais was named by Yeltsin to his top-level post Wednesday and immediately jumped into negotiations for a bailout package. “The problems have even knocked Japan to its knees, let alone Thailand and others,” Chubais said in Moscow. “In this situation, Russia must act aggressively and resolutely and energetically.”

The IMF and the world’s industrial powers have indicated a willingness to back a new loan for Russia, depending on how much they conclude Russia needs to stabilize its currency and replenish its foreign reserves.

But Chubais said Russia was not prepared to accept every condition the IMF might set. Russia, he said, will not borrow “at any price.”