Publication: Monitor Volume: 3 Issue: 238

Conflict continues to rage within the Russian government. Prime Minister Viktor Chernomyrdin has vowed to get to the bottom of last week’s leak to the media of letters sent to the government by IMF managing director Michel Camdessus and World Bank president James Wolfensohn. (NTV, December 20) The two letters were published in Nezavisimaya gazeta on December 18 under the headline, "Why does Russia Need Its Own Government?" They showed the two international financial organizations setting precise conditions that the Russian government would be required to fulfill in order to receive continued financial support. While an outsider might consider that international lending institutions have a right and even a duty to set conditions before lending large amounts of other states’ money, the incident has acutely embarrassed the Russian government, laying it open to accusations by the opposition that it is at the beck and call of international organizations. The resulting scandal has created an additional fissure between the prime minister and his first deputy, Anatoly Chubais. Chernomyrdin has ostentatiously countermanded decisions taken earlier in his absence by Chubais to seize the property of two major tax laggards — the Omsk and Angarsk oil refineries. Instead, Chernomyrdin has given the two oil companies until December 26 to come up with the large amounts of money they owe the federal government in tax arrears. (NTV, December 20)

Meanwhile, the World Bank has given the go-ahead for the release of two loans, totaling $1.6 billion, to Russia. The money is intended for use in modernizing the Russian coal industry. (Itar-Tass, December 18) The loan will be released in three tranches, with the first payment of $400 million dollars expected to reach the Russian government some time this month. The second and third tranches will be disbursed during 1998, but the exact dates will be fixed later depending on Russia’s progress in reforming its coal industry and also on whether the Russian government is able to improve its tax collection performance in line with the demands of the IMF. The money will be used for mine closures, social programs for redundant miners, mine renovation, and the opening of new mines.

New Property Minister Appointed.