CONFUSION PRECEDES IMF VISIT.

Mixed signals from the Russian government have preceded a week-long IMF mission to Moscow, which begins today and which is expected to produce an agreement on Russia’s macroeconomic and structural policies for 1997. (Interfax, March 7) On March 6, First Deputy Prime Minister Vladimir Potanin was reported to have requested a "time out for several months" in negotiations with the Fund, which has held up release of the $340 million January tranche of Russia’s $10.1 billion Extended Funded Facility (EFF) credit. Disagreement seems to have centered on plans for restructuring the Gazprom and United Energy Systems (UES) "natural monopolies." According to Potanin, the two sides have agreed in principle that Gazprom will extend the territorial differentiation of natural gas prices while organizing the wholesale electrical energy market and guaranteeing that equal access to that market is vested in an "independent operator," still to be created, rather than in UES. While both sides agree that arrears continue to be a severe problem, Potanin argued that the 10 and 13 trillion rubles the government received in tax revenues during January and February, respectively, were much larger than the monthly sums collected in late 1996.

Despite the importance commonly ascribed to these meetings, such negotiations seem to be losing their significance. The government was able to raise $1 billion through a heavily oversubscribed Eurobond floated last November, even though Russia was at that time out of compliance with its IMF agreement. Likewise, government plans to raise another $3 billion via Eurobonds in 1997 do not seem to place particular emphasis on remaining in the IMF’s good graces. This year’s first Eurobond issue, which is to be underwritten by the investment banks CS First Boston and Morgan Grenfeld, is to be announced some time this month.

Russia to Set Up Body to Facilitate Center-Minority Dialogue.