Russia’s government and Central Bank released a 37-page document Sunday (November 15) detailing the steps it plans to take “to stabilize the socio-economic situation in the country.” They include: (1) creating reserves of essential products, including energy products, to ensure there will be no shortages, as well as sending supplies to “crisis regions” (presumably, the Far North and Far East, which are plagued by energy shortages); (2) lowering customs tariffs on such goods, including medicine; (3) lowering the profits tax from 35 percent to 30 percent; and (4) introducing new income tax rates as of January 1, 1999. The government’s main task, according to the document, is to make sure that the annualized inflation rate does not exceed 30 percent. The document also states that the government will aim at “amalgamating ‘problem’ organizations into large corporations–some of them to be part-owned by the state”–and will “provide comprehensive support for the development of small and medium-sized business and the creation of a competitive environment.” To achieve the latter, the document states, the government will carry out tough anticrime and anticorruption measures.
The statement also promises to pay off arrears both in wages and in pensions and stipends to the military and state workers (Russian agencies, November 15). Last week, however, Deputy Prime Minister Valentina Matvienko, who is in charge of social policy, had said that the deadline on paying off pension arrears, amounting to 35 billion rubles (over US$2 billion at current exchange rates), would have to be moved back from January 1, 1999 to July 1, 1999 (Itar-Tass, November 12).
In an interview published Friday (November 13), former Prime Minister Sergei Kirienko said the government’s program was simply a stop-gap “political compromise” designed to maintain political stability. Eventually–sooner, rather than later–the government will have to decide whether it will take tough, unpopular measures to produce a balanced budget, or face a financial crash worse than the one it recently experienced (Argumenty i fakty weekly, November 13-19).
MORATORIUM ON COMMERCIAL DEBTS OWED TO WESTERN CREDITORS EXPIRES.