IMF CONTINUES TO PONDER RUSSIAN BAIL OUT.

IMF Deputy Director Stanley Fisher–who met with Prime Minister Sergei Kirienko on June 24–will, according to press reports, recommend to the IMF board that it should release the suspended US$670 million credit. Fisher returned to Moscow this week for further talks in the wake of last week’s IMF board decision to postpone release of the loan. Release of the US$670 million is seen as a hurdle that must be overcome if discussion is to proceed over a US$10 billion stabilization fund to protect the ruble. (Russian Television June 24, Kommersant Daily June 25, Finansovye izvestia, June 25)

It was not clear what conditions Fisher set for the Russian government in return for recommending extension of the loan. It appears that the IMF is not insisting on the separation of the generation and transport divisions of Gazprom, merely calling for more “transparency” in the financial reporting of its operations. There were also rumors that the IMF is insisting on certain personnel changes in the Russian government. The most likely explanation for Fisher’s recommendation is that, having lent a total of US$30 billion to Russia since 1991, the IMF and World Bank cannot afford a Russian financial collapse to compound the ongoing Asian crisis.

It is unlikely that the IMF was persuaded by the content of the government’s ambitious and comprehensive anticrisis program presented to the State Duma on June 23. In a TV interview, Deputy Prime Minister Oleg Sysuev acknowledged that it would be difficult to persuade the Duma to approve the program’s twenty-plus new laws any time soon. He likened the Duma to the orchestra on the Titanic, fiddling while the ship of state heads for the bottom. The anticrisis program includes some familiar measures from the government’s previous twelve-point and seven-point programs–a new tax code, faster bankruptcy procedures, cuts in state spending, etc. It also includes some more radical ideas, such as the complete abolition of off-budget funds. At the beginning of this year there were more than 17 billion rubles in these funds, which make a nonsense of fiscal accountability. (NTV June 23, Kommersant Daily June 24)

RUSSIAN MINISTRY DEBATES NEW LABOR CODE.