IMF TO RESTART LOAN PAYMENTS TO RUSSIA.
Publication: Monitor Volume: 3 Issue: 65
Speaking in Moscow on April 2, IMF managing director Michel Camdessus said that the IMF will resume the $330 million monthly payments of its $10.1 billion Extended Fund Facility. (Reuter, April 2) The credit tranches for January, February, and March were suspended because of the low rate of tax revenue. Camdessus said the Russian government must improve tax collection, fight corruption, and restart economic growth. The IMF loan, approved a year ago, had been interrupted twice before because of concerns that Russia was not meeting the loan conditions. The job of international lending agencies is made difficult by the unreliability of Russian government statistics. The IMF has only four economists based full-time in Moscow, and thus depends heavily upon Russian officials for data on how the economy is performing.
There is now what one observer describes as an "open scandal" over the statistics issued by Russian government agencies. (Finansovye izvestiya, April 1) Last week the European Union-funded Working Center for Economic Reform charged that estimates of Russia’s shadow economy had been boosted, artificially producing an upturn in GDP growth in the first two months of this year.
Statistical confusion is a particular problem in the area of foreign trade and cross-national financial flows. While the Ministry of Foreign Trade estimates the external trade balance in 1996 at $40 billion, the State Customs Committee offers the figure of $20 billion. Despite running an overall current account surplus of $12 billion in 1996 (according to the Foreign Trade Ministry), external debt rose by $4.1 billion (to $124.5 billion) and reserves fell by $3.2 billion (to $11.3 billion), leaving a huge $23 billion "balance item" in the national accounts. This figure dwarfs the $2.2 billion direct foreign investment that flowed into the country last year. (Financial Times, 1 April)
Statistical manipulation was endemic in the Soviet economy, and economist Alec Nove proposed a "law of equal cheating" — that is, one has to assume that the rate of cheating does not change over time, so one can at least look for trends. However, in the transition to the market economy each year brings new financial instruments and new rules of the game, so the "law of equal cheating" may be increasingly untenable.
Workers Continue Strike in Tatarstan.