Publication: Monitor Volume: 6 Issue: 200

Aleksei Kudrin, Russia’s deputy prime minister who doubles as finance minister, announced yesterday that Russia would ask the International Monetary Fund (IMF) for a new short-term credit, covering eighteen to twenty-four months, in November. Kudrin, who made his comments while attending a conference of finance ministers and central bankers in Montreal, gave no indication of the size of the credit Russia would ask for (Kommersant, October 26). Russia has not received new IMF funding since the summer of 1998, when it received a US$4.8 billion credit just weeks before the collapse of the ruble.

That Kudrin publicly announced his government’s intention suggests that he was pretty certain that the Fund would respond positively. Earlier in the week at the same conference, Kudrin talked up the Russian economy’s recent successes and emphasized that his government was working to address some of the concerns shared by the IMF and its main creditors, both of whom were represented at the conference. Kudrin noted that Russia’s economy had grown by 7.5 percent in the first half of this year. He then predicted that it would expand 6.5-7 percent in the second half, with inflation running at only 1.5 percent per month and real salaries rising. Kudrin also said that in December the government would begin talks with the Paris Club of creditors over rescheduling billions of dollars in Soviet-era debt and would present to the Organization for Economic Cooperation and Development the draft of an anti-money laundering law it plans to submit to the parliament (Bloomberg, October 23). The Russian government is also planning to address other IMF concerns, such as reform of its “natural monopolies”–including Gazprom, the natural gas monopoly, United Energy Systems, its electricity monopoly and the railways.

The anti-money laundering bill is clearly aimed in part at assuaging critics of IMF loans to Russia, who claim that Russian officials misappropriated IMF funds–a claim which both Fund and Russian officials deny. The issue came up again recently when U.S. Republican presidential candidate George W. Bush charged that IMF money ended up in the pockets of former Russian Prime Minister Viktor Chernomyrdin and others. Chernomyrdin said he plans to sue Bush for the comment. The Swiss authorities are investigating whether some or all of the IMF’s US$4.8 billion credit in 1998 wound up in Swiss banks (see the Monitor, October 25).