Publication: Monitor Volume: 4 Issue: 116

Russia’s financial markets rallied yesterday on news that the IMF is to send a mission to Moscow on June 22 and that some form of IMF help for Russia’s ailing economy may be forthcoming. The stock market gained 4.2 percent yesterday, though this must be set against Monday’s slide of 7.3 percent. Overall, Russia’s economic situation remains extremely fragile. Martin Gilman, who heads the IMF office in Moscow, said the Fund will consider additional finance only if Russia agrees to put its public finances in order. Stabilization depends primarily on the government itself taking firm action; Gilman stressed, otherwise, “no amount of money will be any help.” (Reuters, June 16)

Prime Minister Sergei Kirienko met yesterday with the team drafting the crisis management program that he is to unveil later this month. The team includes Deputy Prime Minister Viktor Khristenko, Economics Minister Yakov Urinson, Energy Minister Sergei Generalov and Aleksandr Pochinok, recently ousted as head of the tax service and now financial adviser to the government. Later, Kirienko met at his government dacha outside Moscow with a small group of leading bankers and industrialists–commonly known as Russia’s “oligarchs.” Attending last night’s meeting were all those who met with President Boris Yeltsin in the Kremlin on June 2.

Yesterday’s meeting was described as the initiative of media magnate Boris Berezovsky, who makes up–by his close links to the Yeltsin family–for the fact that his official post as CIS Executive Secretary excludes him from formal membership of the “oligarchs.” Attending were the directors of Russia’s gas and electricity monopolies, Rem Vyakhirev of Gazprom and Anatoly Chubais of United Energy Systems, oil company directors Vagit Alekperov of LUKoil and Vladimir Bogdanov of Surgutneftegaz, and financiers Mikhail Fridman of Alfa Group, Vladimir Potanin of Interros, Aleksandr Smolensky of SBS-Agro, Mikhail Khodorkovsky of Rosprom-Yukos and Vitaly Malkin of Rossiisky Kredit. It was not clear whether Berezovsky himself was present. (NTV, June 16)

The financiers reportedly urged Kirienko to advise Yeltsin to re-appoint Chubais as Russia’s chief negotiator with the international lending institutions. (Reuters, June 16) Chubais held this post in his previous incarnation as first deputy premier and finance minister and the new post would restore him to the status of deputy prime minister. This would be a triumph for Chubais, who was sacked from the cabinet less than three months ago by presidential decree. His return to government so soon after his ouster would be a blow for the opposition-dominated parliament, which only last week launched a bid to remove him from his post at the head of United Energy Systems. (Russian agencies, June 11) It would however be greeted with relief by the international financial community. Chubais is widely respected abroad–but detested inside Russia for his role in the privatization of Russian industry.