Publication: Monitor Volume: 2 Issue: 39

. The conditions listed by Camdessus include the scrapping of export duties on oil and gas by July (effectively, that is, by the present Russian leadership) and the maintenance of fiscal and monetary policies calculated to reduce monthly inflation to one percent a month by the end of 1996. Camdessus also said the IMF would tolerate no backtracking on privatization — a clear warning to the Communists. In an apparent bid to boost confidence in the Russian economy, Camdessus said the IMF envisaged that economic growth in Russia could be between 2.2 and 4 percent a year in 1996 and 1997, and 6 percent thereafter. (These are the sort of growth rates that have been reached by Poland and Estonia.) The IMF conditions will once again be difficult for Russian policymakers to meet. The requirement to remove export taxes on oil and gas was a major sticking point. In the case of crude oil, about one-third of output is currently exported, and the domestic price is still well below the world price. In negotiating conditions for last yearÕs standby loan, the IMF required that administrative controls on oil exports be removed and that prices be gradually freed. Controlled domestic prices make exporting attractive and the granting of export licenses or, more recently, access to export pipelines, has been a lucrative source of kickbacks for officials. If there were no controls or taxes on oil exports, the domestic price would soon be dragged up to world levels, which, although desirable, would hardly be popular.

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