Publication: Monitor Volume: 5 Issue: 20

Yevgeny Primakov is due to arrive in Davos, Switzerland, to participate in the annual international economic forum. The Russian prime minister is expected to meet today with Vice President Al Gore, and tomorrow will attend the forum. Other Russian officials, including Fuel and Energy Minister Sergei Generalov and Tax Services chief Giorgy Boos, are also attending the forum. On January 31, Primakov is scheduled to meet with Stanley Fischer, deputy director of the International Monetary Fund (IMF).

Yesterday, against the backdrop of Primakov’s visit, First Deputy Prime Minister Yuri Maslyukov, who is in charge of the government’s economic policy, touted figures showing signs of an economic recovery. Maslyukov, in a meeting with IMF experts visiting Moscow to study Russia’s economic performance, presented statistics purporting to show that the Russian economy grew by an average of 3.1 percent per month in the last quarter of 1998. He said that production would continue to grow this year by as much as 1 percent. Maslyukov also claimed that domestic producers had become more competitive, taking up the slack created by decreased imports, which have become more expensive due to the ruble’s drop in value. Maslyukov said the engineering and food industries were the best performers in the last quarter of 1998, and that the overall growth rate was the highest on record since 1991 (Russian agencies, January 28).

Maslyukov clearly hoped his statistics would create a favorable impression with the visiting IMF mission. After the meeting, Maslyukov said he was optimistic that Russia could reach an agreement with the IMF on restructuring its debts to the fund. Russia is supposed to pay US$17.5 billion on its foreign debt this year, the bulk of which is owed to the IMF. However, counterbalancing Maslyukov’s happy news was a report Thursday from the Central Bank, that its hard currency reserves are currently at US$11.6 billion, the lowest in three years (Moscow Times, January 29).

The IMF–highly critical of the draft 1999 budget–has made it clear that it will provide further assistance to Russia only if Moscow comes up with a “realistic” one. The State Duma is set to consider the budget in its third reading today. Yesterday, members of the Federation Council–the upper chamber of parliament made up of regional governors and leaders–demanded that the draft be amended to provide for an equal distribution of budget funds between the federal government and the regions. While the governors have threatened to veto the draft, most observers believe that it will pass both houses (Russian agencies, January 28).