RUSSIA TO INCREASE SUPPORT TO CIS COUNTRIES.

Russia’s financial support to the CIS countries has been dwindling in recent years. Concurrently, however, awareness of the importance of the CIS market for Russian exports has been building among Russian government and business leaders. Increasingly, they see the CIS as a convenient and necessary outlet by which to effect a change in Russia’s export commodity structure that would reduce the share of energy and raw materials while increasing that of manufactured goods.

A decision taken yesterday by the Russian government commission on operational questions reflects this change of attitude. The commission, chaired by Deputy Prime Minister Aleksei Bolshakov, decided that credits to CIS countries in the 1997 draft budget should increase dramatically — from 200 billion rubles to 3 trillion rubles. (Interfax, November 12) The additional credits are aimed explicitly at raising Russian exports, since they can be used only for the purchase of Russian goods.

The concession of new loans will add to the present CIS countries’ debt to Russia, which, according to CIS Affairs Minister Aman Tuleev, currently amounts to $6 billion. (Interfax, November 12) In the past, Russian credits to the CIS states have been dollar denominated and have carried variable interest rates. Russia has sought, with varying degrees of success, to cancel part of these debts in exchange for assets in the debtor countries. In addition to these inter-state debts, non-payment to Russian energy producers by their consumers in the CIS amounts to 16 trillion rubles, according to Tuleev.

Recent trends have tended, however, to erode these long-standing Russian trade surpluses, and the earlier reductions in credits to CIS countries may be one of the culprits. Trade with the CIS countries has been growing more rapidly than with the rest of the world. According to Russian deputy prime minister Valery Serov, turnover between Russia and the CIS countries increased by 20 percent over the last 9 months. (Interfax, November 11) Russian imports, moreover, have been growing at a faster pace than exports, leading to deficits for Russia in its trade with CIS countries.

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