RUSSIAN GOVERNMENT BYPASSES PARLIAMENT.

The IMF is due today to decide whether to disburse the first half of its huge new stabilization loan to Russia. Anatoly Chubais, Russia’s chief negotiator, will be in Washington to urge the IMF board to release the US$5.6 billion payment.

The IMF has made the new loan conditional on Russia’s undertaking further tough structural reforms. These were put to the parliament for approval last week as a package of twenty-four bills. Before breaking for its summer recess on July 17, the State Duma approved those of the government’s measures that would reduce the tax burden on industry but rejected those aimed at shifting the tax burden onto the shoulders of the individual. Among the revenue-raising measures it rejected were a comprehensive 5 percent sales tax, a VAT, a land tax and increases in the personal income tax. Prime Minister Sergei Kirienko said that, by its refusal to approve unpopular measures, the parliament had reduced the government’s revenue-raising potential by one-third. (Russian agencies, July 17 and 18)

President Boris Yeltsin responded over the weekend by adopting additional tax-raising measures by decree. Both he and Kirienko had earlier tried to conciliate the opposition-dominated Duma by telling deputies that “we are all one team” and that the government could not get Russia out of its financial crisis without parliament’s assistance. Before leaving on vacation for Karelia yesterday, Yeltsin vetoed two tax-cutting laws adopted by the Duma. In addition, he doubled tax on plots of land which are used for other than their officially approved function and on plots of land within city limits. Tax on other categories of land was quadrupled. Meanwhile, Kirienko announced a 3 percent duty on all imports. The purpose is both to raise revenue and to boost sales of domestically produced items. (Russian agencies, July 18 and 19)

There is some doubt about whether these measures are constitutional. The constitution places responsibility for approving all federal taxes and levies on the Duma and requires tax-raising measures to be ratified by the Federation Council. The government’s measures may, therefore, face challenge in the Constitutional Court. Chubais nonetheless told NTV last night that he thought Russia has an 80 percent chance of seeing its loan approved by the IMF today. (Russian agencies, July 19)

BREATHING SPACE IN RAIL BLOCKADE.