Publication: Monitor Volume: 4 Issue: 177

Following his resignation as Deputy Prime Minister on September 25, Aleksandr Shokhin said that there was a “small chance” that the IMF may not agree to release the second tranche of its stabilization loan to Russia until next year. He said also that the IMF wanted the government to secure Duma approval of both an emergency budget for the fourth quarter of 1998 and draft guidelines for the 1999 budget. The IMF was further demanding that the government submit an account, at the end of this year, of its progress in meeting its commitments. Only then would the IMF be prepared to provide funds, Shokhin said. He said this last condition was unacceptable to Moscow. If the IMF continued to make such demands, he continued, Russia would have to negotiate on restructuring its foreign debt. Shokhin in this way repeated his earlier threat that, if the IMF refuses to lend Russia more money, Russia will refuse to repay the debts it already has (Russian agencies, September 25-26).

Shokhin resigned late last week, saying he could not work in the same government as Mikhail Zadornov, who was finally reconfirmed in his post as finance minister on September 25. Shokhin told a press conference that his own appointment as deputy premier with responsibility for negotiating with the IMF and other international bodies had been “only window dressing for the West.” “I could not talk to the West without knowing who stood behind me,” he went on. “We have already seen a situation whereby some people hold talks and get money and other people waste it. It would be dangerous to take this route again” (Russian agencies, September 25-26).

It was not immediately clear whether President Boris Yeltsin had accepted Shokhin’s resignation. Neither was it known who would be appointed in his place. Shokhin speculated that he might be replaced by either tax chief Boris Fedorov or former Yeltsin aide Aleksandr Livshits. Livshits had earlier turned down the post of finance minister, demanding the status of deputy prime minister in addition. This prompted Prime Minister Yevgeny Primakov, in apparent desperation, to re-appoint Zadornov to the job and, in turn, provoked Shokhin’s resignation (Russian agencies, September 26).

All these comings and goings demonstrate all too clearly the continued incoherence in the Russian government. Russia’s main RTS stock market index fell to a record low on Friday. An IMF team, in Moscow since September 15, said on its departure September 25 that the situation in Russia was “critical.” It urged the government urgently to come up with a comprehensive economic strategy. The mission is expected to return to Moscow on October 12 (Russian agencies, September 25).