The entire New World Order and paradigm is resting on World
Stability and ability to put-down emerging fires...
"Anything less than that would be uncivilized" TM
How realistic is this utopy and what is it based on..? History?
DAVOS-Soros says Russia reforms under threat
05:55 a.m. Feb 02, 1998 Eastern
By Elif Kaban
DAVOS, Switzerland, Feb 2 (Reuters) - International financier George
Soros said financial markets were worried about recent policy u-turns in
Russia and the weakened positions of government reform gurus Anatoly
Chubais and Boris Nemtsov.
The situation in Russia is ''very touch-and-go,'' Soros told reporters
at the weekend at the Davos forum of business and political leaders.
''Russia was on the verge of the transition from insider dealing and
robber capitalism to legitimate capitalism and respect for shareholder
rights. But there have been retrogade events and a change of direction
in the government,'' he said.
''That is now endangering the stability of the rouble, bond and stock
markets. It's very important that there should be a reversal of this
reversal.''
The Hungarian-born financier said Russia remained dangerously exposed in
the wake of the Asian crisis.
''Russia is in a very precarious position because the international
financial conditions have changed and the policy response in Russia has
been in the wrong direction,'' he said.
International investors who had dismissed the knock-on effect from Asia
as an external problem that did not affect Russian fundamentals have
recently been selling.
Soros declined to answer a question on reports that his Quantum Fund was
getting rid of Russian securities.
Chubais, a first deputy prime minister, said in Davos that more than $4
billion in foreign capital fled Russia in November and December alone.
Things have worsened since then, forcing the central bank to hike
interest rates to defend the rouble.
Soros said a close shave for a key reformer at Russia's biggest firm,
national electricity company UES, had further undermined investor
confidence in Russian reforms.
''It had a negative effect on investor sentiment,'' he said, referring
to the recent failed attempt by conservative board members to replace
UES chief executive Boris Brevnov with his predecessor.
''These things create an environment where people who own shares don't
feel safe about their rights. There has to be a reaffirmation of
property rights and legal capitalism.''
Soros said markets were also worried about the fate of Chubais and
Nemtsov, both first deputy prime ministers whose positions have been
weakened in recent months.
Investors saw the two as a stabilising factor, he said.
''If Chubais is removed, it would have a very negative effect on the
market, and Nemtsov even more so,'' Soros said.
In Davos at the weekend, Russian Prime Minister Viktor Chernomyrdin said
both reformers would stay in the government in a possible cabinet
reshuffle Yeltsin has floated.
Nemtsov was previously seen as President Boris Yeltsin's favourite to
succeed him, but his star has fallen lately.
Chubais has also been weakened, far more than Nemtsov. Speculation that
he might go has been rife since November when he was linked to a scandal
over advance fees for a book on privatisation. |
