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Politics : Clinton -- doomed & wagging, Japan collapses, Y2K bug, etc

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To: KIWI who wrote (394)	9/20/1998 11:32:00 AM
From: SOROS	Read Replies (5) of 1151

BBC - London - 09/20/1998 The new PM meets IMF officials - but where is their money going? Jonathan Charles in Moscow reports on evidence that millions of dollars provided as aid to Russia is being squandered: Venyamin Sokolov is an unlikely crusader - but Russia's chief auditor has spent the past few months travelling across the country to track down billions of dollars of missing aid from the West. Mr Sokolov does not look like a trouble maker but this short, greying man in his late fifties has been stirring up problems for the new Russian government. When we met in Moscow this week, Mr Sokolov came armed with a briefcase full of evidence detailing corruption and incompetence. He told me that he has uncovered proof that billions sent by the west to help his country's economy have been wasted. Mr Sokolov, who is director of Russia's chamber of accounts, says that some of the money was lost to corruption and much of the rest was used improperly. His comments come as the International Monetary Fund is considering whether to loan Russia another œ3bn in the wake of the latest economic turmoil there. Vanishing money As we drove around Moscow in his car, Mr Sokolov pointed out building after building where officials had colluded with corruption. Passing the finance ministry he said it had been given œ100m to fund an export contract for MIG jet aircraft - but during his investigations he had discovered that the deal was bogus and the money had vanished. Mr Sokolov claims it is just a tiny fraction of the total amount which has gone missing because of corrupt officials and business executives. He says: "Because we are talking about huge sums of money, naturally we can't check everything." "We have checked a fair proportion of the loans and I am ashamed to say that several billion dollars has not been used for its intended purpose - and some of it was simply stolen." Warning to IMF Mr Sokolov says that he gave a warning to the IMF months ago that the loans were being abused. He is urging the West not to send any more money until proper supervisory measures are put into place to prevent it being wasted. "First and foremost we have to establish strict financial controls - the kind that exist in any country in Western Europe ... it's a basic prerequisite for the development of market economics, in order to create a highly effective economy and to overcome corruption." The Russian government is trying to negotiate fresh loans to help it stabilise the economy. The money is needed to prop up the rouble and to help pay for imports. Forty percent of Russia's food is imported, and without hard currency it may face shortages this winter. As I wandered around supermarkets in Moscow this week, the crisis was clearly beginning to bite. Because food is no longer being imported, the prices of everything produced domestically is rocketing. Meat and sugar have tripled in cost since the economic collapse started in the middle of August. As I watched, pensioners with just a few roubles shook their heads sorrowfully at the food which is now just too expensive for them to buy. The government says the West's help is urgently required. But the evidence presented by Mr Sokolov is unlikely to convince the IMF that any new loans should be agreed.

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