Some reading for all the brave bulls out there...
By ANNA DOLGOV Associated Press Writer
MOSCOW (AP) - Russia may be headed toward disintegration and an end of democracy if the deepening economic crisis is not resolved, a top Cabinet official warned in an interview published Wednesday.
The government says that to keep the economy from crumbling, it needs to reschedule Russia's huge foreign debt payments and receive foreign aid that was frozen months ago. But international creditors have not given any sign that they will grant either request.
If the government fails to stabilize the economic situation, ''we will be facing a national catastrophe that would write off the free-market economy, democracy and the territorial integrity of Russia,'' Deputy Prime Minister Yuri Maslyukov said.
He warned that inflation would spiral out of control next year unless the government reaches an agreement with its creditors to reschedule some of the $17 billion in foreign debt payments due in 1999.
''If we succeed in restructuring just half of this amount, we will manage to keep the impact on inflation and industrial output within reasonable limits,'' he said in an interview with the business daily Kommersant.
Russia's impoverished regions, frustrated at mounting debts owed by the federal government, are already defying Moscow.
The president of the impoverished southern republic of Kalmykia, Kirsan Ilyumzhinov, said Wednesday he would push for secession because of the federal government's failure to deliver subsidies to the region.
Ignoring federal government orders, Gov. Alexander Lebed of the vast Siberian region of Krasnoyarsk blocked shipments of nuclear waste into his region and demanded pre-payment in hard currency for future consignments.
Russia is facing its worst economic crisis since the Soviet collapse. Over the past month, the number of Russians living below the official poverty line reached 42 million, or 29 percent of the population, compared to 31 million, or 21 percent, a year ago, the State Statistics Committee said.
The official poverty line is about $40 a month per person.
The government is pushing the International Monetary Fund for more money, saying it is vital to paying off the huge domestic and foreign debts.
An IMF team was back in Moscow on Wednesday for talks on the possibility of releasing the next installment of a $22.6 billion aid package, frozen in after Russia devalued the ruble and defaulted on some debts in August.
The visiting IMF officials said they expected little from the current round of talks.
Despite IMF warnings, Russia has also started printing money to help its ailing banks and pay some debts, which many analysts warn will trigger hyperinflation.
Finance Minister Mikhail Zadornov said Wednesday that Russia has printed 8 billion rubles worth about $470 million since Oct. 1, the Interfax news agency reported. |
