BRIDGE PRESS: Yeltsin sees 10 years of Russian debt problems
By Bridge News
Moscow--March 30--Russia can expect its difficulties in repaying foreign debt to continue for about a decade, and repayment should therefore be extended as far as possible, President Boris Yeltsin said today.
"All government bodies should do everything possible to complete foreign debt talks successfully and restructure our obligations by extending the payments for the longest possible period," Yeltsin told parliament in an annual state of the nation address.
Together with foreign creditors, Russia will need "to seek difficult and possibly unusual solutions" to resolve its debt problems, Yeltsin said.
Russia and the International Monetary Fund on Monday reached broad agreement on a further disbursement of cash, although the exact sum of the IMF loan will not be determined until the multilateral lender's mission to Moscow next week,
Finance Minister Mikhail Zadornov was quoted as saying by the Interfax news agency. Prime Tass reported a figure of $4.8 billion Monday, but Zadornov did not confirm this today.
Russia's foreign debt payments due this year total $17.5 billion, including $4.5 billion owed to the IMF. The government says it can repay $9 billion, but only if it receives around $4.5 billion from the IMF.
The Russian government has faced serious difficulties in servicing foreign debt since it devalued the ruble in August. Two classes of ruble-denominated debt known as GKOs and OFZs were frozen, and creditors have until mid-April to consider the Central Bank of Russia's proposal to swap their holdings for new paper.
Yeltsin said today the government should play a greater role in regulating the market economy and that to this end, it should protect natural monopolies. The nation's economy lost a real chance to start growing in 1998, he added.
"An effective fulfillment of all our tasks is impossible without state regulation of the economy," Yeltsin said.
Economic strategy will remain largely unchanged, but the government will revise its methods for carrying out reforms and will correct some past mistakes in that area.
The 1999 budget may require quarterly revisions, but any printing of money to bridge revenue shortfalls should be accompanied by spending cuts, Yeltsin said. End
By Bridge News
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