World Bank Suspends Loan to Russia
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Moscow-May 13-FWN/UPI--The World Bank has suspended
negotiations on a $3 billion loan package to Russia
following Wednesday's sacking by Russian President Boris
Yeltsin of Prime Minister Yevgeny Primakov and his entire
Cabinet.
World Bank President James Wolfensohn said the bank was
on the verge of completing negotiations on the loan, but the
latest shake-up in Moscow has jeopardized the deal.
The Bank's chief representative in Moscow, Michael
Carter, said the lending organization had expected to
complete negotiations in June, but "in light of the change
in circumstances, this (session of talks) will now probably
be postponed indefinitely."
The Bank had recently agreed in principle to loan
Russia $2 billion and support a Japanese loan for over $1
billion, following progress in talks between Russian
negotiators and the International Monetary Fund.
The IMF, which placed its own billion-dollar loan
package to Russia on hold last August after Russia's refusal
to adopt stringent economic reforms, looked set to resume
disbursement of $4.6 billion in the near future after months
of talks.
As the Primakov Cabinet watched in horror while its
work on wooing international lenders back to Russia
unravelled, Primakov reportedly called Wolfensohn today,
asking him to continue with the loan negotiations despite
the turmoil in Moscow.
The state-owned Itar-Tass news agency said
"Wolfensohn's reaction was favorable," while World Bank
officials had no comment on the report.
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