Rubin Sees No Easy Economic
Answer For Russia
WASHINGTON, May. 20, 1999 -- (Reuters) There is
no easy answer to Russia's deep economic
problems and any new money approved by the
International Monetary Fund will only be used to
repay old debts, U.S. Treasury Secretary Robert
Rubin said on Wednesday.
Rubin, testifying to a Senate panel, admitted that
Russia's decision to channel previous IMF funds
through an offshore bank was "a matter of great
concern" and he said the IMF was waiting for an
independent auditors' report on the issue before
agreeing to release new money.
Russia's problems centerd on corruption, structural
and legal issues and the troubled financial sector, he
said.
"These are vast problems," he said. "There is no
simple answer and there is no short-term answer.
There are going to be ups and downs and if this is
going to work it is going to work over a long period of
time."
Russia, the IMF's biggest single borrower, reached a
framework agreement with the IMF last month under
which the fund would lend Russia $4.5 billion over 18
months.
But the IMF said its board would only approve the
loan program if Russia meets promises on bank
reforms and new laws and if the auditors' report
confirms what happened to the money in the offshore
fund, which was based in Britain's Channel Islands
tax haven.
"This money will never actually go to Russia," Rubin
said. "The money that is going to Russia is less than
the money that Russia owes the IMF and it will be
disbursed as the payments become due to the IMF
and will be used for that purpose."
Russia's new prime minister, Sergei Stepashin, has
promised to work to resolve remaining difficulties with
the IMF, although he wants to ensure people are not
hurt by tough economic conditions surrounding any
deal.
He urged parliament to approve the new laws
demanded by the IMF quickly and said Russia would
be unable to ease its crushing debt burden if this
legislation was not agreed.
Stepashin, confirmed in office by parliament on
Wednesday, also said he would set up a special
commission to investigate what happened to previous
international loans.
"It is necessary to correct the situation whereby
resources that are attracted with difficulty are being
spent ineffectively and are often being openly stolen,"
he told parliament.
(c) 1999 Copyright Reuters Limited. |
