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To: Alex who wrote (19406)	9/21/1998 6:35:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116900

Primakov seeks to reimpose state's vodka monopoly By Marcus Warren in Moscow <Picture>City: Russians 'stole billions in IMF aid' RUSSIA'S prime minister, has yet to announce a full cabinet line-up but has wasted no time in stamping his authority on an area of life central to the national identity: alcohol, which in Russia means vodka. In the most vivid demonstration so far of his strong-man approach to boosting the state's authority, Yevgeny Primakov has called for a restoration of the state's monopoly on the production and sale of alcohol. This is one of the first government policies of any kind to be adopted since Russia devalued the rouble and defaulted on its short-term debts a month ago. Since then, the country has been paralysed by uncertainty and economic disarray. It still has no finance minister. This week the cabinet is due to discuss whether Mr Primakov intends to reimpose the monopoly and whether it will also cover wine and beer. But his preliminary remarks suggest that the state wants to control all alcoholic beverages. One man selling spirits at a Moscow kiosk said: "They have tried to do this several times over the last few years. We will wait and see whether this lot can succeed where the others failed." A return of state control over vodka will be cheered by the many Russians who see it as a key indicator of the state's power. The pro-monopoly lobby argues that both the state and ordinary Russians have suffered without state control. They say that in recent years there has been an unprecedented decline in the quality of vodka sold on the streets. In 1997 some 43,000 Russians were killed by low quality vodka and every other bottle of the national drink on sale had been produced illegally, according to the Interior Ministry. However, many of the deaths will have been caused by Russians' fondness for moonshine. This is unlikely to be affected by the return of the monopoly. Vodka is usually described as Russia's second currency after the US dollar. Over the centuries Tsars and Communist party chiefs derived a large share of their income from the vodka monopoly. Russian leaders interfere with the monopoly at their peril. Mikhail Gorbachev's attempt to wean Russians off the hard stuff by cutting production and restricting sales in the middle Eighties helped to finish off the Soviet economy. President Yeltsin launched Russia's experiment with economic liberalisation in 1992 by abolishing the monopoly. The vodka industry calculated that this move cost the state an estimated œ250 million a month in lost revenue. telegraph.co.uk

To: Alex who wrote (19406)	9/22/1998 9:03:00 PM
From: goldsnow	Respond to of 116900

Speculation swirls about G7 emergency fund plan By Henry Engler LONDON, Sept 22 (Reuters) - Speculation was mounting in financial markets on Tuesday that world powers were preparing a mutli-billion dollar rescue fund for emerging market nations. People familiar with the work of the U.S. Treasury and international agencies such as the International Monetary Fund told Reuters a new initiative could be imminent. Crisis-torn Brazil is seen as the key beneficiary of any rescue. An international monetary source in Washington, speaking on condition of anonymity, said the IMF and Brazil were "examining options on the policy front," but added there had been no request for money. Britain, which holds the presidency of the Group of Seven industrialised nations, said it was unaware of any plan to create an emergency fund. Bank of England governor Eddie George is currently in Latin America, site of some of the most intense market carnage. In London, visiting top U.S. central banker William McDonough declined to comment. The talk, which has been running for days but has now gained credence in financial circles, is that anywhere between $50 billion and $120 billion could be pooled together to provide funds for ravaged economies such as Brazil. "There does seem to be a rescue for Brazil brewing," said one senior banking official. The IMF is strapped for cash, and few think it has a good chance of getting new funds from shareholder governments quickly. Sources said any resuce package would be a multi-pronged effort, including funding from G7 coffers and potentially other multilateral agencies. The Group of Seven comrpises Britain, Canada, France, Germany, Italy, Japan and the United States. Agencies such as the Inter-American Development Bank, the World Bank and others have also been mentioned as potential sources of money. "With the combination of a little from the IMF, something significant from the IADB, and something from G7, you could put together a $50 billion package that would be available to Brazil," the senior banker said. The remaining $50 to $70 billion would be used for other emerging economies in crisis. The primary purpose of the plan would be to halt the recent tide of capital outflows from Brazil and prevent the crisis in the developing world from engulfing Latin America. The region is seen as critical to the U.S. economy's health, and thus to world growth. "I think they have to come up with something and this plan might buy them some time," said another banking source. Financial markets were rife with alternative versions of the same plan, with one option envisaging Brazil and others gaining access to G7 central bank credit, or currency swap lines. A specialist information service called I.D.E.A. published a report quoting "sources in various policy circles" as suggesting there was a growing willingness in G7 countries to put together a package to put a floor under global risk. The I.D.E.A. report spoke of a potential package totalling $50 billion facility for crisis countries that would probably not involve any meaningful collateral. Bankers say the model for any Latin America rescue effort was the Mexican bailout in 1995. During that crisis, the U.S. Treasury provided $20 billion in currency swaps and guarantees from the so-called Exchange Stabilisation Fund, a foreign currency war chest which the U.S. government can use without authorisation from Congress. Congress last week approved just $3.4 billion for the IMF, far short of the $18 billion the White House had requested to fend off the global financial meltdown. In Britain, the British Treasury also said it was unaware of any impending announcement of such a programme. The Bank of England, however, confirmed that governor Eddie George was visiting Argentina on Tuesday. business-times.asia1.com.sg