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Pastimes : Kosovo -- Ignore unavailable to you. Want to Upgrade?

To: Neocon who wrote (9246)	5/20/1999 9:03:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 17770

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.