Reshaped Cabinet Promises Action as IMF Talks Go On

As an International Monetary Fund delegation began Wednesday what is expected to be a final round of talks on Russia's 1997 economic program, the new government pledged action on structural reforms but conceded that the current state of finances is dire.


"The current year will be the decisive one in many ways," Prime Minister Viktor Chernomyrdin told a briefing at the White House, calling for "new approaches" in budget and tax policy and reforms in areas such as so-called natural monopolies, housing and pensions.


With IMF managing director Michel Camdessus due to arrive in Moscow April 1, it appears likely that the government's words will be enough to secure an agreement on the delayed 1997 blueprint. If so, the fund will have to swallow the fact that Gazprom, Chernomyrdin's former employer, has been put last on the monopolies list, after electricity and railways.


The IMF also will have to "fluff over" miserable January and February revenue collection if it is to release as many as four loan tranches in April, one Western analyst said.


As expected Wednesday, Chernomyrdin named Alexei Kudrin, a Chubais protege from St. Petersburg, to serve as first deputy finance minister. The key position of foreign trade minister, formerly held by Oleg Davydov, was left unfilled, as were several posts in charge of regulating monopolies.


Also Wednesday, First Deputy Prime Minister Boris Nemtsov told the press conference that he had submitted a decree to President Boris Yeltsin, under the terms of which key government contracts will be awarded on a competitive basis. Nemtsov said he expected the president to sign the decree within three days.


Under the decree, the contract to supply Russia's armed forces with food, materiel and arms will be put out to tender. Civil engineering contracts will be awarded on the same basis.