IMF Team To Discuss Economic Blueprint

A newly arrived International Monetary Fund team begins consultations Thursday aimed at finalizing Russia's 1997 economic program, with the perpetual questions of tax collection and structural reforms topping the agenda.


"We're hoping that these negotiations can be completed," Thomas Wolf, head of the IMF's Moscow office, said Wednesday.


The team is expected to stay through the end of next week. In addition to finishing the blueprint for fiscal and monetary policy and mandating reforms in areas such as agriculture, energy and privatization, the mission will conduct its regular monthly review, necessary for Russia to receive its next $340 million loan tranche.


Sources close to the talks told The Associated Press on Tuesday that a steep fall in revenue last month could complicate Russia's efforts to win the release of the latest loan installment. Preliminary figures indicate the federal government's revenues could fall far short of the International Money Fund's target.


The pace of tax collection is a "concern," a Western economist said, and the IMF will be looking to see that January's final revenue numbers and the early picture for February continue the increase seen at the end of last year.


The State Tax Service said Monday, however, that January tax revenues totaled 10.1 trillion rubles ($1.8 billion), 26 percent above its target for the month, AP reported.


The three-year, $10 billion loan agreed upon in February 1996 spelled out a detailed set of targets for last year -- many of which slipped as the uncertainty over the presidential elections spilled over into the economy -- and left further specific measures to be negotiated at the beginning of this year.


A final, formal program between the IMF and the government could be signed by the end of February, negotiators have said.


Last Friday, the IMF board approved two delayed loan tranches for November and December that had been held up because of lagging revenues and failure to adopt structural reforms in the energy and trade sectors.


Prodded by the IMF, the government last week announced that prices for natural gas would no longer be set uniformly across the country. Instead, gas prices would vary from region to region, and individual consumers would be asked to bear more of the costs now shouldered by industrial users.


Another reform is the government's plan to reduce the list of so-called "strategic" enterprises that cannot have their gas supply cut off if they do not pay their bills.


Military firms, nuclear power plants and selected other enterprises still will be protected.


A third measure necessary for the release of the November and December loan tranches was Russia's withdrawal of planned quotas on ethyl alcohol and vodka.