Originally created 02/11/99

Primakov says Russia determined to work out IMF agreement

MOSCOW -- Russia is determined to work out an agreement with the IMF and to continue integrating itself into the world economy, Prime Minister Yevgeny Primakov said Wednesday.

"In other words, we are not planning to isolate ourselves, and do not want to be isolated by others," Primakov told the visiting president of the International Chamber of Commerce, Adnan Kassar.

An International Monetary Fund mission left Russia on Saturday after the Cabinet failed to deliver a promised memorandum on economic policies. Fund officials said no date had been set for the mission's return.

Although Russian officials have remained publicly optimistic about the prospects for a new loan, talks have stalled and IMF officials have promised nothing.

The government hopes that an agreement with the IMF would not only give Russia much-needed cash, but also facilitate talks on rescheduling its huge foreign debts.

Russian liberals have blamed the deadlock on the government's inability to draft a viable economic program.

"Talks with the IMF resemble a conversation between the deaf and dumb," said Boris Fyodorov, a former deputy prime minister and tax chief who was fired in August.

In the past, Fyodorov has also blamed the IMF for Russia's latest financial crisis.

Both domestic experts and the IMF dismissed the government-proposed budget for this year as unrealistic. The budget, approved by the parliament last week, forecasts inflation at 30 percent for the year. But prices have already risen by 9.8 percent since Jan. 1, the State Statistics Committee reported Wednesday.

The IMF has also criticized Primakov's plans for greater state control of the economy.

But Primakov reiterated Wednesday that the Russian government intends to take a hand in economic development and not leave it purely to market forces.

"We do not belong to those who believe that support for domestic producers contradicts foreign investment," he told Kassar, according to the ITAR-Tass news agency.

Meanwhile, the Central Bank reported that foreign investment fell by nearly half in the first nine months of last year compared with the same period in 1997, Interfax said.

Russia received $18.6 billion in foreign investment in that period, down 47 percent from the 1997 level.

Russia's government devalued the ruble and defaulted on domestic debts last August, but financial trouble had been brewing for months prior to that.


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