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. Last Updated: 07/27/2016

IMF Team Expected Thursday




An International Monetary Fund mission to Russia will arrive in Moscow on Thursday, Itar-Tass quoted Russia's acting director to the IMF as saying from Washington.


Alexei Mozhin said the mission would be headed by Gerard Belanger, who would take over as head of most Russian missions from Jorge Marquez-Ruarte, previously in charge.


Both men are deputies in the IMF department that handles Russian affairs.


Mozhin said there were a number of technical issues and unresolved problems to be addressed by the fund and declined to forecast when Russia might count on new financing, which the government wants in order to refinance IMF loans due this year.


The fund has held to a firm stance that Russia renew market reforms before lending can resume. Russia's head negotiator, First Deputy Prime Minister Yury Maslyukov, last week said the fund's pressure on Russia was "indecent."


Mozhin said the decision to send the mission was made after Prime Minister Yevgeny Primakov spoke by telephone to IMF Managing Director Michel Camdessus on Friday.


Meanwhile Tuesday, former Russian debt negotiator Alexander Shokhin proposed that the Kremlin start talking to foreign creditors about debt restructuring before reaching a deal with the IMF.


Shokhin, a member of the State Duma, parliament's lower house, and a former deputy prime minister, said in an open letter to President Boris Yeltsin that he (Shokhin) had done something similar in 1993 talks with the Paris Club of creditor nations.


"I think this precedent could be added to our armory," he wrote in the letter, published in the Kommersant newspaper.


But Yevgeny Kogan, fixed-income and financial products head at CentreInvest Securities, said Shokhin's ideas were idealistic.


"Mr. Shokhin's wish to separate [an agreement with the IMF and agreements with creditors] is wonderful, but the problem is that the current Russia, Russia after the 17th of August, is no longer Russia of the past - that is why everyone prefers to deal with it through the IMF," he said.


Shokhin also proposed netting Paris Club debts that Russia inherited from the Soviet Union with debts to Russia within the Paris Club.


Russia owes the Paris Club around $38 billion, while it is owed about $52 billion as a Paris Club creditor. But Russia is mostly owed money by Third World countries unable to pay.


The government estimates that its debt might be worth $12 billion after discounts are applied. Russia has not asked the Paris Club for discounts to be applied to the money it owes.


On the London Club debt front, Shokhin proposed Russia convert cash interest falling due before 2002 into interest arrears notes. These are securities representing restructured overdue interest on Soviet-era debt.


According to the original restructuring scheme, finalized in 1997, Russia pays interest to the London Club partly in cash and partly in IANs, with the cash portion increasing with each year.


Also, Alexander Livshits, a top economist and former presidential economic aide, said Tuesday that Russia should ask its creditors for a write-off of the bulk of the Soviet Union's debts.


"We must write off not less than 75 percent of the former Soviet Union debt," Livshits said in a speech at an investment conference in the United States. But he added that Russia needed a deal with the IMF to get debt relief.