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. Last Updated: 07/27/2016

World Bank VP Due in Moscow

The World Bank’s vice president for Europe and Central Asia, Johannes Linn, will arrive in Moscow on Sunday to discuss progress on structural reforms that are key to unlocking aid, a bank official said Tuesday.

The 2001 draft budget, facing the third of four readings in parliament on Friday, envisages up to $800 million from a World Bank structural adjustment loan.

"He [Linn] is obviously going to review with the government progress with the structural reforms and coal loan questions," said Michael Carter, World Bank director for Russia.

Linn has said a new loan program of about $1 billion to support reforms could be approved if legislation was passed to improve the business climate.

Russia and the Bank agreed in September to cancel a structural adjustment loan-3 program, agreed in 1998.

Only $400 million of a $1.5 billion loan was dispersed as Russia failed to meet loan conditions.

Linn will be in Moscow at the same time as a Bank mission is winding up talks on how to monitor structural reforms that could be the basis for future aid from the World Bank.

Carter said the bank will focus on monitoring the results of reforms in three main areas: reduction of state subsidies, improvement of the regulatory environment for enterprises and strengthening of social protection.

The mission, which arrives Wednesday, will work here for two or three weeks.

Carter said the bank had not yet decided when it would disburse a final $150 million tranche of the so-called coal loan, which the government hoped to receive by the end of 2000.

Linn has said that a $1 billion loan could be approved if the government improves the business climate.

He said the bank was not satisfied with coal-sector reform, including plans to raise production subsidies next year.

If the government proved its commitment to cut subsidies, close loss-making mines and provide social protection to laid-off workers, it could still get a $50 million social tranche in 2000 and $100 million privatization tranche in early 2001, he said.

The World Bank intends to allocate $80 million next year in order to finance the migration of people from the Far North regions to the central regions of Russia, Interfax quoted Carter as saying.

Carter hopes the project will be put on consideration of the World Bank’s board of directors at the beginning of next year.

"At present, the project is on its last stage of negotiations, all main elements are agreed though there are some unagreed questions yet," he said.

"The movement of people will considerably save resources on supporting an infrastructure of the Far North," Carter said.

The project is planning to begin from the Vorkuta, Magadan, Norilsk and Susman regions, Interfax reported.

The project envisages special certificates being issued that won’t cover all resettlement costs, but will give some freedom in choosing new homes.

(Reuters, MT)