Newspaper article The Christian Science Monitor

Russia Toughens Reform Plan Move Seen as Bid to Win Support and Credits from Western Governments and the IMF

Newspaper article The Christian Science Monitor

Russia Toughens Reform Plan Move Seen as Bid to Win Support and Credits from Western Governments and the IMF

Article excerpt

DESPITE rising criticism of the harsh cost of its economic reform policies, the Russian government has prepared a new plan that sets even more stringent reform targets.

The 1992 economic program, approved at a government meeting last week and due to be publicly unveiled today, is aimed at gaining the approval of the leading industrial nations and the International Monetary Fund (IMF). Government officials are hopeful that the IMF stamp of approval, along with membership, will bring a rapid flow of new credits.

Russia and other former Soviet republics are expected to gain membership in the IMF in late April. Russian officials believe it could lead as early as May to several billion dollars in IMF standby credits, those normally made available to members, as well as formation of a $4-billion to $6-billion fund to stabilize the value of the ruble.

Western economic observers here doubt that events will move that fast, suggesting that Russia may not see any real money till late July.

The team of young, radical reformers led by Finance Minister Yegor Gaidar is confident that they can reach the IMF targets, based on the performance of the economy during the first two months of their reform program. The austerity which has dug deep into the living standards of the Russian people includes tightening the supply of money and credit and drastically cutting Russia's huge budget deficit.

"IMF approval of the {Russian government economic} program is the key to the process," the Russian government's economic spokesman Alexey Ulykaev told the Monitor. The senior Russian official provided an advance look at the key goals of the plan. Among them are:

*Inflation: to reduce the inflation rate, which hit 350 percent after state-set prices were freed in January, to 1-3 percent a month by the last quarter of the year.

* Wages: to hold wage increases to not more than 70 percent of price increases. The government estimates a 600 percent rise in prices for 1992 with wages kept to a 400 percent increase. …

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