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Russia will reportedly skip payment on massive debt

By JIM HEINTZ, Associated Press

MOSCOW (January 4, 2001 11:19 a.m. EST http://www.nandotimes.com) - Russia reportedly won't make its first-quarter payments this year on the billions of dollars of debt owed to nations known collectively as the Paris Club.

But the decision "does not mean and has nothing to do with a declaration of default," the Interfax news agency quoted Gennady Yezhov, spokesman for Finance Minister and Deputy Prime Minister Alexei Kudrin, as saying on Thursday.

"A decision on the former U.S.S.R.'s debts will be found after an International Monetary Fund mission comes to Moscow in late January or early February," he said.

Russia owes about $48 billion, racked up by the Soviet Union, to the Paris Club countries, a group of industrialized nations that includes the United States. The debt was defaulted on in the 1991 collapse of the Soviet Union and again in the August 1998 financial crisis when the ruble's value plunged.

But Russia's economy has shown signs of significant growth over the last year and the reason for the delayed payment was not announced. Yezhov could not be reached and the ministry said no one else could comment.

Russia owes about $3.5 billion in interest payments on the debt this year, and the missed first-quarter payment amounts to about $1.5 billion.

The Russian parliament passed a balanced budget for 2001, the country's first ever, and some analysts speculated that the missed payment reflected unwillingness to tamper with what was considered a historic achievement.

Russia's total foreign debt, including to the Paris Club, is about $148 billion. The huge amount is an impediment to the nation's development.

The IMF failed to reach an agreement with Russia last month on new loans.

http://www.nandotimes.com/noframes/story/0,2107,500296083-500471565-503191165-0,00.html

-- Martin Thompson (mthom1927@aol.com), January 04, 2001