Senior members of the Russian parliament and their staff advisors have not seen the text of the Russian agreement with the International Monetary Fund (IMF), although the government has made commitments which require parliamentary approval.
Interviews with deputies and officials of the Supreme Soviet this week also indicate that some of the provisions of IMF agreement may have infringed on parliament’s authority.
The Moscow Times has been told that although the agreement texts were despatched to the IMF between July 5 and July 15, they were not disclosed to the Speaker of the Supreme Soviet, Ruslan Khasbulatov, the secretariat of the presidium, which
is the executive agency of parliament, or the Chairman of the Supreme Soviet’s Committee on Budget, Planning, Taxation and
Prices, Aleksandr Pochinok.
Parliament was in session during that period. It is now in summer recess, and will resume again in a fortnight.
Officials on the staff of Speaker Khasbulatov told the Moscow Times they have not seen the IMF agreement, which was signed by acting Prime Minister, Yegor Gaidar, and the former Chairman of the Central Bank, Georgiy Matyukhin. The Supreme Soviet forced Matyukhin’s resignation on July 16.
His replacement, Viktor Geraschenko, wrote the IMF a few days after his appointment, saying he stood by the commitments which had been made by his precedessor. Last week he said publicly that he favoured renegotiation of the IMF agreement.
Mr Geraschenko met early this week with a delegation of IMF officials headed by Deputy Director, Guy Erb. Erb said after the meeting: “During my last visit in December, it was not possible to visit the central bank at all Now I engaged in a series of discussions with central bank and ministerial representatives together in a very good and positive environment.”
Erb and other IMF officials confirmed that they and Geraschenko agreed on a policy of limiting the expansion of credit to Russia’s ailing enterprises. “I did not find disagreement on this,” Erb said. “I think it” is the clear aim of the central bank and ministries that pushing credit policy and government spending is not the way to create the conditions for economic growth.”
IMF officials told the Moscow Times there was no discussion between Erb and Geraschenko on whether the government intends to draw the first $1 billion credit which was approved by the IMF on August 5.
Geraschenko indicated in remarks to parliamentary officials, following his talks with Erb, that he regards the IMF policy proposals much more negatively than Erb reported from their conversation.
IMF officials also say it is the Russian government’s right to draw on the first tranche, but if it decides not to draw, and over the few months not to meet the targets set out in the IMF agreement, then negotiations will be needed to explain why.
An IMF official told the Moscow Times that in agreements with the Fund, it is the standard practice of governments to include a clause stating that the economic targets and policy commitments it is offering will be proposed to parliament and implementation will be subject to parliamentary approval.
There is no provision of this kind in the text of the Russian government’s agreement with the IMF.
Speaker Khasbulatov is likely to arrange for a panel of economic experts to evaluate the terms of the agreement, before deciding on his response.
Parliamentary officials and deputies say they are considering committee hearings on the IMF terms. The Chairmn of parliament’s Constitutional Commission, Oleg Rumyantsev, told the Moscow Times he supports the idea of hearings.
Parliamentary deputies and officials express particular concern at promises Gaidar made to the IMF to make cuts in expenditure already voted by the Supreme Soviet.
According to the text of a July 5 letter from Gaidar to Michel Camdessus, the IMF Managing Director, the government has committed itself to “sequestering of 20 percent of republican budgetary expenditure in unprotected categories, which should yield budgetary savings of Rbs 200 billion in the second half of 1992.”
The government’s Economic Memorandum to the IMF claims that sequestration of authorized budget funds, to avoid spending what the Supreme Soviet has voted, will be “in accordance with the Law on Budgetary Procedures.” The Memorandum suggests that spending on maintenance and capital expenditure will be targeted by this method.
Parliamentary officials say they have not been informed of the sequestration proposal, and doubt the government has the legal power to implement to implement it.
They also express concern at a commitment by Gaidar to take “additional fiscal measures that would yield Rbs 440 billion in the second half of 1992”. Details were not provided in the main documents of agreement with the IMF.
Rumyantsev said he believes these cuts will be taken from provision the Supreme Soviet has made for the conversion of military-industrial enterprises.