Russia's dollars 142bn loans to Third World may be lost

Click to follow
The Independent Online
WASHINGTON - Russia revealed yesterday that it was owed dollars 142bn (pounds 83bn) in foreign debts by Third World countries, much of which is never likely to be repaid, writes Peter Torday.

The disclosure was made by Piotr Aven, Russia's minister for foreign economic relations, attending the annual meetings of the International Monetary Fund.

Mr Aven did not make clear how the debts were contracted or translated or whether, for instance, they were arbitrary values put on weapons and oil sales by the former Soviet Union.

Mr Aven did say that Cuba owed some dollars 28bn but had rebuffed Russian requests for discussions. 'Cuba said it doesn't want discussions, ever,' Mr Aven said. Iraq owed some dollars 10bn, presumably for weapons deliveries, but Mr Aven indicated that little of this money was likely to be recovered. However, the Russian minister said India, which owed about dollars 10bn, was a more promising case.

The Russian delegation said it was trying to finalise talks on rescheduling foreign debts of some dollars 70bn owed by the former Soviet Union. Russia, which owes the bulk of the debts, is moving to take complete responsibility for negotiations from the other republics. Backed by the US, it is publicly seeking a repayments delay of 15 years, but in private concedes it would accept five years.

It is able to repay only dollars 2.5bn this year, far below Western demands on whatever basis the debt repayment schedule is calculated.

Germany, which is owed roughly half the Soviet debt total, is unwilling to allow a repayment delay of more than two years and urges more Western financial assistance rather than debt relief. But the US, with few debts owed by Russia, has little spare cash owing to its budget problems and accordingly prefers to free up finance for Russia through debt relief. Mr Aven said he hoped for a debt rescheduling accord by the end of October.

Russia is receiving dollars 18bn this year in grants, food aid and loans from the IMF and the World Bank. IMF officials believe a similar assistance package will be needed for 1993.

Comments