Russia `conned the West out of $20bn'

RUSSIA "TRICKED" $20bn (pounds 12bn) of loans out of the international community by concealing the scale of its economic problems, says the man who spearheaded its efforts to become a market economy.

Anatoly Chubais, until recently Boris Yeltsin's chief international financial negotiator, told Kommersant newspaper that the deception was requiredto stave off economic collapse.

His revelations coincided with a report from a ratings agency, which said that Russia may become the largest single credit loss ever suffered by the global banking system.

Fitch IBCA in London concluded that up to $100bn would have to be written off - nearly six times the $16.6bn lost in 1990 during the Mexican fiscal crisis.

Mr Chubais, a former chief-of-staff to Mr Yeltsin and architect of the privatisation drive, said the economy would have crumbled in the Spring."The financial institutions understand, despite the fact that we conned them out of $20bn, that we had no other way out."

In July, Russia secured a $23bn IMF-led loan, but this failed to prevent the collapse of the rouble, that led to a still unresolved political crisis in which Mr Yeltsin is at loggerheads with the State Duma over his choice of prime minister.

Moscow's decision to devalue - only a few days after Mr Yeltsin had vowed to do the opposite - caused deep anger in the West, both politically and among the commercial investors who are reeling from the fall-out.

There has been concern in the IMF, World Bank and elsewhere over Moscow's plans to print money before pegging the rouble to the dollar, an approach widely expected to fuel Russia's rampant inflation.

Many of the West's worries about Russia hinge on the future role in government of the resurgent Communists, led by Gennady Zyuganov.

The Communists, the largest of the array of forces ranged against the Kremlin, have finally acquired real bargaining power. And, speaking to selected foreign correspondents yesterday, Mr Zyuganov clearly knew it.

He talked airily about the importance of the multi-party system, investment, free speech, good relations with Europe, mixed property ownership. What Russia needed was a "left and centre government which will enjoy the support of the maj "We don't want power for ourselves because we don't consider that right under the circumstances," he said.

There was little trace of the other Gennady Zyuganov, the author of A Word to the People, the manifesto of the men behind the failed hardline coup against Mikhail Gorbachev in August 1991.

Nor was there any sign of the conspiracy theorist who believes that the West is plotting to create a "New World Order", or the nostalgic Soviet who remains silent about Stalin's crimes and enthusiastically praises the dictator's industrial triumphs. Yet there are also limits to his negotiating muscle, and he also knows that.

It is impossible for Mr Zyuganov to strike a deal with a Kremlin in which Viktor Chernomyrdin becomes premier. Such a cave-in would threaten his position as leader among the deeply divided ranks of his coalition of forces.

He also knows that if Mr Yeltsin refuses to budge, and the Duma is dissolved after rejecting the hapless acting premier for a third time, there is no guarantee that the Communists will benefit.

Thus, Mr Zyuganov and his colleagues have been willing to go to surprising lengths to get a deal - short of endorsing Mr Chernomyrdin. Their list of compromise candidates for prime minister includes Yevgeny Primakov, a former ally of Mikhail Gorbachev, who is loathed by many on the left who accuse him of destroying the Soviet Union. The Foreign Minister is "educated and experienced," said Mr Zyuganov yesterday. He was as complimentary about another anti-Communist, Yuri Luzhkov, the nationalist mayor of Moscow.

At bottom, Mr Zyuganov is a deal-maker. Although he boasts about his willingness to lead "massive protest actions", his impulses are to strike a bargain which gives the legislature more powers, and saves the Duma from dismissal.

Start your day with The Independent, sign up for daily news emails
News
Lois Pryce... Life Without a Postcode. Lois lives on a boat with her husband.. Registering to vote in the election has prooved to be very difficult without a fixed residential post code. (David Sandison)
newsHow living on a houseboat meant I didn't officially 'exist'
Arts and Entertainment
Cassetteboy's latest video is called Emperor's New Clothes rap
videoThe political parody genius duo strike again with new video
Sport
Steven Fletcher scores the second goal for Scotland
cricketBut they have to bounce back to beat Gibraltar in Euro 2016 qualifier
News
news
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Junior Web Designer - Client Liaison

£6 per hour: Recruitment Genius: This is an exciting opportunity to join a gro...

Recruitment Genius: Service Delivery Manager

Negotiable: Recruitment Genius: A Service Delivery Manager is required to join...

Recruitment Genius: Massage Therapist / Sports Therapist

£12000 - £24000 per annum: Recruitment Genius: A opportunity has arisen for a ...

Ashdown Group: Practice Accountant - Bournemouth - £38,000

£32000 - £38000 per annum: Ashdown Group: A successful accountancy practice in...

Day In a Page

Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
How to make your own Easter egg: Willie Harcourt-Cooze shares his chocolate recipes

How to make your own Easter egg

Willie Harcourt-Cooze talks about his love affair with 'cacao' - and creates an Easter egg especially for The Independent on Sunday
Bill Granger recipes: Our chef declares barbecue season open with his twist on a tradtional Easter Sunday lamb lunch

Bill Granger's twist on Easter Sunday lunch

Next weekend, our chef plans to return to his Aussie roots by firing up the barbecue
Joe Marler: 'It's the way I think the game should be played'

Joe Marler: 'It's the way I think the game should be played'

The England prop relives the highs and lows of last Saturday's remarkable afternoon of Six Nations rugby
Cricket World Cup 2015: Has the success of the tournament spelt the end for Test matches?

Cricket World Cup 2015

Has the success of the tournament spelt the end for Test matches?
The Last Word: Justin Gatlin knows the price of everything, the value of nothing

Michael Calvin's Last Word

Justin Gatlin knows the price of everything, the value of nothing