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.

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
Friends is celebrating its 20th anniversary this year
tvSeries celebrates 20th anniversary
Sport
Yaya Touré (left) and Bayern Munich’s Spanish defender Juan Bernat
football
Life and Style
Jack Cooksey goes for the grand unveiling - moments before dropping his new iPhone 6 on the floor
iphone launch
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Life and Style
Customers look at the new iPhones on display at the launch of the new Apple iPhone 6 and iphone 6 plus at the Apple IFC store in Hong Kong
Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Sport
Wembley Stadium
footballNews follows deal with Germany
Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
Voices
voicesApple continually kill off smaller app developers, and that's no good for anyone
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Life and Style
life

News
ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Sport
Andros Townsend is challenged by Vladimir Volkov
football
Arts and Entertainment
Rapper Jay Z performs on the Pyramid Stage at Glastonbury in 2008
musicSinger sued over use of the single-syllable sample in 'Run This Town'
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

Nursery assistants required across Cambridgeshire

£21000 - £35000 per annum: Randstad Education Cambridge: Nursery assistants re...

SEN 1:1 Teacher

£120 - £130 per day: Randstad Education Chelmsford: Are you a qualified teache...

SEN Teachers and Support Staff

£50 - £130 per day: Randstad Education Chelmsford: Are you an SEN Teacher or L...

English and Media Teacher

£100 - £120 per day: Randstad Education Chelmsford: English & Media Teacher - ...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week