Oil cash seepage raises US aid doubts

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The Independent Online
BILLIONS of dollars of Russian oil revenues have disappeared, creating serious doubts in the United States about the usefulness of giving more aid to prop up the Russian economy, according to World Bank sources.

The World Bank in Washington is preparing a report on the skimming off of Russia's hard currency revenues. The money is alleged to have ended up in foreign bank accounts maintained by top Russian officials. The total unaccounted for may exceed the amount Russia received in foreign aid in 1992.

The discovery comes at an embarrassing moment for President Bill Clinton, who is trying to persuade the US Congress and other industrialised countries to increase assistance to Russia in support of Boris Yeltsin. 'There is going to be a lot of reluctance on the part of donors to get stuck in, if they think the money is all going out the back door,' one US aid official said.

Matthew Sagers, of PlanEcon Inc, consultants who specialise in the Russian economy, says that in the first nine months of last year, 15 million tons more oil left the country than was recorded in the official figures. The extra oil was worth dollars 2.2bn ( pounds 1.5bn), he claimed. Mr Sagers said the money paid for the oil went into private bank accounts abroad, where it remained under the control of senior oil industry officials.

Mr Yeltsin warned the West this month that 'without direct financial help, we could be on the edge of the abyss'. But aid officials say the real problem is the Russian government's loss of control over its own hard currency revenues and inability to reverse the drop in its oil output.

The US is paying only dollars 417m to Russia this year. It hopes that other Group of Seven states will raise their contributions.