It is well-known that the liberalization of the oil-export regime has become the main condition that must be satisfied before Russia can be granted $7.5 billion in international credits.
However, the so-called "front-liners," the red directors and regional authorities have opposed the lifting of export quotas with admirable tenacity. They have been joined by the Foreign Trade Ministry, which sees its corporate interest in maintaining the quota system.
In the last three years, the government promised three times to lift restrictions on energy exports, the first time as early as November 1991. However, each time the deadline approached for implementing the promise, thousands of "convincing" reasons why this should not be done appeared and liberalization was put off.
The final stage of the struggle took the form of a political scandal. General Alexander Korzhakov -- who, although formally simply the president's chief of security, is an extremely influential person in the Kremlin today -- wrote an official letter in which he advocated strict government control over the oil sector. He literally demanded that Chernomyrdin safeguard the domestic energy industry from "foreign influence," which amounts to "protecting" it from credits and investment.
The security chief's order to the prime minister was leaked to the press and a scandal ensued. Commentators began asking, "who is ruling Russia -- Yeltsin, Chernomyrdin or Korzhakov?" The question became even more urgent when it became known that Korzhakov had sent his "instructive" opinions to other economic ministries as well.
In short, despite powerful pressure defending export quotas, supporters of liberalization managed to convince Chernomyrdin to sign order 144. First Deputy Prime Minister Anatoly Chubais nearly had to celebrate New Year's in Chernomyrdin's office, emerging with the signed document only at 10:00 P.M. This order would seem to indicate that security generals have not taken complete control of the Russian government.
According to the old system that existed until Jan. 1, any state-owned or semi-state owned oil exporters paid either a very low duty or none at all. In exchange, the government was able to buy oil from them for state needs at reduced prices. Of course, the existence of dual pricing together with the ability of bureaucrats to determine quotas and export privileges created fertile grounds for corruption.
The new document eliminates the quota system and establishes as single, consistent duty of 23 ecus per ton for all oil exports. This should be enough to quickly bring domestic energy prices to world levels. In addition, a protocol to the order underscores that all exporters will have equal access to rail and port facilities.
Now, though, when the main economic obstacle to foreign aid has been overcome, a new obstacle -- the war in Chechnya -- has arisen. At the beginning of next week, a working group of the International Monetary Fund will arrive in Moscow. Then we will learn the consequences of this new obstacle.
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