WASHINGTON -- The International Monetary Fund and Russia are on the verge of agreeing on an economic program for this year and early 1999 despite the current political instability, the IMF's managing director said Thursday.
"We will have prepared a program for this year and beginning of next which will be signed, I hope, in the next few days," Michel Camdessus told an audience at the National Press Club in Washington.
The comments by the managing director were a clear sign that negotiations between the IMF and Russia were on track and nearing completion despite President Boris Yeltsin's abrupt sacking of the entire government March 23.
The signing of Russia's "statement of economic policies," which outlines the IMF program, is a critical step for Moscow. It should pave the way for the IMF board to approve the release of the next $670 million payout under the fund's $9.2 billion four-year loan for Russia.
The IMF is backing Russia's transformation to capitalism from communism with the large financial package.
First signed in March 1996, the loan has been extended for an extra year and now it is not due to expire until 2000.
As part of the economic reform program underpinning the loan, Russia and the IMF agree on annual statements outlining policy commitments for the coming year.
An IMF spokeswoman in Washington could not say when the board would take a vote on the next loan payout.
U.S. and IMF officials had expressed concern Russia may lose time reforming the economy as a result of the political uncertainty following the government's dismissal.
Yeltsin dismissed his veteran Prime Minister Viktor Chernomyrdin and the entire government, saying he wanted to preserve its reformist course but needed a more dynamic team.
Russia's old team of reformers, led by first deputy prime ministers Anatoly Chubais and Boris Nemtsov, had played a key role in previous rounds of talks with IMF.
Just last week, an IMF official in Washington said the change in Russia's government would probably delay the signing of the 1998 agreement. The IMF, worried about dismal Russian tax collection, has already delayed several payments of the loan.
But Camdessus played down these concerns, saying he was unfazed by the shakeup.
"He's more than ever committed to reform," Camdessus said, referring to Yeltsin. Of acting Prime Minister Sergei Kiriyenko, Yeltsin's choice as government head, Camdessus said, "He's a man who is strongly committed to reform."
"You have still reforms and reformers at work in Russia," he added.
The Kremlin has made clear that economic policies would follow the same reformist course as previously, and Yeltsin has stated he wanted his government to attack problems more energetically.
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