Tough anti-crisis plan targets tax
Russia yesterday put the finishing touches to a tough anti-crisis economic plan aimed at pre-empting further danger of economic collapse.
Russian Prime Minister Sergei Kiriyenko presented the plan to President Boris Yeltsin in what analysts expect to be the toughest measures so far.
It aims to tackle head-on the potentially crippling level of tax revenues earned by the government, which are dangerously low due to poor methods of tax collection.
'In essence, a country cannot live if it does not collect taxes and cannot spend more than it raises through taxes,' Mr Kiriyenko said.
If successful, Mr Kiriyenko is hopeful that a long-promised US$15 billion facility from the International Monetary Fund will not have to be used.
Russia is seeking to ensure that it does not again experience the market turmoil that has gripped Asia for almost a year and which hit Russia briefly this month, forcing the central bank to raise interest rates for one day by 150 percentage points.
Yesterday an IMF team arrived in Moscow to review the new economic measures and the reforms that have been carried out.
Mr Kiriyenko hopes the $15 billion IMF credit available through its Supplemental Reserve Facility will become an emergency back up.
Importantly the existence of the credit - whether it is used or not - is widely acknowledged by analysts as being enough to send a positive signal to the markets.
'We re only talking about stabilisation resources for the central bank,' Mr Kiriyenko said of the credit.
'This will boost the reliability of the rouble and allow for tougher defence against any speculative attacks.' Mr Kiriyenko said the anti-crisis plan had been endorsed by Mr Yeltsin. His support is vital for the reform measures to get off the ground.
There is also an important safety net incorporated into the measures to guard against undue hardship to the poorest sections of the Russian population.
Russia is plagued by demonstrations from unpaid workers - particularly miners - who have disrupted transport links in protest over non-payment of wages.
Mr Kiriyenko still has to win the support of the Duma, the Russian parliament, which is dominated by the government's main opposition parties and whose support is vital for certain sections of the plan to be implemented.