MOSCOW (AP) -- Russian leaders met Wednesday with the head of the International Monetary Fund, who gave no sign he was prepared to release the frozen loans the country so badly needs.
Michel Camdessus met for a second day with Prime Minister Yevgeny Primakov and praised Russia's "pragmatic" course in dealing with the country's economic crisis. But he said an IMF team would have to return to Russia next month for further negotiations on the loan installments."We are hoping 1999 will be excellent for cooperation between Russia and the IMF," Camdessus said.
The stakes are high: Russia owes billions of dollars to workers, pensioners and foreign creditors and wants the IMF to provide new installments on a $22.6 billion bailout package. The loans were negotiated this summer, but have been on hold since the latest economic crisis hit in August.
The IMF has been demanding a realistic recovery plan from the Russian government and has so far been unimpressed with Moscow's efforts. Primakov sought to lower expectations even before today's talks began.
"Don't measure the significance of Camdessus' visit by how much money he brought," Primakov said. "He has come with an attache case containing documents, not cash. You shouldn't think that the question of giving money to Russia will be solved now."
Speaking to reporters after the talks, the Russian prime minister said Russia expected advice, not money, from Camdessus.
"We haven't considered specific credits, the size and timing of their release," Primakov said. "It was important for us that the fund chief come to Moscow and analyze and assess the situation."
The IMF put the loan installments on hold after Russia's government devalued the ruble and defaulted on some of its debts in August. Primakov's government has moved cautiously, refraining from any radical measures and hoping the IMF and other lenders will offer help.
The government delayed a debate this week on next year's budget as it struggles to find ways to come up with enough money to meet expenses.
While the Cabinet insisted the delay was not connected with Camdessus' visit, Russian media have suggested the government put off action on the budget because it still holds out hope for receiving IMF money. The latest budget draft assumes Russia will receive the IMF loan.
If the Russian government doesn't receive foreign help soon, it will be forced to start printing money, which would drive up inflation and further imperil Russia's fragile economy, Primakov and other officials have warned.
An IMF mission left town last week saying the government's revenue forecast for next year was overly optimistic. It also disapproved of the government's intention to lower taxes, offer subsidies to ailing industries and increase state regulation of the economy.
Primakov played down the differences today, saying he and Camdessus agreed some state intervention in the economy may be positive, provided it doesn't prevent the development of a free-market.
"We will find a common approach, probably not immediately, but we will," Primakov said.
Russia has so far received only about $5 billion of the bailout package, which also involves the World Bank and the Japanese government.
Meanwhile, Central Bank chairman Viktor Geraschenko outlined the country's economic woes in an address today to parliament's upper house, the Federation Council.
Russia's economy has shrunk 5 percent to 6 percent compared to a year ago and inflation is up an estimated 70 percent compared to last December, he said. The government hopes to limit inflation to 30 percent next year, he said.