Board receives report on Russian program; structural benchmarks remain to be met

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"We have been examining the progress made by Russia in the implementation of its economic program," Camdessus said. "Important progress has been made on the macroeconomic side. In particular, program expectations have been exceeded regarding economic growth, the containment of inflation, the fiscal balance, and international reserves.

"On the structural side, there has also been some progress. However, a number of structural benchmarks set for end-September 1999 remain to be met. When these remaining issues have been satisfactorily resolved, I expect to recommend completion of the review to the Executive Board," he said.

The structural benchmarks for end-September 1999 that remain to be completed are items 4, 5, 6, 8, 9 (see below), based on Table 3 of Russia's Letter of Intent, released on July 13 (http://www.imf.org/external/np/loi/ 1999/071399.HTM).

Structural benchmarks

1. Implement a system of preapproval of all federal contracts; all obligations lacking such approval will be declared invalid. This preapproval will rely on a reporting system monitoring the amount of registered contracts against budget limits on an ongoing basis, with all contracts that exceed federal budget spending limits being denied.

2. Verify and restructure all budgetary arrears from previous years.

3. Submit amendments to the Duma on the Law on Banks and Banking to require lending institutions to make annual public disclosure of banks' key financial indicators, such as capital adequacy ratios and provisions against bad assets; income statements to be introduced by December 31, 1999, for fiscal year 1999; to have annual accounts prepared and audited by a qualified firm; and to publish quarterly reports. *4. Increase cash collection rates for electric power, district heating, and natural gas to 35 percent and for freight service provided by the railways, increase cash collection rate to 60 percent.

*5. Pass amendments to the Law on Insolvency...