Moscow Wants a New Deal

The West fears hyperinflation as Primakov talks reform but plans to print new rubles.

By Tony Karon Tuesday, Sept. 15, 1998
    • MOSCOW: Russia's new leaders may want a new deal from the international financial community, but they're going about getting it in an unusual way. Prime Minister Yevgeny Primakov met Tuesday with IMF representatives to reassure them of Russia's commitment to reform at the same time that his central bank chief Viktor Gerashchenko called for the printing of new rubles to pay back wages and pensions. "That announcement is unlikely to persuade the IMF to release bailout funds," says TIME Moscow correspondent Andrew Meier. "But Primakov is probably looking beyond the current arrangement with the IMF toward some kind of international supersummit on Russia."

    Primakov's public statements suggest that he wants to combine reform measures with policies designed to kick-start moribund industries and protect Russians from escalating poverty. Western bankers, however, fear that new rubles will plunge the country back into catastrophic hyperinflation. Moscow may be gambling that President Clinton's emphasis, in his Monday speech , on the need to stimulate growth in failing economies may signal that the West is ready to renegotiate the terms of Russian reform.