It’s not only the IMF that needs to be persuaded that things are getting better. Russians go to the polls in December to elect a new parliament and, notwithstanding its reported budget surplus, the Kremlin looks to be suffering a political deficit. It got more bad news Thursday as a new political alliance between presidential aspirant and Moscow mayor Yuri Luzhkov and a grouping of regional governors announced it had invited ousted prime minister Yevgeny Primakov to head its list of candidates. "The Kremlin is very threatened by Luzhkov’s new bloc, particularly if — as is expected — Primakov agrees to lead them in the election," says Meier. "Primakov right now leads all other politicians in the polls. Then again, in most polling the top choice remains ‘none of the above.’"
One thing you can say about the Kremlin — it hasn’t lost its sense of humor. Just when you thought Russia’s economy was down the toilet, the government on Thursday announced a $51 million budget surplus. Yes, surplus. That bit of statistical good news — which the government attributes to more efficient tax collection — happened to coincide, as good news usually does, with decisions by the IMF and other creditors to extend a little leeway on debt repayment. "Different ministries are already quarreling about how real the surplus is because the budget was calculated at a much higher ruble-to-dollar rate," says TIME Moscow correspondent Andrew Meier. "There certainly are some strong economic indicators on the positive side — exports are up, imports are down and industrial output is increasing. But the improvement in government revenues is mostly due to a rise in oil export earnings and tighter currency controls. And the economy remains as graft-riddled and barter-driven as ever."