Who Owes Moscow What?
The Russian PM, Viktor Chernomyrdin, is in Vietnam for talks concentrating
mainly on Vietnamese debts to Moscow built up in the Soviet period; there is
disagreement exactly how much Vietnam owes. How big are the debts that
Moscow's former allies still owe, and what hope has Russia of getting them
back? Here's BBC regional analyst Malcolm Haslett:
Russia claims that it is owed almost 200 billion dollars by foreign
countries, mostly by close ideological allies from the Soviet period. And it
wants as much of the money back as it possibly can. The largest debtors are,
according to Russian sources, Cuba - which owes almost a fifth of the total
debt, Mongolia - which owes more than 10%, and Vietnam, which owes just
slightly less. India, Syria and Afghanistan are next on the list.
To help it pull in some of the debts incurred in recent decades Russia in
September became a member of the so-called Paris Club of creditor nations.
The problem is that most of the debtor countries are not in a position to
pay Russia back what they owe. Most of them are poor countries, which were
helped by the Soviet Union for political rather than commercial reasons. A
lot of the money went on building up military capabilities - especially in
the case of Vietnam during North Vietnam's long war with the United States.
And the aid that did go to the Soviet Union's allies for economic purposes
was not, in the view of western specialists, invested very wisely. There was
a tendency to go for rather grandiose, heavy industry projects which were
not always successful.
The Vietnamese economy, however, has picked up rapidly in recent years as
its government, though still communist, has opted for market-oriented
economics. It is one of those countries which is in a position to pay back
at least some of the debts it owes. But there's a problem. The rouble has
declined drastically in value since the heyday of the Soviet Union. It used
to have parity with the British pound, but now a pound buys roughly 10,000
roubles. The Vietnamese say the old rate was artificially high, and that the
Russian estimate that the debt is in the region of $17 billion is just
unrealistic. But the Russians complain that to calculate the debt at current
rates of exchange is also highly misleading, and would cheat Russia of the
real value of the debt.
Mr Chernomyrdin has indicated that the two sides are close to announcing an
agreement on what the sum should be. That is at least a start, from the
Russian point of view. Moscow will not want, however, to press the
Vietnamese too hard on repayment. There's still a lot of residual good will
in Vietnam towards Russia for its past support, and the present government -
though it has shed the ideological trappings of communism - does not want to
lose that good will. Asia is a region which Moscow is currently wooing in
its attempt to re-establish itself as a major international power. President
Yeltsin has recently met the Japanese and Chinese leaders, and is due to go
to India soon. Mr Yeltsin is keen to support his active and enterprising
foreign minister, Yevgeni Primakov, in his efforts to counter the United
States' current domination of world affairs, and build what the Russians
call a "multi-polar world".
BBC - Nov 24, 1997
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