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IMF Team Leaves Russia After Talks

March 20, 1999

MOSCOW (AP) _ A team from the International Monetary Fund left Moscow on Saturday after surveying Russia’s economic situation in advance of Prime Minister Yevgeny Primakov’s trip to Washington to press for more IMF loans.

Finance Minister Mikhail Zadornov, who is to accompany Primakov on the three-day trip that starts Tuesday, described weeklong talks with the visiting team as difficult.

And First Deputy Prime Minister Yuri Maslyukov, who is in charge of Russia’s economic policy, said that despite headway made in the talks, ``there are a few very difficult points,″ the Interfax news agency reported.

Russia has been trying to persuade the IMF that its finances are well enough to merit resumption of loans that were frozen after the government defaulted on some debts and devalued the ruble last August.

But loan talks have been stalled for months because the IMF disapproves of the government’s desire to cut some taxes, among other things.

Primakov signed a decree Saturday increasing wages for state workers as of April 1, the ITAR-Tass news agency reported. The report did not say what the new pay scale would be.

Government workers’ wages have not kept up with inflation since the government stopped propping up the ruble in August.

It is unclear whether the government will be able to pay the new rates, particularly because it already owes an estimated $500 million to state workers and pensioners and hasn’t had the money to pay salaries and pensions on time for years.

That revenue shortfall was exacerbated by the August financial crisis, as well as by the global crisis in emerging markets and a drop in world oil prices.

Also Saturday, Primakov met with top officials to discuss cutting expenditures on federal bureaucracy in Russia’s regions.

Primakov has said the government employs 300,000 people in the regions and doesn’t have the money to pay for all of them. Government bureaucracy in Russia has been bloated for years, but officials have done little to trim it.

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