Russia news - loans & war

Henry C.K. Liu hliu at mindspring.com
Mon Mar 29 22:52:38 PST 1999


Russia may very well still default, regardless of Kosovo. But a Russian default has no real global impact because the Russian economy is very small in global terms. Also, the Yeltsin government is being popped up by the IMF and the G7. Yeltsin will fall if his anemic economic plan fails. For this reason, Yeltsin will not act on Kosovo nor will he default if he can help it. Russia can only act on Kosovo after Yeltsin falls. Russian could break the deal with the US in non-proliferation and arms embargo. This will give Russia quick cash. The IMF package amounts to $4.8 billion to be released in 4 equal tranches with harsh conditionalities. A single B2 costs $3 billion. Russia can sell $5 billion of arms within a month from its ready inventory. But if Russia does that, $5 billion will not solve its problems. Russian strategy would have to turn East from its traditional and current Western orientation (since Peter the Great). It is a strategy that Russia may not be prepared to undertake yet as long as it still has other options. The latest poll yesterday showed that 55% of Russians think Kosovo will lead to a world war. Clinton poll rating dropped from 69% to 55% yesterday. American objective in Kososvo has shifted in the last few day. The consensus from the American establishment is now focused on preserving American credibility: once we begin, we must win as imperative for the only superpower left, whatever it takes. American ground troops will be sent in about a month. The figure floating around is 200,000 troops to handle 40,000 Serbs. Based on historical data on casualty suffered by the Nazis in Yugoslavia, Clinton is going to have to face some very difficult decisions very soon. Can Clinton survive casulty reports of 100 per week, or even 10 per week?

Henry C.K. Liu

michael at ecst.csuchico.edu wrote:


> If Russia really wanted the US to stop bombing, couldn't they have
> threatened to default?
> --
> Michael Perelman
> Economics Department
> California State University
> Chico, CA 95929
>
> Tel. 530-898-5321
> E-Mail michael at ecst.csuchico.edu



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