Chris Doss The Russia Journal ---------------------------- Putin says Russia will work with World Bank while refusing big loans
By VLADIMIR ISACHENKOV Associated Press Writer
MOSCOW (AP) - Despite Russia's policy of refusing to accept big loans from international financial institutions, President Vladimir Putin on Thursday pledged to continue cooperation with the World Bank on financial management and other policy issues.
"Relations between Russia and the World Bank have a good history ... and despite the fact that today we refuse taking big loans, we are quite interested in continuing joint work," Putin said after a meeting with World Bank President James Wolfensohn.
Under Putin, Russia has stopped accepting big loans from international lenders and sought to slash its foreign debt to lenders like the World Bank and International Monetary Fund, paying off dlrs 13 billion to dlrs 15 billion last year, according to the latest Russian government estimate.
The government says it was able to do this because of three successive years of economic growth, fueled by high world prices for oil, Russia's top commodity. Although growth slowed last fall, officials pledged to keep the economy growing by stimulating domestic demand.
"We are very impressed by the various reform measures and management measures which have been taken in this country and we want to be friends even if we cannot lend you money," said Wolfensohn.
Putin said Russia would still work with the World Bank on specific projects.
"Currently we are considering joint projects with the bank in the sphere of financial management and environmental protection which are very important for us," Putin said.
World Bank's loans for various projects in Russia would total dlrs 300 million to dlrs 500 million annually for the next three years, Deputy Prime Minister Viktor Khristenko told reporters after the talks.
One project envisages a dlrs 22-23-million World Bank loan to help make the Baikal Paper Mill environmentally safe, Khristenko said. He said that the loan would finance building of a closed water circulation system that would end dumping toxic waste into the lake, the world's largest reservoir of fresh water.
Russia inherited massive debt from the Soviet Union and racked up a large number of new debts itself, becoming one of the IMF's biggest borrowers in the 1990s. The World Bank alone had loaned Russia about dlrs 10 billion since 1992, Putin said.
Russia defaulted on international loan payments during the 1998 financial meltdown, but the budget situation has improved to the point that Putin declared Russia would not be accepting new loans and would try to make payments on existing debts ahead of schedule.
Russia's overall foreign debt stands at dlrs 132 billion to dlrs 134 billion, according to the latest Russian government estimate.