Rus News Journal

We now pay for omissions of the former governments

One month ago has published interview with and. An island of the president Vladimir Putin. That
  We now pay for omissions of the former governments
One month ago has published interview with and. An island of the president Vladimir Putin. That soon became with Putin, all know. Today we publish interview to the first vitse - prime minister MICHAEL KASYANOV, one of applicants on premerskoe an armchair in the new government. He has deserved Putin`s praise when has agreed with the London club about re-structuring of the Russian debts. In April - May of Russia the next large payments on an external debt are coming. How the government will pay, and a state debt Michael Kasyanov tells about the new concept of management to an observer to PETER - RUSHAJLO.

- this year Russia is coming considerable payments on an external debt, and a situation with external financing while the uncertain. Without credits of IMF we can manage?
- till now managed. However, we have a good help - credits of the World bank and the government of Japan. But there will be no drama if suddenly there will be no external sources, and, most likely, and happens in April, May, maybe, and in June. About an internal debt of speech in general is not present - on it we pay automatically. And repayment external too will not be the big problem. I even think that in May we will do without loans at the Central Bank. And for April we already all have balanced and have precisely decided that we will not occupy from the Central Bank. Though we can theoretically borrow at it to $1 mlrd without special harm for economy - these are results of our joint analysis from IMF.
- Differently, you are assured that without IMF credits this year Russia can pay off on external debts.
- theoretically it is possible. I think that it probably and practically. But it is impossible to be guided by it as on the most correct way. It is a correct way from the point of view of fast repayment of a debt. But from the point of view of the concept of development of the country and achievement of the purposes planned in macroeconomic sphere and in financing of social sphere, such succession of events it would be desirable to avoid. Budget incomes can be directed on the purpose of internal development, on social needs, consumer demand creation that is a growth source.
- if nevertheless IMF credits will not be, how it will be reflected in economic growth, social payments?
- I do not think that there will be a decrease in rates of increase. It is a question of a delay of the decision of some problems - for example, repayments of debts of former budgets " more likely; live money. First of all I mean debts for the executed and not paid defensive order, serious debts against regional budgets for the departmental habitation transferred to it.
- how many all - taki to us needs to be received for the account of external sources that nothing to reduce?
- in I quarter on external debts we have paid $2,4 billion In the second we will pay $3 more mlrd - again - taki without the aid of IMF. Till the end of the year it is necessary to pay $4,8 billion Thus at us very good primary proficiency of the budget at the expense of what we can cover approximately 2/ 3 obligations on a state debt. Means, from IMF $1,5 mlrd - two " are necessary; standard a tranche. If we do not receive them, government intentions on accounts payable repayment will not be completely realised. And their realisation is very important: it will improve a situation in the country, will raise level of a monetization of economy, will lower a share of the barter calculations budget default was which original cause.
- If to speak about the state external debt in general, what nearest plans of the government?
- our problem now - to finish the transaction with the London club. Then there will be very difficult negotiations with Parisian. They will carry politiko - economic character, and this question should be, of course, mentioned at a meeting of leaders the eights . We will ask our creditors to give us conditions, comparable with conditions on the London club. It would be desirable, that the transaction with the Parisian club has been finished till the end of the year - then with re-structuring of an external debt we would finish.
- when the exchange of debts of Russia to the London club on new eurobonds will begin?
- preparation of corresponding documents now comes to the end. I think, in two weeks all will be ready to start an exchange. By this time we, on - visible, will finish a choice of agents under the future promissory notes, namely the agent on an exchange and the fiscal agent through whom there will be payments to all holders of new papers. And in the end of May - the beginning of June we plan to begin this exchange already.
- who applies for performance of functions of agents?
- while I will not name concrete institutes, but, in general, their circle is narrow enough, as in the world of all some such global financial houses which professionally are engaged in similar transactions.
- and still, how many demands applicants have submitted?
- three demands for performance of functions of the agent on an exchange and three - the fiscal agent.
- if in the end of May the exchange when you plan it to finish will begin?
- certain term will be given. It will not be big - some weeks. More particularly we were not defined yet.
- the transaction will be recognised by taken place if on an exchange will agree not less than 85 % of investors. What chances of it?
is only formal restrictions. Russia has really the right to refuse the transaction at an exchange of debts for the sum less than $25 mlrd, and investors - if $19 billion will not be typed But personally we to refuse from what we do not gather. Besides, we are assured that the percent of the investors who have taken part in an exchange, will be very high.
- and what situation with an exchange vebovok ?
- the Exchange goes not so actively as it would be desirable. The matter is that we have not given concrete termination dates of an exchange, therefore investors do not hurry up to make decisions. Now obmeneno papers for the sum of $500 million from total amount $1300 million
- But many holders of papers have declared that on an exchange will not go and will have legal proceedings with the Ministry of Finance...
- while there is no concrete judgement on which the Ministry of Finance should pay on OVVZ.
- After end of negotiations with the London club in the market there will be new papers. Whether the state will work in the market of the debts? Perhaps, will start them to buy up?
- there is no necessity to begin them to buy up, for this purpose and re-structuring is spent. For buying up means are necessary. If they were, it would be not necessary to spend re-structuring, it would be necessary to pay simply in due time under the obligations.
- and if to enter the market with new loans and at their expense to repay the old?
is already from management area a debt portfolio. In the long term we, as well as other countries, will do it. When we will create the general control system of a debt, we will have possibilities regularly to enter the market and to borrow. On it it is necessary not less than two years. By then we will be engaged, of course, in management of a debt both in respect of a reshaping of the promissory notes, and in the management plan the risks connected with change of exchange rates, interest rates. At us in different currencies promissory notes, and sometimes it brings some additional expenses.
- as you consider, whether the separate state structure on management of a state debt is necessary to Russia?
- at the present stage it, probably, is not required. I think that is not required and in the future. However the good agent who will work in the market can be demanded and to carry out government commissions, to press buttons .
- What will be the status at this agent?
- here there can be different variants. It can be as though debt office, state. Not the ministry, of course, not a state institution, but institute belonging to the state which directly carries out tasks in view. Strategy is developed and the problem is put to achieve any purposes. And any more the Ministry of Finance daily makes decisions, and the managers sitting there, carry out these problems on behalf of the government. It is simple division which can perform commercial operations.
- the government promises to create for a long time the uniform concept of management of a state debt. When it will occur?
- this question in active study, but yet at the latest stage. Unfortunately, we have lagged behind with this process. However, it is not so strong, that it prevented to work to us. While management of a state debt still functions in two blocks: an external debt separately, internal - separately. But now at us the main task - to understand with an external debt. On the internal strategy of loans, or, say, the plan of loans that investors could feel comfortably themselves from the point of view of predictability of behaviour of the state is now developed. I think that by the end of April the Ministry of Finance declares key parametres of the loans till the end of 2000.
- what will be these parametres?
- It is a question of approximate terms of issue of various promissory notes, their volumes and repayment dates. On the basis of this data investors can easily calculate, what will be a profitableness curve, and to plan own investments. We want to let know to investors that we will declare the plans not from time to time - we will tell, one week prior to auction, - and in advance we will acquaint all with intentions of the Ministry of Finance.
- whether it is possible concrete to declare something already now?
- the Ministry of Finance will let out three-monthly, six-monthly and 12 - monthly papers. Now we also think, whether papers with intermediate terms are necessary, we will tell for nine months or on four - five. While it is not clear. Volumes of loans will be small - a maximum 40 mlrd rbl. Volume of each release - 2,5 - 3 mlrd We borrow rbl. not for the sake of a budgeted deficit covering - I quarter is executed with the general proficiency of 0,7 % of gross national product and with primary proficiency of 3,5 % of gross national product. Therefore for the budget loans do not play home market of a serious role. However it is an important element from the point of view carrying out credit - the monetary policy.
- you have told that while internal and external debts are considered separately...
- it is impossible to tell that absolutely separately. I as the Minister of Finance, and my assistants in this question we are engaged regularly. So coordination full, but only while at level of a management of the ministry, instead of at level of an average link. Two departments of the Ministry of Finance - an internal and external debt - on - former exist separately. I think that by the end of the year there will be a question on some structural changes in the Ministry of Finance that the debt system functioned as a unit. While the situation in the market yet does not press on us how it was in 1997 - 1998, and we have possibility to prepare these changes in more or less quiet conditions.
- From the point of view of the general control system of a state debt what will be priorities at realisation of new loans?
- internal loans as it and should be will be priority. Today still the postcrisis situation, and participants of the financial market have no possibility to put up money for long term. We should restore gradually their trust to the state and give them a tooling which would allow to operate better liquidity, instead of simply to hold money in three-monthly deposits and in short papers and to it to be content. Participants of the market should have possibility to enclose the means which have been not involved at present in real sector, in the state papers. Therefore we, probably, will give some tax privileges to those who holds papers without sale, say, over a year.
- you consider, what it is better, than to occupy abroad?
- yes because it is a debt in national currency. Once again I will underline: These loans - not on budgeted deficit financing. The deficiency covering - too an important thing, but now it is not for us a main objective of loans. There should be absolutely accurate reference points of profitableness for all market. And the main reference point is the state, its risks. According to an estimation of risk of the state the risk of any other borrower depending on its financial condition or circumstances another aggravating or softening its position is estimated. It is clear that the best borrower on poor loans is all - taki the state.
- what for then IMF credits if in the internal Russian market the state now can borrow money practically under the zero rate of profitableness in general are necessary?
- in home market there are no long loans. Long papers have appeared basically during re-structuring of state credit obligations, instead of as a result of normal sale at auction.
- well and if perezanimat each three months?
- Basically such mode of loans is too risky, in what we had possibility to be convinced in 1998. But all depends on volumes. If instead of regular refinancing these bonds can be at any moment extinguished, such way of loans is harmless. Besides at the moment we help the Central Bank to carry out sterilisation of superfluous liquidity. So now the government pays off for the failures on attraction of means in real sector. Superfluous means which are in the financial market and do not go to economy, - the certificate of that the government for all previous years has not managed to create an attractive investment climate. On the contrary, all conditions for the financial market - money have been created and turned there. Participants of the market do not have understanding of necessity to invest in economy.
- what for them to encourage, letting out new state papers?
- we encourage nobody, letting out new papers. We only satisfy a pressing need in investment superfluous at present liquidities. And by that we eliminate threat for stability of national currency. We perfectly realise that work on creation of an investment climate is not the single action, and a series of the steps directed on elimination of misunderstanding, money interfering arrival to real sector of economy. Before there was a scheme when financed the industry basically big banks, and that it concerned mainly the enterprises under control to them. Crediting of the usual enterprise on - former extremely risky from - for imbalance of laws. In particular, the normal law on the bankruptcy, reliably protecting the rights of creditors and investors, and etc. Absence of it and other laws - omission of the former governments is necessary. And we now pay for it rather high price.