Russia's $22 Billion Debate

The Russian Duma wrangled with the Yeltsin government Thursday, reports CBS News Senior European Correspondent Tom Fenton. The battle this time is over the reforms the International Monetary Fund (IMF) is demanding as the price for its $22 billion bailout package.
The Kremlin has promised the IMF to slash government spending by a third, to improve tax collection and to crack down on corruption. However, the Russian government has made those promises before.

Opposition legislators question whether Yeltsin's administration will again squander the money or actually carry out the difficult, unpopular reforms.

Cutting the budget means firing state employees. Tax reform would require the government to actually collect taxes from corporations and individual Russians. Nobody wants to pay taxes, and, in Russia, almost nobody does.

Russia's new chief tax collector has already started the crackdown. He threatened to seize the property of the world's largest natural gas company, Gazprom, which also happens to be the nation's biggest tax deadbeat. He has also targeted 100 of Russia's most prominent individual tax evaders.

There's no question that Russia needs the money. The government is almost bankrupt, and if it doesn't beef up its cash reserves, the value of the ruble will tumble. That would throw the already shaky economy into a tailspin.

It's not as if times aren't already hard enough. Striking coal miners have been picketing government offices for weeks and have shut down part of the Trans-Siberian Railroad.

State employees and pensioners, who haven't seen a dime from the government in months, are calling for Yeltsin's impeachment. If the economy gets any worse, Russia's cash crisis could turn into a political nightmare.

Reported by Tom Fenton
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