HISTORY OF RELATIONS BETWEEN THE G-7 AND RUSSIAN FEDERATION

The G-7 includes the world's seven major industrialized nations Great Britain, Italy, Canada, the United States, France, Germany and Japan.

The G-7's London summit was held on July 14-16, 1991. USSR President, Mikhail Gorbachev, was invited to attend at the time. The summit adopted a plan for aiding the Soviet Union, granting it associated IMF and World-Bank membership; the plan also called for Western technical assistance in helping the Soviet military industrial complex to switch over to civilian production.

The G-7's ministers of finance conferred in Paris on August 30,1991, discussing financial and economic aid to the USSR. The G-7's financial experts held their conference in Dresden in mid-September 1991 to debate economic and humanitarian relief aid to the USSR.

The G-7's deputy ministers of finance met in Paris on November 68,1991 to agree on rendering financial aid to the USSR and on introducing a moratorium on Soviet external-debt payments.

The G-7's representatives met with former Soviet republics' heads of government in Moscow late in November 1991, signing a communique on deferring Soviet debts worth $3.6 billion and agreeing to set up an interstate committee to monitor compliance with debt-servicing operations.

The G-7's ministers of finance and heads of its central banks met on January 29, 1992 in Garden City, USA to discuss the principles of Russia's and other former Soviet republics' participation in the IMF.

The G-7's ministers of finance and heads of its central banks conferred in Washington D.C. on April 26,1992, with Russian Deputy Prime Minister, Yegor Gaidar, taking part in the talks. It was decided to furnish Russia with a $24-billion multilateral financial-aid package and allow further deferment of the Russian external debt-repayment plan.

The G-7 held its Munich summit on July 6-8, 1992, with its leaders meeting President Boris Yeltsin of the Russian Federation. The G-7 turned down US President George Bush's proposal to admit Russia as a fully fledged G-7 member. It was also decided to set aside $700 million for the modernization of Russian nuclear power plants, with the concluding economic declaration supporting the said cooperation strategy between the Russian Government and the IMF.

The G-7's ministers of finance and heads of its central banks conferred on September 19, 1992 in Washington D.C. The conference decided to set up a special group to render technical assistance to Russia.

The G-7's ministers of finance and heads of its central banks met on February 27, 1993 to discuss measures aimed at supporting Russia's transition to market economics.

The G-7's ministers of finance and foreign ministers conferred in Tokyo on April 14-15,1993. The meeting was attended by Russian foreign minister Andrei Kozyrev and Deputy Prime Minister, Boris Fedorov. It was decided to set aside an emergency aid package worth a total of $43.4 billion to Russia, including deferred Russian debts worth $15 billion. The conference supported the Russian reforms being implemented by President Boris Yeltsin.

The G-7's Tokyo summit was held on July 7-9, 1993. The summit decided to lift all restrictions on trade with Russia by the year 2003, with COCOM exports-control committee virtually ceasing to exist. It was also decided to furnish Russia with a $3-billion aid package with a view to facilitating the privatization and reorganization of its enterprises. The G-7 agreed to set up a support group in Moscow; this group will help implement Western aid programms on Russian territory.

The G-7's ministers of finance and heads of its central banks met in Kronberg, Germany on February 26-27, 1994, with the Russian delegation assuring those present that monthly inflation rates would be reduced from 20 - 7%.

The G-7 will hold its Naples, Italy summit on July 8-10, 1994. The summit will be attended by Russian President Boris Yeltsin.

G-7 AID TO RUSSIA

The G-7's ministers of finance and foreign ministers met in Tokyo on April 1993. It was decided to present Russia with a $43.4-billion aid package.

This aid package is being distributed in the following way:
All in all, $14.2 billion have been set aside to promote the Russian privatization process, streamline market mechanisms and infrastructure and facilitate the development of the nation's power industry and agricultural complex. The G-7 has set aside a total of $10.6 billion to date, including five billion in the form of export credits. Another five billion, or so, will be channelled into Russia by the end of the current calendar year. In addition, the World Bank will endorse additional loans worth $2.3 billion already in the near future.

The IMF and World Bank are channelling another $4.1 billion as part of the so-called "initial stabilization programme". Russia has already received about $3.5 billion. Another World-Bank loan will be approved in July.

The "complete stabilization programme" is virtually hanging in mid-air. As a matter of fact, the IMF has set aside just one billion dollars for that programme (out of a projected $4 billion). Russia still can't lay its hands on the promised $6-billion rouble-stabilization fund.

The remaining $15 billion are not made up of "live" money (hard cash); on the contrary, they consist of factoring operations, as regards the mammoth $83-billion Russian external debt. This sum includes $7.2 billion worth of deferred debts (as allowed by the Paris Club's June 1994 meeting). In exchange, Russia has agreed to pay out $3.04 billion as part of a debt-repayment/servicing plan, pertaining to all debts accumulated ever since January 1992.

Source: Russian Information Agency "Novosti"

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