Russia won't settle all Soviet debts in 2006 Russia Fin. Ministry
(RIA Novosti) - Russia will not be able to settle all its Soviet-era debts before the end of 2006, a deputy finance minister said Wednesday, reports Trend.
"We would like to settle all Soviet-era debts this year, but this seems to be impossible" Sergei Storchak said, adding that debt settlement with the Paris Club took too much time.
Russia has moved to clear its foreign debt using windfall revenues from oil exports, and it fully repaid its debt to the Paris Club of Creditor Nations, worth $23.7 billion, ahead of schedule August 18-21.
But Storchak said Russia could still pay its debt to Bosnia and Herzegovina this year. He said the Bosnian government asked Russia to accept its debt for natural gas supplies in lieu of the Russian debt.
Storchak said the amount of the gas debt has yet to be determined, whereas Russia owes Bosnia and Herzegovina about $170 million.
Storchak added the government will sign a resolution to pay a $12 million debt to Greece soon.
Russia is also working on Soviet-era debts it is owed by a number of countries.
The deputy minister said Russia plans to write off 90% of Iraq's debt to the country, which stands at $13 billion. The move follows an agreement in November 2004 by the Paris Club nations, which pledged to cancel 80% of the Iraqi debt to each of the club's 19 creditor nations.
"We resorted to a currency clause with respect to [Iraq's] outstanding payments, and the debt increased by $2.5 billion," he said.
Earlier reports said Iraq owes Russia $10 billion. The deputy minister said the rest of the debt will be restructured.
Finance Minister Alexei Kudrin said earlier the debt could be written off in the next few months. But the deputy minister said a bilateral agreement with Iraq has not been signed yet.
He also said technicalities involved in writing off Afghanistan's $4.5 billion and Madagascar's $80 million debts to Russia are being settled.
Madagascar's debt will be written off under a new debt relief scheme for poor nations, when funds that appear after restructuring are spent in debtor countries on projects agreed to with creditors.
In Madagascar, the money will go to finance education and healthcare, particularly measures to fight malaria.