Russian Finance Minister Alexey Kudrin takes part in the government meeting summoned to discuss reconstruction and renovation of the Bolshoi Theatre building.
Photo: Dmitry Azarov
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Russian Weapons Go Down in Value Post Factum
Russian Finance Minister Alexey Kudrin agreed with Syrian Prime Minister Naji al-Otari Sunday to write off 73 percent of the Syrian debt to Russia. It looks as if Russia adhears to a new scenario to promote military and technological cooperation with Arab countries. First it sells weapons, second, it writes off the debt. Many in the East stand ready to benefit.
Exactly this scenario – armaments in exchange for the debt write-off - was sought for by Syrian President Bashar al-Assad during his January tour to Russia. Bashar al-Assad proposed to Moscow to write off nearly $10 billion of $13.4 billion indebtedness of Syria. At that time, the visit of the Syrian president triggered a wave of international scandals, as the world community was not eager to embrace the further sale of Russian weapons to the country called potential sponsor of the world terrorism by Washington.
General condemnation notwithstanding, the deal neared its end yesterday. Syria’s debt to Russia amounts to $13.4 million overall. Under the agreement, 73 percent of it is to be written off and only $3.6 billion to be cleared by Syria. From that amount, Syria will pay $1.5 billion during a decade in convertible currency in annual installments. The remainder is to be converted into the currency of Syria and settled by delivery of Syrian goods to Russia or to the third countries, or by contribution in Russian investment projects in Syria. According to Alexey Kudrin, the agreed terms match national interests, as forthcoming capital investments (or former debts) pave the way to becoming one of the biggest investors in the Middle East. “If the provisions to be agreed on under investment projects satisfy both parties, those will be the largest investments made in the region over the latest years,” Kudrin was emphatic.
But the actual good news is that Russia still may hope for at least $1.5 billion, moreover, it may get money in the US dollars. The downside of the deal is that the price for the sold armaments of Russia is set with regard to writing off the debt, i.e. it is conditional. Arabic countries stand ready to benefit. If Libya is quite satisfied with the Syrian pattern, Algeria is willing to proceed further. Algerian ANP Chief of Staff Major General Salah Ahmed Gaid made it clear during his recent visit to Moscow Algeria will buy Russian armaments worth nearly $2 billion in exchange for $3-billion write-off.
www.kommersant.com
All the Article in Russian as of May 30, 2005
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