MOSCOW, June 14. (RIA Novosti) - Following the announcement that the London conference of G8 finance ministers had decided to write off debts to the 18 poorest countries, news came that Russia would forgive debts on loans issued on a bilateral basis.
Today's issue of Noviye Izvestia, a popular daily, says the news was made public after a meeting between Russian President Vladimir Putin and British Prime Minister Tony Blair at the former's Novo-Ogaryovo residence outside Moscow yesterday.
Therefore, the Russian leader lent support to Blair's efforts to write off African debt in the run-up to the G8 summit, which Britain will chair this year.
The generous decision to write off the debts of African countries will cost Russia about $2.2 billion, though Finance Minister Alexei Kudrin said the chances of getting the money back had been negligible anyway. The support for Britain now may reap dividends in the near future. In a year, Russia will take over the G8 baton from Britain and will also determine the agenda for the next summit. So, when welcoming Blair in Novo-Ogaryovo, the Russian president hinted broadly that he expected to gain support from London for Moscow's future initiatives.
The developing states owe the bulk of their debts to the former Soviet Union for arms deliveries formalized in the so-called special loans. When Russia joined the Paris Club, it automatically lost the right to demand the repayment of debts for the delivery of weapons and medicines provided "to the national-liberation struggle against global imperialism." As a result, foreign states' debts to Russia plummeted from $165 billion to $50 billion.
Debt write-offs are routine procedure for Paris Club members. Early this year Russia forgave the bulk of Syria's debts (73%), which it mostly incurred on arms loans.
