Moldova faces delay on IMF loan decision

CHISINAU, Dec 12 (Reuters) - The International Monetary Fund may delay until January a decision on whether to resume lending to Moldova, Viktor Dorash, an adviser to President Vladimir Voronin said on Wednesday.

Dorash said the government and the global lender had managed to agree on major targets needed to unlock aid under a $142 million loan programme and denied reports by former government members that the talks with the IMF were deadlocked.

"There are rumours we have huge problems (with the IMF). There are no problems," Dorash told a news conference.
"Yes, we are behind the schedule on some dates. But talks are under way and if some issues are
delayed then it means the decision will be postponed until the next board meeting."

An IMF mission is due in the Moldovan capital in the near term, Dorash said, adding he expected the board meeting to take place in January and that there were no problems in principle.

The delay is a blow for the government which had met one of the IMF's key terms by approving a lean 2002 budget in November and hoped to get fresh funds by the end of the year.

The IMF's resident representative office in the capital Chisinau declined to comment.

Dorash said the IMF would review an agreement on debts for Russian natural gas supplies.
Russia has agreed to restructure $800 million of debts owed to it by Moldova for 11 years with a three-year grace period.

Analysts said they believed the IMF was concerned that details of the deal were unavailable and
it was unclear whether debts for Russian natural gas supplies were being treated as a state debt or a corporate debt.

The IMF froze its three-year lending programme to the tiny agricultural country earlier this year
after some deputies in the newly elected Communist parliament proposed scrapping privatisation plans and introducing protectionist trade tariffs.

President Voronin has said foreign credits are vital for the country, one of Europe's poorest
states, to help it fend off economic and political turmoil and avoid a default.
A resumption of IMF lending would be also seen by investors as a vote of confidence in the
communist government.

Wednesday, 12 December 2001 14:13:34