[Intl-tobacco] IMF Threatens to Cut Relations w/ Moldova Unless Tobacco Privatization Occurs (fwd)

[Robert Weissman]

March 24, 2000

Dow Jones Newswires

IMF Threatens To Cut Relations With Moldova

 Dow Jones Newswires

CHISINAU, Moldova (AP)--The International Monetary Fund threatened Friday to
sever relations with Moldova if the former Soviet Republic fails to sell off
key agricultural industries and meet other criteria set by the fund, a
statement said.

 Hasan al-Atrash, the IMF representative to Chisinau, met early Friday with
Parliament's finance and budget committee, and told lawmakers to follow the
fund's directives if they want collaboration to continue, a statement by
Parliament's press office said.

 Al-Atrash said Moldova must agree to sell its key wine and tobacco
industries and to adopt this year's budget by the end of March.

Moldova must cut special funding to widows with several children and war
veterans, and must create an agricultural fund to help local farmers.

 If Moldova fails to meet these conditions, the IMF will cancel a promised
loan of $35 million and freeze bilateral relations, al-Atrash said. New
negotiations would be considered in six months, in accordance with IMF
regulations.

 In an interview late Thursday broadcast by local television stations,
Premier Dumitru Braghis said such a move would send "a bad signal" to
potential foreign investors and would seriously hamper his government's
efforts to make economic reforms.

 He also acknowledged Moldova might be unable to pay its foreign debts if
the wine and tobacco privatizations do not proceed.

 Media in Chisinau said most of the IMF conditions could be easily met, but
the wine and tobacco privatizations, which are estimated to bring the
country more than $200 million, remain controversial.

 The communists, who hold 40% of parliamentary seats, oppose approving laws
that would allow the sale. They argue the country's five tobacco and five
wine producers are "strategic," and the state should retain a monopoly in
those sectors, which are among the few that could be profitable.

 The proposed privatizations are expected to be debated in Parliament in the
coming weeks.