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Sunday, September 20, 1998 Published at 19:38 GMT 20:38 UK World: Europe Billions in Russian aid 'stolen or wasted' ![]() The new PM meets IMF officials - but where is their money going? Jonathan Charles in Moscow reports on evidence that millions of dollars provided as aid to Russia is being squandered: Venyamin Sokolov is an unlikely crusader - but Russia's chief auditor has spent the past few months travelling across the country to track down billions of dollars of missing aid from the West.
When we met in Moscow this week, Mr Sokolov came armed with a briefcase full of evidence detailing corruption and incompetence.
Mr Sokolov, who is director of Russia's chamber of accounts, says that some of the money was lost to corruption and much of the rest was used improperly. His comments come as the International Monetary Fund is considering whether to loan Russia another £3bn in the wake of the latest economic turmoil there. Vanishing money
Passing the finance ministry he said it had been given £100m to fund an export contract for MIG jet aircraft - but during his investigations he had discovered that the deal was bogus and the money had vanished.
He says: "Because we are talking about huge sums of money, naturally we can't check everything." "We have checked a fair proportion of the loans and I am ashamed to say that several billion dollars has not been used for its intended purpose - and some of it was simply stolen." Warning to IMF
Mr Sokolov says that he gave a warning to the IMF months ago that the loans were being abused. He is urging the West not to send any more money until proper supervisory measures are put into place to prevent it being wasted. "First and foremost we have to establish strict financial controls - the kind that exist in any country in Western Europe ... it's a basic prerequisite for the development of market economics, in order to create a highly effective economy and to overcome corruption."
Forty percent of Russia's food is imported, and without hard currency it may face shortages this winter. As I wandered around supermarkets in Moscow this week, the crisis was clearly beginning to bite. Because food is no longer being imported, the prices of everything produced domestically is rocketing. Meat and sugar have tripled in cost since the economic collapse started in the middle of August. As I watched, pensioners with just a few roubles shook their heads sorrowfully at the food which is now just too expensive for them to buy. The government says the West's help is urgently required. But the evidence presented by Mr Sokolov is unlikely to convince the IMF that any new loans should be agreed. |
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