A risky game with the Paris Club

Russia never seems to play by the same rules as the rest of us. Its macroeconomic indicators for 2000 were the country's best in 30 years. The economy grew by somewhere between 7% and 8%; tax reforms - part of a wide-ranging economic reform plan - helped the government record a fiscal surplus of 3% of GDP, after many years of high deficits; the strong oil price helped Russia to rebuild its foreign currency reserves to $28 billion. Leading Russian companies took steps to improve their dismal record of abusing minority shareholder rights, under pressure from a government that understands the urgent need to attract foreign investment. The government itself concluded a renegotiation of commercial debts with the London club of private sector creditors in August 2000.

Then at the start of January 2001, came the big surprise.