RUSSIA DROPS TARIFFS PLAN; IMF LOAN BACK IN FOCUS.

Byline: Michael R. Gordon The New York Times

Russia has dropped a plan for a sharp across-the-board increase in import tariffs, clearing the way for a $10.2 billion loan from the International Monetary Fund, Western economists said Monday night.

The election-year loan had been thrown into doubt earlier this month after Russia's finance minister proposed a 20 percent increase in the tariffs, contradicting previous assurances to the IMF.

But a senior Western economist said Monday night that Russia has now met almost all of the conditions and that the fund's staff had prepared a confidential analysis recommending that the loan go forward.

The IMF's 24-member executive board is scheduled to take up the loan today, and formal approval now is virtually assured.

The huge loan, which the United States has strongly supported, is linked to a comprehensive plan to proceed with market reforms and is expected to give President Boris N. Yeltsin an important election-year boost.

Yeltsin has been gaining ground in the polls against Gennadi Zyuganov, the Communist candidate. One of Yeltsin's selling points has been his ability to secure Western financial assistance.

Under an expedited schedule, an initial disbursement of $340 million could come as early as this month. According to this schedule, more than $1 billion would be available before the June presidential elections.

That would provide Yeltsin with a badly needed infusion of money at a time when he is trying to make good on his promise to pay back wages and increase social spending to win votes.

The basic terms of the IMF loan were set in February when Michel Camdessus, the fund's managing director, met Russian officials.

But only a week later, Vladimir Panskov, Russia's finance minister, proposed an average 20 percent increase in tariffs to raise revenue for increased social spending during this election year.

Fueling concerns, Prime Minister Viktor Chernomyrdin promised beleaguered farmers and ailing industries protectionist measures to help safeguard them from foreign competition.

That was a particular problem because Russia had promised the IMF that it would reduce the average import tariff by 1998. It also pledged that the average tariff would not increase before then.

The European Union had sharply criticized Russia's talk of protectionism.

Russia's move toward protectionism also worried the United States.

But the administration also was distressed over the protectionist measures that blocked American exports of frozen chicken. In an effort to boost Yeltsin's standing with the voters, Clinton had endorsed the IMF loan before negotiations were even complete.

But weeks of intensive consultations between the fund and Russian officials, as well as the IMF's explicit threat to withhold the loan, forced the Russians to modify their plans for the generally higher tariffs.

That does not mean that Russia's protectionist impulses have been completed checked.

According to Western economists, the average Russian tariff still has increased 5 percent to 10 percent. But the IMF staff does not believe that is reason enough to hold up the politically important loan.