Russia is notorious for its casual attitude to the re-payment of its debts. It has defaulted and re-scheduled its obligations more times in the last decade than it has in the preceding century. Yet, Russia is also one of the world's largest creditor nations. It is owed more than $25 billion by Cuba alone and many dozens of additional billions by other failed states. Indeed, the dismal quality of its forlorn portfolio wouldn't shame a Japanese bank. In the 18 months to May 2001, it has received only $40 million in repayments. It is still hoping to triple this trifle amount by joining the Paris Club - as a creditor nation. The 27 countries with Paris Club agreements owe roughly half of what Russia claims. Some of them - Algeria in cash, Vietnam in kind - have been paying back intermittently. Others have abstained. Russia has spent the last two years negotiating generous package deals - rescheduling, write-offs, grace periods measured in years - with its most obtuse debtors. Even the likes of Yemen, Mozambique, and Madagascar - started coughing up - though not Syria which owes $12 billion for weapons purchases two decades ago. But the result of these Herculean efforts is meager. Russia expects to get back an extra $100 million a year. By comparison, in 1999 alone Russia received $800 million from India. The sticking point is a communist-era fiction. When the USSR expired it was owed well over $100 billion in terms of a fictitious accounting currency, the "transferable ruble". At an arbitrary rate of 0.6 to the US dollar, protest many debtors, the debt is usuriously inflated. This is disingenuous. The debtors received inanely subsidized Russian goods and commodities for the transferable rubles they so joyously borrowed. Russia could easily collect on some of its debts simply by turning off the natural gas tap or by emitting ominous sounds of discontent backed by the appropriate military exercises. That it chooses not to do so - is telling. Russia has discovered that it could profitably leverage its portfolio of defunct financial assets to geopolitical and commercial gain. On March 25, Russia's prime minister and erstwhile lead debt negotiator, Kasyanov, has "agreed" with his Mongolian counterpart, Enkhbayar, to convert Mongolia's monstrous $11.5 billion debt to Russia - into stakes in privatized Mongolian enterprises. Mongolia's GDP is minuscule (c. $1 billion). Should the Russian behemoth, Norilsk Nickel, purchase 49% of Erdenet, Mongolia's copper producer, it will have bagged 20% of Mongolia's GDP in a single debt conversion. A similar scheme has been concluded between Armenia and Russia. Five enterprises will change hands and thus eliminate Armenia's $94 million outstanding debt to Russia. Identical deals have been struck with other countries such as Algeria which owes Russia c. $4 billion. The Algerians gave Gazprom access to Algeria's natural gas exports.