The man credited with beating Argentina's hyperinflation nightmare was quoted yesterday as saying a solid currency was the key to Russia's economic recovery.
Dr Domingo Cavallo, a former economy minister, left Buenos Aires for Moscow at the invitation of the Russian Deputy Prime Minister, Mr Boris Fyodorov, who has asked him to analyse Russia's economic crisis.
Dr Cavallo, a Harvard-trained economist and contender in presidential elections next year, told La Nacion newspaper he would have to speak to members of Russia's government before recommending any solutions.
Asked if he would suggest a convertibility plan like the one he introduced in Argentina in 1991, Cavallo said: "For me, it is key to have a solid and trustworthy currency".
Under Mr Cavallo's 1991 plan the peso was pegged to the dollar, meaning that Argentina effectively surrendered independent monetary policy. But its four-digit inflation was virtually snuffed out.
The system, also known as a currency board, requires central banks to hold as much foreign currency in reserve as there is local currency in circulation.
"I cannot say now, however, without speaking to those who have invited me, what would be the most logical solution to a situation like Russia's," Mr Cavallo said.
"What I can say is that any convertibility system only works well if there is an important political decision to adopt that measure."
Asked how Russia could find the necessary reserves for a currency board system like Argentina's, Mr Cavallo said it would need financial support from the International Monetary Fund as well as the Group of Seven industrialised countries.
He said an article he wrote for Forbes Global business magazine probably led to the invitation from Russia. "I said two things. One, Russia needs to urgently establish the force of law, halt the power of the new oligarchy, and consolidate a system of property laws, including the most basic: the stability of its currency based on a balanced fiscal situation.
"Secondly, Western governments need to make concrete decisions. For example: create a special fund to help Russia, which, in exchange, should commit itself to securing democracy, intensify its reforms and guarantee to responsibly manage its nuclear arsenal," Mr Cavallo said.
President Carlos Menem, who fired Mr Cavallo in 1996 in a dispute over economic policy, said he was happy that Mr Cavallo had been invited to Russia. "This should make us all feel good as Argentinians," he told reporters. Mr Cavallo, who has bombarded the government with accusations of corruption, won a seat in congressional elections last October.
He is planning to run for president next year, backed by his anti-corruption Action for the Republic Party. He is only attracting about five per cent support in opinion polls, but his support could prove vital if there is a second run-off.
AFP adds: The G7 industrialised nations yesterday urged Moscow to stick to the reform path despite the unprecedented financial crisis afflicting the country.
"There is a clear feeling among G7 leaders that it is in all our interests to make sure Russia gets through this crisis," said a spokesman for the British government, which holds the G7 chair until the end of the year.
The statement followed weekend consultations among the seven member nations on Russia's economic crisis.
Following telephone conversations on Saturday with President Jacques Chirac of France and the Italian government chief, Mr Romano Prodi, the British Prime Minister, Mr Tony Blair was in contact yesterday with Chancellor Helmut Kohl of Germany and his Japanese counterpart, Mr Keizo Obuchi.
Mr Blair was also in contact with Mr Michel Camdessus, managing director of the IMF.
The US President, Mr Bill Clinton begins an official visit to Moscow on today.