DATE=12/2/1999
TYPE=BACKGROUND REPORT
TITLE=RUSSIA / I M F
NUMBER=5-44891
BYLINE=ANDRE DE NESNERA
DATELINE=WASHINGTON
CONTENT=
VOICED AT:
/// Eds: This is the third in an eight-part series on
Russia. Among other issues to be raised: corruption
scandals, President Boris Yeltsin's legacy and NATO-
Russia relations. ///
INTRO: One of the main issues surrounding the "Who
lost Russia" debate under way in the United States is
whether international financial organizations helped
promote economic reforms in that country. In this
third of eight reports on Russia, former V-O-A Moscow
correspondent Andre de Nesnera looks at the role of
the International Monetary Fund.
TEXT: Several weeks ago, the head of the
International Monetary Fund - Michel Camdessus -
announced he would leave the international
organization in mid-February - two years before the
end of his term. He told reporters his resignation
was prompted by "entirely personal reasons"- but he
did not elaborate.
Although Mr. Camdessus won praise from many of the
fund's major shareholders for his 13-year stewardship
of the I-M-F, over the past few years, the
organization has come under increasing criticism for -
among other things - its lending policies toward
Russia.
Since the fall of communist rule in Russia eight years
ago, the I-M-F has pumped billions of dollars into
that country, ostensibly to promote economic reforms.
But critics say those reforms have not materialized
and much of the I-M-F money has essentially been
squandered.
Paula Dobriansky - from the Council on Foreign
Relations - says the whole lending procedure toward
Russia has to be reviewed.
/// DOBRIANSKY ACT ///
The issue of why we have given significant aid,
substantial aid, particularly large-scale
amounts of aid to Russia. And that these large
amounts of assistance have not been monitored,
that appropriate safeguards have not been placed
on them and consequently, there appears to be a
loss here, where these monies have essentially -
in some cases - gone down a black hole.
/// END ACT ///
Many experts ask whether some of the I-M-F money
earmarked for Russia has left the country as part of
money-laundering schemes now under investigation. But
I-M-F officials say they have no evidence of such
diversion.
Marshall Goldman -long-time Russia expert from Harvard
University - expresses the view of many experts, when
he says the I-M-F imposed too few safeguards when it
began disbursing funds to Russia.
/// GOLDMAN ACT //
The I-M-F was too lax, in part because they had
never really dealt with a country that had such
lax moral codes of business as Russia. And that
is a strong statement, because they deal a lot
with Latin America and the countries in Africa,
as well as Asia.
/// END ACT ///
In response, fund officials say they always carefully
monitor how their loans are handled. At the same
time, they say they are looking at ways to strengthen
safeguards on the use of I-M-F funds.
But Bruce Johnson - from the Hudson Institute (in
Indianapolis) research center - says it is virtually
impossible to monitor how Russian officials use
international financial aid, because they employ old
Soviet-style techniques.
/// JOHNSON ACT ///
Anybody in the I-M-F who considers himself or
herself capable of monitoring the Russian
government in the way it handles its finances is
a self-deluded fool. And the Soviets are very
well trained in deception. Their lives depended
on their ability to deceive those above them at
all times. They simply carry on and hide what
they are doing. It takes extraordinary insight
to monitor that kind of activity and get under
the blankets to see what they are doing in the
dark.
/// END ACT ///
Many experts say a major flaw in the West's lending
policy toward Russia was that the I-M-F provided money
directly to the Russian government. They say it would
have been more effective to assist small-scale
enterprises and non-governmental organizations - in
other words go directly to the Russian people,
bypassing the government.
The I-M-F's lending policy toward Moscow has fostered
a debate whether the organization should continue to
help the Russian government.
Condoleeza Rice - an expert on Russia and senior
foreign policy adviser to presidential hopeful George
Bush - says "no."
/// RICE ACT ///
I think the I-M-F has done enough in Russia for
now. And it is probably wise to let the Russians
come up with an economic program that works for
where they find themselves now. And then perhaps
to have a conversation about how that can be
supported. But my own view is that more macro-
economic engineering is probably not going to be
helpful.
/// END ACT //
But for the time being, the I-M-F has no plans to
alter its activities in Russia. A recent statement
from the fund says Russia and the international
community will be better served if the I-M-F remains
engaged and provides assistance under strict
conditions. (Signed)
NEB/ADEN/KL
02-Dec-1999 14:17 PM EDT (02-Dec-1999 1917 UTC)
NNNN
Source: Voice of America
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