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IMF/World Bank: Annual Meeting Focused On Russia, Debt Relief

  • Robert Lyle



The 54th annual meetings of the International Monetary Fund (IMF) and the World Bank ended in Washington Thursday, with Russia still in the headlines but very little attention paid to the other nations in transition. RFE/RL's Robert Lyle reports:

Washington, 1 October 1999 (RFE/RL) - Russia was in the spotlight even before the formal meetings when the finance ministers of the G-7 group of major industrial nations endorsed IMF conditions requiring Russia to adopt additional anti-fraud safeguards before receiving each tranche of the current $4.5 billion IMF loan.

The spotlight was due to the discovery that large sums of money had moved through private Russian bank accounts in western banks and the resulting suspicions that the money could have been from organized crime or from Russian officials stealing assistance funds.

U.S. and other investigations are continuing, but IMF Managing Director Michel Camdessus on several occasions spoke out in support of the IMF program in Russia, saying the fund would not turn its back on a country in need.

At his final press conference, Camdessus said there was a flurry of rumor, innuendo and allegation flying in the press:

"All of that blurred the perception of the reality, and the very fact that what is at the heart of our mission in Russia -- namely, support of the difficult transition of this economy toward a market economy -- is presently working and the program we have since July is being overperformed."

But the IMF managing director acknowledged that the fund is not having an easy time in Russia:

"Our work in Russia is extremely difficult. We know pretty well we are working in a universe where there is flight of capital, corruption, instances of bad governance, in a country where it is absolutely essential to make a major effort together with the Russian authorities."

The broader focus of the annual IMF/World Bank meetings was not on Russia, but on the adoption of new broad programs to make fighting poverty a central part of all loans to all countries. Included in that is an expanded debt relief project jointly undertaken for the first time by both institutions.

World Bank President James Wolfensohn, at his concluding press conference, said he hopes this cooperative anti-poverty effort will for once make a significant dent in the millions of people now living on less than one dollar a day around the world. But he said he did not want to unduly raise people's expectations:

"I was careful to raise the challenge and saying that we really need to rise to that challenge. So I made no promises. I CAN promise that the bank and that I and my colleagues will do everything we can. But it needs all of us. And surely in terms of the resources of the bank, the bank can't do it alone. It needs to be everybody."

Unlike in other annual meetings in recent years, the problems and needs of the countries in Central and East Europe and Central Asia in various stages of transition to market economies were barely noticed.

Officials from countries in the Balkan region quietly complained that while they had made huge political and financial sacrifices to support the NATO actions over Kosovo, they felt as though they were now being forgotten once the spotlight was off the region.

Still, a number of officials from transition nations did speak at the plenary sessions, often taking stands on issues facing the global economy.

Georgia's Finance Minister, David Onoprishvili, for example, said the international community must confront the scourge of corruption -- starting at home:

"Bold steps will be taken to combat the problem of corruption which hinders economic and democratic reforms in Georgia."

Speaking for all three Baltic nations, senior Latvian minister Roberts Zile said corruption must not be confused with real distress in providing help to countries:

"We suggest that both the Bank and the fund develop strict criteria in order to evaluate countries' defaults. Natural disasters, business failures and mistakes in management should be clearly distinguished from deliberate fraud and corruption. The latter deserves a very different handling and attitude."

Armenia's finance minister, Levon Barkhoudarian, picked up a theme that many have raised around the world:

"A fully integrated world economy, Mr. chairman, is difficult to imagine without regional cooperation. The strengthening of such cooperation is one of Armenia's top priorities. International financial institutions could greatly facilitate regional cooperation in our region and in others by giving increased importance to those projects which benefit both the country and the region."

The IMF/World Bank annual meetings next year will be held in Prague, the Czech Republic. It will be the first time ever that the gathering occurs in Central Europe. ss

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