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Russia: Putin, IMF Call For Mutual Engagement

  • Andrew Tully

Since September, the International Monetary Fund (IMF), has been holding back on a loan package to Russia for $4.5 billion. The government in Moscow, the IMF said, was moving too slowly to reform its financial structure. And yet, the acting president of Russia and the managing director of the IMF still appear to be on speaking terms. RFE/RL's Andrew F. Tully looks at this relationship.

Washington, 9 February 2000 (RFE/RL) -- The outgoing leader of the International Monetary Fund (IMF) and Vladimir Putin, Russia's acting president, are beginning to sound like good friends who merely agree to disagree.

Late Monday, Putin said in Moscow that "it would be wrong" for Russia to break relations with the IMF, even though the fund suspended loan installments to his government five months ago.

The acting president said Moscow will not beg for the money from any international lending institution. But at the same time, he cautioned that it would be unwise for Russia to sever ties with the IMF out of pique.

This measured approach was reciprocated on Tuesday when Michel Camdessus gave his farewell press conference to Washington correspondents at the IMF's headquarters in the American capital.

Camdessus, who will be retiring as the IMF's managing director next Monday [Feb. 14], said he has been "frustrated" and "disappointed" in his dealings with Russia since the fall of communism. But he, too, said the best course is to work with the Moscow government.

The IMF leader said he believes he was too optimistic a decade ago when Russia, under then-President Boris Yeltsin, moved from a centrally managed economy to the free market.

"If I regret something, it is possibly to have shared somewhat the illusion of everybody in the world, including Russia, that this could be done rapidly."

Camdessus said politics and a cumbersome process slowed the banking and other financial reforms that are necessary for Russia to emerge quickly from seven decades of authoritarian rule.

"We were frustrated many times by half-hearted implementation of the agreed programs of the Russian authorities. We were disappointed by the lack of support, of sufficient support, by the state Duma for these policies."

But Camdessus told one journalist that it would be wrong to give up on Russia.

"But Russia, sir, is a country where the democratic rules for election of a president are not challenged. Russia is a country where the basic -- where the basic principles of the market economy are not challenged, and where the government now -- and all political forces now -- recognize that the only route for the future is reform, further integration in the world economy."

In September, the IMF announced it was suspending a package of loans worth $4.5 billion because, it said, Moscow was moving too slowly on structural financial reforms. The IMF recently sent a delegation to Moscow to discuss the pace of reforms, but the talks broke up on a discordant note on Friday [Feb. 4].

Yet for Camdessus -- as for the government of U.S. President Bill Clinton -- the only way to ensure Russia's eventual emergence as a free-market economy is to engage it. And to Putin, it is just as important for his government to engage the IMF.