Prague, 14 July 1998 (RFE/RL) -- The financial bailout of Russia, led by the International Monetary Fund, is making headlines in the world press today. An important aspect of the affair is that the IMF itself has not had an easy time finding the money to support Russia. A related topic which continues to draw press attention is Japan, which commentators link with Russia in common misfortune.
WALL STREET JOURNAL: Is IMF money likely to banish the goblins?
The Wall Street Journal Europe, in an unsigned commentary, expresses skepticism about the effectiveness of the Russian bailout. It says: "Boris Yeltsin warned the world of his dark fears of an impending military coup and got the desired results: The International Monetary Fund over the weekend arranged a new bailout -- totaling $17.1 billion dollars this time -- of the Russian financial system. For the edification of the U.S. Congress, the German Bundestag, the Japanese Diet and other legislatures that are asked to commit public resources to these exercises, the IMF has once again asserted that its largesse preserves peace and stability in the world. Send more money, please."
The commentary goes on to say however that before approving any more financial commitments to the IMF, the U.S. Congress might want to ponder whether the IMF money is in fact likely to banish the goblins that haunt Russia. It says even some IMF officials had doubts about that, knowing how past IMF transfusions had been squandered.
It continues: "Does an IMF bailout really aid economic reform or does it instead, in most cases, postpone it? Economic reform hasn't failed in Russia, The failure has been an insufficiency of economic reform...."
SUEDDEUTSCHE ZEITUNG: This week can decide the fate of the Kiriyenko government
The fate of Russian Prime Minister Sergei Kiriyenko is seen as linked to the success of the IMF package and the approval in the Russian parliament of measures designed to make the Russian economy function better. A commentary by Josef Riedmiller in the Sueddeutsche Zeitung says:
"This week can decide the fate of the Kiriyenko government. During his two months in office, Boris Yeltsin's young man has spent most of his time looking at the debit and credit ledger, and come to the un-surprising conclusion that Russia's state coffers are empty. A hastily constructed crisis program, aimed at curbing state expenditure and increasing tax revenues, goes before the Duma for debate this week."
NEW YORK TIMES: The IMF face a real possibility of being caught short
The Russian crisis has also put strains on the IMF itself, as it comes at a time when the fund's resources are already depleted by big bailouts of Asian countries. To cover this latest financial package for Moscow, the IMF says it is going to have to borrow from 11 of its richest members, including the United States, through a special back-up credit line.
In a commentary appearing in the New York Times, Richard Stevenson notes that "the fund has not had to use the credit line -- described by a senior American official on Monday as a 'spare fuel tank' -- since 1978. With Japan in political and economic flux and other economies in Asia moving downward, analysts and American officials said that the IMF and other multilateral lending institutions faced a real possibility of being caught short should another major crisis erupt."
LOS ANGELES TIMES: There are fears that Russia and Japan will fail to right themselves
The fates of Russia and Japan are interlinked in an analysis written for the Los Angeles Times by James Flanigan. Flanigan says; "The reforms of the economies of Japan and Russia are essential to the optimism that has pushed U.S. stock markets to record heights and launched an era of rising confidence across the world.
"But there are fears that both Japan, the second-largest economy in the world and the key to Asia's recovery, and Russia, the erstwhile superpower that once held the world's second-largest economy title, will fail to right themselves.
"And the consequences would be dire for the global economy. Lack of progress could lead to a worldwide recession and a decline in financial markets.
"These are the stakes. On Sunday, voters in Japan opted for change and forced a prime minister from office. On Monday, the International Monetary Fund approved a $17 billion emergency rescue plan for Russia's ailing economy. Some business leaders hailed both events as grounds for hope that the post-Cold War move to open markets and raise living standards around the world would continue. But global markets were more restrained in their reactions. Of the two economies, Russia is seen as nearer the brink."
FRANKFURTER RUNDSCHAU: Here is some good news from Tokyo
In Japan, Premier Ryutaro Hashimoto has resigned following the defeat of his ruling Liberal Democratic Party in upper house elections. U.S. officials have said they fear that political paralysis in Tokyo will complicate efforts to bring recovery in Asia and ease pressure on other countries, including Russia.
A commentary by Henrik Bork in the Frankfurter Rundschau draws some positive points from the situation. He writes: "For a change, here is some good news from Tokyo: democracy is alive and kicking in Japan. This is the happy conclusion from the clear election defeat on Sunday of the conservative Liberal Democratic Party (LDP).
"Premier Ryutaro Hashimoto himself had urged voters to pass judgment on his economic policies in the otherwise unimportant upper house election. The voters heeded his plea and decided that Hashimoto should collect his cards.
"But it is not only that the Japanese went to the polls in far greater numbers than expected: turnout was over 58 percent, almost 14 percent more than at the last elections for the upper house. It was clear that in view of the economic crisis this would work against the ruling LDP."
SUEDDEUTSCHE ZEITUNG: Japan is, in effect, the property of a single party
A less optimistic interpretation of what happened in Japan is given in a commentary by Josef Joffe in the Sueddeutsche Zeitung. Joffe writes: "Why does the Japanese government constantly change yet still stay the same? Because Japan is, in effect, the property of a single party, the Liberal Democrats (LDP), that is always in power.
"So a Hashimoto resigns on Monday? His place will only be taken by another prime minister made of the same petrified LDP material. Or, to be more precise, one who has sat his way through to the top without upsetting the even older party leaders in whom power really resides.
"If it were Germany one must imagine the Christian Democrats having held power in Bonn since 1945 with an unlimited job guarantee. Then Konrad Adenauer would have been followed by his No. 2, Ludwig Erhard, and Erhard by a compromise candidate, Kurt-Georg Kiesinger...."
IRISH TIMES: A prolonged period of uncertainty risks far more serious repercussions
The Irish Times of Dublin, in an editorial, worries about the broader impact of the Japanese political turmoil. It says: "The announcement by Japan's Prime Minister that he intends to resign will cause further instability in the turbulent Asian markets and in that continent's beleaguered economies. The yen has taken early losses only to rebound in the hope that political defeat may force the government to implement reforms -- but analysts predict the currency's prospects to be shaky.
"Hopes that the worst elements of a convulsion which has strongly upset not only Japan's Asian neighbors but countries such as Russia, Australia, and South Africa, might come to an end have proved to be forlorn.... A prolonged period of political and economic uncertainty in the world's second largest economy risks far more serious repercussions on a much wider scale."