Publication: Monitor Volume: 5 Issue: 210

Russian politicians and observers are clearly unhappy with the November 9 announcement by International Monetary Fund Director Michel Camdessus that he plans to leave his post in February of next year. Camdessus is widely seen in Russia as having been very pro-Russian–meaning that for most of his tenure he was lenient with Russia when it came to conditionalities for loans. As Mikhail Zadornov, Russia’s former finance minister and envoy to international financial institutions put it, Camdessus was “personally involved” in Russia-IMF relations and “had personal obligations to Russia.” His resignation, Zadornov said, was “bad news for Russia.” Aleksandr Pochinok, Russia’s tax minister, said that Camdessus “truly wished Russia well” and that his resignation could “complicate” ongoing negotiations with the Fund over the release of aid tranches. However, Aleksandr Livshits, Russia’s envoy to the Group of Seven industrialized powers, said that the IMF was still likely to disburse two tranches, each worth US$640 million, which were supposed to be released in 1999 (Russian agencies, November 10).

A number of Russian observers attributed Camdessus’ relationship with Russia as the key factor behind his decision to step down. A newspaper today quoted former Economics Minister Yevgeny Yasin as saying that “friction” had been growing between the IMF director and both the Clinton administration and the U.S. Congress, over the IMF’s financing program for Russia. Given the United State’s position as the Fund’s major shareholder, Camdessus was essentially forced to announce his resignation, Yasin suggested. As the paper noted, Washington had been pushing the Fund to add new conditions to the disbursal of further tranches from its US$4.5 billion loan, including increased transparency on the part of Russia’s Central Bank and monetary system. Camdessus, meanwhile, believed that one must not “reconsider agreements already reached and… attach additional conditions for the borrower.” The paper also said Camdessus’ position was also undermined by Washington’s “cynical position” prior to last August’s ruble collapse and debt default, when it reportedly forced the Fund to release a multi-billion-dollar loan to the government of then Prime Minister Sergei Kirienko, but then, in essence, put the blame for the default on the Fund (Vedemosti, November 11).

Another paper attributed Camdessus’ resignation to this past summer’s Bank of New York money laundering scandal (Kommersant, November 11). At the height of the scandal, several Western newspapers quoted anonymous law enforcement officials as saying that several hundreds of million dollars from IMF loans to Russia may have been among the billions allegedly laundered through the Bank of New York. Still other observers yesterday pointed to the scandal involving FIMACO, the Channel Islands offshore company into which Russia’s Central Bank deposited tens of billion of dollars from its hard currency reserves over five years, as being a factor in Camdessus’ resignation. IMF Deputy Director Stanley Fischer said earlier this year that Russia had lied to the Fund in 1996, when it failed to notify it of more than a billion dollars that had been placed with FIMACO (NTV, November 10).