HERE’S THE DEAL….
Countries that are big contributors to the capital of the International Monetary Fund get to put their representatives on the Board of Directors. These government officials will cast their (weighted) votes today on a proposal by Fund management to make $11.2 billion available to Russia this year, half immediately and the remainder in two equal installments in the third and fourth quarters. This money would be in addition to two remaining tranches of $670 million each under the three-year agreement approved in February, 1996, and due to be paid this year.
Fund management has also asked for the Board’s approval of a new agreement to begin in January, 1999, to provide credits of about $2.6 billion a year for three years. So the IMF totals are: $12.54 billion in 1998 and $7.8 billion in 1999-2001, for a total of $20.24 billion in 1998-2001, of which $19 billion is new money.
The World Bank will pony up $1.25 billion in new money in 1998 and $3.0 billion in 1999, in addition to the $1.75 billion in the World Bank pipeline. That’s $6 billion in 1998-1999, of which $4.25 is new money. Japan has agreed to put up $1.5 billion in 1998-1999, in Japanese Eximbank cofinancing linked to World Bank disbursements.
So the total package is $22.6 billion in 1998-1999, of which $18 billion is new money from the Fund and the Bank, plus $5.2 billion from the Fund in 2000-2001.