The International Monetary Fund has agreed to extend for a further year — until 2000 — its present three-year $10 billion loan to Russia. The extension is intended to help Russia ride out the aftereffects of the Asian crisis. The agreement was announced yesterday at the close of a high-profile visit to Moscow by IMF Managing Director Michel Camdessus. Camdessus expressed confidence that Russia’s reforms are on track. He said, however, that Russia must learn the lessons of the Asian crisis by reducing spending and boosting tax collection, making its corporate governance fairer and more transparent, and fostering a healthy climate for investment.
Though yesterday’s announcement conferred the IMF’s seal of approval on the government’s economic plans, Russia is not yet out of the woods. Camdessus said the IMF would release the next tranche of the loan only after a regular quarterly review. Before handing over any more money, in other words, Camdessus wants to be sure that the government does not backtrack on the budget cuts due to be debated by parliament today. (Financial Times, February 20)
State of Emergency in Nakhodka.