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. Last Updated: 07/27/2016

MAILBOX: Ditching IMF Loans Won't Ease Financial Pain

In response to the editorial of Sept. 2, "IMF Scores a Dubious PR Coup."


So rarely does the IMF receive credit for a public relations "coup" that it seems ungracious to object to the modifier "dubious" in your editorial of Sept. 2. Nonetheless, we at the International Monetary Fund feel obliged to point out that the IMF, not its critics, first emphasized that money is fungible. The Moscow Times appears to take the opposite view, claiming that additions to Central Bank reserves or budgetary resources - if they come from the IMF, World Bank or bilateral foreign assistance - are sure to be wasted on excessive military outlays or corruption-laden projects. The cure, you imply, is to stop all assistance from abroad.

Our reading of history and economies differs. Cutting off international support to countries in economic difficulty seldom compels them to redistribute domestic spending from economic "bads" to "goods" such as needed imports, infrastructure and social programs. Providing international assistance with conditionality, on the other hand, can induce better policies and a better allocation of resources even though money remains fungible.

The IMF Executive Board, representing 182 countries, chose to resume international financial support for Russia earlier this year but with strict conditionality. Russia has reduced its fiscal deficit, pursued a cautious monetary policy, and made progress in righting the reversals in structural reforms that occurred after August 1998. More progress will be expected before additional support is disbursed. This process carries no guarantee of success, to be sure, but it offers a more promising path than the dead-end to which an abrupt and enduring rupture of financial support would lead.

Bob Russell


IMF External Relations Department

Who's the President?

In response to "Minsk, Moscow Ready for Merger," Sept. 9.


Thank you for your coverage of the ongoing saga of Russian-Belarussian relations. In both your editorial and the front-page story appearing in your Sept. 9 issue, however, you failed to mention that Alexander Lukashenko is no longer the legal president of Belarus. His term of office, under the valid 1994 Belarussian Constitution, expired this past July.

Though Lukashenko illegally extended his term in office pursuant to an illegal referendum in 1996, the results of this referendum have never been recognized by the OSCE, EU, and the U.S. government.

Semyon Sharetsky, the chairman of the Belarussian 13th Supreme Soviet, is currently the legal president of Belarus pursuant to the 1994 Constitution since Lukashenko prevented the holding of new presidential elections. Unfortunately, Sharetsky has been forced to flee to Vilnius, Lithuania, due to threats from those who oppose his challenge to Lukashenko's rule.

To my knowledge, acting President Sharetsky does not support Lukashenko's current machinations with respect to a reunification with Russia.

It is important that President Boris Yeltsin and Prime Minister Vladimir Putin understand that neither Lukashenko nor his government - under both Belarussian and international law - have the jurisdiction to agree to any new arrangements or reunification treaties with Russia. Russia should not subsidize Mr. Lukashenko's regime, especially when the Russian economy is so dependent on Western largess.

Ethan S. Burger

Don't Single Out Russia

In response to recent articles about the Bank of New York money-laundering scandal.


I think hardly anyone in Russia doubts that there is more to the recent corruption and money laundering allegations than simple pre-election mud-slinging. But the timing of the scandal and how it is being handled by the Western - particularly the American - media is interesting.

Disappearing funds have been and always will be a problem as long as financial aid is wired off to receiving countries without specific instructions and controls for its use.

This is as much a problem for the lender as it is the receiver. Oversights and errors in this area can, and have, led to enormous amounts of money being used to do nothing but line the pockets of corrupt officials on the taxpayers' bill.

But what is still unclear about all of the recent allegations is: Why Russia? Switzerland's banks have never really made a habit of asking from where the deposits in their banks come, as witness recent revelations that these banks held enormous accounts for the Nazi government in Germany.

Or how about the accounts of any number of Asian and Southeast Asian dictators, like the late Ferdinand Marcos? Did anyone in Switzerland question where his fortunes came from?

Was he selling his wife's shoes? Apparently not.

In short, the Swiss and the Western media do not seem to ask any questions about the origins of vast and shady fortunes except when it comes to Russia.

This is not to let Russia off the hook. So far the government hasn't done itself any favors with its bluster about a Western media conspiracy, and it would do best to offer a clear, understandable explanation.

The rest of the world could do itself an equally valuable turn by investigating the other 99 percent of the dubious accounts held in Swiss banks and island tax havens that no one ever seems to complain about.

All corruption is bad and Russia is probably not innocent. But it is not the only villain - and certainly not the worst one.

Joerg Boese