Magazine article American Banker

Discord among Rich Lands Worries World Bank, IMF

Magazine article American Banker

Discord among Rich Lands Worries World Bank, IMF

Article excerpt

WASHINGTON -- Because of the stalling world economy and Russia's struggles with reform, International Monetary Fund and World Bank ended 1992 on a unhappy note.

IMF officials, whose job is to promote international monetary cooperation, said they were particularly concerned with an apparent breakdown of a carefully woven system of economic cooperation among the largest and richest industrial countries.

A global recession, IMF officials warn, could prompt rich nations to go their separate ways instead of acting in the interests of the world economy.

Meanwhile, at the World Bank, officials have grown more worried about their continued inability to lift the poorest countries, especially in sub-Saharan Africa, out of poverty.

It wasn't supposed to be like this, since 1992 was the first full year that both the IMF and World Bank became truly global. Russia and the other former Soviet republics joined the multilateral financial institutions that they once reviled as capitalist tools

"While not every country agrees with everything the two agencies press for, virtually none feel they can be a part of the international economic system without being members," said one official. The holdouts include North Korea and Cuba.

Russia's entry into the IMF and World Bank has proved to be a mixed blessing.

The IMF, in particular, has been harshly criticized as too tough on Russia, demanding painful reforms before the country can obtain IMF money. …

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