No IMF Aid to Russia
Russia's President Boris Yeltsin would surely have liked a fresh International Monetary Fund (IMF) loan to showcase this month, just in time for today's parliamentary elections.
In the past, IMF loans to Russia have emerged at fortuitous times for both the Yeltsin administration and the West. Russia received an IMF loan in March 1996, shortly before presidential elections, and in July 1998, when Russia's currency devaluation and debt default threatened the global economy. An April 1999 loan, during NATO's military campaign in Kosovo, was also conspicuously timely. In those cases, Russia's failure to meet economic conditions certainly wasn't a pressing concern.
For this parliamentary election, Mr. Yeltsin has no loan to bolster the standing of pro-Kremlin candidates in the Unity Party, but he has something even better - an immensely popular military onslaught against the Chechens. The war on Chechnya has done more to boost support for those candidates than an IMF loan ever could. In fact, international condemnation of the conflict has given Mr. Yeltsin and his team shining opportunities to taunt the West with blustery statements. In response to President Clinton's criticism of the Chechnya campaign, Russian Prime Minister Vladimir Putin impressed fellow Russians by saying this week, "We are not used to such language, since Russia has a nuclear shield."
As uncouth as Mr. Putin's comments may have seemed to Western ears, the premier was simply articulating what has been one of Mr. Clinton's overriding fears regarding Russia. In fact, Moscow's economic and nuclear ability to cause global harm has prompted Mr. Clinton to oblige Russia in a variety of ways, compromising U.S. leadership in the process.
The White House, for example, has been an active supporter of IMF aid to Russia, even when Moscow didn't meet the lending agency's own economic criteria. "Russia is too nuclear to let it fail," has been the unstated policy. In July of this year, the IMF received the first $640 million quarterly installment of a $4.5 billion loan to Russia. Earlier this month, the IMF officially announced that it had decided to suspend payment of the second installment of that loan because Russia had failed to improve its tax collection and push through more effective bankruptcy legislation and improved baking regulation.
This is a rather extraordinary pronouncement, since the IMF's outgoing director, Michel Camdessus, told the Associated Press in late September that "Russia is a program that works. …