Third World Recruit

October 15, 1991

Moscow joined the Third World at the annual meeting of the International Monetary Fund in Thailand this week, opening itself to scrutiny and financial discipline long imposed on less developed countries. Such a step downward for the leader of the Second World was not acknowledged, nor was it welcomed by endemically poor countries that fear their share in First World riches will diminish.

Yet there was no denying that the collapse of the Soviet Union is at the top of the world economic agenda. Grigory Yavlinsky, Moscow's reform economist, was delighted by the deal he got in Bangkok. By drawing the industrialized democracies into the urgent business of rescuing the Soviet economy, he moved the West a big notch forward from the cautious cooperation of the London summit.

The next step, however, is strictly Soviet as Moscow tries to draw independence-minded republics into a union aimed at preventing complete breakdown and even civil war. A central bank, a common currency, trading arrangements across internal borders -- these are immediate goals in the long-term drive to build a capitalist economy.

Even as the Soviet and Russian presidents wrestle with catastrophe, deputy finance ministers from the Group of Seven countries -- the U.S. Britain, France, Germany, Japan, Italy and Canada -- will soon be converging on Moscow to offer their input in the economic reform process. At the same time, the IMF will be setting up shop for its newest associate member and stationing the experts who will monitor compliance with IMF objectives.

The end goal is financial assistance for what is left of the Soviet Union. The United States, Japan and the European Community have pledged $7.5 billion to tide the stricken superpower through the coming winter -- a sum Mr. Yavlinsky said will be sufficient. But down the road, the First World nations will have to decide how much money they are prepared to spend and on what terms.

In Bangkok, there was already friction among the big-money powers. The U.S. clumsily proposed a deferral in Soviet debt payments, a step disdainfully rejected by Germany and France, which as primary lenders have the most to lose. Just wait, American experts replied, confident that in the end its European allies will have to accept debt deferral to obtain U.S. infusions of financial aid.

So the mighty rescue has begun. If there is any comfort to the world's newest supplicant, it is that other Third World countries have failed again and again, yet have not been turned away by the IMF.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.