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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Ramsey Su who wrote (6474)	9/17/1998 4:48:00 PM
From: DMaA	Read Replies (1) \| Respond to of 9980

FYI, that was the whole article. It was in a short feature call "Asides".

To: Ramsey Su who wrote (6474)	9/18/1998 8:59:00 AM
From: Henry Volquardsen	Read Replies (1) \| Respond to of 9980

Ramsey, Sanders asked a very intelligent question, though a little excited and critical of the IMF in his delivery. Greenspan responded simply by disagreeing with no reasoning, treating Sanders as if he is a moron. I enjoyed Sanders passion in his questioning but his question only made sense if you are predisposed to accept his assessment of what got Russia where it is. His question included the statement that the IMF was responsible for managing the Russian economy and that their policies are responsible for various declines the foremost of which he listed was turning a food exporter into a food importer. First to dispose of the specific regarding food production. He is confusing Russia with the old Soviet Union. Even the Soviet Union was rarely a food exporter. But even so, within the Soviet Union Russia was never a food exporter and always relied on the other republics. The Ukraine and Belorussia were the bread baskets and produced the food. Russia is a food importer today not because of the failed policies of the IMF but because they no longer have control of the agricultural production of the other republics, those are now imports. Sanders argument regarding the effectiveness of the IMF rested on the assumption that Russia is following IMF restrictions and that the IMF is therefore responsible for the collapse of Russia. Anyone watching the Russian situation will recognize the patent absurdity of that assumption. Russia has been blithely ignoring IMF guidelines and in fact their politicians have been flaunting the fact. The real culprit in Russia has been that there has been very little real reform. The privatization of Soviet state industries is a prime example. There was no open bidding for assets. Prime assets were essentially handed over to Communist era bureaucrats and politicians for pennies on the dollar. These industries often retained their monopoly status. This process created the billionaire oligarchs who are raping the country today and the politicians are the paid operatives of these people. The IMF does not come away without criticism. Their biggest fault was to lend to Russia without any commitment to real reform. They continued to just throw money at the problem, often at the urging of western, particularly US, politicians. And I agree with the sentiment that in many parts of the world the IMF's draconian policies do more harm than good. Greenspan, Rubin and Summers all made comments to that effect. Korea and Thailand were both examples. All three made specific comments about the need to reform the IMF. I am also very sympathetic to the notion that western taxpayers should not be asked to bailout reckless western investors, a frequent result of IMF policies. Sanders only gave the appearance of asking an intelligent question. His assumptions are demonstrably false. Greenspan pointed out correctly that in order to accept his, Sanders, conclusions you had to accept his assumptions and he, Greenspan, disagreed with his assumptions. Greenspan was correct in this matter. Sanders assertions were based on erroneous reasoning. The IMF deserves criticism but not for the specifics Sanders alleged. Henry