WEST AIDS RUSSIA FOR GLOBAL STABILITY: WORLD BANK.
The West supports Russia, despite the corruption there, because of the former Soviet state's economic and military stature on the world stage, Reuters reports World Bank President James Wolfensohn said in Copenhagen yesterday. "The reason we need to help is that the whole of the former Soviet Union represents not only an economic threat or economic opportunity, but politically it does have a somewhat different weight than some other countries because of its defense and offensive capabilities," Wolfensohn is quoted as saying.
"When you get to the issue of corruption the important thing is to take the opportunity and try and clean the house when you uncover it," Wolfensohn continued. "I don?t think that anyone could really be surprised that there has been some corruption in Russia. I regard it frankly as rather positive that all this is coming out now. If you go back a few years, or even a few months, getting public examination of these things was not in the cards."
Analysts say corruption has historically accompanied large economic shifts throughout the world, and Wolfensohn agrees, says the story. Pointing to the history of the US, he said: "It took a long while for the mechanisms of the state to come into play. That is what you?re seeing in Russia today." The new Russia is still less than 10 years old, and "that?s not a long time to develop a state. So I don?t think we should be too critical of ourselves in trying to help the Russians get a stable state. Trying to ensure that the Russian state moves forward in a manner that is balanced is probably of great interest for other countries."
The World Bank was doing its best to monitor how the funds it had poured into Russia were being used, Wolfensohn said. "We have tried it in all our programs with independent audits and with direction of our funding to make sure that our particular money is not stolen. I hope that will prove to be the case."
Wolfensohn?s remarks comes as investigators have found evidence that 780 Russian officials used a bond-selling scheme to transfer billions of dollars overseas last year after Moscow received a $4.8 billion IMF payment, AFP says the USA Today reported yesterday. Citing US, British, Russian, and IMF officials and bank documents, the report said investigators believe the bond-selling scheme began just days after the Fund deposited the $4.8 billion in Russia's central bank.
The Wall Street Journal (page A2) reports that Russian law enforcement officials will meet with the U.S. Justice Department?s criminal division to discuss tensions that have arisen over the allegations of money laundering at the Bank of New York. The case has prompted a broader look at alleged official corruption in Russia, the story notes. Allegations that Russian officials may have moved billions of dollars in personal assets out of the country during last year?s ruble collapse, if proven true, could cause embarrassment not only to Russian officials, but also to the IMF and the Clinton Administration, according to the story.
Meanwhile, USA Today (page A1) reports that U.S. Congressional investigations into the Russian money laundering scandal will intensify in the coming months. The House Banking Committee will extend its planned two-day hearing into the fall, the story says, and the Senate Foreign Relations Committee will hold its own inquiry on September 23 and 30. The House hearings will begin September 21 and will concentrate on corruption, money laundering, and possible misuse of IMF loans to Russia, according to the article.