AFP January 31 Soros says IMF should pull out of Russia
US financier George Soros said on Sunday the International Monetary Fund should pull out of Russia in view of the current political climate there. Foreign institutions and investors "have lost the ability to influence the direction of events" in Russia, Soros, chairman of the influential Soros Fund Management, told a news conference at the World Economic Forum meeting.
"My personal belief is I do think that with the political developments moving in the wrong direction, the IMF should pull out of Russia," said Soros, asked whether the IMF should withdraw funding.
"For 10 years ... we had the ability to influence things in Russia and move them in the right direction and we flubbed it," Soros told reporters.
He pointed to the conflict in Chechnya as a worrying sign of political trends there.
Civilian deaths and the high number of refugees - up to 250,000 have fled Chechnya since the fighting began - have prompted international criticism of the war, which is popular among Russians.
On Saturday, the IMF's No.2 official said the fund may delay paying Russia the second US$460 million installment of a US$4.5 billion loan until after presidential elections in March.
Stanley Fischer told reporters there is little evidence to suggest Moscow has made progress with some economic reforms crucial to approving the installment.
The payment originally was due in September, but was delayed after the IMF imposed new conditions amid international concern about what happened to previous loans.
The Russian government is counting on receiving four IMF installments of US$460 million each in 2000 to help finance its budget.
The IMF agreed to the loan programme last July, releasing US$640 million at the time.
US Treasury Secretary Lawrence Summers Sunday urged the Russian government to rebuild its economy around the "rule of law," taking steps to combat corruption and revive confidence among both local and international investors.
He said Moscow should rely on sound economic management, and not capital controls, to staunch the flood of capital out of the country.
Summers met on Sunday with Mikhail Kasyanov, Russia's finance minister.
The two discussed economic conditions in Russia and - "in general terms" - Moscow's rocky relationship with the IMF, he said.