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For more information, see Russian Federation and the IMF
A Letter to the Editor
by John Odling-Smee
Director of the International Monetary Fund’s (IMF’s)
European II Department
November 30, 1998
The IMF has worked closely with several Russian governments to work out practical—and not orthodox—ways of defining a role for the state that can benefit the country. These included encouraging Russia to create a level playing field for the emergence of the private sector. Successive governments introduced policies to remove unnecessary government regulations and controls, strengthen the legal and tax systems, and establish an arms-length relationship between business and government. They were not unreasonable or unrealistic goals, and significant progress was made.
In the end, however, implementation has fallen far short of what was needed to see Russia through its difficult transition. A key reason for this was the failure of the Russian political establishment to take ownership of the reform agenda. President Yeltsin, the Duma, regional governments and portions of the federal executive all failed to support measures that were unpopular, especially with powerful interest groups. It is now up to the Russian government and people to find a solution to their country's crisis. The IMF and the international community stand ready to work with them, if there is a willingness to address the problems directly.