August 17, 2000
Russia, Brazil and Mexico have repaid billions of dollars in loans made by the International Monetary Fund (IMF) during the world financial crisis, new figures show.
But other countries caught in the 1997-98 economic crisis, like Thailand and Indonesia, are finding it difficult to make any repayments at all. The IMF has published details of the financial position of all its member governments for the first time on its website.
The IMF lent Russia billions of dollars during the summer of 1998 to try and prevent the devaluation of the rouble, whose collapse brought the world financial system close to melt-down. Russia is still the biggest borrower from the IMF, with $12.6bn in loans outstanding. The IMF suspended its programme with Russia last year following allegations that the Russian central bank diverted part of the loans to off-shore accounts. However, there are hopes that the IMF will reach agreement with the new Putin government that will allow lending to resume by the autumn.
The size of Russia's repayments - which reached $3.6bn during the year - will make it easier for the IMF and Russia to reach that agreement. Russia still owes the IMF billions of dollars. But its ability to repay has been boosted by the strong export earnings from its oil and gas sector, and strong performance from the economy, which is now projected to grow at around 7% this year. President Putin has pledged to make economic reform his top priority.
Latin glee, Asian woes
Meanwhile, the figures also show which developing countries have managed to come out strongly of the economic crisis, and which ones are still struggling.
In Asia, Indonesia has been unable to reduce its reliance on IMF lending, and indeed now has more than $1bn more borrowing from the Fund than it did one year ago. Thailand has also been unable to make any net repayments this year. Korea, however, whose economy has bounced back strongly from the Asia crisis, has repaid more than $3.2bn and is well on course to repay its entire loan within the next year.
But the star performer in debt repayment is Brazil, which also faced a devaluation crisis in 1998. Brazil made repayments of $7.4bn last year, and now has a total loan of only $1.7bn. Mexico, which did not face an economic crisis in l997-98, but had huge borrowings during the 1994-5 peso crisis, also made major repayments last year.
Debt relief slow
The figures show that the IMF has reduced its overall lending from a record $80bn at the height of the world financial crisis in 1998 to $55bn by the middle of 2000.
But they also reveal the slow pace of debt relief under the HIPC (highly indebted poor countries) initiative. Only some $275m has been disbursed to poor countries for debt relief by July 2000, out of some $650m that was promised so far. Other payments to poor countries under structural adjustment funds also slowed to around $130m each quarter, about half their pace of two years ago.
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