Russian Senator: Argentinian Ecnomic Crisis Is "latest Failure" Of Imf

Mikhail Margelov, chairman of the Federation Council (upper chamber of Russia's parliament) committee for international affairs, has described the economic crisis in Argentina as "the latest failure of the IMF." According to him, the current crisis and the 1998 default in Russia were the result of blindly following IMF recommendations - stabilising loans in exchange for drastic cutbacks on social expenditure. The main conclusion that can be drawn from the Argentinian experience, Margelov stressed, was that Russia had chosen the right course in relations with the IMF. According to him, the 1998 default forced a serious re-think in Russia, i.e. "if serious structural reforms are not carried out, everything could end in a national disaster." All this, the chairman is convinced, proves again that economic reform is an extremely "difficult and risky" business. At the same time, Margelov stressed that investors in Argentina were rushing to buy shares of their companies prior to a possible future devaluation in an effort to avoid losses. The senator emphasised that this spoke about the fact that there were facilities in Argentina open to investment, while in Russia in 1998 domestic investors bought only dollars, as no one took the idea into their heads to save their capital in their companies' shares.