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Soviets Gain IMF Status; Expert Advice Promised

Global economy: Specialists will begin a program of technical assistance to help market forces take over.

October 06, 1991|MICHAEL PARKS, TIMES STAFF WRITER

MOSCOW — The Soviet Union became an associate member of the International Monetary Fund on Saturday amid promises that the organization will get some of the world's best economists to help establish a free-market economy here.

Michel Camdessus, the fund's managing director, said IMF specialists will immediately begin an extensive program of technical assistance to advise the Soviet Union on moving from a state-owned, government-run economy toward one based on the market forces of supply and demand and private enterprise.


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"This will not create miracles overnight," Camdessus said of the planned transition. "The transformation of such an immense economy will require much effort and perseverance."

But the agreement was nonetheless a major step toward the integration of the Soviet Union into the world economy, ending years of go-it-alone policies of socialist self-reliance and using the rigors of international competition to force efficiency in its declining industry and agriculture.

The agreement also reflects the strengthening commitment of the leading industrial nations, including the United States, Japan, Germany and other members of the European Community, to assist in the overhaul of the Soviet economy, providing aid to ensure radical reforms.

Camdessus, speaking after a meeting with President Mikhail S. Gorbachev, said that he was convinced that the Soviet leadership was determined to press ahead with fundamental reforms and at the same time stabilize its economy, where inflation is running at roughly 300% and the banks are running out of money.

"This transformation is indispensable for this country and, at the same time, essential for the world," he said, reflecting on the dangers posed by the economic collapse of a superpower.

"Such a level of inflation is a deadly cancer, not only for the economy but the society of this country," Camdessus added. "Our job is to assist countries to avoid hyper-inflation and to combat it with the greatest energy."

The transition of the socialist economies of Eastern Europe showed, Camdessus continued, that the pace of change can be quite rapid.

"The process will be painful, and dislocations will take place," he said. "But simultaneously there will be a formidable mushrooming of initiatives to create enterprises according to the resources and perspectives opened by a market economy.

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