This Week

"This Week" Continued...

Issue: "Exodus from Disney," Nov. 7, 1998

Refilling the trough

As Washington last week formally handed over another $18 billion to the International Monetary Fund, two more countries reached out their hands for global bailout money. The ever-unstable Russian government gave the IMF a plan for pulling itself out of its economic crisis. This blueprint, full of price and currency controls, was a condition for getting another injection from the $22.6 billion bailout package that was negotiated over the summer. The Russians say they need cash to pay their bills. The government is so desperate to save the ruble that it plans to prevent stores from setting prices in dollars or any currency other than rubles. Also, exporters would be required to sell 75 percent of profits to the state for rubles. "Russia at this stage needs state regulation," says Prime Minister Yevgeny Primakov. Meanwhile, Brazil unveiled its own plan for a $30 billion package from the IMF. That scheme involves tax increases and spending cuts that are expected to slow economic growth and raise unemployment. Nevertheless, Treasury Secretary Robert Rubin supports the aid, saying it is essential for the government to implement the program "promptly and convincingly." Ironically, Mr. Rubin also blames the global economic crisis on the industrial nations that extend excessive credit without properly weighing the risks. The biggest example is the Thai baht. When it collapsed in July 1997, it took many currencies and other financial markets across Southeast Asia with it. Financial turmoil soon spread around the globe. "Thailand was simply the first country in which financial institutions erupted," Mr. Rubin told the Conference of the Americas. "This crisis is the result of problems that developed over many years." He explained, "One difference now is how much it all matters in the interdependent global economy, where decisions can affect not only the country involved but, to a far greater extent than before, other countries around the globe."

Caught in the middle

Back in the Middle East, Israeli Prime Minister Benjamin Netanyahu and Palestinian leader Yasser Arafat faced the aftermath to their historic peace agreement reached in Wye, Md., a week ago that was neither peaceful nor agreeable. From the ultra-right parties, which form part of Mr. Netanyahu's coalition government, opposition to his concessions to cede West Bank territory to Palestinians may force the prime minister to call early elections. The outcry back home forced Mr. Netanyahu to postpone a meeting of cabinet ministers scheduled to vote on the Wye Memorandum. Jewish settlers demonstrated against Mr. Netanyahu outside his residence and during a Likud rally, reminding Shin Bet, the security force, of the scenario that led to the assassination of Yitzhak Rabin, Israel's prime minister who was killed by a Jewish extremist in 1995 after also reaching a land-for-peace accord with the Palestinians. For Mr. Arafat, upholding his end of the bargain looked equally difficult. Palestinian security forces are under a deadline to submit a paper to the CIA this week outlining plans for rooting out terrorist cells. The U.S. intelligence agency will oversee the terrorist cleanup, but a car bomb attack on Oct. 29 proved how high the bar is.


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