Official Creditor Seniority and Burden-Sharing in the Former Soviet Bloc

Jeremy Bulow,

JB

Jeremy Bulow Stanford University

Afonso S. Bevilaqua, and

ASB

Afonso S. Bevilaqua University of California at Berkeley

Kenneth Rogoff

Kenneth Rogoff Professor of Economics - Harvard University

Discussants: Michael Bruno and

MB

Michael Bruno

Susan M. Collins

Susan M. Collins President - Federal Reserve Bank of Boston, Former Nonresident Senior Fellow - Economic Studies

THE COLLAPSE of the Soviet empire has created an unprecedented opportunity
for political and economic reform in Eastern Europe and the
former Soviet Union (FSU). In response, the Group of Seven industrialized
democracies (G-7) has asked the two main international financial
institutions (IFIs)-the World Bank and the International Monetary
Fund (IMF)-to assume a leadership role in providing loans to the region.
(Private capital flows are expected to be relatively small.) Current
estimates suggest that the IFIs may be responsible for close to half of
overall planned aid to the FSU. Recently, the IMF announced plans to
lend $25 billion to $30 billion to the FSU over the next four years; the
World Bank is expected to pitch in an additional $12 billion to $15
billion