Powerful Moscow mayor Yuri Luzhkov said on Wednesday serious policy mistakes by the International Monetary Fund and Western banks had ensured the billions they lent Russia "were thrown into the fire."
Luzhkov, who is regarded as a possible candidate in Russia's 2000 presidential election, repeated that he had not ruled out taking part in the race to replace Boris Yeltsin. He also vowed there would be no food shortages in Moscow this winter.Luzhkov said Moscow's economic policies were far better than those of the Russian government, which on Aug. 17 announced it was devaluing the ruble, defaulting on some foreign debts and freezing GKO treasury bills that had offered high interest.
Experts say Russia's financial collapse could cost the West tens of billions of dollars but Luzhkov said the financial institutions had only themselves to blame.
"All the different kinds of loans, which include the mad interest rates offered on the GKOs, were given to Russia for consumption.
"How can you expect the money to be repaid when it was given for consumption, when such interest rates were being offered, especially given that there was some misappropriation?" he said. Luzhkov said the IMF had made a serious strategic error by treating Russia like a small east European country.