P.M. BRIEFING : IMF Prods East Bloc on Reform

The head of the International Monetary Fund today urged East European countries to move quickly toward market economies.

Warning against half-measures in Eastern Europe, IMF Managing Director Michel Camdessus stressed that market reform programs must be introduced as rapidly as possible and must be as general as possible for them to succeed.

“You can’t take a little liberalization of prices, a little autonomy of enterprises . . . a little less state regulation, because that doesn’t work,” he said.

He also emphasized the need for a “social safety net” to cushion the impact of the reforms on vulnerable sectors of the population.

“The passage to a market economy does not create poverty, but it reveals it,” he said. “The characteristics of a centralized economy are unemployment and inflation in waiting. When you liberalize prices . . . these increase.”