In response to "A Flawed Program to Develop Banking," a column by Robert Farish, Dec. 1.





Editor:


Your article on the program to develop the Russian banking sector, supported by World Bank/European Bank loans, focuses on a key element of the government's program of transition to a market economy. It is disturbing, however, that Farish, by not checking his facts first, has made a number of factual errors and overlooked the overriding objectives of the Financial Institutions Development Project (FIDP).


First of all, Farish overstates the relative dimensions of the systems modernization investments to be funded by the FIDP. Total orders already placed by the Russian banking sector for systems modernization and related consulting services largely exceed the $240 million allocated under the project. Moreover, the FIDP is intended to accommodate 40 banks (not 20) -- resulting in an average investment per bank of $6 million (not $11 million).


Farish's second factual error concerns the sequencing of automation purchases, twinning programs and technology consulting services supported by the FIDP. The automatic component provides for two phases of technology investments. The first phase is limited to supporting banks' most immediate and basic needs -- personal computers, LANs, and off-the-shelf spreadsheet and word processing programs, not to exceed 10 percent of the financing available for systems modernization.


The second phase of the automation component commences only after the Twinning Program is underway, and it concerns the development of an information strategy and acquisition of items necessary to support the bank's longer-term development strategy.


In both phases of the automation program, banks are required to demonstrate the consistency of their proposed investments with business needs. In order to assist the banks in meeting this requirement, the FIDP provides financing, on a voluntary basis, for the services of external systems experts to advise banks on technical and procurement matters. Coordination and consistency with the Twinning Program is mandated in and carefully monitored by the local Project Implementation Unit.


Having addressed the main factual errors in Farish's article, I would like to point out what, in my view, constitutes a more serious flaw in his portrayal of the FIDP -- a complete omission of any discussion of a core group of modern market-oriented banks in Russia, integrated with and recognized by the international financial community. This core group is intended to serve as a model and as a catalyst for the development of the entire financial system. A reader informed solely by Farish's article would think that the purpose of FIDP is to impose expensive and unnecessary computer systems on a small group of passive Russian banks.


Lou Naumovsky


Moscow Representative, EBRD





Ardy Stoutjesdijk


Moscow Director, World Bank





Soup Kitchen's Closure


Editor:


I had the privilege of being in Moscow earlier this year. During that time I became acquainted with the wonderful work being done among the elderly and homeless by Alexander Ogorodnikov. He had established a soup kitchen and was feeding several hundred needy people every day. I saw the kitchen at work and realized what an important need was being met by men and women of real compassion and mercy on behalf of others. It was one of the most inspiring things I witnessed while I was in Russia.


I was astonished and disappointed when I recently read that this soup kitchen had been shut down. It is one of the hallmarks of a strong and good society to support such a work as Ogorodnikov's.


I would like to register my strong disapproval of the Moscow officials who discontinued such a worthy enterprise. It may not have been making anyone rich in rubles, but it was enriching the life of the Russian character.


Rev. Michael J. Antanaitis


Nashville, Tennessee





A Russian Reformation


In response to "'You're the Boss and I'm a Fool.' And Vice Versa," by Konstantin Zuyev, Nov. 30.





Editor:


I wanted to express my appreciation of Zuyev's very thoughtful article, not in order to gloat over Russia's problems, but with a sense of profound sympathy for the suffering inflicted on a people for centuries, which has resulted in the prevailing moral climate. Indeed, this is a fundamental problem that must be solved before this country can become a flourishing democracy, all the babble in parliament and decrees of the government notwithstanding.


As one looks for parallels in history to the moral climate in Russia today, pre-Reformation Western Europe comes to mind. Even slight familiarity with that subject shows that society throughout the Holy Roman Empire was even more corrupt and law-breaking than that of Russia today. It took a "reformation" to create the kind of values that eventually made democracy possible. Maybe that is where we can begin.


George A. Marquart


Moscow





Photographing Stalin


Editor:


I am writing to draw public attention to one example of the absurdity and nonsense that still exists in Russia.


I used to be a seaman, a purser on a passenger liner. I have travelled all over the world, indulging in my favorite hobby -- photography. I have never been forbidden from taking pictures in any city of any country in the world.


However, on a recent visit to Lenin's mausoleum on Red Square, I was told that it is still forbidden to take pictures of the graves of the former Soviet leaders and the revolutionaries who are buried along the Kremlin wall. Can anyone tell me why the police still do not allow people to take pictures there?


Yevgeny Kunitsyn


Moscow