The IMF has had another emergency program in place sinceDecember 1997 but the supplementary reserve facility, as it iscalled, only provides cash to countries already in the throes ofcrisis. Critics, including some European and developing-countryofficials, warn that the scheme could backfire. Because itimplicitly guarantees repayment, they say, it actually couldencourage excessive private lending and speculative investment inrisky countries. According to IMF First Deputy Managing Director StanleyFischer, however, the credit line ''will encourage goodbehavior'' and help convince investors ''that the country ismeeting high standards of economic performance. Finance officials have complained that governments in aposition to qualify for the money probably wouldn't need it whilethose in need probably wouldn't qualify.
Misgivings also remain about the cost of the emergency credits.
The IMF would charge borrowers seven to eight percent, compared with its normalcharges of four to five percent. Loans would be disbursed within one yearand repayments would be expected within 18 months, with a one-yearextension possible in an extreme case. Mexican Finance Minister Jose Angel Gurria has assailed thescheme's preconditions, saying they bar countries, including his,that are already using IMF loans to offset crises not of their own making. Peruvian President Alberto Fujimori is weighing a possible re-election bid next April. His popularity hinges on the economy.