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By Matthew Russell Lee, CJR PFT NY Post

NEW YORK CITY, February 21 – When the International Monetary Fund held its biweekly embargoed media briefing on February 7, Inner City Press submitted five questions including two on Zimbabwe and Barbados which the IMF answered, see below. Now on February 21 from the IMF on Australia: "On February 4, 2019, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation [1] with Australia.  Australia has advanced further in its economic rebalancing after the end of the mining investment boom of the 2000s. Economic growth picked up to rates above that of potential output in the first half of 2018, with solid private and public consumption and residential investment more than offsetting the drag from delays in public investment plans and drought. Growth slowed down somewhat in 2018Q3. Labor market conditions also improved, with strong employment growth and declining unemployment.  The housing market has been cooling after a long boom. The cooling since mid-2017 reflects a number of factors, including the bottoming out of interest rates globally, the weakening of foreign and domestic investor demand, and the tightening of lending standards and bank capital requirements. The housing market correction is helping housing affordability, but accumulated vulnerabilities related to house prices and debt levels remain high. On the supply side, progress has been made in using City Deals, agreements across all levels of government that integrate planning and infrastructure delivery for new developments and redevelopments.  The fiscal policy stance has been supportive, with increased infrastructure spending. The Commonwealth government deficit has narrowed to 0.3 percent of GDP and should move into surplus in FY2019/20. The authorities have accelerated the lowering of the company tax rate for small companies with a turnover of up to A$50 million to 25 percent by FY2021/22 and set up a schedule for cutting personal income taxes and rationalizing the tax brackets over the next seven years. This should maintain a tax-to-GDP ceiling at the federal level of 23.9 percent of GDP while protecting its commitment to a budget surplus of 1 percent of GDP over the business cycle as a medium-term fiscal anchor.  The monetary policy stance remains accommodative, with the current policy rate being on hold at 1.5 percent since August 2016 and inflation hovering just below the lower end of the Reserve Bank of Australia’s (RBA’s) target range of 2-3 percent. The cash rate setting implies a real policy rate of zero relative to estimates of the real neutral interest rate in the range of 1-2 percent.  Australian banks are well capitalized and profitable. In 2018Q3 compared with end-2017, banks’ regulatory capital to risk-weighted assets ratio remained stable at 14.7 percent, and the return on assets increased by 0.2 percentage point to 1.4 percent. The ratio of liquid assets to total assets remained relatively stable at 17.2 percent in 2018Q3. Stress tests under Financial Sector Assessment Program (FSAP), conducted in parallel with the Article IV consultation, found banks to be resilient to solvency and liquidity stress but also noted the vulnerability to external funding shocks, given that banks’ wholesale funding accounts for about one-third of total liabilities, of which two-thirds are from external sources."

From the IMF on February 14 about Uganda, where Sam and Edith Kutesa gave inside information on Crane Bank after taking $500,000 from CEFC China Energy UNSG Antonio Guterres is linked to and covers up for, this: "An IMF mission visited Uganda January 29 to February 12, 2019 to hold discussions for the 2019 Article IV consultations. Economic growth has recovered, while progress on social indicators is mixed and poverty reduction has stalled. Fiscal and external vulnerabilities have increased, reflecting scaled-up infrastructure investment, but also weaknesses in the budget process. To achieve more inclusive growth, the trend towards reduced budget allocations for social sectors should be reversed. Monetary policy has maintained low inflation and can stay the course. Banking sector health has improved, and credit to the private sector has increased.  Recent Economic Developments and Outlook  1. Uganda’s economy maintains momentum. The economy grew by 6.1 percent in FY17/18, supported by improvements in the services sector and a rebound in agriculture from the previous year’s drought. Investor surveys indicate that business conditions and sentiment are strong. Credit to the private sector has improved, helped by a supportive monetary policy stance. Growth is projected at 6.3 percent in FY18/19, as manufacturing, construction, and services continue to expand.  2. Social indicators show mixed progress. Literacy and numeracy improved until 2010 but have stagnated since... In this regard, cabinet’s recent decision to start the accession process to become a member of the Extractive Industries Transparency Initiative is a welcome step. Uganda has achieved important progress in addressing technical compliance issues with the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) standards and was removed from the Financial Action Task Force’s (FATF’s) grey list in FY17/18. The authorities are encouraged to continue their work to align their AML/CFT regime with strengthened international standards to ensure that Uganda’s regime is fully compliant with FATF requirements. Uganda’s application to the Egmont Group is one step in this direction.  The mission met with Minister Matia Kasaija, Governor Emmanuel Tumusiime-Mutebile, Permanent Secretary/Secretary to the Treasury Keith Muhakanizi, Deputy Governor Louis Kasekende, Commissioner General Doris Akol, Acting Director Uganda Bureau of Statistics Imelda Atai Musana, senior government officials, civil society, unions, and the private sector. The IMF team welcomes the open and constructive discussions with the authorities and expresses its gratitude for their hospitality and excellent cooperation." On February 12 from IMF spokesperson Gerry Rice on Ecuador, this: "Gerry Rice, the International Monetary Fund’s chief spokesperson, made the following statement on Ecuador today:     “The IMF together with other partner multilateral financial institutions have been engaged in a close dialogue with the Ecuadorian authorities over policies to strengthen Ecuador’s economy for the benefit of all Ecuadorians.     “As part of this partnership, the Ecuadorian authorities and the IMF have agreed to deepen this dialogue with the goal of working toward a possible IMF-supported financial arrangement. This potential IMF supported arrangement would aim to protect the poor and most vulnerable, boost competitiveness and job creation, improve transparency and strengthen the fight against corruption as well as fortify the institutional foundations for dollarization.     “In this context, an IMF team is currently in Quito to continue this dialogue and identify how the IMF can best support the government’s home-grown policy plan." This is the same Ecuador whose foreign minister Maria Fernanda Espinosa Garcés is claiming openness at the UN while inviting bribees and banning the Press...  On February 7 Inner City Press asked, "On Zimbabwe, what is the IMF's comment on reports that " Zimbabwe has cleared its arrears with the IMF, but the country still owes $687 million to the AfDB, $1.4 billion to the World Bank and $322 million to the European Investment Bank" and on recent developments including crackdowns in the country?" Spokesperson Gerry Rice said that the IMF's rules mean it would not lend while arrears exist to other multilateral organizations; on the crackdown he emphasized that all stakeholders should proceed "peacefully." Inner City Press also asked, "On Barbados, former co-chair of Jamaica’s EPOC Richard Byles has said the circumstances which forced Jamaica to turn to the IMF were very similar to those currently faced by Barbados with very high debt to GDP ratios and low foreign reserves. Any IMF comment? Has Barbados reached out to the IMF?" Rice responded about the EFF program initiated last October - here's from the transcript: "There is one other -- a couple of other questions on line I'll take. One is on Barbados where, again, Matthew Lee is asking the former co-chair of Jamaica's EPOC, Richard Byles, has said the circumstances which forced Jamaica to turn to the IMF were very similar to those currently faced by Barbados, very high debt levels, low foreign reserve. Any IMF comment, has Barbados reached out to the IMF, the answer is clearly yes because last October our Board approved a program, a financial program for Barbados under our extended fund facility, one of those instruments that we can use when countries are in difficulty. So just confirming that." And on Zimbabwe: "Then let me take a few calls from this -- there is one on Zimbabwe asking about -- what is our comment on reports that Zimbabwe has cleared its arrears with the IMF but the country still owes, he says 687 million to the African Development Bank, 1.4 billion to the World Bank, 322 million to the European investment bank and on recent developments including the crackdowns in the country.  We have talked quite a bit about Zimbabwe here in the past but just to answer the question, it’s -- I can confirm that -- and I’ve said it before here, that Zimbabwe has cleared, indeed, its arrears to the IMF but arrears remain outstanding to other multilateral creditors, including the World Bank and that severely limits Zimbabwe’s access to international financial support -- Zimbabwe has no arrears to the IMF. Our rules preclude lending given the arrears to other financial institutions.  And on the crackdown he asks about, I don't have too much to add beyond what I said here before, which is that we encourage all stakeholders to collaborate peacefully -- and I think that's the word I would want to stress, is the "peacefully" -- and, you know, try to develop policies that will stabilize the economy and promote sustainable and inclusive growth. It's clearly a very difficult situation there in Zimbabwe and we recognize that." Inner City Press also asked, "On Nigeria, Minister of Budget and National Planning, Senator Udo Udoma, has said the nation’s economy will grow by 3.01 per cent this year, compared to a forecast of two per cent by the International Monetary Fund. What is the IMF's response?  What is the IMF's comment on the making public of US “Field Manual (FM) 3-05.130, Army Special Operations Forces Unconventional Warfare” and its mentions of the IMF? On Cameroon, now the US is cutting military aid due to human rights violations (and a Cameroon minister threatening opponents with a Holocaust). Do these issues, and the continued crackdown in the Southwest and Northwest of the country, have no impact the IMF's continued programs with the Biya government?" Somehow these Cameroon questions don't get answered. We'll have more on this. On Venezuela Rice made it clear that IMF has not spoken with Guaido, saying the IMF will take its guidance from the international community and stating of the IMF, "we don't do politics, we do economics." We'll have more on this.  Back from the IMF's January 17 transcript answering Inner City Press' Zimbabwe question at the time. RICE: "I'll take one more online and that's about Zimbabwe and asking for the status of where we are with the countries debt and relation with the IMF and did we have any comment on the unrest and the government crackdown there is the question.  So in answer to that, I would say that of course Zimbabwe is facing major challenges and just in terms of the unrest, we encourage all stakeholders to collaborate peacefully in developing and implementing policies that will stabilize the economy and promote sustainable and inclusive growth.  On the overall economic situation, debt and the IMF, there has been no real change in what I have said here recently which is Zimbabwe continues to be in a difficult situation regarding debt with protracted arrears to official creditors including multilateral creditors such as the World Bank which severely limits Zimbabwe's access to international financial support.  In terms of the IMF, Zimbabwe has in fact cleared its arrears to us, to the Fund, but our rules preclude lending to a country that is still in or under arrears to other international financial situations. So until that particular situation is resolved, we would not be moving forward with a financial support for Zimbabwe.  I said here the last time that the authority's economic policies we felt were headed in the right direction broadly in terms of addressing the fiscal deficit and monetary policy and so on. I won't repeat what I said the last time but that’s where we are on Zimbabwe."

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