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As IMF Urges Pakistan to Raise Tax, Dodges Food Prices, Cote d'Ivoire and, Belatedly, Bulgaria

By Matthew Russell Lee

UNITED NATIONS, February 3, updated -- With protests related to rising food prices and mis-government spreading worldwide, the IMF in Pakistan is reportedly urging the much-opposed government to raise taxes on agricultural income, and thereby food prices too.

At the IMF's fortnightly press briefing on Thursday, Inner City Press submitted four question, including about Pakistan, food prices and Cote d'Ivoire. IMF spokesperson Caroline Atkinson, calling three of the four questions “bilateral,” read out and answered only one:

“On Pakistan, can you confirm the IMF is accepting delay in the Reformed General Sales Tax, in exchange for the gov't raising other taxes, such as taxes on agricultural income? What impact could this have on food prices?”

To this, Ms. Atkinson said that what she would confirm was that the IMF had a team in Pakistan, working closely with the government “to get the program back on track” including “revenue raising measure so that they have the resources... especially after the floods." But what safeguards are there that this revenue raising won't further raise food prices?

Among the questions that Atkinson called “bilateral” was one directly on food prices:

“On Africa, what is the IMF's response to Botswana Central Bank governor Linah Mohohlo's statement that 'The IMF (International Monetary Fund) is also lagging behind. I am almost sure the problems of Africa will not reach the board of the IMF.' She added that higher food inflation in the continent squeezes the poor?”

One wonders how this is a “bilateral” question -- does that mean, not of general interest? Those in person at the IMF's briefing asked question after question about Egypt, even after Atkinson made it clear she would not answer, saying “we are not political experts.” She would not even answer if the IMF had been in contact this week with Egypt's finance minister.

Protest in Tunisia, IMF role not acknowledged, other Qs called bilateral

  In response to a question from an Israeli newspaper, Ms. Atkinson acknowledged the obvious, that events in Egypt would have regional impact. But here is another question she called bilateral:

“On Cote d'Ivoire, what is the IMF's comment on the recent sovereign bond default? What does the IMF think the impacts would be of Cote d'Ivoire breaking from the CFA and establishing its own currency? What are the IMF's plans on Cote d'Ivoire?”

  At the end of the IMF briefing, Spokesperson Atkinson concluded, "I should just say that we've received some bilateral questions on Botswana, Cote d'Ivoire and Romania that will be answered bilaterally." This was the question about protests against the IMF also not answered at the briefing nor by embargo deadline:

On Romania, what is the IMF's response to 1000s of people protesting in Romania after “the government cut public workers' salaries, increased the sales tax from 19 to 24 per cent and cut child benefits to meet demands by the IMF”?

  Recently at the UN, a wire service reporter proposed that other reporters at briefings should only ask questions in which “everyone” is interested. Perhaps the IMF has adopted this approach. But it goes around world trumpeting its interest in Africa, for example. How then are questions about Cote d'Ivoire and Botswana “bilateral”? Watch this site.

Update: later, this arrived:

From: IMF spokesperson
Date: Mon, Feb 7, 2011 at 6:11 PM
Subject: FW: Inner City today--Romania
To: Inner City Press

Dear Matthew, Apologies for the delay in getting back to you. Below you will find our answer with regard to your question on Romania, which you can attribute to an IMF spokesperson.

“Following very large nominal wage increases during the economic boom period in Romania, public wages were cut 25 percent last summer. Adjustment of the public sector was necessary and the authorities decided on a combination of expenditure cuts and increases of revenues to put the public finances back on a sustainable path.”

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