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By Matthew Russell Lee, CJR PFT NY Post

NEW YORK CITY, June 17 – When the International Monetary Fund held its biweekly embargoed media briefing on June 13, Inner City Press submitted a half dozen questions including on Pakistan, Kenya and Haiti which the IMF answered, see IMF transcript and video here and below. On June 17 on Guatemala, with no direct reference to the place of corruption in the current election much less of ex-UN Edmond Mulet in it, the IMF issued this: "On June 10, 2019, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Guatemala [1] and considered and endorsed the staff appraisal without a meeting. [2]  Background  Underpinned by a strong macroeconomic framework, fundamentals remain solid. Growth has revived since mid-2018 after three years of weaker performance supported by strong remittances and private consumption, a positive fiscal impulse, and a turnaround in credit and investment. In 2018, inflation remained subdued at 3¾ percent, and the overall fiscal deficit and public debt ratios stayed at moderate levels of around 1.8 percent and 25 percent of GDP. The external position remained solid as continued strong remittances offset the worsening terms of trade and trade balance. The banking sector continued to be liquid and well-capitalized, and nonperforming loans remained at low levels and well-provisioned.  Near-term growth prospects are positive aided by supportive fiscal and monetary policies. Growth is projected to peak at 3.7 in 2021, before converging to its potential rate of 3½ percent by 2024, while inflation is projected to remain within the 4±1 percent target. The fiscal deficit is expected to widen to 2.4 percent next year, enabling a cumulative fiscal impulse of 0.6 percent of GDP over 2019−20, while monetary policy would remain accommodative over the near term and proceed with a gradual normalization thereafter. The current account balance is expected deteriorate to -1½ percent of GDP by 2024, nonetheless foreign reserves would remain within comfortable ranges. Risks to outlook are titled to the downside coming primarily from a growth slowdown in the U.S. and other regional trade partners, and, domestically, from lagged implementation of business climate reforms and anticorruption efforts.  Over the medium term, higher and more inclusive growth is key to meaningfully lift Guatemalans’ living standards, while preserving the strong macroeconomic buffers. Ongoing efforts to improve spending execution capacities, reverse the decline in tax collections, secure a more efficient and agile use of public resources, and foster a prosperous business environment, should continue to promote private sector growth and the attainment of the SDGs.  Executive Board Assessment  In concluding the 2019 Article IV Consultation with Guatemala, Executive Directors endorsed staff’s appraisal, as follows:  The outlook is positive amidst strong fundamentals, but efforts to raise potential growth remain a priority to improve living standards. Building consensus to implement long-delayed business climate and public sector reforms is key to promote private sector growth and social and infrastructure spending conducive to the attainment of the SDGs.  Near-term growth is poised for a rebound. Growth is projected to accelerate and peak in 2021, propelled by a further fiscal impulse, exports recovery and stronger investment momentum, before converging to its potential rate of 3½ percent by 2024....Strengthening the Attorney General’s Office and judicial capacities should be focal points, with efforts aimed at preserving the legal and institutional progress, and existing capabilities, and further fortifying the investigative and prosecutorial competences and reducing the judicial backlog. Staff welcomes the authorities’ plans to extend the coverage of the public prosecutor’s office and to consolidate its financial independence. Complementing these efforts, a preventive anticorruption strategy should strengthen the procurement and the AML/CFT frameworks, reduce red tape, improve contract enforcement, and increase the transparency of tax exemptions.  Building on a sound financial system, the authorities should focus on promoting financial inclusion. Further efforts are needed to operationalize the 2016 microfinance law, and to set in motion simplified bank accounts and credit bureaus. The creation of an interinstitutional Commission to coordinate the implementation of a National Strategy for Financial Inclusion represents an opportunity to promote FinTech solutions. The authorities’ intention to explore regulatory responses via a sandbox approach that balances technological innovation with financial stability, is welcome." We'll have more on this.

  On June 13 about Pakistan Inner City Press asked, "what is the IMF's response to JI leader Sirajul Haq criticism of the "budget of IMF purely concentrating only on increasing taxes and prices of essential commodities, and was just read out by its slaves.  He said the budget did not care about reducing the problems of common man and price hike, adding that it was just a jugglery of figures and words which was incomprehensible even to the economic champions of the government."

  IMF Spokesperson Gerry Rice in the briefing said, transcript and video here: "There is a question on Pakistan, from our friend Matthew Lee in New York, asking in summary what is the IMF's response to the criticism of the Pakistani budget which was recently announced that the IMF is purely concentrating on increasing taxes and prices and doesn’t care about reducing the problems of the common man. Again, stepping back, Pakistan has requested a program from the IMF. Last month we reached a staff level agreement on that program so that’s now under discussion. So, I don’t really have a specific comment on the budget.  But in terms of our discussions, I can say that we are talking about broadly how to restore stronger, more balanced growth by reducing domestic and external imbalances, improving the business environment, strengthening institutions, increasing transparency and importantly protecting social spending. So that last part does indeed speak broadly to the point that Matthew is raising, that social spending is and protecting social spending is in fact an important part of the discussion that we are having on a program with Pakistan."

 Inner City Press asked asked, "On Kenya, please state the status with the IMF given reports that the country is "on course to renewing its $1.5 billion standby credit facility with the IMF signing a deal with selected banks to release close to Ksh1 trillion ($10 billion) in loans to the private sector despite the prevailing rate caps."  On the upcoming June 25-26 Bahrain conference on Palestine, given that the IMF has said it "has been invited to the meeting and expects to attend, along with other international financial institutions," please state if the IMF understands that the wider United Nations will attend, and/or has been invited."

Rice said, "There is a question on Kenya. “Please give the status of the IMF program with Kenya given reports that it's on course to renew its standby credit facility.” And on that about all I can say is that negotiations indeed are ongoing on a Fund supported program. I don't have a timetable on that but with the negotiations are underway."

  Inner City Press asked asked, again, for an update on Haiti.

 Rice said, "There is a final question online that I want to take which is on Haiti and asking about developments there and the status of IMF discussions on a program. And again, this is a case where recently there have been protests on the streets and some violence I'm sad to say. So, on that front of course as always, we express our condolences for the loss of life there in Sunday's demonstrations in particular. And, what I can also say is that of course we hope that the dialogue can go forward there and, you know, eliminate the violence that’s taking place and that we can have some consensus around a reform agenda.  On the program and discussions around the program, given the time that has now elapsed since the IMF team reached a staff level agreement, that was back in March. And given the changes in Haiti's' economic situation a reassessment of the economic framework and of the measures needed to stabilize and support the economy is going to be needed before we would be in the position to propose a program to our executive board. That said, we look forward to engaging with Haiti's new government as soon as feasible to find the best way forward and to protect the most vulnerable groups, improve governance and secure macroeconomic stability. So that’s where we are on Haiti."

  It's appreciated.

On May 23 Inner City Press asked, "what is the IMF's response to / comment or explanation on  the May 15 letter addressed to Congolese Prime Minister Clement Mouamba that "The advisers to the Republic wish to make you aware of the major risk of the programme’s rejection by the IMF’s board,” said Congo hired French financial advisers Lazard and more recently Parnasse, a firm employing former IMF Managing Director Dominique Stauss-Kahn, to assist it in the negotiations with the Fund. How is this not a conflict of interest?"

  IMF spokesperson Gerry Rice to his credit took the question, on camera, emphasizing that the discussion have been only between IMF staff and the authorities, no one else. He said that address the conflict of interest question. He also noted the IMF's May 9 announcement of a staff level agreement. But when will it go to the Board?

 On Barbados, Inner City Press asked for "   the IMF's response to Senator Crystal Drakes saying  that the Mia Mottley administration may have hit the benchmarks set under the IMF-sanctioned Barbados Economic Recovery and Transformation programme but is ignoring it’s sustained and impending collateral damage to the society.  “All of this has come at a social cost. Meeting those targets have been economic winds but socially we have paid a serious price for meeting those targets.  “In reducing our debt and closing the fiscal gap, Barbadians had to give up their wealth, particularly the vulnerable group of pensioners.  “Their disposable income through higher taxes and user fees, has resulted in persons falling below the poverty line.”

  Rice said the IMF's discussions had been with social partners including the unions and that the floor for social spending had been met, by an ample margin, in December and March.

 On Canada Inner City Press asked, "   On Canada, please explain how this IMF "advice" is not anti-poor: “The government is under pressure to ease macroprudential policy or introduce new initiatives that buttress housing activity,” said the IMF in its report.  “This would be ill-advised, as household debt remains high and a gradual slowdown in the housing market is desirable to reduce vulnerabilities.”  The tightened mortgage rules, brought in by Finance Minister Bill Morneau, mandated that would-be borrowers undergo a stress test to determine whether they could still make payments if faced with higher interest rates or less income.  In a report last month that calls for a rethinking of the mortgage stress test, CIBC economist Benjamin Tal estimated the measure accounted for more than half of a $25-billion, or eight per cent, drop in new mortgages last year." Rice said, among other things, that the IMF supports the government. More on this, including transcript, to follow. And on this:

  As China uses its Belt and Road Initiative to take over ports in Sri Lanka and prospectively Kenya, while using supposed NGOs to bribe UN officials including bidding on an oil company owned by Gulbenkian Foundations whose payments to UN Secretary General Antonio Guterres were omitted from his public financial disclosure covering 2016, even the IMF's Christine Lagarde is genuflecting in Beijing, albeit less cravenly than Guterres. Unlike Guterres' obsequious blue washing of BRI, Lagarde in her April 26 speech as least gently chided China for unsustainable loans. She said, "The BRI is clearly having an impact. From stimulating infrastructure investment to developing new global supply chains, some of the promises of BRI are being realized. Consider Kazakhstan, where a new manufacturing zone is beginning to unleash previously untapped economic potential. Or look at Senegal, where robust economic growth of over 6 percent in each of the last four years was supported partly by BRI-linked investment projects, including the construction of a new highway linking the airport to three large cities. At the same time, history has taught us that, if not managed carefully, infrastructure investments can lead to a problematic increase in debt. I have said before that, to be fully successful, the Belt and Road should only go where it is needed. I would add today that it should only go where it is sustainable, in all aspects." But what does this mean in terms of the BRI loans to Sri Lanka, and to the Kenya railroad? We'll have more on this.

When the International Monetary Fund held its biweekly embargoed media briefing on March 7, Inner City Press submitted five questions including on Haiti which the IMF answered. But on March 21 the IMF added this, that it hopes the "uncertainty" is resolved quickly. Inner City Press has submitted five new questions, unanswered as of the embargo time perhaps due to the IMF changing its media website and sign in: "On Congo-Brazzaville, what is the IMF's comment on the revolving door report that The Republic of Congo sought the assistance of former International Monetary Fund Managing Director Dominique Strauss-Kahn as the debt-strapped nation’s bid to secure a bailout stretches into a third year?"

More here.

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