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By Matthew Russell Lee, CJR PFT NY Post

NEW YORK CITY, July 26 – When the International Monetary Fund held its biweekly embargoed media briefing on July 25, Inner City Press submitted five questions including on Jamaica and Lebanon which the IMF answered, see below. On July 26 on Guinea the IMF said, "On July 26, 2019, the Executive Board of the International Monetary Fund (IMF) completed the third review of Guinea’s economic performance under the program supported by an Extended Credit Facility (ECF). Completion of this review enables the immediate disbursement of SDR 17.213 million (about US$23.9 million), bringing total disbursements under the arrangement to SDR 68.849 million (about US$95.7 million). The Board also approved the authorities’ request for modification of a performance criterion.  Guinea’s three-year ECF arrangement was approved by the Executive Board of the IMF on December 11, 2017 (see Press Release No. 17/484) for SDR 120.488 million (about US$170.1 million at the time of the arrangement’s approval, or 56.25 percent of Guinea’s quota). The ECF arrangement aims at strengthening resilience, scaling-up public investment in infrastructure while preserving stability, strengthening social safety nets, and promoting private sector development.  Following the Executive Board’s discussion on Guinea, Mr. Mitsuhiro Furusawa, Acting Chair and Deputy Managing Director, issued the following statement:  “Guinea’s growth momentum continues and the medium-term outlook is favorable with some downside risks. The authorities are moving ahead in the implementation of macroeconomic policies and reforms to foster high and broad-based growth and reduce poverty while preserving stability. Performance under the ECF-supported program against end-December 2018 targets was satisfactory, and program-supported reforms have advanced. Program performance continued to be satisfactory through the first quarter of 2019. The authorities have started implementing additional adjustment measures to achieve the end-2019 fiscal target, given higher than-anticipated electricity subsidies and lower tax revenues.  “Achieving a basic fiscal surplus will preserve stability while growth-supporting public investment will be scaled-up. Advancing programmed tax revenue measures and applying the petroleum price adjustment mechanism will support revenue mobilization. Gradually bringing electricity tariffs to cost recovery levels will reduce untargeted electricity subsidies and create fiscal space for priority spending. In parallel, social safety nets will be strengthened to protect the most vulnerable and reduce poverty. Improving public investment management will foster investment returns and efficiency. Maintaining non-concessional loans to programmed amounts and continuing to strengthen debt management will preserve debt sustainability.  “Continuing to build external buffers against shocks will strengthen Guinea’s resilience. Greater exchange rate flexibility will support building reserves. To this end, competition in the foreign exchange market is being strengthened and a rule-based intervention strategy will be finalized.  “Monetary policy will need to be prudent to moderate inflation. Limiting the central bank’s lending to the government will be key to contain inflationary pressures. An active liquidity management effort will support achieving monetary targets. Strengthening banking supervision and regulation will support stability.  “The authorities are advancing growth-supporting structural reforms. Strengthening the anti-corruption framework, the AML/CFT regime, and the business climate will enhance governance." Yeah.

On July 25 on Jamaica Inner City Press asked, "given that the $1.6-billion Precautionary Stand-By Arrangement comes to an end in November, please state and explain what the functions will be of the IMF office that, unlike elsewhere, is to remain in the country for two years after the expiration of the SBA." Spokesman Gerry Rice, after reading out the question from "our friend Matthew Lee in New York" - these days covering it from the U.S. District Court for the Southern District of New York SDNY amid cases about for example Nigerian oil and GSE bonds - replied that it is be no means unheard of for the IMF to keep and office behind after a program. Inner City Press might add that it has given rise to enough concern among some Jamaicans that the IMF wrote to the Gleaner... 

From the IMF transcript, Rice: "On that one, I'd like to refer to a letter that was actually published by our mission chief in Jamaica, Uma Ramakrishnan and that was published in the Glean[e]r newspaper in Jamaica just yesterday. So, I urge you to take a look at that. I would also add that since 2013, we have had consecutive IMF-supported programs. Jamaica has established an exemplary track record of economic reform achieved through commitment and implementation of the Economic Reform Program. Now in that context then, IMF and the Jamaica Government consider it useful to have that office open, remaining open in Jamaica with the ResRep to continue the support in the post-program period, and as we transition from program to the Article IV annual process with Jamaica, and to continue to support Jamaica with capacity building. And what I can say is, you know, the question said that this as suggested that this was unlike elsewhere. In fact, this is not an unusual arrangement, so it's not unique to Jamaica by any means."

On Lebanon Inner City Press asked, "what is the IMF's comment on or response to PM Hariri having said, "I know the IMF has some reservations, but also if we want to adopt everything the IMF does ... (well then it also) proposes that we leave the Lebanese pound to float, that it go up and down as it wants." The IMF had also requested an increase of fuel excise in addition to an increase in VAT, Hariri said.  What is the IMF's comment?" On this, Spokesperson Rice said, "What's the IMF's comment on that? I would refer you to the recent concluding statement of our staff mission to Lebanon which said, amongst other things, rebalancing the economy in the current framework of an exchange rate peg requires strong implementation of a large and credible fiscal adjustment and ambitious structural reforms." We'll have more on this.

 Back on June 27, on Pakistan Inner City Press asked, "On Zimbabwe, what is the IMF's response to Finance Minister Mthuli Ncube saying 'The first order of business is to clear the arrears and then move on to phase two, which is the bilateral discussions with the Paris Club' - asked if Zimbabwe would seek financing from the IMF next year, Ncube said: 'Why not? We can only ask, they can only say no'?"  Camilla Andersen, Assistant Director of the IMF's Communications Department, read out Inner City Press' question and replied among other things that while Zimbabwe has cleared its arrears to the IMF, other debts that would have to be cleared remain. She cited the Staff Managed Program running into 2020 (transcript to come).

 On Moldova Inner City Press asked, "On Moldova, please confirm or deny this from the government: "The head of the IMF mission, Ruben Atoyan, said that the International Monetary Fund had quite attentively monitored the situation in Moldova and that the Fund showed full openness to help Moldova.  ... The resumption of the negotiations with the International Monetary Fund and implementation of the provisions of the memorandum of economic and financial policies will allow Moldova receiving the last two installments of the financing program on behalf of the Fund, worth about 66 million Dollars."  The IMF's Camilla Andersen replied among other things that the the IMF has disbursed $112 million under the program and continues to assess (full transcript to come). 

Back on June 13 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.

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.

More here.

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