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By Matthew Russell Lee, CJR PFT NY Post

NEW YORK CITY, May 6 – 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. On May 6, the IMF has issued this about Honduras: "The Honduran authorities and the IMF have reached a staff-level agreement on a 24-month blended Stand-By Arrangement (SBA) and Standby Credit Facility (SCF) for US$311 million. The authorities intend to treat the arrangement as precautionary.  The economic program supported by the Fund aims to maintain macroeconomic stability through reforms to secure sustainability of the public electricity company (ENEE), and to allow space for investment and social spending while safeguarding fiscal sustainability.  The program also includes measures to strengthen governance and improve the business climate to foster sustainable and inclusive economic growth.  An International Monetary Fund (IMF) mission led by Esteban Vesperoni visited Tegucigalpa and San Pedro Sula during April 22-May 6, 2019 to conduct the annual Article IV consultation and pursue discussions with the authorities on an economic program that can be supported by the International Monetary Fund. At the end of the mission, Mr. Vesperoni issued the following statement:  “I am pleased to announce that in support of the Honduran government’s economic and institutional reform agenda, the IMF and the Honduran authorities have reached a staff-level agreement on a 24-month blended Stand-By Arrangement (SBA) and Standby Credit Facility (SCF) for US$311 million (equivalent to SDR 224.8 million or 90 percent of Honduras’ quota in the IMF). The authorities have indicated that they intend to treat the agreement as precautionary.  “Macroeconomic conditions in Honduras remained stable in 2018. GDP growth slowed from the buoyant performance in 2017 to 3¾ percent last year due to weaker terms of trade, but remained close to potential, supported by private consumption amid strong growth in remittances. Inflation is stable around the center of the central bank´s 4±1 percent target band. Owing to lower coffee prices and higher oil prices, the current account widened to 4¼ percent of GDP; but stayed close to its historical average. Despite a higher than expected deficit in the electricity company (ENEE), the nonfinancial public sector (NFPS) posted a deficit of 0.9 percent of GDP, in line with the target in the Fiscal Responsibility Law (FRL). The financial system is stable, liquid, and well capitalized, with NPLs at historic lows.  “Amid lower global growth and still weak terms of trade, growth in 2019 is expected to moderate slightly to around 3½ percent, still close to potential. Policies in the economic program targeting an increase in productivity will sustain the macroeconomic performance in coming years and gradually create fiscal space for much-needed public investment and social spending. Inflation and inflation expectations are expected to converge towards the midpoint of the central bank target range, while the current account deficit is expected to remain stable at around 4 percent of GDP.  “A key objective of the economic program is to maintain macroeconomic stability, while enacting economic and institutional reforms to foster inclusive growth. Policies will build on previous achievements to strengthen the policy and institutional framework. Adherence to the FRL will be coupled with reforms aimed at creating fiscal space to reduce the infrastructure gap and increase social spending, including on important gender programs. The program will preserve previous revenue mobilization efforts, implement the electricity sector framework law, and put the financial situation of the public electricity company (ENEE) on a sustainable path.  “Priority has also been given to enhancing governance, including through measures to increase transparency. These reforms will aim at improving the macroeconomic policy framework, increasing the quality of public spending, and strengthening the rule of law. These reforms are fundamental to improving the business environment and foster growth.  “Monetary policy will continue to focus on controlling inflation and maintaining an adequate level of international reserves. In addition, the program will aim at further strengthening monetary policy and financial institutions, developing money and foreign exchange markets to support the transition towards inflation targeting, and enhancing the macro-prudential framework to reinforce financial resilience.  “The mission held discussions with President Juan Orlando Hernández, Head of the Economic Cabinet Marlon Tábora, Central Bank Governor Wilfredo Cerrato, Minister of Finance Rocío Tábora, Director of the Tax Agency Miriam Guzmán, President of the National Commission of Banking and Insurance Ethel Deras and other senior officials and representatives of the private sector." We'll have more on this.  On March 26 the IMF said, "The signing of an agreement between Cabo Verde and the European Union for fish exports is a welcome development in this context. The central bank (BCV) needs to continue monitoring developments in the Euro area closely and stand ready to change the monetary policy stance as needed; and should continue to maintain a high level of reserves to protect the peg and increase the economy’s resilience to adverse shocks. To enhance the efficiency of monetary policy, further actions are needed to strengthen the monetary policy transmission mechanism.  “The BCV’s continued efforts to strengthen banking sector supervision are welcome. In 2018, financial stability indicators improved, and banks’ profitability increased. Although non-performing loans (NPLs) declined in 2018, their high level (12.2 percent of total loans at end-December 2018) remains a source of concern, and resolution of legacy loans linked to the 2008 financial crisis should be an important priority.” Cabo Verde is one of the Lusophone countries where UNSG Antonio Guterres' son Pedro Guimarães e Melo De Oliveira Guterres has murky business links undisclosed by Guterres like his own links with UN bribery CEFC China Energy, through the Gulbenkian Foundation. See video here. We'll have more on this. Here's the IMF's March 7 transcript: "There is question on Haiti coming from Matthew Lee in New York. I'll take a couple of Matthew's questions as usual. And Matthew is asking about any updates I can give him on Haiti. And I can say that an IMF team is in Port Au-Prince as we speak to complete the Article IV consultation. But more than that, to discuss a possible IMF financial arrangement with Haiti. And we will hear more on that very, very soon.  But I can say that the mission will propose that what the mission will propose is highly concessional, on the most concessional terms we can offer for Haiti and it will highlight social protection. It will highlight the fight against corruption while deferring any fuel price adjustments until the government is able to guarantee that the most vulnerable will be protected from any negative effects.  Those of you who follow Haiti, you know, will understand the context of what I have just said. And again, the mission will communicate its findings at the end of the visit."  Eleven hours later, the IMF announces this: "In response to a request from the Haitian authorities, an International Monetary Fund (IMF) mission led by Mr. Chris Walker visited Port-au-Prince from February 25 to March 8, 2019 to discuss IMF support for measures to ease poverty, encourage good governance, raise growth and stabilize the country’s economic situation. At the end of the visit, Mr. Walker issued the following statement:  “I am pleased to announce that in support of the government and the people of Haiti, we, the IMF, the Haitian government and the Central Bank of Haiti (Banque de la République d’Haiti (BRH)) have reached an IMF staff-level agreement on a concessional 0 percent, three-year loan of US$ 229 million for Haiti. This agreement will have to be approved by the IMF’s Executive Board, which is expected to consider Haiti’s request in the coming weeks.  “The agreement we have reached is aimed at helping Haiti overcome its current fragile state, and alleviating the hardship of the most vulnerable. We have placed social protection firmly at the center of the accord, and once the agreed measures are successfully implemented, the poorest in Haiti will be among the first to benefit in a tangible way.  The program provides money for a variety of social protection measures ranging from school feeding, through targeted cash transfers, to money for social housing.  “Priority has also been given to the fight against corruption and improvements in governance.  The IMF backs the government’s aim of state reform.  In its agreement, it has drawn up measurable targets to boost this fight with the goal of injecting greater transparency into the management of public finances, tax and revenue administration, as well as expenditure control.  “To enable Haiti to return to macroeconomic stability, the loan to Haiti represents 100 percent of quota, and the money will be disbursed over the three years of the program which is subject to regular Executive Board and staff reviews.  “The loan is offered under the IMF’s Extended Credit Facility (ECF) which allows lending at concessional rates and is aimed at stabilizing Haiti’s economy by putting its budget deficit on a downward trajectory and managing its debt, while protecting the poorest in the country.  “The visit also encompassed the IMF’s Article IV consultation, or its regular check of the health of the country’s economy.  Real growth remains near its four-year average of 1.5 percent.  The country has been facing severe financing constraints while political turbulence has discouraged private investment and limited action on needed fiscal reform.   “Under the program, we expect that financial constraints will be relaxed, allowing for faster growth.   “We at the IMF are ready to partner with Haiti on its economic revitalization. We will also encourage other multilateral agencies and countries to support the country. We have talked to partner agencies and they are willing to help. It would also be very helpful for Haiti’s bilateral partners to step forward at this critical time.  “The mission would like to thank the authorities and all those with whom they met for their warm welcome and the frank and constructive discussions.'"  We'll have more on this - and this: on March 7 Rice said he was not aware of any IMF contact with Team Guaido on Venezuela... On February 7 Inner City Press 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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