SDNY COURTHOUSE,
Jan 19 – When the
International Monetary Fund
held its biweekly embargoed
press briefing on January 14,
Inner City Press asked for the
status of programs with Kenya
and Costa Rica. Spokesperson
Gerry Rice answered on each,
video here.
Now on
January 19 on Panama the IMF
has this: "The Executive Board
of the International Monetary
Fund (IMF) approved today
Panama’s request for a
two-year arrangement under the
Precautionary and Liquidity
Line (PLL) for SDR 1.884
billion (500 percent of
Panama’s quota, equivalent to
about US$2.7 billion), which
the authorities intend to
treat as precautionary. The
PLL will serve as insurance
against extreme external
shocks. stemming from the
COVID-19 pandemic. In
2020, Panama was severely
affected by the global
pandemic as containment
measures significantly reduced
economic activity, especially
tourism. In addition, the
country was hit by hurricane
Eta and tropical storm Iota
which curtailed a large part
of the country's agricultural
production. As a result,
output is estimated to have
dropped by 9 percent, with the
fiscal position deteriorating
significantly amid revenue
shortfalls and expenditure
pressures. While Panama
is able to cover its external
financing needs under present
conditions, the arrangement
provides insurance against
downside risks."
On January
14 on Kenya, Inner City Press
asked about public debt
disclosure and "On Kenya, does
the government re-raising
taxes including on individuals
make an IMF program more
likely?"
Rice said
the IMF is pushing a "pause on
fiscal adjustment" for the
year, for health spending, and
that it might go to the IMF
Board in early 2021.
On Costa
Rica, Inner City Press asked
about the talks that began
January 11 and "what is the
status, and what is the IMF's
response to statements that
that "the public employment
law, sale of assets, among
others, are measures that must
be taken"?
Rice said
the virtual talks have begun
and will, he said, include
civil society. Now the transcript:
Inner City Press:
I wanted to ask about two
programs or possible programs
that seem to be kind of in
play. One is in Kenya. It's
reported, at least, that $1.5
billion program is getting
near. There seems to be a lot
of issues with the Paris Club.
This sort of re-raising of
taxes, at least as I
understand it. And maybe --
it's reported, and I'd like
you to confirm or deny the IMF
asking for great public debt
disclosure. Can you say, what
are the issues from the IMF's
point of view at to
Kenya?
And on Costa
Rica, if there's no program,
there's no plan B. That's,
like, a big headline over
there. But what is the status
of the talks that began
January 11, and what's the
IMF's thinking about the sale
of assets and other issues?
Where does it stand with Costa
Rica? Thanks a lot.
MR. RICE: Thank
you, Matthew. On Kenya, and on
the status and plausibility of
an IMF program, we are in
discussions with the Kenyan
authorities on the possibility
of a program to support the
next phase of their response
to the crisis. We had a
mission there towards the end
of last year, and reached
agreement in many areas, so
that technical work is
continuing. And we hope that
will lead to something being
presented to our board for
consideration in early
2021. Clearly, Kenya
continues to face an
unprecedented external shock
that will severely challenge
the economy's underlying
health and the policy path
forward. We have actually --
we are recommending a pause in
fiscal adjustment this fiscal
year to accommodate increased
health spending and support
for the economy during this
shock. And we're also
recommending continued
supportive monetary policy
response, as has been the case
in Kenya. And then as we
move beyond the crisis, it
will be critical that the
authorities resume the pursuit
of fiscal sustainability,
fiscal adjustment. Especially
now that the shock has
increased the debt
vulnerabilities, as you
mentioned, Matthew. So we
would be talking in those
terms about a reduction of the
fiscal deficit through a
well-balanced policy mix.
That's on Kenya. On
Costa Rica, again, status
update. What can I say? The
government did request an IMF
program last year, again, to
help fight the pandemic, put
the economy on a growth path,
protect the most vulnerable,
and so on. I can tell you,
Matthew, that an IMF staff
team has begun virtual
discussions this week, January
the 11th, on policy priorities
and economic plans that could
underpin a potential IMF
supported program. And
the staff team will be meeting
with government officials,
parliamentarians, civil
society, the private sector,
and academics. And again,
discussions began this week,
and we'll update you as those
discussions progress.
Thank you for your questions,
Matthew
Watch this site.
Back on January 8
Inner City Press asked the
IMF's Helge Berger, Mission
Chief, about China's so-called
Belt and Road Initiative:
"Your Article IV report cites
China's "overseas lending
projects" amid "rising
geopolitical tensions and
economic and trade frictions."
How does the IMF think that
rising debt levels among
African countries, and
increased skepticism about the
"Belt and Road" will impact or
be addressed going forward?
-Matthew Russell Lee, Inner
City Press. Video here.
Berger
responded about
the IMF's work
to provide
lower income
countries
"breathing
space." He
said while the
IMF generally
welcomes the
BRI it stresses the
need for
transparency,
where the
money is
going.
(An aside: Inner
City Press has
reported on
the CEFC China
Energy Fund
Committee's
activities in
Chad and
Uganda and in
the UN, on
which the UN is
UNresponsive.)
Other questions
included
China's digital
currency (Inner
City Press also reports
on
crypto-currency
cases in the
U.S. District
Court for the
Southern
District of
New York and
elsewhere).
Berger said
when used
overseas an
issue is that
residents
could start
using another
country's
currency, if
it is easier.
We'll have more
on this.
***
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