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By Matthew Russell Lee, CJR PFT NY Post

NEW YORK CITY, July 22 – When the International Monetary Fund held its biweekly embargoed media briefing on June 27, Inner City Press submitted six questions including on Zimbabwe and Moldova which the IMF answered, see below. On July 22 on Thailand the IMF issued this: "An International Monetary Fund (IMF) staff team, led by Mr. Lamin Leigh, visited Bangkok from July 4 – 19, 2019, to hold discussions on the 2019 Article IV Consultation with Thailand. At the conclusion of the visit, Mr. Leigh issued the following statement:  “Thailand’s economy has slowed this year. Following real GDP growth of 4.1 percent in 2018, growth decelerated to 2.8 percent (y/y) in the first quarter of 2019 driven largely by declines in exports. Global trade tensions have weighed heavily on exports which continued to decline through May. Weaker external demand and slowing tourism receipts have partly contributed to the narrowing of the current account surplus to 6.4 percent of GDP in 2018. Although private consumption has held up, headline inflation remains subdued, averaging 0.9 percent (y/y) in the first half of 2019 and below the Bank of Thailand’s target range on the back of food and energy prices. Growth in 2019–20 is expected to slow as uncertainty over trade tensions weigh on global demand. Risks to the outlook are tilted to the downside, most notably the escalation of protectionism threatening the global trade system.  “To support domestic demand, the team recommends an expansionary policy mix consisting of judicious use of fiscal space, fiscal reforms, and monetary easing consistent with a data dependent approach. The authorities are making steady progress on implementing the medium-term fiscal framework in support of the fiscal responsibility law, increasing the efficiency of the tax structure, and preparing a bill to improve the pension system. Going forward, the mission recommends a frontloaded increase in public investment in FY 2020, including through PPPs (e.g. Eastern Economic Corridor projects), supported by stronger public investment management, which can catalyze private investment and raise productivity growth. Given the delay in the enactment of the FY 2020 Budget with the transition to the new government and the resulting lack of fiscal stimulus in the remaining months of 2019, as well as the moderation of the financial cycle, monetary easing would help support domestic demand and external rebalancing. The exchange rate should remain flexible to serve as a key shock absorber in response to volatile capital flows while using macroprudential policies to address possible financial stability risks. Foreign exchange intervention should be limited to avoiding disorderly market conditions.  “The authorities have also made commendable progress in improving the coverage and effectiveness of financial supervision and macroprudential policies (MPPs). The recently concluded Financial Sector Assessment Program (FSAP) highlighted that financial vulnerabilities appear to be contained, but household indebtedness is relatively high and there are signs of weaknesses in some corporates and small and medium sized enterprises. Stress test results suggest that the banking sector is resilient to severe shocks and that systemic and contagion risks stemming from interlinkages are limited. To safeguard financial stability, the mission encourages the authorities to continue to implement the FSAP recommendations, including closing existing gaps in the crisis management and resolution frameworks, and enhancing the macroprudential framework and policies. The authorities have already started implementing some of the recommendations, including expanding the MPP toolkit and strengthening further an Early Warning Indicators framework and triggers for early intervention for the banking system.  “Structural reforms would also help address macroeconomic imbalances, promote inclusive growth, and enhance the key drivers of long-run growth. In this context, the authorities’ plan to propel Thailand to higher-value activities and to a digital economy (Thailand 4.0) as outlined in the 20-year National Strategy is an important step forward. Policy priorities should aim to enhance labor productivity, boost competitiveness, promote inclusiveness and address large regional income disparities. Greater investment in human capital across the regions will help unlock growth potential, including through education, health, and equalizing opportunities. Measures to facilitate household deleveraging and better targeted social safety net programs should help spur domestic demand and more inclusive growth. Pension reform, combined with measures to strengthen active labor market policies and more liberal immigration policies to attract foreign skilled labor, can help address demographic headwinds from population aging. The team takes note of the ongoing work by the National Anti-Corruption Commission (NACC) to implement the national anti-corruption strategy phase 3 (2017-2021) that would also help promote growth over the medium term.  “The IMF team exchanged views on recent economic developments and the outlook with officials in the government, the Bank of Thailand, other public institutions, and representatives of the private sector. The team would like to thank the authorities and other interlocutors in Bangkok and Khon Kaen for the constructive dialogue and generous hospitality. The IMF’s Executive Board is tentatively scheduled to discuss the Staff Report in September." We'll have more on this.

On June 27, on Zimbabwe 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.

  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....

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