Inner City Press: Investigative Reporting from the United Nations

IMF Still Murky on Honduras and SDR Use, Critique on Georgia, Serbia, Hungary and Latvia

By Matthew Russell Lee

UNITED NATIONS, September 10 -- The International Monetary Fund through spokesman David Hawley repeated on Thursday that despite its recent allocation to Honduras of $168 million in Special Drawing Rights, "the regime in de facto control is not able to use [the allocation] until a decision is made if the Fund will deal with" the regime as the government of Honduras.

But Hawley also said that he has "no details on how individual countries have used the allocation," and when asked if countries have to disclose if they convert SDRs into hard currency, he said, I'll have to get back to you. So still the IMF's approach to Honduras, as well as other countries with coups and de facto regimes, remains unclear.

At the IMF's regular press briefing on September 10, Inner City Press submitted three questions, including "Please clarify the conditions under which a government of Honduras could access the SDRs voted to the country on August 28? Could the Micheletti government never do so? Or after a new election" without UN observers?

Mr. Hawley read the first part of the question out loud, and then flipped through a binder to repeat a line the IMF e-mailed to the Press on Sunday. Left unanswered is who will make the decision about the Honduran government and its right to the allocated SDRs, when the decision will be made, and in light of Hawley's other answers, how any decision, including the current supposed prohibition, would be policed.

The President the UN General Assembly, which passed a resolution on Honduras after the coup, says that no country or body like the IMF can recognize the Micheletti government, or send observers to an election it organizes. Does the IMF mean that its executive board could decide, tomorrow, to recognize Micheletti? Or that to recognize a government elected in a Micheleti organized election?

Honduras protest -- pro Micheletti -- IMF conditions not shown

Earlier this week, UNCTAD released a report criticizing the IMF at length. Inner City Press submitted this question:

"While the IMF says that "conditionality" is a thing of the past, this week's UNCTAD report criticizes the IMF for imposing "restrictive financial policies" on Latvia, Serbia, Georgia and Hungary. What is the IMF's response?"

While Hawley for some reason declined to even read this question out, during the briefing he said he and the IMF have no response to the UNCTAD report. This is more than a little strange. During the briefing, as simply one example, Hawley described how in connection with an IMF package for Ukraine, gas prices to consumers had to be raised. Labor unions are fighting it, he said, but the authorities are litigating to get the gas price rises in place and the IMF is monitoring it.

On September 8, Inner City Press posed questions about the IMF to Heiner Flassbeck from the UN Conference on Trade and Development, video here. Flassbeck laughed when told of the IMF's denials of conditionality. For this and other reasons, it would seem the IMF would have a response. Watch this site.

Footnote: Caroline Atkinson, who has presided over the IMF's past four or five press briefings, was said to be in Turkey, a country for which the IMF is considering a package. Based on Thursday's briefing by Mr. Hawley, it seems that while Ms. Atkinson is at least willing to extemporize IMF responses to question for which there is no "if-asked" ready in her binder, Mr. Hawley declines live questions for which no written answer is ready, and edits out or censors questions submitted electronically if he does not want to answer them. We'll see.

As Honduras' Post-Coup Central Bank Brags of IMF Funding, IMF Continues Its Spin

By Matthew Russell Lee

UNITED NATIONS, September 6 -- The International Monetary Fund, which in July told Inner City Press it had no program in Honduras and therefore, even after the coup, there was "no issue," is now under fire for its allocation of Special Drawing Rights to the country. The Honduran Central Bank has put out a press release bragging that

"At the initiative of the twenty industrialized and emerging countries (G-20), presided by the Prime Minister of England, Gordon Brown, the International Monetary Fund injects liquidity into the world economy and Honduras augments its international reserves by $150.1 million."

In response, on a Sunday when the IMF is closed Monday for U.S. Labor Day, the IMF told the press

"The IMF recently approved a global allocation of US$ 250 billion in IMF Special Drawing Rights to supplement all of the Fund's 186 member countries' foreign exchange reserves. It does not constitute aid money. In the specific case of Honduras, the present regime in de facto control is not able to use these SDRs until a decision is made on whether the Fund will deal with that regime as the government of Honduras."

But back in July, when Inner City Press asked IMF spokespeople Caroline Aktinson and William Murray, they replied that there was no issue, that no decision had to be made. At the IMF's July 16 briefing, Inner City Press asked if the expulsion of Manuel Zelaya from Honduras has given rise to any changes or discussions within the IMF. Ms. Atkinson responded that "we have followed the normal international practice." She said that "we don't have any program with Honduras."

Protest in Honduras, spin at IMF

But the IMF in June opened up a Technical Assistance Center for Central America, Panama, and the Dominican Republic (CAPTAC-DR) in Guatemala City. IMF Deputy Managing Director Takatoshi Kato was quoted that "this center is an example of strong regional cooperation in Central America, Panama and the Dominican Republic... A region with almost 40 million people has significant economic potential. The Fund is proud to be a partner in the effort to promote regional economic growth and development, and hopes that CAPTAC-DR will serve as an engine to push forward the objective of a more economically cohesive region.” The latest regional technical assistance center will serve Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and Panama.

When Inner City Press raised this in July and asked, "is there no change in IMF stance toward Honduras?" the IMF's response was that "On Honduras, we have no financial program there. It's not an issue per se."

So the IMF has a center which spend money to serve Honduras. Clearly the IMF likes to as long as possible dodge questions and, some say, accountability.

Footnote: At the UN, it is the position of the supporters of Zelaya that the General Assembly resolution prohibits any member state from sending observers to an election held by the coup leaders. Watch this site.

IMF Says on Sri Lanka, Int'l "Views Will Be Considered," Spends on Honduras But Dodges Question

By Matthew Russell Lee

UNITED NATIONS, July 16 -- When the International Monetary Fund's Executive Board finally meets on Sri Lanka's application for a $1.9 billion loan, IMF spokeswoman Caroline Atkinson told the Press on Thursday, "all of the international community's views will be considered."

The question posed, by Inner City Press, asked the IMF to respond to reports that "funds spent in the North are 'the jailer of these people and 'looks like internment.' What safeguards would be in place?" Ms. Atkinson's answer, referring to what she called the IMF's "good discussion with the authorities," did not mention any safeguards. Briefing at Minute 17:18.

United Kingdom officials have made statements, which they have not retracted, that Sri Lanka's application for an IMF loan is "not moving," that the conditions are not right.

While the US position has vacillated, the Obama administration's close attention to media probably means that the New York Times front page story of July 13, and the next day's editorial, makes less likely for now U.S. support for a $1.9 billion loan to Sri Lanka, whose military budget is $1.6 billion.

This in Honduras -- but could be Sri Lanka, IMF answers not shown

Inner City Press also asked if the expulsion of Manuel Zelaya from Honduras has given rise to any changes or discussions within the IMF. Ms. Atkinson responded that "we have followed the normal international practice." She said that "we don't have any program with Honduras."

But the IMF last month opened up a Technical Assistance Center for Central America, Panama, and the Dominican Republic (CAPTAC-DR) in Guatemala City. IMF Deputy Managing Director Takatoshi Kato was quoted that "this center is an example of strong regional cooperation in Central America, Panama and the Dominican Republic... A region with almost 40 million people has significant economic potential. The Fund is proud to be a partner in the effort to promote regional economic growth and development, and hopes that CAPTAC-DR will serve as an engine to push forward the objective of a more economically cohesive region.” The latest regional technical assistance center will serve Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and Panama.

So the IMF has a center which spend money to serve Honduras. Clearly, as in the case of Sri Lanka for the last four months, the IMF likes to dodge questions and, some say, accountability. But in light of the CAPTAC-DR, it cannot so easily dodge the question of Honduras. The World Bank has spoken to the question. When will the IMF?

Footnote: Inner City Press also asked the IMF, "What is the IMF's response to the UN General Assembly's outcome document with its criticism of the IMF and geographical balance, etc? And please deny that you pick and choose and censor questions submitted online about pending IMF loan applications - like Sri Lanka." The former has yet to be answered; there has been one round of back and forth (without substantive answer) on the latter. We will continue to pursue this.

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On Sri Lanka, IMF Said Ready to Lend, Dodges Ethnic Cleansing, Where Are Obama, UK?

UNITED NATIONS, May 20 – With the Red Cross blocked from access in Sri Lanka to the wounded and dying, with NGOs increasingly barred from the UN-financed camps for IDPs, in Washington the International Monetary Fund said Thursday that it looks forward to presenting for approval to its Board Sri Lanka's request for a $1.9 billion loan.

The statement was made by the IMF's director of external relations Caroline Atkinson. Inner City Press online asked a follow-up during the Fund's biweekly press briefing, which Ms. Atkinson re-stated: please state whether as the Sri Lankan government says the proceeds of any IMF loan would support re-housing in the north, which some would described as ethnic cleansing?

The IMF's Ms. Atkinson responded, “Perhaps it's just helpful to clarify that when the IMF lends, it is not for specific projects. We lend to support a country's finances. We make a loan to the Central Bank to support reserves. Any other question?”

Now, after two weeks ago refusing to take the question at their briefing, the IMF says that while there is still no access to the killing zone in the North, while doctors who reported on the war as well as offering treatment are detained and interrogated, it wants to present the loan for approval by its Board within weeks.

What happened, some ask, to the ostensible US and UK opposition? At the US State Department this week, the Obama Administration appeared to waver or move on from it previous position, both on the loan and as stated by the President following Time magazine's diagnosis that Barack Obama was failing the Sri Lanka test.

The IMF's implicit argument that it is not supporting what a government does on the ground by lending to its Central Bank is specious. In fact, many experts on Sri Lanka note that the government's military offensive in the North was assisted not only by aid after the tsunami, but even more by the proceeds, to the Central Bank, of debt forgiveness. Now during the current crisis the IMF wants to make a loan to the Sri Lankan Central Bank. Ms. Atkinson alluded to, but did not give an explanation as requested by Inner City Press, of a “larger facility” being discussed.

Victor's justice, victor's loans, some call it, as they call the UN's Ban Ki-moon's impending visit to Sri Lanka a sort of victory tour. Inner City Press leaves today on the UN trip. Watch this site.

These reports are usually also available through Google News and on Lexis-Nexis.

Click here for a Reuters AlertNet piece by this correspondent about Uganda's Lord's Resistance Army. Click here for an earlier Reuters AlertNet piece about the Somali National Reconciliation Congress, and the UN's $200,000 contribution from an undefined trust fund. Video Analysis here

Other, earlier Inner City Press are listed here, and some are available in the ProQuest service, and now on Lexis-Nexis.

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