SDNY COURTHOUSE,
March 30 – When the
International Monetary Fund
held its biweekly embargoed
press briefing on March 25,
Inner City Press asked about
Pakistan, Costa Rica and
African finance ministers'
comments on SDRs and COVID
vaccines. Video
forthcoming.
Spokesperson Gerry Rice
responded on each, below.
Now on March 30
to South Sudan, this: "The
Executive Board of the
International Monetary Fund
(IMF) today approved a
disbursement of SDR 123
million (50 percent of quota
or about US$174.2 million) to
South Sudan under the Rapid
Credit Facility (RCF). This is
the second IMF financial
assistance to South Sudan
since it joined the IMF in
2012. The disbursement will
help finance South Sudan’s
urgent balance of payments
needs and provide critical
fiscal space to maintain
poverty-reducing and
growth-enhancing
spending. A sharp
decline in international oil
prices triggered by the
pandemic and devastating
floods have eroded economic
gains of the peace process.
The economy is slated to
contract by 4.2 percent in
FY20/21. The economic downturn
widened the fiscal and the
balance of payments deficits,
opening large financing gaps
in the absence of concessional
financing. In the past, the
monetization of the fiscal
deficit resulted in high
inflation and significant
exchange rate depreciation. A
modest economic recovery is
projected in FY21/22 on the
heels of oil price
recovery. The
authorities have embarked on
reforms to restore
macroeconomic stability. Since
October 2020, the authorities
have stopped monetary
financing of the deficit
which, along with the forex
auctions, have helped
stabilize the exchange rate.
Revenue mobilization measures,
including phasing out some tax
exemptions, have bolstered
domestic non-oil revenue in
recent months. A Staff
Monitored Program (SMP) will
help in creating the
conditions for strong and
inclusive growth by restoring
fiscal discipline,
implementing a rules-based
monetary policy framework, and
addressing distortions in the
foreign exchange market.
The authorities are committed
to strengthening governance
and accountability through
public financial management
reforms. The transparency of
the use of the RCF resources
will be achieved through
regular reports and audits.
The SMP will foster greater
transparency of government
operations while strengthening
governance and reducing
vulnerabilities. At the
conclusion of the Board
discussion, Mr. Mitsuhiro
Furusawa, Deputy Managing
Director and Acting Chair,
made the following
statement: “South Sudan
has been hit hard by the
COVID-19 pandemic, lower
international oil prices, and
severe floods in recent
months. These challenges have
led to urgent balance of
payments and fiscal financing
needs and reversed early
economic gains from political
stability. The IMF’s emergency
financing under the Rapid
Credit facility would help
meet priority spending needs,
catalyze donor support, and
foster critical economic
reforms envisaged under the
Staff-Monitored Program.
Prudent fiscal and monetary
policies are necessary to
promote macroeconomic
stability."
Inner City Press
asked, "On SDRs to low-income
and middle-income countries,
African finance ministers
noted that IMF’s PRGT should
be considered for this, that
funding the PRGT with SDRs
could facilitate the
acquisition of vaccines by
low-income countries - what is
the IMF's response and view?"
The IMF's
Rice among other things cited
$24 billion since COVID hit,
including "recycled" SDRs.
Inner City Press
asked, On Costa Rica, what are
the IMF's comments on and
reactions to protests ats the
government tries to eliminate
hundreds of “pluses” /
supplementary payments that it
pays employees - "it is all at
risk if the IMF bill gets
greatly watered down in the
face of protests, according to
Fernando Losada, director of
emerging market research for
Oppenheimer & Co.
Inc. “Execution risks
remain high,” Losada wrote in
a note. IMF?
The IMF's
Rice said the bill is supposed
to be passed in May and would
bring "equity" to public
employments.
Inner
City Press
asked, On
Pakistan, what is the IMF's
role in and response to that
the government has decided to
raise electricity prices
considerably over the next few
years, which many attirbute to
the IMF? It's said the federal
government will have increased
the price of electricity by Rs
4.6 per unit by the year
2023. In the short term,
electricity price is set to
rise by Rs 2.55 per unit by
June 2021."
The IMF's
Rice said the reforms are the
decision of Pakistan
authorities. Full transcript
to follow.
Back
on March 11 in a question
Inner City Press, given what
it has reported on for the
past three days was compelled
to ask, it sent and asked, "On
Honduras, given mounting
evidence including in the
trial of Geovanny
Fuentes-Ramirez that high
government officials are
implicated in
narco-trafficking, what are
the IMF's comments on current
programs and safeguards in
place?"
As noted,
Spokesperson Rice said that
IMF does not comment on
(pending) judicial
proceedings. At least he took
the question.
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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