Inner City Press: Investigative Reporting from the United Nations

On Small Islands, UN Talks “Sustainable Debt,” But What Does IMF Say & Do?

By Matthew Russell Lee

UNITED NATIONS, August 21 -- The UN says it is doing its all for Small Island Developing States, that Secretary General Ban Ki-moon will convene a meeting of the UN's Chief Executives Board on Samoa in early September. At the Third International Conference on SIDS there, one of the topics is “debt sustainability.” But what is the UN doing about that?

Inner City Press on August 21 put the question to Wu Hongbo, the Under Secretary-General for Economic and Social Affairs. He said that the small island states have been hit by the financial crisis, and that the CEB meeting will be convened.

But will the International Monetary Fund be there? And is so, what will the IMF be doing? Take for example the IMF's austerity conditions in Yemen - these have led to protests, the Houthis are in Sana'a. What does the IMF say? It will be a full week until the IMF holds its next briefing.

On Gaza, Inner City Press on July 24 asked the International Monetary Fund for its estimate of the economic impact of the conflict in both Gaza and Israel, including specifically with the FAA and now Delta and other airlines' decisions on access to Ben Gurion Airport.

IMF Deputy Spokesperson William Murray read out Inner City Press' Gaza question (and others from Inner City Press on Ukraine and Liberia) at the IMF's embargoed briefing on July 24. On Gaza, the IMF's Murray answered Inner City Press:

“With the conflict ongoing, it is too soon to make an accurate assessment of the impact, which will depend on the conflict's duration. Post-conflict reconstruction poses risk to Palestinian Authority finances absent additional donor financing. The Palestinian Authority does not have fiscal room to take on this additional burden.”

On Israel, after noting that he saw news of renewed access to Ben Gurion Airport, Murray answered Inner City Press:

“As for Israel, Israel financial market have remained stable, with shekel steadily appreciating, the Tel Aviv 100 has been little changed in past two weeks. The cost of the conflict of past two weeks, point two percent of GDP... The impact on economic activity, tourism and SMEs in southern Israel has already been felt. A further deceleration of GDP growth could be likely in 3d quarter. Once conflict ends we expect growth in Israel to rebound relative quickly.”

A tale of two economies, you might call it. Murray added that the IMF Executive Board will be off from August 4 to 15, and that the IMF's next briefing will be on August 28. Watch this site.

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