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As
IMF Waives Pakistan Bank Law Not Power Subsidy Deadline, Conditionality
Cut Only in Name?
By
Matthew Russell Lee
UNITED
NATIONS, August 10 -- On August 7 the International Monetary Fund's
executive board approved additional funds for Pakistan, up to $11.3
billion, explicitly waiving a previously condition that more
stringent bank supervision legislation be enacted. Also waived, or
excused, was Pakistan's delay in complying with a commitment to
eliminate power subsidies, In a media conference call late on August
7, Inner City Press asked the IMF's head of mission to Pakistan Adnan
Mazarei about the two waivers.
He
acknowledged
both, but insisted that the IMF no longer engages in conditionality,
and therefore there was no formal vote on the continuation of power
subsidies. The bank supervision commitment, it seems, comes from
another time. But if both commitments were sought, is the IMF's claim
to no long engage in conditionality just a semantic difference? What
really has been changed?
IMF's Adnan
Mazarei, public notation of power subsidy waiver not shown
From
the IMF
transcript:
Inner
City Press: I see in the press release that the Board granted a
waiver to legislative amendments to increase the effectiveness of
bank supervision. I wonder if you could say if that’s extended for
a particular period of time. And, also, I did not see any mention of
this power subsidy. I thought that IMF had asked that that be
eliminated by July 1. At least it has been reported some places that
that is, but I do not see it in the press release.
I
also saw an article about the consolidation of ministries in
Pakistan, including the Ministry of Human Rights is somehow being
something directed by or requested by the IMF. Can you comment on
that?
MR.
MAZAREI: Let me start with the last question on the consolidation of
ministries. I think it is very good for a government to be lean and
mean in this administration, but the Fund has had nothing to do with
that particular recommendation. We do not micromanage government
organizations; we make general recommendations about the level of
spending. We do not get involved in how many ministries government
should have or not.
On
the issue of electricity, electricity sector, as you are aware, is a
major drain on the economy of Pakistan. Because of ongoing recurrent
blackouts, GDP growth and manufacturing output and generally welfare
of consumers is very much undermined. At the same time, because of
well-known and long-lasting problems of areas of customers not paying
the power companies, the government putting in place price limits on
electricity, which has created also some financial problems with
electricity sector, investment in power and energy in Pakistan has
been very low.
The
World Bank and Asian Development Bank have recently agreed with
Pakistan on a set of measures to help improve the finances of the
electricity sector, taking care of the problem of inter-enterprise
areas, which is in Pakistan known as circular debt. At the same time,
the Asian Development Bank and the World Bank have agreed with the
Pakistani authorities on possible increases in electricity prices in
the period ahead such that by August of next year, electricity tariff
differential subsidies will be eliminated.
You
are absolutely right that the authorities had intended to eliminate
the subsidies by last July, but because of political considerations,
because of social issues, these increases have been delayed.
Now,
on bank supervision, you are absolutely right. The authorities had
indicated that they would like to increase the powers of the Central
Bank in the area of bank supervision, but they have been delayed in
implementing this, and they are going to do this by September 1,
hopefully. And the waiver doesn’t have a time limit, but the
authorities have committed to do this, and in a short while from now,
and that should be okay.
Inner
City Press: Could I just ask was there not a waiver given on the
power subsidy or was the commitment made by the government not as
sort of binding, or does the press release just not contain all the
waivers that were given?
MR.
MAZAREI: There was no conditionality on the electricity sector. What
we put down officially as performance criteria, which we will not
have anymore going here forward because policies in this area have
changed, used to require waivers. Now, the reason there was no waiver
for electricity, as I said, was because there was no formal
conditionality on this. And this area, the issue of electricity is
formally in the domain of the World Bank. We are interested in it by
and large by of its criticality in terms of macroeconomic policy for
the government finances and for growth.
* * *
IMF
Won't Detail Sri Lanka Vote Or Release MoU, Spins Only to
Colombo Despite Press Exclusions
By
Matthew Russell Lee
UNITED
NATIONS, July 27 -- While the International Monetary Fund speaks of
its transparency, and the government of Sri Lanka brags about
releasing its Letter of Intent to the IMF, the Technical Memorandum
of Understanding for the IMF's contested $2.6 billion loan to the
Rajapakse regime is still being withheld, and the IMF won't even
confirm that the abstention of the UK, France, Germany, Argentina and
U.S. from Friday's vote on the loan.
Inner
City Press asked IMF spokesman William Murray to "state which
countries abstained or vote against the $2.6 billion loan to Sri
Lanka on Friday, or to explain why such basic information on voting
on a loan of this size is not routinely made public."
The
IMF's Murray replied, "On Board votes, it is their policy to
refrain from formally disclosing specific votes." What kind of
transparency is this?
Inner
City Press also asked Mr. Murray, "how
were reporters who cover the IMF and/or the loan to Sri Lanka
informed about the conference call with [head of IMF mission to Sri
Lanka] Brian Aitken?"
Murray
replied that "that was a briefing with reporters in Colombo."
At
three IMF press briefings this year, Inner City Press has asked about
Sri Lanka's application for a $1.9 billion loans. In March,
asking in
person in the IMF's briefing room, Inner City Press was told that
conditions were being negotiated by the IMF's mission to Sri Lanka.
After that briefing, Inner City Press was approached by IMF
communications staffer Yoshiko Kamata, who committed to keep Inner
City Press informed.
At
two subsequent IMF briefing, the IMF's Caroline Atkinson told Inner
City Press that the loan was only for the Central Bank, and that
international views would be considered. Then the loan was approved,
Mr. Murray declined to confirmed which countries abstained, and Ms.
Kamata set up a media conference call in Washington DC about the
loan without
informing or inviting Inner City Press.
Sri Lanka troops -- IMF loan, dead
journalists and TMoU not shown
It's reported that the UK, France,
Germany, Argentina and the
United States abstained
on the Sri Lanka loan. While the IMF now refuses to confirm this,
sources remind Inner City Press of the irony that, during the Malvinas
/ Falklands Islands contoversy, an IMF loan to Argentina was opposed by
a "gang of four" of the UK backed up by Oman, Belize and ironically Sri
Lanka, in quid pro quo for a development project loan from Margaret
Thatcher...
* * *
After
IMF Vote, Sri Lanka Releases Letter, Drops IDP Release from 80 to 60%
By
Matthew Russell Lee
UNITED
NATIONS, July 25 -- Only after procuring approval
of a $2.6 billion
loan from the International Monetary Fund Executive Board did the
Sri
Lankan government, under pressure, put
online a copy of its July 15
Letter of Intent to the IMF.
Contrary to claims that the purposes and
IMF debate around the loan had nothing to do with the detention camps
and relocations in Northern Sri Lanka, the Letter of Intent describes
use of funds for the camps, and states that "the government
aims to resettle 70-80 percent of IDPs by the end of the year."
When
UN Secretary
General Ban Ki-moon belatedly visited Sri Lanka and the Manik Farm
internment camp in late May, the government said it would release 80
percent of those being detained by the end of the year. The July 16
letter to the IMF -- withheld until after the July 24 vote on the
loan -- dropped the percentage to seventy.
In
fact, before
the IMF board voted but also before it was publicly acknowledged that
the release of detained Tamils was part of Sri Lanka's letter of
intent to the IMF, Sri
Lanka's foreign minister had already further
dropped the percentage, to sixty.
Some now say
that the IMF board on
July 24 voted on old and inaccurate information -- which was allowed
only because the IMF and Sri Lanka withheld the July 16 letter until
after the $2.6 billion had been voted on.
UN's Ban and Mahinda Rajapakse: extended
detention of IDPs not shown
At
the UN's July
24 noon briefing, before the IMF executive board vote, Inner City
Press asked UN Associate Spokesman Farhan Haq:
Inner
City Press: Since it was said that the Secretary-General was closely
monitoring the compliance with the joint statement and all of this,
it’s just come out that the Foreign
Minister of the country has now
said that the commitment made, including while the Secretary-General
was there, to allow 80 per cent of those in the detention camps to
return home by the end of the year no longer holds, that it’s going
to be a lower number. Has the UN taken note of that and what’s the
response to that?
Associate
Spokesperson Haq: We have always expected the Government to abide by
the commitments that have been reached on this particular matter.
Beyond anything further, I’d check whether OCHA has new reaction to
the latest comments. I don’t know whether we necessarily would
react to the very latest comments that you just cited, though.
Those
detained by
the Sri Lankan government can, some say, legitimately be called
political prisoners. The government committed to the UN to release
80% of them by the end of the year. The government committed to the
IMF, in a letter withheld until after approval of a $2.6 billion
loan, to release 70 to 80% by the end of the year. [A reader points out
that per Mahinda Rajapakse, it is not a commitment or promise, only a "target"
-- click here.]
Then prior to
the
IMF vote, but before the letter to the IMF was released, the
government gave itself space to continue to detain some additional
30,000 to 60,000 people past the previously committed deadline. The
UN has nothing to say, and the IMF is giving $2.6 billion to the
government.
Some call it
an IMF reward for the extended detention of
political prisoners -- apparently the IMF would look favorably on the
internment -- and opacity or delayed release -- practices of Myanmar
and North Korea. Watch this site.
IMF footnote: the
belatedly released Sri Lankan Letter of Intent to the IMF about the
loan puts in a different light the IMF
Director of Communications' public May 21 response to Inner City
Press' questions about IDPs and relocation, that
"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."
Then why was the following in
Sri Lanka's Letter of Intent to the IMF, withheld under after the
IMF vote?
Reconstruction
of the North and East and the protection of vulnerable groups
adversely affected by the conflict will be an integral part of our
program. To this end the government has moved quickly to provide
humanitarian assistance to those affected by the conflict and to
develop a post-war reconstruction plan. The immediate priority is
addressing the humanitarian needs of the estimated 280,000 internally
displaced persons (IDPs). The government aims to resettle 70-80
percent of IDPs by the end of the year...In 2009 the government
intends to make room within the programmed deficit targets for
spending on humanitarian assistance and the resettlement of IDPs
using savings in existing budget provisions, redeployment of certain
categories of military personnel for demining and for the provision
of basic infrastructure, and any external grants from our development
partners. About two percent of the projected government spending will
be used for the provision of humanitarian assistance and the
resettlement of displaced persons. A needs assessment is expected to
be completed by end July 2009 to determine additional funds needed
for the broader reconstruction strategy.
Watch
this site.
* * *
As
IMF Hands $2.5B Loan to Sri Lanka, Letter of Intent
Withheld, Ethnic Cleansing Alleged
By
Matthew Russell Lee
UNITED
NATIONS, July 24, updated --
As the International Monetary Fund's executive
board approved a $2.5 billion loan to Sri Lanka, the IMF refused to
release a copy of the Rajapakse government's letter of intent for the
loan. As far back as a March
press briefing in Washington, Inner City
Press asked the IMF what safeguards, if any, would ensure that the
IMF funds not boost the Rajapakse government's shelling and now
detention of civilians in northern Sri Lanka, and alleged ethnic
cleansing there.
At
its press
briefing days before the IMF
Managing Director announced his staff's
recommendation that the loan be approved, IMF spokesperson Caroline
Atkinson said that
the international community's views would be taken
into account. But her colleague William Murray on Friday rejected
Inner City Press' reject for a copy of the letter of intent, first
saying that Sri Lanka would be the one to release it, then replying
that the IMF's "transparency policy" leaves release
entirely in the hands of the applicant, Sri Lanka. Mr. Murray wrote:
"Will
check on the Letter of Intent. They're released by the member
country, and typically after Executive Board review of the economic
program. Sri Lanka's board meeting is today."
And
then, after Inner City Press formally re-request a copy of the
Letter, Murray wrote:
"The
publication of the Letters is governed by the Executive Board's
transparency policy. That policy empowers the member country to
decide whether to release the document or not."
But
the policy
states that the country's consent to publication by the IMF is
"presumed." So why is the Sri Lankan letter not made public
by the IMF?
IMF, through a glass darkly, Sri Lankan letter of intent not shown
In
fact, long after Sri Lanka's Ambassador to the U.S. had
publicly announced the IMF's approval, which he said no one opposed,
Mr. Murray at 5:49 p.m. Friday told Inner City Press to "stay tuned"
about the IMF's Sri Lanka decision. While the Times of
London reported that the UK would vote against the loan, the UK has
only a five percent say. At press time it appeared the UK, France,
Germany, Argentina and the
United States abstained
on the loan, an "IMF source" was quoted. How can the IMF let an
applicant country scoop it on announcing a loan, while allowing the
country to withhold its letter of intent?
Update -- long after
deadline for this article and after Sri Lanka already announced the
IMF's approval, the IMF put
online a press release (no further communication was received from
Mr. Murray) putting the size of the loan even larger, at $2.6 billion.
Analysis will follow, watch this site.
* * *
On
Sri Lanka, IMF Said Ready to Lend, Dodges Ethnic Cleansing, Where
Are Obama, UK?
Byline:
Matthew Russell Lee of Inner City Press at the UN: News Analysis
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?”
On March 12,
Inner City Press went to the IMF in Washington and asked Ms.
Atkinson's colleague David Hawley what safeguards were being
considered to ensure that the proceeds of any IMF loan to Sri Lanka
wouldn't be enable war or ethnic relocation. Mr. Hawley said that
things were at an early stage. Later, French
Ambassador to the UN
Jean-Maurice Ripert told Inner City Press that “the Americans are
trying to play with the loan.”
The U.S. subsequently confirmed
this, receiving human rights credit for raising the issue. The UK has
as well. After a contrary
statement by the UK Ambassador to the UN, in
response to Inner City Press' question at the UN Security
Council stakeout, UK Foreign Minister David Miliband said he didn't
think conditions for an IMF loan to Sri Lanka were right. Are they
now?
IMF's Dominque Strauss-Kahn and Ms. Atkinson,
ready to lend to Sri Lanka
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.
Click here
for an Inner City Press YouTube channel video, mostly UN Headquarters
footage, about civilian
deaths
in Sri Lanka.
Click here for Inner City
Press' March 27 UN debate
Click here for Inner City
Press March 12 UN (and AIG
bailout) debate
Click here for Inner City
Press' Feb 26 UN debate
Click
here
for Feb.
12 debate on Sri Lanka http://bloggingheads.tv/diavlogs/17772?in=11:33&out=32:56
Click here for Inner City Press' Jan.
16, 2009 debate about Gaza
Click here for Inner City Press'
review-of-2008 UN Top Ten debate
Click here for Inner
City Press' December 24 debate on UN budget, Niger
Click here from Inner City Press'
December 12 debate on UN double standards
Click here for Inner
City Press' November 25 debate on Somalia, politics
and this October 17 debate, on
Security Council and Obama and the UN.
* * *
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
Feedback: Editorial
[at] innercitypress.com
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Office: S-453A, UN, NY 10017
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Reporter's
mobile (and
weekends):
718-716-3540
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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2006-08 Inner City Press, Inc. To request
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